MIRA INFORM REPORT

Report Date :

10.10.2012

IDENTIFICATION DETAILS

Name :	DOTIHU CO., LTD
Registered Office :	Lot IV.11 Road No.4 - Tan Binh Industrial Zone - Tay Thanh Ward, Tan Phu District, Ho Chi Minh City
Country :	Vietnam
Financials (as on) :	31.12.2011
Date of Incorporation :	04.08.1999
Legal Form :	Limited Liability Company
Line of Business :	Spinning, weaving and finishing of textiles
No. of Employees :	300

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 (31.03.2011)	Current Rating (30.06.2012)
Viet Nam	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
English Name (Registered)	DOTIHU CO., LTD
Vietnamese Name (registered)	CONG TY TNHH SAN XUAT-THUONG MAI DONG TIEN HUNG
Short name (registered)	DONG TIEN HUNG CO., LTD
Type of Business	Limited liability company
Year Established	1999
Establishment Decision	1782/GP-UB
Date of Issuance	04 Aug 1999
Place of Issuance	People's Committee of Ho Chi Minh city
Business Registration No.	0301792743
Date of Registration	10 Jul 2009 (09^th adjustment)
Place of Registration	Business Registration Office – Planning and Investment Department of Ho Chi Minh City
Chartered capital	VND 60,000,000,000
Total Employees	300

Historical Identification & Legal form

List	Changed Items
1	Subject has got former Business Registration No: 072886 which was first issued on 07 Aug 1999 Changed to: 0301792743
ADDRESSES
Head Office
Address		Lot IV.11 Road No.4 - Tan Binh Industrial Zone - Tay Thanh Ward, Tan Phu District, Ho Chi Minh City, Vietnam
Telephone		(84-8) 3815 2002 - 3815 8649 / 38159194 / 38159762 / 38153668
Fax		(84-8) 3815 2532

RELATED COMPANIES
1. DOTIHUTEX COMPANY LIMITED
Vietnamese Name (registered)	CONG TY TNHH DET DONG TIEN HUNG
Trade name (registered)	DOTIHUTEX CO., LTD
Short name (registered)	DTH CO., LTD
Type of Business	Limited liability company
Year Established	2004
Business Registration No.	3700573932
Date of Registration	25 Jul 2011 (06^th adjustment)
Place of Registration	Business Registration Office - Planning and Investment Department of Binh Duong province
Chartered capital	VND 170,000,000,000
Tax code	3700573932
Address	Lot 1.2 Section A - Road 4 - Tan Dong Hiep A Industrial zone , Di An Town, Binh Duong Province, Vietnam
Telephone	(84-650) 3729653
Fax	(84-650) 3729583
Email	dotihutex@hcm.vnn.vn
Website	www.dotihutex.com.vn
2. DONG TIEN HUNG II TEXTILE GARMEN INVESTMENT TRADING JOINT STOCK COMPANY
Vietnamese Name	CONG TY CO PHAN DET MAY DAU TU THUONG MAI DONG TIEN HUNG II
Short name	DOTIHUTEX II JSC
Type of Business	Joint stock company
Year Established	2010
Business Registration No.	3701760685
Date of Registration	06 Aug 2010
Place of Registration	Business Registration Office - Planning and Investment Department of Binh Duong province
Tax code	3701760685
Address	Lot 1.2, Group A Tan Dong Hiep A Industrial Zone, Tan Dong Hiep ward, Di An Town, Binh Duong Province, Vietnam
Telephone	84-650.3729653
Fax	84-650.3729654
Email	info@dotihutex.com.vn

DIRECTORS
1. NAME	Ms. PHAM THI TUYET NHUNG
Position	Director
Date of Birth	05 May 1959
ID Number/Passport	020271552
ID Issue Date	15 Oct 2004
ID Issue Place	Police Station of Ho Chi Minh city
Current resident	255 Vo Thanh Trang street, ward 11, Tan Binh District, Ho Chi Minh City, Vietnam
Nationality	Vietnamese
Tel/Mobile phone	+84 903 863 063
2. NAME	Ms. LE THI THU
Position	Chief accountant
Current resident	Ho Chi Minh City, Vietnam
Nationality	Vietnamese
3. NAME	Ms. TRAN THI TUYET HONG
Position	HR Manager
Current resident	Ho Chi Minh City, Vietnam
Nationality	Vietnamese
Cell phone	+84 908 810 908

BUSINESS NATURE AND ACTIVITIES

Spinning, weaving and finishing of textiles
Retail sale of clothing, footwear and leather articles in specialized stores
Leasing warehouse
Wholesale of plastic materials in primary forms
Other land transport

IMPORT & EXPORT ACTIVITIES
IMPORT:
· Types of products	Machinery, equipment, material
· Market	Taiwan, China, Germany, Malaysia, Korea
EXPORT:
· Types of products	yarns
· Market	China, Thailand, Turkey, Korea

BANKERS
1. VIET NAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE
Address	No. 29 Ben Chuong Duong Street, 1^st District, Ho Chi Minh City, Vietnam
Telephone	(84-8) 3825 1317
Fax	(84-8) 3829 7228
2. ASIA COMMERCIAL BANK SAI GON BRANCH
Address	No.30 Mac Dinh Chi Str, 1^st District, Ho Chi Minh City, Vietnam
Telephone	(84-8) 3824 3770
Fax	(84-8) 3824 3946
3. VID PUBLIC BANK LIMITED CHO LON BRANCH
Address	No.26-28 Tran Hung Dao Str, Ward 7 , 5^th District, Ho Chi Minh City, Vietnam
Telephone	(84-8) 62610507 /8/9
Fax	(84-8) 62610505
4. VIETIN BANK HO CHI MINH CITY BRANCH NO. 1
Address	No. 93 – 95 Ham Nghi Street, Nguyen Thai Binh Ward, 1^st District, Ho Chi Minh City, Vietnam
Telephone	(84-8) 38215388 – 38210089
Fax	(84-8) 38290696

SHAREHOLDERS
1. NAME	Ms. PHAM THI TUYET NHUNG
Position	Director
Date of Birth	05 May 1959
ID Number/Passport	020271552
Issued on	15 Oct 2004
Issued Place	Police Station of Ho Chi Minh city
Current Resident	255 Vo Thanh Trang street, ward 11, Tan Binh District, Ho Chi Minh City, Vietnam
Mobile phone	+84 903 863 063
Nationality	Vietnamese
Value of shares	VND 58,500,000,000
Percentage	97.5%
2. NAME	Ms. PHAM THI TUYET VAN
ID Number/Passport	022170632
Resident	140bis Vo Thanh Trang street, ward 12, Tan Binh District, Ho Chi Minh City, Vietnam
Nationality	Vietnamese
Value of shares	VND 1,500,000,000
Percentage	2.5%

FINANCIAL DATA
BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2011
Number of weeks	52
Audit status	Unknown
ASSETS
A – CURRENT ASSETS	207,176,512,647
I. Cash and cash equivalents	10,111,379,886
1. Cash	10,111,379,886
2. Cash equivalents
II. Short-term investments
1. Short-term investments
2. Provisions for devaluation of short-term investments
III. Accounts receivable	15,881,462,729
1. Receivable from customers	8,328,316,212
2. Prepayments to suppliers	16,921,500
3. Inter-company receivable
4. Receivable according to the progress of construction
5. Other receivable	7,536,225,017
6. Provisions for bad debts
IV. Inventories	169,522,458,290
1. Inventories	169,522,458,290
2. Provisions for devaluation of inventories
V. Other Current Assets	11,661,211,742
1. Short-term prepaid expenses	4,856,062,668
2. VAT to be deducted	5,862,122,051
3. Taxes and other accounts receivable from the State	58,725,639
4. Other current assets	884,301,384
B. LONG-TERM ASSETS	42,584,753,188
I. Long term accounts receivable
1. Long term account receivable from customers
2. Working capital in affiliates
3. Long-term inter-company receivable
4. Other long-term receivable
5. Provisions for bad debts from customers
II. Fixed assets	42,584,753,188
1. Tangible assets	38,131,516,215
- Historical costs	102,202,266,106
- Accumulated depreciation	-64,070,749,891
2. Financial leasehold assets
- Historical costs
- Accumulated depreciation
3. Intangible assets	4,453,236,973
- Initial costs	6,989,696,038
- Accumulated amortization	-2,536,459,065
4. Construction-in-progress
III. Investment property
Historical costs
Accumulated depreciation
IV. Long-term investments
1. Investments in affiliates
2. Investments in business concerns and joint ventures
3. Other long-term investments
4. Provisions for devaluation of long-term investments
V. Other long-term assets
1. Long-term prepaid expenses
2. Deferred income tax assets
3. Other long-term assets
VI. Goodwill
1. Goodwill
TOTAL ASSETS	249,761,265,835
LIABILITIES
A- LIABILITIES	206,036,447,572
I. Current liabilities	206,036,447,572
1. Short-term debts and loans	139,273,538,561
2. Payable to suppliers	44,128,004,347
3. Advances from customers	3,410,028,252
4. Taxes and other obligations to the State Budget	12,506,421
5. Payable to employees
6. Accrued expenses
7. Inter-company payable
8. Payable according to the progress of construction contracts
9. Other payable	19,212,369,991
10. Provisions for short-term accounts payable
11. Bonus and welfare funds
II. Long-Term Liabilities
1. Long-term accounts payable to suppliers
2. Long-term inter-company payable
3. Other long-term payable
4. Long-term debts and loans
5. Deferred income tax payable
6. Provisions for unemployment allowances
7. Provisions for long-term accounts payable
8. Unearned Revenue
9. Science and technology development fund
B- OWNER’S EQUITY	43,724,818,263
I. OWNER’S EQUITY	43,724,818,263
1. Capital	60,000,000,000
2. Share premiums
3. Other sources of capital
4. Treasury stocks
5. Differences on asset revaluation
6. Foreign exchange differences	-640,973,741
7. Business promotion fund
8. Financial reserved fund
9. Other funds
10. Retained earnings	-15,634,207,996
11. Construction investment fund
12. Business arrangement supporting fund
II. Other sources and funds
1. Bonus and welfare funds (Elder form)
2. Sources of expenditure
3. Fund to form fixed assets
MINORITY’S INTEREST
TOTAL LIABILITIES AND OWNER’S EQUITY	249,761,265,835

PROFIT & LOSS STATEMENT
Description	FY2011
1. Total Sales	337,595,077,629
2. Deduction item	1,056,514,968
3. Net revenue	336,538,562,661
4. Costs of goods sold	322,791,298,107
5. Gross profit	13,747,264,554
6. Financial income	1,647,715,218
7. Financial expenses	24,073,932,094
- In which: Loan interest expenses	9,969,937,092
8. Selling expenses	5,880,262,828
9. Administrative overheads	3,741,420,662
10. Net operating profit	-18,300,635,812
11. Other income	277,815,381
12. Other expenses	63,749,305
13. Other profit /(loss)	214,066,076
14. Total accounting profit before tax	-18,086,569,736
15. Current corporate income tax
16. Deferred corporate income tax
17. Interest from subsidiaries/related companies
18. Profit after tax	-18,086,569,736

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2011	Average Industry
Current liquidity ratio	1.01	1.13
Quick liquidity ratio	0.18	0.62
Inventory circle	1.90	5.92
Average receive period	17.22	55.47
Utilizing asset performance	1.35	1.39
Liability by total assets	82.49	70.41
Liability by owner's equity	471.21	301.78
Ebit / Total assets (ROA)	-3.25	9.72
Ebit / Owner's equity (ROE)	-18.56	34.85
Ebit / Total revenue (NPM)	-2.40	7.85
Gross profit / Total revenue (GPM)	4.07	16.74
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data
CASH FLOW STATEMENT
(Indirect method)
Items	FY2011
I. Cash flows from operating activities
1. Profit before tax	-18,086,569,736
2. Adjustments
- Depreciation and amortization	6,644,529,446
- Provisions
- Unrealized foreign exchange difference	-325,956,100
- Gain/loss from investing activities	-1,647,715,218
- Interest expense	9,969,937,092
3. Operating profit before movements in working capital	-3,445,774,516
- (Increase)/Decrease in receivables	23,314,569,986
- (Increase)/Decrease in inventories	-96,816,276,294
- Increase/(Decrease) in accounts payable	30,645,721,785
- (Increase)/Decrease in prepaid expenses	-4,785,735,093
- Interest paid	-9,969,937,092
- Corporate income tax paid
- Other cash inflows
- Other cash outflows
Net cash from (used in) operating activities	-61,057,431,224
II. Cash flows from investing activities
1. Acquisition of fixed assets and other long - term assets	-1,126,272,728
2. Proceeds from fixed assets and long - term assets disposal
3. Cash outflow for lending, buying debt instruments of other companies
4. Cash recovered from lending, selling debt instruments of other companies
5. Investment in other entities
6. Cash recovered from investments in other entities
7. Interest income, dividend and profit paid	1,647,715,218
Net cash from (used in) investing activities	521,442,490
III. Cash flows from financing activities
1. Proceeds from issuing stocks, receiving capital from owners
2. Capital withdrawal, buying back issued stocks
3. Proceeds from borrowings	370,705,626,732
4. Repayment of borrowings	-391,825,776,444
5. Repayment of obligations under finance leased
6. Dividends paid
Net cash from (used in) financing activities	-21,120,149,712
Net increase/(decrease) in cash and cash equivalents	-81,656,138,446
Cash and cash equivalents at beginning of year	91,538,051,197
Effect from changing foreign exchange rate
Cash and cash equivalents at end of year	9,881,912,751

PAYMENT HISTORY & PERFORMANCE EXPERIENCES
Trade Morality	Fair
Liquidity	Low/ Medium
Payment status	Average
Financial Situation	Below average
Development trend	Negative
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	By cash or through the bank
Sale Methods	Retailer and Wholesaler

INTERPRETATION ON THE SCORES

The subject - DOTIHU CO., LTD (DONG TIEN HUNG CO., LTD) was established in 1999. Its chartered capital has been VND 60 billion. The subject focuses on spinning and chemical yarn.

The subject has one factory which has a workforce of more than 300 employees. The subject has used materials (PSF, POY, PET chips…) from domestic and foreign suppliers. Its machinery has been mainly imported from Germany. Its main products are Polyester, Peco, Cotton, Petpoy, Dty… in various types. Its products are for domestic consumption and for export.

The subject is a family owned enterprise. Owners of this company have operated in yarn manufacturing and trading fields for a long time. They started business by establishing Lien Phat Thanh in 1993. In 1999, they established the subject. In order to widen its production capacity, they established the second factory and third factory in Binh Duong province under legal registrations of DOTIHUTEX CO., Ltd and DOTIHUTEX II JSC.

There are hundreds of yarn manufacturers available in Vietnam. Among them, the subject is regarded as a small entity. In difficulties of Economy and Garment & Textile Industry, business results of the subject have been ineffective in recent years.

In summary, the company has guarantees for average size debt repayment. It is expected that the company would overcome difficulties; therefore the rating outlook for the company is at average level.

------------ 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.52.37
UK Pound	1	Rs.83.99
Euro	1	Rs.67.99

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%)

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