MIRA INFORM REPORT

Report Date :

05.06.2012

IDENTIFICATION DETAILS

Name :	JULIE SANDLAU VIETNAM COMPANY LIMITED
Registered Office :	Km 9, Lang Hoa Lac, An Khanh, Hoai Duc District, Ha Noi City
Country :	Vietnam
Financials (as on) :	31.12.2010
Year of Establishment :	2006
Legal Form :	Limited Liability Company
Line of Business :	manufacturing, Processing Jewelry Products
No. of Employees :	50

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

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 – March 31^st, 2012

Country Name	Previous Rating (31.12.2011)	Current Rating (31.03.2012)
Vietnam	B1	B1

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

SUBJECT IDENTIFICATION & LEGAL FORM

English Name	JULIE SANDLAU VIETNAM COMPANY LIMITED
Vietnamese Name	CONG TY TNHH JULIE SANDLAU VIET NAM
Type of Business	Limited liability company
Year Established	2006
Investment Certificate No	011043000783
Latest Date Of Issuance	16 Mar 2010
Place of Issuance	Ha Noi People's Committee
Registered Investment Capital	USD 300,000
Chartered capital	USD 100,000
Status	Unlisted
Tax code	0102029255
Total Employees	50

company ADDRESSES

Head Office
Address	Km 9, Lang Hoa Lac, An Khanh, Hoai Duc District, Ha Noi City, Vietnam
Telephone	(84 - 4) 33656768
Fax	(84 - 4) 33656768

SUBSIDIARIES AND RELATED COMPANIES

1. PARENT COMPANY - JULIE SANDLAU APS
Address	Denmark

DIRECTORS

1. NAME	Mr. SOREN ROED PEDERSEN
Position	Director
ID Number/Passport	203191187
Nationality	Danish
2. NAME	Ms. HO BICH NGOC
Position	Chief Accountant
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

The subject specializes in manufacturing, processing jewelry products.

IMPORT & EXPORT ACTIVITIES

IMPORT:
· Market	Denmark
EXPORT:
· Market	Denmark

BANKERS

1. JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM
Address	No. 198 Tran Quang Khai Street, Hoan Kiem District, Ha Noi City, Vietnam
Telephone	(84-4) 3934 3137 / (84-4) 3814 8919
Fax	(84-4) 3826 9067 / (84-4) 3825 1322

SHAREHOLDERS

1. NAME	JULIE SANDLAU APS
Address	Denmark
Percentage	100%

FINANCIAL DATA

BALANCE SHEET
Unit: Million VND
Balance sheet date	31/12/2010	31/12/2009
Number of weeks	52	52
ASSETS
A – CURRENT ASSETS	3,042	4,879
I. Cash and cash equivalents	570	848
1. Cash	570	848
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	741	262
1. Receivable from customers	149	0
2. Prepayments to suppliers	153	227
3. Inter-company receivable	437	0
4. Receivable according to the progress of construction	0	0
5. Other receivable	2	35
6. Provisions for bad debts	0	0
IV. Inventories	899	1,839
1. Inventories	2,194	1,839
2. Provisions for devaluation of inventories	-1,295	0
V. Other Current Assets	832	1,930
1. Short-term prepaid expenses	217	251
2. VAT to be deducted	541	446
3. Taxes and other accounts receivable from the State	2	1
4. Other current assets	72	1,232
B. LONG-TERM ASSETS	2,035	2,305
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	899	2,101
1. Tangible assets	885	2,095
- Historical costs	2,733	3,709
- Accumulated depreciation	-1,848	-1,614
2. Financial leasehold assets	0	0
- Historical costs	0	0
- Accumulated depreciation	0	0
3. Intangible assets	14	6
- Initial costs	27	12
- Accumulated amortization	-13	-6
4. Construction-in-progress	0	0
III. Investment property	0	0
Historical costs	0	0
Accumulated depreciation	0	0
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	1,136	204
1. Long-term prepaid expenses	1,011	204
2. Deferred income tax assets	0	0
3. Other long-term assets	125	0
VI. Goodwill	0	0
1. Goodwill	0	0
TOTAL ASSETS	5,077	7,184
LIABILITIES
A- LIABILITIES	45,362	26,256
I. Current liabilities	44,849	24,967
1. Short-term debts and loans	37,794	22,048
2. Payable to suppliers	31	1,202
3. Advances from customers	0	550
4. Taxes and other obligations to the State Budget	60	25
5. Payable to employees	67	391
6. Accrued expenses	620	224
7. Inter-company payable	5,315	0
8. Payable according to the progress of construction contracts	0	0
9. Other payable	962	527
10. Provisions for short-term accounts payable	0	0
II. Long-Term Liabilities	513	1,289
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	384	1,226
5. Deferred income tax payable	0	0
6. Provisions for unemployment allowances	129	63
7. Provisions for long-term accounts payable	0	0
B- OWNER’S EQUITY	-40,285	-19,072
I. OWNER’S EQUITY	-40,285	-19,072
1. Capital	1,600	1,600
2. Share premiums	0	0
3. Other sources of capital	0	0
4. Treasury stocks	0	0
5. Differences on asset revaluation	0	0
6. Foreign exchange differences	0	-660
7. Business promotion fund	0	0
8. Financial reserved fund	0	0
9. Other funds	0	0
10. Retained earnings	-41,885	-20,012
11. Construction investment fund	0	0
II. Other sources and funds	0	0
1. Bonus and welfare funds	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	5,077	7,184

PROFIT & LOSS STATEMENT
Description	FY2010	FY2009
1. Total Sales	3,975	n/a
2. Deduction item	0	-
3. Net sale	3,975	-
4. Costs of goods sold	12,547	-
5. Gross profit	-8,572	-
6. Financial income	19	-
7. Financial expenses	1,161	-
- In which: Loan interest expenses	76	-
8. Selling expenses	18	-
9. Administrative overheads	10,591	-
10. Net operating profit	-20,323	-
11. Other income	558	-
12. Other expenses	1,245	-
13. Other profit /(loss)	-687	-
14. Total accounting profit before tax	-21,010	-
15. Current corporate income tax	0	-
16. Deferred corporate income tax	0	-
17. Interest from subsidiaries/related companies	0	-
18. Profit after tax	-21,010	-

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2010	FY2009	Average Industry
Current liquidity ratio	0.07	0.20	1.23
Quick liquidity ratio	0.05	0.12	0.64
Inventory circle	9.17	-	4.94
Average receive period	68.04	-	71.93
Utilizing asset performance	0.78	-	1.24
Liability by total assets	893.48	365.48	62.81
Liability by owner's equity	-112.60	-137.67	196.78
Ebit / Total assets (ROA)	-412.33	-	7.80
Ebit / Owner's equity (ROE)	51.96	-	21.65
Ebit / Total sale (NPM)	-526.64	-	6.58
Gross profit / Total sale (GPM)	-215.65	-	10.46
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Normal
Liquidity	Low
Payment status	Limited
Financial Situation	Below Average
Development trend	Negative
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	Through its banks
Sale Methods	Wholesaler
Public opinion	Normal

CREDIT INQUIRY: 125,000 USD Against DA terms – Please Caution.

INTERPRETATION ON THE SCORES

JULIE SANDLAU VIETNAM COMPANY LIMITED was established in 2006 as a foreign invested company. Its parent company is JULIE SANDLAU APS in Denmark. Currently, it is operated under Investment Certificate No. 011043000783 and tax code 0102029255.

The subject specializes in manufacturing, processing jewelry products. Most of them are made from Silver. The subject plays a role working for its parent company. So, it imports from its parent company and after that it exports to Denmark.

Its head office and factory are located at Km 9, Lang Hoa Lac An Khanh, Hoai Duc District, Ha Noi City, Vietnam. The facilities and premises are average. Its director is Danish. The management ability is normal.

According to the financial statement of the subject, we can see that its financial status were not good. In 2010, the subject gained VND 3,975 million in total sales but it lost VND 21,010 million. This is a big loss. In addition, the retained earnings of the subject were negative. So, its owner’s equity was negative, too. This was very dangerous for it activities of the subject. It is at risk of bankruptcy. Its financial ratios were bad, too. Liquidity ratios were very low (only 0.07 and 0.05)

In general, its operation and business activities were not effective. The subject must try to overcome this situation. Please caution with its financial commitments.

APPENDIX

INDUSTRY DATA
Industry code	Growth speed by price compared with 1994 (%)		Total enterprises 2009		Total employees 2010 (Thous.pers.)	Annual average capital of enterprises 2009 (billion dongs)
	2011	2010
Agriculture, Forestry and Fishing	4.00	2.78	8,749		23,896.3	81,559
Industry and Construction	5.53	7.70	85,115		10,630	2,751,975
Trade and Services	6.69	7.52	154,978		14,522	4,939,069
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

DIAMOND INDUSTRY – INDIA

- From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8^th Century B.C.  India, in fact, remained undisputed leader till 18^th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

- The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

- The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

- Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

- Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

- The diamond jewellery industry in India today may be more than Rs 60000 mil and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

- Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

- Excerpts from Times of India dated 30^th October 2010 is as under –

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

- Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.52
UK Pound	1	Rs.85.29
Euro	1	Rs.68.86

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