MIRA INFORM REPORT

Report Date :

24.12.2012

IDENTIFICATION DETAILS

Name :	PHU NONG SERVICE TRADING COMPANY LIMITED
Registered Office :	149/D17 Ly Thanh Tong Street, Tan Thoi Hoa Ward, Tan Phu District, Ho Chi Minh City
Country :	Vietnam
Financials (as on) :	31.12.2011
Year of Establishment :	2008
Com. Reg. No.:	0306062437
Legal Form :	Limited Liability Company
Line of Business :	Wholesaler of agricultural raw materials (except wood, bamboo) and live animals
No. of Employees :	12 employees

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30^th, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
Vietnam	B1	B1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

vietnam - ECONOMIC OVERVIEW

Vietnam is a densely-populated developing country that in the last 30 years has had to recover from the ravages of war, the loss of financial support from the old Soviet Bloc, and the rigidities of a centrally-planned economy. While Vietnam's economy remains dominated by state-owned enterprises, which still produce about 40% of GDP, Vietnamese authorities have reaffirmed their commitment to economic liberalization and international integration. They have moved to implement the structural reforms needed to modernize the economy and to produce more competitive export-driven industries. Vietnam joined the World Trade Organization in January 2007 following more than a decade-long negotiation process. Vietnam became an official negotiating partner in the developing Trans-Pacific Partnership trade agreement in 2010. Agriculture's share of economic output has continued to shrink from about 25% in 2000 to about 22% in 2011, while industry's share increased from 36% to 40% in the same period. Deep poverty has declined significantly, and Vietnam is working to create jobs to meet the challenge of a labor force that is growing by more than one million people every year. The global recession has hurt Vietnam's export-oriented economy, with GDP in 2009-11 growing less than the 7% per annum average achieved during the last decade. In 2011, exports increased by more than 33%, year-on-year, and the trade deficit, while reduced from 2010, remained high, prompting the government to maintain administrative trade measures to limit the trade deficit. Vietnam's managed currency, the dong, continues to face downward pressure due to a persistent trade imbalance. Since 2008, the government devalued it in excess of 20% through a series of small devaluations. Foreign donors pledged nearly $8 billion in new development assistance for 2011. However, the government's strong growth-oriented economic policies have caused it to struggle to control one of the region's highest inflation rates, which reached as high as 23% in August 2011 and averaged 18% for the year. In February 2011, Vietnam shifted its focus away from economic growth to stabilizing its economy and tightened fiscal and monetary policies. In early 2012 Vietnam unveiled a broad "three pillar" economic reform program, proposing the restructuring of public investment, state-owned enterprises and the banking sector. Vietnam's economy continues to face challenges from low foreign exchange reserves, an undercapitalized banking sector, and high borrowing costs. The near-bankruptcy and subsequent default of the state-owned-enterprise Vinashin, a leading shipbuilder, led to a ratings downgrade of Vietnam's sovereign debt, exacerbating Vietnam's borrowing difficulties.

Source : CIA

SUBJECT IDENTIFICATION & LEGAL FORM

Registered English Name	PHU NONG SERVICE TRADING COMPANY LIMITED
Registered Vietnamese Name	CONG TY TNHH THUONG MAI DICH VU PHU NONG
Type of Business	Limited liability company
Year Established	2008
Business Registration No.	0306062437
Date of Latest Adjustment (3^rd)	03 Jul 2012
Place of Registration	Business registration Office - Planning and Investment Department of Hochiminh City
Chartered capital	VND 3,600,000,000
Tax code	0306062437
Total Employees	12

company ADDRESSES

Head Office
Address	149/D17 Ly Thanh Tong Street, Tan Thoi Hoa Ward, Tan Phu District, Ho Chi Minh City, Vietnam
Telephone	(84-8) 3961 6892 - 3961 3537
Fax	(84-8) 3961 3541
Email	phunongco@vnn.vn
Branch in Hochiminh
Address	225F Tran Quang Khai Street, Tan Dinh Ward, District 1, Ho Chi Minh City, Vietnam

DIRECTORS

1. NAME	Mr. VU NGOC TRAN
Position	Director
Date of Birth	25 Dec 1975
ID Number/Passport	361574628
ID Issue Date	02 May 2002
ID Issue Place	Police Station of Can Tho Province
Resident	128/22/19M Dinh Tien Hoang Street, Ward 1, Binh Thanh District, Ho Chi Minh City, Vietnam
Nationality	Vietnamese
2. NAME	Mr. VO VAN LOI
Position	Deputy Director
ID Number/Passport	340387424
Resident	An Hoa Hamlet, Tan Binh Commune, Chau Thanh District, Dong Thap Province, Vietnam
Nationality	Vietnamese
3. NAME	Ms. TA THI HA
Position	Chief Accountant
Resident	Ho Chi Minh City, Vietnam
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

The subject registered in:

 Wholesale of agricultural raw materials (except wood, bamboo) and live animals

 Wholesale on a fee or contract basis

 Wholesale of other household products

 Wholesale of waste and scrap and other products n.e.c

 Wholesale of food

 Wholesale of agricultural machinery, equipment and supplies

IMPORT & EXPORT ACTIVITIES

IMPORT:
 Market	India, Australia, USA
EXPORT:
 Types of products	N/A

BANKERS

ASIA COMMERCIAL JOINT STOCK BANK
Address	444 Nguyen Thi Minh Khai, District 3, Ho Chi Minh City, Vietnam
Telephone	(84-8) 3832 8988
Fax	(84-8) 3832 8987

SHAREHOLDERS

1. NAME	Mr. VO VAN LOI
Position	Deputy Director
ID Number/Passport	340387424
Resident	An Hoa Hamlet, Tan Binh Commune, Chau Thanh District, Dong Thap Province, Vietnam
Nationality	Vietnamese
Value of shares	VND 1,800,000,000
Percentage	50%
2. NAME	Mr. VU NGOC TRAN
Position	Director
Date of Birth	25 Dec 1975
ID Number/Passport	361574628
Issued on	02 May 2002
Issued Place	Police Station of Can Tho Province
Resident	128/22/19M Dinh Tien Hoang Street, Ward 1, Binh Thanh District, Ho Chi Minh City, Vietnam
Nationality	Vietnamese
Value of shares	VND 1,800,000,000
Percentage	50%

FINANCIAL DATA

BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2011
Number of weeks	52
ASSETS
A – CURRENT ASSETS	36,830,000,000
I. Cash and cash equivalents	4,734,000,000
1. Cash	4,734,000,000
2. Cash equivalents	0
II. Short-term investments	0
1. Short-term investments	0
2. Provisions for devaluation of short-term investments	0
III. Accounts receivable	14,140,000,000
1. Receivable from customers	7,074,000,000
2. Prepayments to suppliers	5,766,000,000
3. Inter-company receivable	0
4. Receivable according to the progress of construction	0
5. Other receivable	1,300,000,000
6. Provisions for bad debts	0
IV. Inventories	17,228,000,000
1. Inventories	17,228,000,000
2. Provisions for devaluation of inventories	0
V. Other Current Assets	728,000,000
1. Short-term prepaid expenses	0
2. VAT to be deducted	0
3. Taxes and other accounts receivable from the State	728,000,000
4. Other current assets	0
B. LONG-TERM ASSETS	12,520,000,000
I. Long term accounts receivable	0
1. Long term account receivable from customers	0
2. Working capital in affiliates	0
3. Long-term inter-company receivable	0
4. Other long-term receivable	0
5. Provisions for bad debts from customers	0
II. Fixed assets	12,520,000,000
1. Tangible assets	5,398,000,000
- Historical costs	5,943,000,000
- Accumulated depreciation	-545,000,000
2. Financial leasehold assets	0
- Historical costs	0
- Accumulated depreciation	0
3. Intangible assets	7,122,000,000
- Initial costs	7,122,000,000
- Accumulated amortization	0
4. Construction-in-progress	0
III. Investment property	0
Historical costs	0
Accumulated depreciation	0
IV. Long-term investments	0
1. Investments in affiliates	0
2. Investments in business concerns and joint ventures	0
3. Other long-term investments	0
4. Provisions for devaluation of long-term investments	0
V. Other long-term assets	0
1. Long-term prepaid expenses	0
2. Deferred income tax assets	0
3. Other long-term assets	0
VI. Goodwill	0
1. Goodwill	0
TOTAL ASSETS	49,350,000,000
LIABILITIES
A- LIABILITIES	44,057,000,000
I. Current liabilities	34,372,000,000
1. Short-term debts and loans	16,992,000,000
2. Payable to suppliers	14,874,000,000
3. Advances from customers	1,750,000,000
4. Taxes and other obligations to the State Budget	16,000,000
5. Payable to employees	0
6. Accrued expenses	0
7. Inter-company payable	0
8. Payable according to the progress of construction contracts	0
9. Other payable	740,000,000
10. Provisions for short-term accounts payable	0
11. Bonus and welfare funds	0
II. Long-Term Liabilities	9,685,000,000
1. Long-term accounts payable to suppliers	0
2. Long-term inter-company payable	0
3. Other long-term payable	0
4. Long-term debts and loans	9,685,000,000
5. Deferred income tax payable	0
6. Provisions for unemployment allowances	0
7. Provisions for long-term accounts payable	0
8. Unearned Sale	0
9. Science and technology development fund	0
B- OWNER’S EQUITY	5,293,000,000
I. OWNER’S EQUITY	5,293,000,000
1. Capital	9,000,000,000
2. Share premiums	0
3. Other sources of capital	0
4. Treasury stocks	0
5. Differences on asset revaluation	0
6. Foreign exchange differences	0
7. Business promotion fund	0
8. Financial reserved fund	0
9. Other funds	0
10. Retained earnings	-3,707,000,000
11. Construction investment fund	0
12. Business arrangement supporting fund	0
II. Other sources and funds	0
1. Bonus and welfare funds (Elder form)	0
2. Sources of expenditure	0
3. Fund to form fixed assets	0
MINORITY’S INTEREST	0
TOTAL LIABILITIES AND OWNER’S EQUITY	49,350,000,000

PROFIT & LOSS STATEMENT
Description	FY2011
1. Total Sales	170,695,000,000
2. Deduction item	0
3. Net sale	170,695,000,000
4. Costs of goods sold	161,155,000,000
5. Gross profit	9,540,000,000
6. Financial income	127,000,000
7. Financial expenses	6,429,000,000
- In which: Loan interest expenses
8. Selling expenses	5,580,000,000
9. Administrative overheads	2,749,000,000
10. Net operating profit	-5,091,000,000
11. Other income	1,385,000,000
12. Other expenses	0
13. Other profit /(loss)	1,385,000,000
14. Total accounting profit before tax	-3,706,000,000
15. Current corporate income tax	0
16. Deferred corporate income tax	0
17. Interest from subsidiaries/related companies	0
18. Profit after tax	-3,706,000,000

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2011	Average Industry
Current liquidity ratio	1.07	1.21
Quick liquidity ratio	0.57	0.72
Inventory circle	9.35	12.25
Average receive period	30.24	51.49
Utilizing asset performance	3.46	2.30
Liability by total assets	89.27	59.32
Liability by owner's equity	832.36	229.17
Ebit / Total assets (ROA)	-7.51	8.16
Ebit / Owner's equity (ROE)	-70.02	24.08
Ebit / Total sale (NPM)	-2.17	6.61
Gross profit / Total sale (GPM)	5.59	16.82
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Fair
Liquidity	Low/ medium
Payment status	Limited
Financial Situation	Average
Development trend	N/A
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	Direct payment or through its corresponding bank
Sale Methods	Wholesaler

INTERPRETATION ON THE SCORES

The subject - PHU NONG SERVICE TRADING COMPANY LIMITED - was established in 2008. The subject is a limited liability company which is owned by two shareholders: Mr. Vu Ngoc Tran and Mr. Vo Van Loi - they are also in the board of director of the subject. The subject is now operating under business registration No. 0306062437 issued by Business Registration Office - Planning and Investment Department of Hochiminh City with registered capital of VND 3.6 billion.

The subject specializes in trading materials of animal feed. It imports products mainly from India, Australia and USA and distributes in domestic market. Main customers of the subject are manufacturers in some neighbouring provinces such as Binh Duong, Dong Nai, Vung Tau…

Premise and facility of the subject is normal. Besides the head office, the subject also has a branch in Hochiminh city. Currently, the subject has about 12 staffs in office. The management capacity is average.

Operation of the subject seems busy, but according to the financial data in 2011, the subject had an normal business result. Total sale was remarkable, however, the cost of goods sold and expenses were so high. It is the main reason causes the profit was negative. According to the subject’s staff, business result in year 2011 will not be better than the previous year because the economic crisis. Future prospect of the subject is average.

APPENDIX

INDUSTRY DATA
Industry code	Growth speed by price compared with 1994 (%)		Total enterprises 2010		Total employees 2011 (Thous.pers.)	Annual average capital of enterprises 2010 (billion dongs)
	2011	2010
Agriculture, Forestry and Fishing	4.00	2.78	8,887		24,362.9	95,227
Industry and Construction	5.53	7.70	95,217		10,718.9	3,641,376
Trade and Services	6.69	7.52	187,195		15,270.2	6,957,082
ECONOMIC INDICATORS
			2011	2010		2009
Population (Million person)			87.84	86.93		86.02
Gross Domestic Products (USD billion)			119	102.2		91
GDP Growth (%)			5.89	6.78		5.32
GDP Per Capita (USD/person/year)			1,300	1,160		1,080
Inflation (% Change in Composite CPI)			18.58	11.75		6.88
State Budget Deficit compared with GDP (%)			4.9	5.8		6.9
SERVICE TRADE PERFORMANCE
Billion USD			2011	2010		2009
Exports			96.3	72.2		57.1
Imports			105.8	84.8		69.9
Trade Balance			-9.5	-12.6		-12.8

Source: General Statistics Office

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.07
UK Pound	1	Rs.89.54
Euro	1	Rs.72.77

INFORMATION DETAILS

Report Prepared by :

MNL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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