MIRA INFORM REPORT

Report Date :

26.10.2012

IDENTIFICATION DETAILS

Name :	CAT KHANH COMPANY LIMITED
Registered Office :	Group 7, Chi Dong Town , Me Linh District, Ha Noi City
Country :	Vietnam
Financials (as on) :	31.12.2011
Year of Establishment :	2005
Com. Reg. No.:	2500235109
Legal Form :	Limited Liability Company
Line of Business :	Manufacturing and trading artemisinin
No. of Employees :	80

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 but correct
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)
Vietnam	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
Current legal status
English Name	CAT KHANH COMPANY LIMITED
Vietnamese Name	CONG TY TNHH CAT KHANH
Short name	CAT KHANH CO., LTD
Type of Business	Limited liability company
Year Established	2005
Business Registration No.	2500235109
Date of Registration	07 Dec 2011
Place of Registration	Planning and Investment Department of Ha Noi City
Chartered capital	VND 3,000,000,000
Status	Unlisted
Tax code	2500235109
Total Employees	80

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Business Registration No: 1902000659 (issued by Planning and Investment Department of Vinh Phuc Province, on 13 Jan 2005), changed to 0102035962 (issued by Planning and Investment Department of Ha Noi City, on 24 Jun 2008), then Changed to: 2500235109 (same with tax code)	07 Dec 2011

ADDRESSES
Head Office
Address	Group 7, Chi Dong Town , Me Linh District, Ha Noi City, Vietnam
Telephone	(84-4) 38134003 / ++84 912466470
Fax	(84-4) 35251137
Email	lamnt_ck@yahoo.com
Note: The correct telephone number is as above

DIRECTORS
1. NAME	Mr. NGO TIEN LAM
Position	Director
Date of Birth	16 May 1954
ID Number/Passport	013116120
ID Issue Date	26 Aug 2008
ID Issue Place	Ha Noi City Public Security
Resident	Group 7, Chi Dong Town, Me Linh District, Ha Noi City, Vietnam
Nationality	Vietnamese
2. NAME	Ms. NGO THI HONG NHUNG
Position	Chief Accountant
ID Number/Passport	013228819
Resident	Group 7, Chi Dong Town, Me Linh District, Ha Noi City, Vietnam
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

Manufacturing and trading artemisinin

IMPORT & EXPORT ACTIVITIES
IMPORT:
Note: Currently, the subject does not import
EXPORT:
· Types of products	Artemisinin
· Market	India

BANKERS
1. BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM TAY HA NOI BRANCH
Address	Thang Long Bridge No.11 Company, Tu Liem District, Ha Noi City, Vietnam
2. VIETNAM TECHNOLOGICAL AND COMMERCIAL JOINT STOCK BANK HOANG QUOC VIET BRANCH
Address	1st Floor - No. 98 Hoang Quoc Viet Str, Cau Giay District, Ha Noi City, Vietnam
Telephone	(84-4) 6267 0269
Fax	(84-4) 6267 0265

SHAREHOLDERS
1. NAME	Mr. NGO TIEN LAM
Position	Director
Date of Birth	16 May 1954
ID Number/Passport	013116120
Issued on	26 Aug 2008
Issued Place	Ha Noi City Public Security
Resident	Group 7, Chi Dong Town , Me Linh District, Ha Noi City, Vietnam
Nationality	Vietnamese
Value of shares	VND 2,400,000,000
Percentage	80%
2. NAME	Ms. NGO THI HONG NHUNG
Position	Chief Accountant
ID Number/Passport	013228819
Resident	Group 7, Chi Dong Town, Me Linh District, Ha Noi City, Vietnam
Nationality	Vietnamese
Value of shares	VND 600,000,000
Percentage	20%

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	4,779,035,873	6,492,545,617	3,589,019,970
I. Cash and cash equivalents	1,636,663,770	91,858,283	1,755,117,096
1. Cash	1,636,663,770	91,858,283	1,755,117,096
2. Cash equivalents
II. Short-term investments
1. Short-term investments
2. Provisions for devaluation of short-term investments
III. Accounts receivable	229,798,498	2,177,382,250	1,752,292,250
1. Receivable from customers	124,851,046	2,177,382,250	1,752,292,250
2. Prepayments to suppliers	104,947,452
3. Inter-company receivable
4. Receivable according to the progress of construction
5. Other receivable
6. Provisions for bad debts
IV. Inventories	2,860,833,283	4,095,757,083	78,082,624
1. Inventories	2,860,833,283	4,095,757,083	78,082,624
2. Provisions for devaluation of inventories
V. Other Current Assets	51,740,322	127,548,001	3,528,000
1. Short-term prepaid expenses
2. VAT to be deducted
3. Taxes and other accounts receivable from the State	3,528,000	3,528,000	3,528,000
4. Other current assets	48,212,322	124,020,001
B. LONG-TERM ASSETS	3,039,483,983	2,240,699,592	1,890,877,724
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	3,039,483,983	2,240,699,592	1,890,877,724
1. Tangible assets	3,005,747,983	2,240,699,592	1,890,877,724
- Historical costs	4,443,862,130	3,361,773,948	2,704,010,312
- Accumulated depreciation	-1,438,114,147	-1,121,074,356	-813,132,588
2. Financial leasehold assets
- Historical costs
- Accumulated depreciation
3. Intangible assets
- Initial costs
- Accumulated amortization
4. Construction-in-progress	33,736,000
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			0
TOTAL ASSETS	7,818,519,856	8,733,245,209	5,479,897,694
LIABILITIES
A- LIABILITIES	5,249,122,104	7,516,429,642	4,085,331,518
I. Current liabilities	5,249,122,104	7,516,429,642	4,085,331,518
1. Short-term debts and loans	2,450,000,000	5,150,000,000	3,650,000,000
2. Payable to suppliers	2,457,037,693	2,026,055,700	298,700,256
3. Advances from customers	336,028,655	336,028,655
4. Taxes and other obligations to the State Budget	6,055,756	4,345,287	136,631,262
5. Payable to employees
6. Accrued expenses
7. Inter-company payable
8. Payable according to the progress of construction contracts
9. Other payable
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	2,569,397,752	1,216,815,567	1,394,566,176
I. OWNER’S EQUITY	2,569,397,752	1,216,815,567	1,394,566,176
1. Capital	1,400,000,000	1,400,000,000	1,400,000,000
2. Share premiums
3. Other sources of capital
4. Treasury stocks
5. Differences on asset revaluation
6. Foreign exchange differences
7. Business promotion fund
8. Financial reserved fund
9. Other funds
10. Retained earnings	1,169,397,752	-183,184,433	-5,433,824
11. Construction investment fund			0
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			0
MINORITY’S INTEREST			0
TOTAL LIABILITIES AND OWNER’S EQUITY	7,818,519,856	8,733,245,209	5,479,897,694

PROFIT & LOSS STATEMENT
Description	FY2011	FY2010	FY2009
1. Total Sales	51,718,143,200	9,525,000,000	7,157,500,000
2. Deduction item
3. Net revenue	51,718,143,200	9,525,000,000	7,157,500,000
4. Costs of goods sold	46,264,958,711	9,221,450,250	5,285,484,749
5. Gross profit	5,453,184,489	303,549,750	1,872,015,251
6. Financial income	5,407,057	2,688,098	966,479
7. Financial expenses	2,123,301,813	223,859,527	728,852,163
- In which: Loan interest expenses	2,050,445,551	220,462,500	727,958,193
8. Selling expenses	1,357,038,662
9. Administrative overheads	632,091,276	259,381,553	409,421,699
10. Net operating profit	1,346,159,795	-177,003,232	734,707,868
11. Other income	6,422,390
12. Other expenses	0	747,377
13. Other profit /(loss)	6,422,390	-747,377
14. Total accounting profit before tax	1,352,582,185	-177,750,609	734,707,868
15. Current corporate income tax
16. Deferred corporate income tax			0
17. Interest from subsidiaries/related companies			0
18. Profit after tax	1,352,582,185	-177,750,609	734,707,868

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2011	FY2010	FY2009	Average Industry
Current liquidity ratio	0.91	0.86	0.88	1.65
Quick liquidity ratio	0.37	0.32	0.86	1.04
Inventory circle	13.30	4.42	67.69	4.14
Average receive period	1.62	83.44	89.36	105.37
Utilizing asset performance	6.61	1.09	1.31	1.20
Liability by total assets	67.14	86.07	74.55	53.11
Liability by owner's equity	204.29	617.71	292.95	159.74
Ebit / Total assets (ROA)	43.53	0.49	26.69	10.37
Ebit / Owner's equity (ROE)	132.44	3.51	104.88	23.03
Ebit / Total revenue (NPM)	6.58	0.45	20.44	10.15
Gross profit / Total revenue (GPM)	10.54	3.19	26.15	25.88
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES
Trade Morality	Normal
Liquidity	Low/Medium
Payment status	Normal
Financial Situation	Average
Development trend	Positive
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	TT
Sale Methods	To contracts

INTERPRETATION ON THE SCORES

Originally, CAT KHANH COMPANY LIMITED was established following the business registration No. 1902000659, granted by Planning and Investment Department of Vinh Phuc Province. After three year, in 2008, because Me Linh District was merged into Ha Noi City, the subject was changed its business registration to 0102035962, which was issued by Planning and Investment Department of Ha Noi City.

Currently, the company is operating under the business registration No. 2500235109 which is also the company's tax code. Until now, the company has chartered capital of VND 3 billion, and total employees of 80 persons.

The company’s head office is located at Group 7, Chi Dong Town , Me Linh District, Ha Noi City, Vietnam, where is stood on the area of 11,000 m2. The subject specializes in manufacturing and trading artemisinin from artemisia annua leaves. Its capacity is 2,000 ton leaves per year. Its products are mainly exported to India; the rest is sold domestically for pharmaceutical companies. Currently, the subject does not import; at early this year it imported a machine shipment from China with small value of VND 500 million.

The financial situation of the subject is average. In 2011, the subject’s total asset was VND 7.818 billion, decreased slightly compared with year 2010. The main reason was the decrease of accounts receivable and inventories. Although the total asset went down, its total sales and profit after tax has opposite changes. In 2011, the company total sales reached to VND 51.7 billion, by more five times in compared with one year earlier – an impressive growth. Its revenue was mainly from export activity (with export revenue of VND 43,072,905,000). Also, its profit after tax reached VND 1.3 billion in compared with the loss of VND 177 million in 2010. It made its profitable ratios was quite good and higher than average industry. ROA in 2011 was 43.53 % when average industry was 10.37 %. Especially, the company’s ROE in 2011 reached to 132.44 %. The company used owner equity effectively. However, the financial ratios show the poor status of liquidity, it is lower than the average industry ratios in three years 2009, 2010 and 2011. The current assets did not cover the current liability. Besides that, the leverage ratio shows the rather high dependent on debt of the subject.

In general, this is a small-size company in this industry. Its future prospect seems bright. It can meet small-medium financial 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.53.63
UK Pound	1	Rs.86.17
Euro	1	Rs.69.74

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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