MIRA INFORM REPORT

Report Date :

29.12.2012

IDENTIFICATION DETAILS

Name :	MACHINERY JOINT STOCK COMPANY

Registered Office :	Km 9 Nguyen Trai Street Thanh Xuan Bac Ward, Thanh Xuan District, Ha Noi City

Country :	Vietnam

Financials (as on) :	31.12.2011

Date of Incorporation :	1959

Com. Reg. No.:	0500233549

Legal Form :	Joint stock company

Line of Business :	Trading machinery, equipment, spare parts and production line

No. of Employees :	95

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

(31.03.2012)

Current Rating

(30.06.2012)

Vietnam

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		MACHINERY JOINT STOCK COMPANY
Vietnamese Name		CONG TY CO PHAN THIET BI
Short name		MACHINCO1
Type of Business		Joint stock company
Year Established		1959
Establishment Decision		2357/QD-BTM
Date of Issuance		14 Sep 2005
Place of Issuance		Ministry of Industrial and Trade
Business Registration No.		0500233549
Date of Registration		19 Jul 2011
Place of Registration		Hanoi Department of Planning and Investment
Chartered capital		VND 31,944,160,000
Status		Unlisted
Tax code		0500233549
Total Employees		95
Size		Medium

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Chartered capital: VND 31,944,160,000 Changed to: VND 36,735,090,000	19 Jul 2011
2	Subject has got former Business Registration No: 0103011186 Changed to: 0500233549	19 Jul 2011
3	Subject has got former Chartered capital: VND 30,136,500,000 Changed to: VND 31,944,160,000	Jun 2009
4	Subject has got former Chartered capital: VND 24,303,000,000 Changed to: VND 30,136,500,000	2008
5	Subject has got former Chartered capital: VND 18,000,000,000 Changed to: VND 24,303,000,000	Apr 2007
6	Subject has got former Type of Business: State Enterprise Changed to: Joint stock company	Apr 2006

ADDRESSES

Head Office
Address		Km 9 Nguyen Trai Street Thanh Xuan Bac Ward, Thanh Xuan District, Ha Noi City, Vietnam
Telephone		(84-4) 38541022
Fax		(84-4) 38542276
Email		tochucmachinco1@vnn.vn
Website		www.machinco1.com.vn

DIRECTORS

1. NAME		Mr. VU THANH TUNG
Position		Chairman - General Director
Date of Birth		09 Oct 1960
ID Number/Passport		012801417
ID Issue Date		09 Jun 2005
ID Issue Place		Hanoi Department of Planning and Investment
Resident		No. 47 Lane 19, Lac Trung Street, Vinh Tuy Ward, Hai Ba Trung District, Ha Noi City, Vietnam
Nationality		Vietnamese

2. NAME		Mr. PHAM MANH KIEM
Position		Vice General Director
Date of Birth		07 Nov 1963
ID Number/Passport		111152181
ID Issue Date		12 Jul 2004
ID Issue Place		Ha Tay Department of Planning and Investment
Resident		Mo Lao Hamlet Van Mo Commune, Ha Dong District, Ha Noi City, Vietnam
Nationality		Vietnamese

3. NAME		Ms. LE THI NAM HA
Position		Vice General Director
Date of Birth		31 Dec 1960
ID Number/Passport		011115913
ID Issue Date		14 Sep 1999
ID Issue Place		Hanoi Department of Planning and Investment
Resident		No. 47 Lane 47, Khuong Trung Ward, Thanh Xuan District, Ha Noi City, Vietnam
Nationality		Vietnamese

BUSINESS NATURE AND ACTIVITIES

- Trading machinery, equipment, spare parts and production line
- Trading materials for industrial production
- Trading electronics products, agriculture products, steel and bar steel,
- Trading car and spare parts
- Trading real estate projects
- Trading consumer products

IMPORT & EXPORT ACTIVITIES

IMPORT:
Types of products		Steel, machinery
Market		EU, India, China, Singapore.
Mode of payment		TT, L/C

EXPORT:
Note: Currently, the subject does not export

BANKERS

1. VIET NAM BANK FOR AGRICULTURE AND RURAL DEVELOPMENT NAM HA NOI BRANCH
Address		C3 Building Phuong Liet, Thanh Xuan District, Ha Noi City, Vietnam
Telephone		(84-4) 38687092
Fax		(84-4) 38687062

2. JOINT STOCK BANK FOR FOREIGN TRADE OF VIETNAM HA NOI BRANCH
Address		No. 78 Nguyen Du Str, Hoan Kiem District, Ha Noi City, Vietnam
Telephone		(84-4) 38268035
Fax		(84-4) 38228039

SHAREHOLDERS

1. NAME		STATE CAPITAL INVESTMENT CORPORATION
Business Registration		0101992921
Date of Registration		09 Jul 2010
Place of Registration		Ha Noi Planning and Investment Department
Registered Capital		VND 19,000,000,000,000
Tax code		0101992921
Address		No. 15A Tran Khanh Du Str., Hoan Kiem District, Ha Noi City, Vietnam
Tel		(84-4) 62780126
Fax		(84-4) 62780136
Value of shares		VND 2,720,800,000
Percentage		7.41%

2. NAME		OTHER SHAREHOLDERS
Value of shares		VND 34,014,290,000
Percentage		92.59%

FINANCIAL DATA

BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2011	31/12/2010
Number of weeks	52	52
Audition status	Audited	Audited
ASSETS
A – CURRENT ASSETS	47,579,467,475	43,419,081,012
I. Cash and cash equivalents	20,222,293,277	29,315,542,964
1. Cash	20,222,293,277	29,315,542,964
2. Cash equivalents	0	0
II. Short-term investments	0	0
1. Short-term investments	0	0
2. Provisions for devaluation of short-term investments	0	0
III. Accounts receivable	25,610,754,999	12,964,324,152
1. Receivable from customers	25,269,368,819	12,532,276,463
2. Prepayments to suppliers	0	0
3. Inter-company receivable	0	0
4. Receivable according to the progress of construction	0	0
5. Other receivable	957,098,567	844,709,701
6. Provisions for bad debts	-615,712,387	-412,662,012
IV. Inventories	1,008,326,122	676,253,251
1. Inventories	1,008,326,122	676,253,251
2. Provisions for devaluation of inventories	0	0
V. Other Current Assets	738,093,077	462,960,645
1. Short-term prepaid expenses	0	0
2. VAT to be deducted	0	0
3. Taxes and other accounts receivable from the State	0	0
4. Other current assets	738,093,077	462,960,645
B. LONG-TERM ASSETS	37,446,463,489	35,090,886,531
I. Long term accounts receivable	0	0
1. Long term account receivable from customers	0	0
2. Working capital in affiliates	0	0
3. Long-term inter-company receivable	0	0
4. Other long-term receivable	0	0
5. Provisions for bad debts from customers	0	0
II. Fixed assets	23,859,492,721	20,782,871,834
1. Tangible assets	18,508,830,374	17,072,859,487
- Historical costs	52,334,305,654	50,155,649,682
- Accumulated depreciation	-33,825,475,280	-33,082,790,195
2. Financial leasehold assets	0	0
- Historical costs	0	0
- Accumulated depreciation	0	0
3. Intangible assets	20,000,000	0
- Initial costs	35,000,000	15,000,000
- Accumulated amortization	-15,000,000	-15,000,000
4. Construction-in-progress	5,330,662,347	3,710,012,347
III. Investment property	12,701,717,542	12,983,977,932
Historical costs	14,295,212,951	14,295,212,951
Accumulated depreciation	-1,593,495,409	-1,311,235,019
IV. Long-term investments	0	0
1. Investments in affiliates	0	0
2. Investments in business concerns and joint ventures	0	0
3. Other long-term investments	0	0
4. Provisions for devaluation of long-term investments	0	0
V. Other long-term assets	885,253,226	1,324,036,765
1. Long-term prepaid expenses	0	0
2. Deferred income tax assets	0	0
3. Other long-term assets	885,253,226	1,324,036,765
VI. Goodwill	0	0
1. Goodwill	0	0
TOTAL ASSETS	85,025,930,964	78,509,967,543

LIABILITIES
A- LIABILITIES	29,802,730,492	35,524,459,581
I. Current liabilities	25,596,472,723	13,716,892,305
1. Short-term debts and loans	13,605,405,664	8,938,723,371
2. Payable to suppliers	7,023,443,777	811,802,189
3. Advances from customers	137,751,021	317,889,586
4. Taxes and other obligations to the State Budget	0	0
5. Payable to employees	0	0
6. Accrued expenses	0	0
7. Inter-company payable	0	0
8. Payable according to the progress of construction contracts	0	0
9. Other payable	4,829,872,261	3,648,477,159
10. Provisions for short-term accounts payable	0	0
11. Bonus and welfare funds	0	0
II. Long-Term Liabilities	4,206,257,769	21,807,567,276
1. Long-term accounts payable to suppliers	0	0
2. Long-term inter-company payable	0	0
3. Other long-term payable	0	0
4. Long-term debts and loans	4,206,257,769	21,807,567,276
5. Deferred income tax payable	0	0
6. Provisions for unemployment allowances	0	0
7. Provisions for long-term accounts payable	0	0
8. Unearned Revenue	0	0
9. Science and technology development fund	0	0
B- OWNER’S EQUITY	55,223,200,472	42,985,507,962
I. OWNER’S EQUITY	55,223,200,472	42,985,507,962
1. Capital	36,735,090,000	31,944,160,000
2. Share premiums	106,064,590	106,064,590
3. Other sources of capital	0	0
4. Treasury stocks	0	0
5. Differences on asset revaluation	0	0
6. Foreign exchange differences	11,190,436	125,220,891
7. Business promotion fund	4,835,448,233	1,550,714,550
8. Financial reserved fund	883,684,248	383,684,248
9. Other funds	0	0
10. Retained earnings	12,651,722,965	8,875,663,683
11. Construction investment fund	0	0
12. Business arrangement supporting fund	0	0
II. Other sources and funds	0	0
1. Bonus and welfare funds (Elder form)	0	0
2. Sources of expenditure	0	0
3. Fund to form fixed assets	0	0
MINORITY’S INTEREST	0	0
TOTAL LIABILITIES AND OWNER’S EQUITY	85,025,930,964	78,509,967,543

PROFIT & LOSS STATEMENT

Description	FY2011	FY2010
1. Total Sales	89,630,419,249	109,267,659,992
2. Deduction item		52,472,542
3. Net revenue	89,630,419,249	109,215,187,450
4. Costs of goods sold	68,491,186,927	89,742,648,151
5. Gross profit	21,139,232,322	19,472,539,299
6. Financial income	3,963,096,608	1,552,039,498
7. Financial expenses	3,430,919,254	2,679,533,812
- In which: Loan interest expenses	2,856,080,451	2,071,233,214
8. Selling expenses	2,693,962,453	3,682,494,911
9. Administrative overheads	3,312,407,545	2,914,406,973
10. Net operating profit	15,665,039,678	11,748,143,101
11. Other income	482,721,159	160,195,573
12. Other expenses	325,718,931	59,616,202
13. Other profit /(loss)	157,002,228	100,579,371
14. Total accounting profit before tax	15,822,041,906	11,848,722,472
15. Current corporate income tax	3,170,318,941	2,973,058,789
16. Deferred corporate income tax
17. Interest from subsidiaries/related companies
18. Profit after tax	12,651,722,965	8,875,663,683

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS

Description	FY2011	FY2010	Average Industry
Current liquidity ratio	1.86	3.17	1.60
Quick liquidity ratio	1.82	3.12	0.95
Inventory circle	81.32	132.71	8.86
Average receive period	104.29	43.33	85.75
Utilizing asset performance	1.05	1.39	1.86
Liability by total assets	35.05	45.25	60.56
Liability by owner's equity	53.97	82.64	254.73
Ebit / Total assets (ROA)	21.97	17.73	9.21
Ebit / Owner's equity (ROE)	33.82	32.38	28.87
Ebit / Total revenue (NPM)	20.84	12.74	7.68
Gross profit / Total revenue (GPM)	23.58	17.82	15.58
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		Above Average
Development trend		Positive
Litigation data		No Record
Bankruptcy		No Record
Payment Methods		TT, L/C
Sale Methods		Retailer and Wholesaler
Public opinion		Good

INTERPRETATION ON THE SCORES

The subject was state owned company which establishment in 1959. Since the date of establishment, the subject has merged with several state owned enterprise and re-establishment in 1993. In 1993, the subject also under management of Ministry of Trade (now is Ministry of Industrial and Trade). In 2005, the organization in charge of the subject has issued a decision to equitizing the subject. Now it is joint stock company and state still holding amount of stock.

The business activities of the subject are import materials for industrial production. It also exports some kinds of footwear to foreign market. Besides that, the subject trades electronics products for local market, office for lease service and preparing for investment into real estate projects. The products that the subject mainly imports from foreign are stainless steel, construction steel and billet steel. It is considered a large company in supply billet steel and stainless steel in local area.

Currently, the subject is operating with chartered capital as VND 31,944,160,000 billion is considerable equity capital in comparison with other companies in the same field. Up to now its total labors are 95 employees working for the subject. Throughout more 50 years operation, the company was also awarded many achievements. Market share of the subject are throughout Vietnam.

In terms of financial position, operating result of the subject in 2011 was reduced in comparison with 2010. Because of decreased in revenues, its total assets turnover was reduced to 1.05 and was lower the industry. The retained earnings were fair thus its profitable was fairly good. The profitability ratio was higher compared with the average industry, especially ROA ratio. Moreover, liquidity ratios were also higher than the industry; its liquidity was around 1.8. It could be seen that average receivable period was longer than the average industry. Liability over total assets and liability over total equity ratio was low so its capital structure was safe.

Overall, the subject is medium company has long time of operation. Its developing prospect seems bright. It is reliable for normal financial obligations.

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.54.85
UK Pound	1	Rs.88.40
Euro	1	Rs.72.63

INFORMATION DETAILS

Report Prepared by :

SDA

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