MIRA INFORM REPORT

Report Date :

20.03.2012

IDENTIFICATION DETAILS

Name :	LOVETEX INDUSTRIAL VIETNAM COMPANY LIMITED
Registered Office :	Lot 212 Road 4 AMATA Industrial Park, Long Binh Ward, Bien Hoa City, Dong Nai Province
Country :	Vietnam
Financials (as on) :	31.12.2010
Year of Establishment :	2005
Legal Form :	Foreign Invested Company
Line of Business :	manufacturing garment accessories such as rough snap, rough courses, hook & loop
No. of Employees :	114

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 :	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 – September 30^th, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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

Current legal status
English Name	LOVETEX INDUSTRIAL VIETNAM COMPANY LIMITED
Vietnamese Name	CONG TY TNHH LOVETEX INDUSTRIAL VIETNAM
Type of Business	Foreign invested company
Year Established	2005
Investment Certificate No	472023000680
Date Of Issuance	21 Feb 2006
Place of Issuance	Dongnai Industrial Zone Authority
Registered Investment Capital	USD 9,000,000
Chartered capital	USD 3,643,944
Status	Unlisted
Tax code	3600786729
Total Employees	114
Size	Medium
Note: The given subject’s name LOVETEX INDUSTRIAL VN CO LTD is incorrect. The correct one is as above.

Historical Identification & Legal form

List	Changed Items
1	Subject has got former Investment Certificate No: 429/GP-KCN-DN Changed to: 472023000680

company ADDRESSES

Head Office
Address	Lot 212 Road 4 AMATA Industrial Park, Long Binh Ward, Bien Hoa City, Dong Nai Province, Vietnam
Telephone	(84-61) 3936439/40
Fax	(84-61) 3936441
Note: - The given number phone belongs to Mr. SIMON CHOU – The subject’s Sales manager. - The correct address of the subject is as above.

PARENT COMPANY

LOVETEX INDUSTRIAL CORP
Address	6F No. 66 - Sec 2 Nanking E Road , Taipei , Taiwan
Tel	(886-2) 2565 2340
Fax	(886-2) 25629091

DIRECTORS

1. NAME	Mr. TAI HUNG-YI
Position	Director
ID Number/Passport	131614347
Nationality	Taiwan
Tel/Mobil phone	(84-61) 3936439
2. NAME	Ms. PHAN THI HUONG GIANG
Position	Chief Accountant
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

The subject specializes in manufacturing garment accessories such as rough snap, rough courses, hook & loop

IMPORT & EXPORT ACTIVITIES

IMPORT:
· Types of products	Machinery
· Market	Taiwan, Korea, China
· Mode of payment	L/C, T/T
EXPORT:
· Types of products	Garment accessories
· Market	Taiwan, India, Thailand, USA
· Ratio	65%
· Mode of payment	L/C, T/T

BANKERS

1. INDOVINA BANK LIMITED
Address	No.46-48-50 Pham Hong Thai str - Ben Thanh ward, 1 District, Ho Chi Minh City, Vietnam
Telephone	(84-8) 3822 4995, 3914 1758, 3914 0232
Fax	(84-8) 3823 0131
2. JOINT STOCK BANK FOR FOREIGN TRADE OF VIETNAM DONG NAI BRANCH
Address	No. 14C Dong Khoi Str Tan Phong Ward, Bien Hoa City, Dong Nai Province, Vietnam
Telephone	(84-61) 38871117
Fax	(84-61) 38871119

SHAREHOLDERS

1. NAME	LOVETEX INDUSTRIAL CORP
Address	6F No. 66 - Sec 2 Nanking E Road, Taipei , Taiwan
Tel	(886-2) 2565 2340
Fax	(886-2) 25629091
Value of shares	USD 3,000,000
Percentage	100%

FINANCIAL DATA

BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2010	31/12/2009
Number of weeks	52	52
ASSETS
A – CURRENT ASSETS	62,574,856,700	41,173,447,643
I. Cash and cash equivalents	2,352,829,956	3,624,841,260
1. Cash	2,352,829,956	3,624,841,260
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	20,820,146,342	5,336,047,115
1. Receivable from customers	19,332,687,824	5,295,985,235
2. Prepayments to suppliers	3,288,682	11,441,352
3. Inter-company receivable	0	0
4. Receivable according to the progress of construction	0	0
5. Other receivable	1,484,169,836	28,620,528
6. Provisions for bad debts	0	0
IV. Inventories	38,971,854,986	31,205,739,905
1. Inventories	38,971,854,986	31,205,739,905
2. Provisions for devaluation of inventories	0	0
V. Other Current Assets	430,025,416	1,006,819,363
1. Short-term prepaid expenses	424,025,416	64,773,489
2. VAT to be deducted	0	936,045,874
3. Taxes and other accounts receivable from the State	0	0
4. Other current assets	6,000,000	6,000,000
B. LONG-TERM ASSETS	54,304,844,987	52,928,893,364
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	53,809,848,126	52,007,827,529
1. Tangible assets	38,666,692,230	36,417,090,677
- Historical costs	49,236,518,691	42,541,470,113
- Accumulated depreciation	-10,569,826,461	-6,124,379,436
2. Financial leasehold assets	0	0
- Historical costs	0	0
- Accumulated depreciation	0	0
3. Intangible assets	15,143,155,896	15,590,736,852
- Initial costs	16,560,495,590	16,560,495,590
- Accumulated amortization	-1,417,339,694	-969,758,738
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	494,996,861	921,065,835
1. Long-term prepaid expenses	494,996,861	921,065,835
2. Deferred income tax assets	0	0
3. Other long-term assets	0	0
VI. Goodwill	0	0
1. Goodwill	0	0
TOTAL ASSETS	116,879,701,687	94,102,341,007
LIABILITIES
A- LIABILITIES	65,438,873,042	47,515,563,692
I. Current liabilities	65,438,873,042	47,515,563,692
1. Short-term debts and loans	1,642,801,836	1,494,361,836
2. Payable to suppliers	62,850,406,383	45,004,862,913
3. Advances from customers	0	467,957,438
4. Taxes and other obligations to the State Budget	143,145,475	130,558,263
5. Payable to employees	318,732,435	315,127,803
6. Accrued expenses	15,951,000	0
7. Inter-company payable	0	0
8. Payable according to the progress of construction contracts	0	0
9. Other payable	467,835,913	102,695,439
10. Provisions for short-term accounts payable	0	0
II. Long-Term Liabilities	0	0
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	0	0
5. Deferred income tax payable	0	0
6. Provisions for unemployment allowances	0	0
7. Provisions for long-term accounts payable	0	0
B- OWNER’S EQUITY	51,440,828,645	46,586,777,315
I. OWNER’S EQUITY	51,440,828,645	46,586,777,315
1. Capital	48,667,881,239	48,667,881,239
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	0
7. Business promotion fund	0	0
8. Financial reserved fund	0	0
9. Other funds	0	0
10. Retained earnings	2,772,947,406	-2,081,103,924
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	116,879,701,687	94,102,341,007

PROFIT & LOSS STATEMENT
Description	FY2010	FY2009
1. Total Sales	72,241,568,168	30,539,135,880
2. Deduction item	55,447,483
3. Net revenue	72,186,120,685	30,539,135,880
4. Costs of goods sold	59,548,103,715	26,473,834,136
5. Gross profit	12,638,016,970	4,065,301,744
6. Financial income	2,271,630,021	1,226,526,923
7. Financial expenses	4,217,722,048	1,210,082,882
- In which: Loan interest expenses
8. Selling expenses	2,619,503,572	1,755,182,204
9. Administrative overheads	3,387,341,372	2,748,074,192
10. Net operating profit	4,685,079,999	-421,510,611
11. Other income	168,971,331	131,234,994
12. Other expenses
13. Other profit /(loss)	168,971,331	131,234,994
14. Total accounting profit before tax	4,854,051,330	-290,275,617
15. Current corporate income tax
16. Deferred corporate income tax
17. Interest from subsidiaries/related companies
18. Profit after tax	4,854,051,330	-290,275,617

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2010	FY2009	Average Industry
Current liquidity ratio	0.96	0.87	1.61
Quick liquidity ratio	0.36	0.21	0.72
Inventory circle	1.70	0.85	6.41
Average receive period	105.27	63.78	40.98
Utilizing asset performance	0.62	0.32	1.30
Liability by total assets	55.99	50.49	58.19
Liability by owner's equity	127.21	101.99	206.32
Ebit / Total assets (ROA)	4.15	-0.31	8.26
Ebit / Owner's equity (ROE)	9.44	-0.62	21.07
Ebit / Total revenue (NPM)	6.72	-0.95	5.03
Gross profit / Total revenue (GPM)	17.49	13.31	12.08
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Normal
Liquidity	Medium
Payment status	Normal
Financial Situation	Average
Development trend	Positive
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	L/C, T/T
Sale Methods	To contracts
Public opinion	Well-known

INTERPRETATION ON THE SCORES

LOVETEX INDUSTRIAL VIETNAM COMPANY LIMITED was established a 100% Taiwanese invested company under the former investment certificate No. 429/GP-KCN-DN, granted by Dong Nai Industrial Zone Authority on 14 Nov 2005. The subject has changed investment certificate to No. 472023000680 following as new business legal.

The subject specializes in manufacturing garment accessories. Its main products are rough snap, rough courses, hook & loop tapes. Currently, its raw material is mainly imported from Taiwan and supplied by domestic market but sometimes the subject also import material from China. 60% of its output is exported to foreign market as Taiwan, India, Thailand, USA. Its market share is acceptable.

The garment industry in Vietnam is developing strongly with large demand on material and garment accessories. Moreover, the competition in garment accessories manufacturing field is low because of humble competitor firms. Thus, this field has bright prospect.

The facilities of the subject are fair with only head office and factory at Lot 212 Road 4 AMATA Industrial Park Long Binh Ward - Bien Hoa City - Dong Nai Province. This place is fairly convenient for its operation and goods transportation. Its factory was equipped machinery line and transferred technology from Taiwan and Korea. Currently, it is preparing for application of the quality management system ISO 9001: 2008. This plan is expected finishing in near future.

According to financial data in 2010, the subject’s business operation was improved. Its retained earning account was positive. Moreover, in 2011 its revenue and profit was about VND 101 billion, VND 5 billion respectively.

The subject’s liability ratio was moderate. In last 2010 it increased from 50.49% to 55.99%, show its capital structure was not risky. Thus, its self-financing and solvency were fairly good.

In 2010, although the subject's debt rate was moderate, current liquidity was still low because it remained the high short-term liabilities ratio. Moreover, as in 2010 it remained the considerable inventory rate its quick liquidity was poor too.

In 2010, the subject's utilizing asset performances increased slightly and it still lower in comparison with the industry. Its receivables turnover was low because the subject applied the looser credit policies for its customers. Its profitability was not high because its total assets turnover was low. The ROA and ROE were 4.15%, 9.44% respectively. Its future prospect is bright.

In conclusion, the company’s finance and operation status is fair. The subject is expected to be more stable and developing in the coming years. The company has capacity to meet normal 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

Source: General Statistics Office

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.50.12
UK Pound	1	Rs.79.37
Euro	1	Rs.66.02

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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