MIRA INFORM REPORT

Report Date :

28.12.2012

IDENTIFICATION DETAILS

Name :	FORMOSA INDUSTRIES CORPORATION

Registered Office :	Nhon Trach III Industrial Park, Hiep Phuoc Ward, Nhon Trach District, Dong Nai Province

Country :	Vietnam

Financials (as on) :	31.12.2011

Year of Establishment :	2001

Legal Form :	Foreign Invested Company - Limited liability company

Line of Business :	Manufacture and trading in textile and chemical fibers

No. of Employees :	2,600

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
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

(31.03.2011)

Current Rating

(30.06.2012)

Viet Nam

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

Current legal status
English Name		FORMOSA INDUSTRIES CORPORATION
Vietnamese Name		CONG TY TNHH HUNG NGHIEP FORMOSA
Trade name		FIC
Type of Business		Foreign Invested Company - Limited liability company
Year Established		2001
Investment Certificate No		472023000477
Date Of Issuance		22 May 2008
The latest adjustment		31 Oct 2012
Place of Issuance		Management Board of Dong Nai Industrial Zones
Registered Investment Capital		USD 1,250,417,000
Chartered capital		USD 610,000,000
Investment Duration		50 years
Tax code		3600517557
Total Employees		2,600

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Registered Investment Capital: USD1,220,417,000 Changed to: USD1,250,417,000	31 Oct 2012
2	Subject has got former Chartered capital: USD600,000,000 Changed to: USD610,000,000	31 Oct 2012
3	Subject has got former Registered Investment Capital: 1,116,078,000 USD Changed to: 1,220,417,000 USD	30 May 2010
4	Subject has got former Chartered capital: 447,000,000 USD Changed to: 600,000,000 USD	30 May 2010
5	Subject has got former Investment Certificate No: 2244/GP Changed to: 472023000477	22 May 2008
6	Subject has got former Registered Investment Capital: 951,356,000 USD Changed to: 1,116,078,000 USD	22 May 2008


ADDRESSES

Head Office
Address		Nhon Trach III Industrial Park, Hiep Phuoc Ward, Nhon Trach District, Dong Nai Province, Vietnam
Telephone		(84-61) 3560309 / 3560308 / 3560307
Fax		(84-61) 3560306 / 3560310 / 3560311, 3560 666
Email		ficadm@fic.com.vn
Occupied area		2,990,622 m²

DIRECTORS

1. NAME		Mr. HONG FU YUAN
Position		General Director
Date of Birth		13 Oct 1945
ID Number/Passport		132483005
ID Issue Date		24 Sep 2001
ID Issue Place		Taiwan
Resident		No. 359 Chung Shan Road, Section 3 Chang Hua, Taiwan
Nationality		Taiwanese

2. NAME		Mr. HUANG DONG JANG
Position		Deputy General Director
Nationality		Taiwanese

3. NAME		Mr. CHANG CHUN YANG
Position		Deputy General Director
Nationality		Taiwanese

BUSINESS NATURE AND ACTIVITIES

The subject registered the following activities:
- Manufacture and trading in textile and chemical fibers
- Manufacture of synthetic fiber, polyester, artificial fiber
- Manufacture of electricity, cotton, plastic, BOPP…
- Construction industrial infrastructure zone for hire

IMPORT & EXPORT ACTIVITIES

IMPORT:
· Types of products		Machines equipment, Materials
· Market		Taiwan, Japan, China, Philippines, Germany
· Ratio		N/A
· Mode of payment		T/T (Mainly), L/C

EXPORT:
· Market		Turkey, Singapore, Korea, USA, Northern Europe…
· Ratio		53%
· Mode of payment		T/T (Mainly), L/C


BANKERS

1. JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM DONG NAI BRANCH
Address		No 77C Hung Dao Vuong,Trung Dung Ward, Bien Hoa City, Dong Nai Province, Vietnam
Telephone		(84-61) 3823666
Fax		(84-61) 3824191

2. CITI BANK - HOCHIMINH CITY BRANCH
Address		No. 115 Nguyen Hue Street, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
Telephone		(84-8) 3824 2118
Fax		(84-8) 3824 2114

3. FIRST BANK
Address		No.88 Dong Khoi Street, District 1, Ho Chi Minh City, Vietnam
Telephone		(84-8) 8238111
Fax		(84-8) 8221747

4. MEGA INTERNATIONAL COMMERCIAL BANK
Address		No. 5B, Ton Duc Thang Str Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
Telephone		(84-8) 822 5697
Fax		(84-8) 822 5698

5. INDOVINA BANK LIMITED
Address		Nhon Trach Industrial Zone 3, Street 25, Hiep Phuoc Commune, Nhon Trach District, Dong Nai Province, Vietnam
Telephone		(84-61) 3569029
Fax		(84-61) 356902

SHAREHOLDERS

1. NAME		FORMOSA CHEMICALS & FIBRE CORPORATION
Address		No. 359 Chung Shan Road, Section 3 Chang Hua, Taiwan
Tel		886-2-2712-2211
Fax		886-2-22718-0358
Value of shares		USD 259,250,000
Percentage		42.5%

2. NAME		NAN YA PLASTICS CORPORATION
Address		No. 35-1 Chung Shan 3 Road, Kaoshiung City, Taiwan
Tel		886/2/2712-2211
Website		http://www.npc.com.tw/
Value of shares		USD 259,250,000
Percentage		42.5%

3. NAME		FORMOSA TAFFETA CO., LTD
Business Registration		14001199
Date of Registration		19 Apr 1973
Place of Registration		Taiwan
Address		No. 317, Shiu-Liu Road, Liuchung Li, Touliu City, Yunlin Hsien, Taiwan
Tel		886-5-557 3966, 886-5-5537884-5, 886-5-557 3886-7
Fax		886-5-557 3969
Website		www.ftc.com.tw/
Value of shares		USD 61,000,000
Percentage		10%

4. NAME		KING CAR FOOD INDUSTRIAL CO., LTD.
Address		No. 230, Sec. 3, Roosevelt Road, Taipei City, Taiwan
Tel		886 2 23697807
Fax		886 2 23657740
Website		http://www.kingcar.com.tw/
Value of shares		USD 30,500,000
Percentage		5%

FINANCIAL DATA

BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2011	31/12/2010	31/12/2009
Number of weeks	52	52	52
ASSETS
A – CURRENT ASSETS	6,121,336,193,877	5,035,353,021,633	3,420,238,735,332
I. Cash and cash equivalents	403,436,045,083	1,476,169,019,789	320,451,585,945
1. Cash	225,256,407,024	166,474,338,063	153,078,295,481
2. Cash equivalents	178,179,638,059	1,309,694,681,726	167,373,290,464
II. Short-term investments	0	0	0
1. Short-term investments	0	0	0
2. Provisions for devaluation of short-term investments	0	0	0
III. Accounts receivable	1,320,664,257,309	702,776,925,520	583,388,867,953
1. Receivable from customers	1,124,308,464,190	636,528,138,095	401,159,468,337
2. Prepayments to suppliers	135,990,321,616	59,482,360,191	179,884,849,958
3. Inter-company receivable	0	0	0
4. Receivable according to the progress of construction	0	0	0
5. Other receivable	60,365,471,503	6,766,427,234	2,344,549,658
6. Provisions for bad debts	0	0	0
IV. Inventories	3,990,008,858,473	2,718,174,492,380	2,392,640,332,685
1. Inventories	4,187,433,340,903	2,718,174,492,380	2,392,640,332,685
2. Provisions for devaluation of inventories	-197,424,482,430	0	0
V. Other Current Assets	407,227,033,012	138,232,583,944	123,757,948,749
1. Short-term prepaid expenses	19,490,675,578	4,360,681,607	1,892,188,018
2. VAT to be deducted	296,575,690,424	131,063,955,448	119,416,960,702
3. Taxes and other accounts receivable from the State	88,317,740,672	0	0
4. Other current assets	2,842,926,338	2,807,946,889	2,448,800,029
B. LONG-TERM ASSETS	12,002,484,497,382	11,606,814,133,590	8,643,541,817,903
I. Long term accounts receivable	0	0	0
1. Long term account receivable from customers	0	0	0
2. Working capital in affiliates	0	0	0
3. Long-term inter-company receivable	0	0	0
4. Other long-term receivable	0	0	0
5. Provisions for bad debts from customers	0	0	0
II. Fixed assets	11,896,827,855,577	11,493,880,724,815	8,529,792,475,323
1. Tangible assets	10,643,874,404,486	6,297,409,628,662	6,885,938,338,422
- Historical costs	15,739,607,487,176	10,298,127,242,367	10,021,397,482,375
- Accumulated depreciation	-5,095,733,082,690	-4,000,717,613,705	-3,135,459,143,953
2. Financial leasehold assets	0	0	0
- Historical costs	0	0	0
- Accumulated depreciation	0	0	0
3. Intangible assets	145,657,233,345	149,301,217,317	152,945,035,291
- Initial costs	180,524,607,666	180,524,607,666	180,524,607,666
- Accumulated amortization	-34,867,374,321	-31,223,390,349	-27,579,572,375
4. Construction-in-progress	1,107,296,217,746	5,047,169,878,836	1,490,909,101,610
III. Investment property	93,907,001,424	96,303,984,480	98,700,967,536
Historical costs	107,770,817,000	107,770,817,000	107,770,817,000
Accumulated depreciation	-13,863,815,576	-11,466,832,520	-9,069,849,464
IV. Long-term investments	0	0	0
1. Investments in affiliates	0	0	0
2. Investments in business concerns and joint ventures	0	0	0
3. Other long-term investments	0	0	0
4. Provisions for devaluation of long-term investments	0	0	0
V. Other long-term assets	11,749,640,381	16,629,424,295	15,048,375,044
1. Long-term prepaid expenses	11,749,640,381	16,629,424,295	15,048,375,044
2. Deferred income tax assets	0	0	0
3. Other long-term assets	0	0	0
VI. Goodwill	0	0	0
1. Goodwill	0	0	0
TOTAL ASSETS	18,123,820,691,259	16,642,167,155,223	12,063,780,553,235

LIABILITIES
A- LIABILITIES	6,729,816,871,614	5,721,556,008,959	5,192,204,142,461
I. Current liabilities	3,228,960,348,683	2,246,174,298,844	3,537,898,967,431
1. Short-term debts and loans	1,238,830,200,000	140,740,575,241	473,095,081,807
2. Payable to suppliers	1,677,181,647,486	1,899,031,457,733	2,948,072,782,022
3. Advances from customers	74,737,402,324	45,155,720,980	18,043,428,505
4. Taxes and other obligations to the State Budget	90,166,832,014	20,427,070,408	10,257,075,162
5. Payable to employees	24,981,434,855	7,074,244,852	12,498,634,498
6. Accrued expenses	110,962,052,533	116,277,101,589	67,741,180,301
7. Inter-company payable	0	0	0
8. Payable according to the progress of construction contracts	0	0	0
9. Other payable	12,100,779,471	17,468,128,041	8,190,785,136
10. Provisions for short-term accounts payable	0	0	0
II. Long-Term Liabilities	3,500,856,522,931	3,475,381,710,115	1,654,305,175,030
1. Long-term accounts payable to suppliers	0	0	0
2. Long-term inter-company payable	0	0	0
3. Other long-term payable	22,225,954,067	11,936,723,166	9,172,597,000
4. Long-term debts and loans	3,473,248,080,000	3,459,392,727,171	1,641,667,577,023
5. Deferred income tax payable	0	0	0
6. Provisions for unemployment allowances	5,382,488,864	4,052,259,778	3,465,001,007
7. Provisions for long-term accounts payable	0	0	0
B- OWNER’S EQUITY	11,394,003,819,645	10,920,611,146,264	6,871,576,410,774
I. OWNER’S EQUITY	11,394,003,819,645	10,920,611,146,264	6,871,576,410,774
1. Capital	10,177,994,369,586	10,177,994,369,586	7,269,914,369,586
2. Share premiums	0	0	0
3. Other sources of capital	0	0	0
4. Treasury stocks	0	0	0
5. Differences on asset revaluation	0	0	0
6. Foreign exchange differences	0	0	10,960,002,361
7. Business promotion fund	0	0	0
8. Financial reserved fund	0	0	0
9. Other funds	0	0	0
10. Retained earnings	1,216,009,450,059	742,616,776,678	-409,297,961,173
11. Construction investment fund	0	0	0
II. Other sources and funds	0	0	0
1. Bonus and welfare funds	0	0	0
2. Sources of expenditure	0	0	0
3. Fund to form fixed assets	0	0	0
MINORITY’S INTEREST	0	0
TOTAL LIABILITIES AND OWNER’S EQUITY	18,123,820,691,259	16,642,167,155,223	12,063,780,553,235


PROFIT & LOSS STATEMENT

Description	FY2011	FY2010	FY2009
1. Total Sales	15,601,849,589,800	10,892,117,477,516	7,463,541,110,435
2. Deduction item	19,809,750,406	6,990,412,944	37,109,174,419
3. Net revenue	15,582,039,839,394	10,885,127,064,572	7,426,431,936,016
4. Costs of goods sold	14,164,846,359,058	8,938,952,344,338	6,649,555,404,733
5. Gross profit	1,417,193,480,336	1,946,174,720,234	776,876,531,283
6. Financial income	372,058,942,965	132,644,872,608	87,008,632,235
7. Financial expenses	768,112,657,147	382,740,351,917	320,394,101,458
- In which: Loan interest expenses	40,630,941,131	15,420,794,105	25,670,387,908
8. Selling expenses	222,396,035,438	177,900,924,061	130,110,835,358
9. Administrative overheads	358,001,280,994	350,887,164,439	218,827,837,851
10. Net operating profit	440,742,449,722	1,167,291,152,425	194,552,388,851
11. Other income	82,992,236,930	34,947,990,337	22,719,240,837
12. Other expenses	42,523,053,151	22,863,789,136	10,483,665,860
13. Other profit /(loss)	40,469,183,779	12,084,201,201	12,235,574,977
14. Total accounting profit before tax	481,211,633,501	1,179,375,353,626	206,787,963,828
15. Current corporate income tax	7,818,960,120	27,460,615,775	0
16. Deferred corporate income tax	0	0	0
17. Interest from subsidiaries/related companies	0	0	0
18. Profit after tax	473,392,673,381	1,151,914,737,851	206,787,963,828


FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS

Description	FY2011	FY2010	FY2009	Average Industry
Current liquidity ratio	1.90	2.24	0.97	1.65
Quick liquidity ratio	0.66	1.03	0.29	0.95
Inventory circle	4.22	3.50	2.78	5.36
Average receive period	30.94	23.57	28.67	69.02
Utilizing asset performance	0.86	0.65	0.62	1.15
Liability by total assets	37.13	34.38	43.04	55.74
Liability by owner's equity	59.06	52.39	75.56	197.00
Ebit / Total assets (ROA)	2.88	7.18	1.93	11.75
Ebit / Owner's equity (ROE)	4.58	10.94	3.38	26.54
Ebit / Total revenue (NPM)	3.34	10.97	3.11	10.24
Gross profit / Total revenue (GPM)	9.08	17.87	10.41	19.81
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality		Good
Liquidity		Medium/High
Payment status		Above Average
Financial Situation		Strong
Development trend		Positive
Litigation data		No Record
Bankruptcy		No Record
Payment Methods		T/T (Mainly), L/C
Sale Methods		To contracts

INTERPRETATION ON THE SCORES

FORMOSA INDUSTRIES CORPORATION was established in 2001. Currently, it operates under Investment Certificate No. 472023000477 which was issued on 22 May 2008 by Management Board of Dong Nai Industrial Zones.

The head office of the subject is located at Nhon Trach III Industrial Park, Hiep Phuoc Ward - Nhon Trach District - Dong Nai Province – Vietnam. It occupies an area of 30 hectares. Its premises and facilities are fairly good with 4 synthetic fibers factories, 2 plastics factories, 1 small capacity thermal power plants, 1 waste-water treatment plant. It is invested by four companies in Taiwan.

The subject operates the following activities: manufacture and trading in textile and chemical fibers, manufacture of synthetic fiber, polyester, artificial fiber, manufacture of electricity, cotton, plastic, BOPP…, construction industrial infrastructure zone for hire…. Synthetic fibers manufacturing activity is major. Materials and equipment for production are imported from Taiwan, Japan, China, Philippine, Germany. Its complete products are exported to Turkey, Singapore, Korea, USA, and Northern Europe… The subject's current position in the industry is high. Currently it is considered as one of the biggest foreign invested companies in Vietnam. The management capacity is fairly good. The financial situation is fairly good.

In overview, the subject is considered as one of the biggest foreign investment capital in Vietnam. It has advantages of developing. It is supported from its shareholders such as capital, management, technique and market… The subject has ability to meet all medium business transactions.

----------- 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.54.84
UK Pound	1	Rs.88.55
Euro	1	Rs.72.63

INFORMATION DETAILS

Report Prepared by :

PRL

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

SUBJECT IDENTIFICATION & LEGAL FORM

Current legal status

ADDRESSES

DIRECTORS

BUSINESS NATURE AND ACTIVITIES

BANKERS

SHAREHOLDERS

FINANCIAL DATA

Unit: One VND

ASSETS

LIABILITIES

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

INTERPRETATION ON THE SCORES

INDUSTRY DATA

ECONOMIC INDICATORS

SERVICE TRADE PERFORMANCE

Unit