MIRA INFORM REPORT

Report Date :

02.04.2013

IDENTIFICATION DETAILS

Name :	QUANG NINH PINE JOINT STOCK COMPANY
Registered Office :	Group 1, Area 1 Yen Thanh Ward, Uong Bi District, Quang Ninh Province
Country :	Vietnam
Financials (as on) :	31.12.2012
Year of Incorporation :	1978
Com. Reg. No.:	5700478344
Legal Form :	Joint Stock Company
Line of Business :	Protection and management pine forest
No. of Employees :	400

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Usually 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	QUANG NINH PINE JOINT STOCK COMPANY
Vietnamese Name	CONG TY CO PHAN THONG QUANG NINH
Short name	QUANG NINH PINE., JSC
Type of Business	Joint stock company
Year Established	1978
Establishment Decision	4647
Date of Issuance	17 Dec 2003
Place of Issuance	Quang Ninh People's Committee
Business Registration No.	5700478344
Date of Registration	04 Jul 2008
Place of Registration	Quang Ninh Department of Planning and Investment
Chartered capital	VND 24,000,000,000
Status	Unlisted
Tax code	5700478344
Total Employees	400
Size	Large

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former chartered capital: VND 10,000,000,000 Changed to: VND 24,000,000,000 VND	08 Jun 2011
2	Subject has got former Business Registration No: 2203000210 (issued on 08 Jan 2004) Changed to: 5700478344	04 Jul 2008
3	Subject has got former Registered English Name: Quang Ninh Pine Enterprise Changed to: QUANG NINH PINE JOINT STOCK COMPANY	08 Jan 2004

ADDRESSES
Head Office
Address	Group 1, Area 1 Yen Thanh Ward, Uong Bi District, Quang Ninh Province, Vietnam
Telephone	(84-33) 3854965/ 3854273
Fax	(84-33) 3854263
Email	qnpe@hn.vnn.vn
Website	www.quangninhpine.com

SUBSIDIARIES AND RELATED COMPANIES
1. QUANGPHU PINE JOINT STOCK COMPANY
Business Registration	3200290809
Date of Registration	09 Sep 2008
Place of Registration	Planning and Investment Department of Quang Tri Province
Registered Capital	VND 15,000,000,000
Tax code	3200290809
Address	South Dong Ha Industrial Zone, Dong Ha City, Quang Tri Province, Vietnam
Tel	(84-53) 3577268
Fax	(84-53) 3577568

DIRECTORS
1. NAME	Mr. DUONG VAN THOM
Position	Chairman cum General Director
Date of Birth	1962
ID Number/Passport	B1144410
ID Issue Date	18 Apr 2007
ID Issue Place	Immigration Bureau
Resident	Group 29c, Area 8 Quang Trung Ward, Uong Bi District, Quang Ninh Province, Vietnam
Nationality	Vietnamese
2. NAME	Mr. TRAN VIET HUNG
Position	Deputy General Director
ID Number/Passport	100600110
Resident	Group 8, Area 2 Trung Vuong Street, Uong Bi District, Quang Ninh Province, Vietnam
Nationality	Vietnamese

BUSINESS NATURE AND ACTIVITIES

- Protection and management pine forest
- Production and trading forestry products
- Processing pine resin
- Import - export goods
- Trading metal material

IMPORT & EXPORT ACTIVITIES
IMPORT:
The subject imports polyethylene in trust from other companies.
EXPORT:
· Types of products	Turpentine oil and gum rosin
· Market	Japan, Korea, India, Indonesia, Singapore, Malaysia, Thailand, Pakistan, USA, Taiwan...
· Ratio	90%
· Mode of payment	T/T,LC, D/A, D/P

BANKERS
1. JOINT STOCK COMMERCIAL BANK FOR FOREIGN TRADE OF VIETNAM QUANG NINH BRANCH
Address	No 703 Le Thanh Tong, Ha Long City, Quang Ninh Province, Vietnam
Telephone	(84-33) 3629215
Fax	(84-33) 3827206
2. VIET NAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE UONG BI BRANCH
Address	No.466 Quang Trung, Uong Bi District, Quang Ninh Province, Vietnam
Telephone	(84-33) 3854250

SHAREHOLDERS
1. NAME	PEOPLE'S COMMITTEE OF QUANG NINH PROVINCE
Address	Nguyen Van Cu Street, Hong Ha Ward, Ha Long City, Quang Ninh Province, Vietnam
Tel	(84-33) 3836032
Fax	(84-33) 3835353
Email	vpubnd@quangninh.gov.vn
Website	http://www.quangninh.gov.vn/Trangchu/gioi_thieu_ub
Number of shares	357,000
Value of shares	VND 3,570,000,000
Percentage	35.7%
Representatives:
1.1. NAME	Mr. DUONG VAN THOM
Position	Chairman cum General Director
Date of Birth	1962
ID Number/Passport	B1144410
Issued on	18 Apr 2007
Issued Place	Immigration Bureau
Resident	Group 29c, Area 8 Quang Trung Ward, Uong Bi District, Quang Ninh Province, Vietnam
Nationality	Vietnamese
Number of Shares	119,000
Value of shares	VND 1,190,000,000
Percentage	11.9%
1.2. NAME	Mr. TRAN VAN SON
ID Number/Passport	100880424
Resident	Group 13, Area 4 Quang Trung Ward, Uong Bi District, Quang Ninh Province, Vietnam
Nationality	Vietnamese
Number of Shares	119,000
Value of shares	VND 1,190,000,000
Percentage	11.9%
1.3. NAME	Mr. LE DINH TRAM
ID Number/Passport	100647951
Resident	Group 1 Area 1, Cao Xanh Ward, Ha Long City, Quang Ninh Province, Vietnam
Nationality	Vietnamese
Number of Shares	119,000
Value of shares	VND 1,190,000,000
Percentage	11.9%
2. NAME	Mr. TRAN VIET HUNG
Position	Deputy General Director
ID Number/Passport	100600110
Resident	Group 8, Area 2 Trung Vuong Street, Uong Bi District, Quang Ninh Province, Vietnam
Nationality	Vietnamese
Number of Shares	23,900
Value of shares	VND 239,000,000
Percentage	2.39%
3. NAME	Mr. NGO DUY KHANG
ID Number/Passport	100022190
Resident	Group 1, Area 9 Thanh Son Ward, Uong Bi District, Quang Ninh Province, Vietnam
Nationality	Vietnamese
Number of Shares	11,000
Value of shares	VND 110,000,000
Percentage	1.1%
4. NAME	OTHER SHAREHOLDERS
Number of shares	608,100
Value of shares	VND 6,081,000,000
Percentage	60.81%

FINANCIAL DATA
BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2012	31/12/2011	31/12/2010
Number of weeks	52	52	52
ASSETS
A – CURRENT ASSETS	113,719,733,869	78,194,000,000	106,123,000,000
I. Cash and cash equivalents	1,370,068,096	675,000,000	2,209,000,000
1. Cash	1,370,068,096	675,000,000	2,209,000,000
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	32,647,709,114	29,525,000,000	65,040,000,000
1. Receivable from customers	27,647,363,908	24,514,000,000	62,074,000,000
2. Prepayments to suppliers	5,000,345,206	5,011,000,000	2,966,000,000
3. Inter-company receivable		0	0
4. Receivable according to the progress of construction		0	0
5. Other receivable		0	0
6. Provisions for bad debts		0	0
IV. Inventories	54,895,827,564	36,285,000,000	28,912,000,000
1. Inventories	54,895,827,564	36,285,000,000	28,912,000,000
2. Provisions for devaluation of inventories		0	0
V. Other Current Assets	24,806,129,095	11,709,000,000	9,962,000,000
1. Short-term prepaid expenses	1,112,141,757	1,207,000,000	190,000,000
2. VAT to be deducted	1,010,230,989	331,000,000	1,457,000,000
3. Taxes and other accounts receivable from the State		0	0
4. Other current assets	22,683,756,349	10,171,000,000	8,315,000,000
B. LONG-TERM ASSETS	20,508,806,789	16,364,000,000	12,858,000,000
I. Long term accounts receivable	5,400,000,000	5,400,000,000	5,400,000,000
1. Long term account receivable from customers		0	0
2. Working capital in affiliates	5,400,000,000	5,400,000,000	5,400,000,000
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	15,108,806,789	10,964,000,000	7,458,000,000
1. Tangible assets	14,073,823,351	10,964,000,000	7,085,000,000
- Historical costs	30,219,448,137	23,726,000,000	18,036,000,000
- Accumulated depreciation	-16,145,624,786	-12,762,000,000	-10,951,000,000
2. Financial leasehold assets		0	0
- Historical costs		0	0
- Accumulated depreciation		0	0
3. Intangible assets		0	0
- Initial costs		0	0
- Accumulated amortization		0	0
4. Construction-in-progress	1,034,983,438	0	373,000,000
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		0	0
1. Long-term prepaid expenses		0	0
2. Deferred income tax assets		0	0
3. Other long-term assets		0	0
VI. Goodwill			0
1. Goodwill			0
TOTAL ASSETS	134,228,540,658	94,558,000,000	118,981,000,000
LIABILITIES
A- LIABILITIES	73,494,295,025	35,907,000,000	86,691,000,000
I. Current liabilities	73,494,295,025	35,907,000,000	86,139,000,000
1. Short-term debts and loans	45,229,167,116	9,957,000,000	37,524,000,000
2. Payable to suppliers	12,435,794,893	9,085,000,000	32,105,000,000
3. Advances from customers	1,276,320,598	162,000,000	37,000,000
4. Taxes and other obligations to the State Budget	1,215,212,315	5,722,000,000	4,058,000,000
5. Payable to employees	2,868,607,534	2,990,000,000	4,725,000,000
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	10,391,909,140	7,991,000,000	7,690,000,000
10. Provisions for short-term accounts payable	77,283,429	0	0
11. Bonus and welfare funds
II. Long-Term Liabilities		0	552,000,000
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	552,000,000
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
9. Science and technology development fund
B- OWNER’S EQUITY	60,734,245,633	58,651,000,000	32,290,000,000
I. OWNER’S EQUITY	60,734,245,633	58,581,000,000	31,413,000,000
1. Capital	24,000,000,000	24,000,000,000	22,425,000,000
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	11,313,023,869	6,841,000,000	6,841,000,000
8. Financial reserved fund	4,564,300,841	2,147,000,000	2,147,000,000
9. Other funds		0	0
10. Retained earnings	20,856,920,923	25,593,000,000	0
11. Construction investment fund		0	0
12. Business arrangement supporting fund
II. Other sources and funds		70,000,000	877,000,000
1. Bonus and welfare funds (Elder form)		70,000,000	877,000,000
2. Sources of expenditure		0	0
3. Fund to form fixed assets		0	0
MINORITY’S INTEREST			0
TOTAL LIABILITIES AND OWNER’S EQUITY	134,228,540,658	94,558,000,000	118,981,000,000

PROFIT & LOSS STATEMENT
Description	FY2012	FY2011	FY2010
1. Total Sales	346,146,185,883	591,007,000,000	454,004,000,000
2. Deduction item		0	0
3. Net revenue	346,146,185,883	591,007,000,000	454,004,000,000
4. Costs of goods sold	293,334,401,183	527,668,000,000	409,825,000,000
5. Gross profit	52,811,784,700	63,339,000,000	44,179,000,000
6. Financial income	4,321,774,345	3,241,000,000	1,111,000,000
7. Financial expenses	2,357,629,414	2,506,000,000	1,934,000,000
- In which: Loan interest expenses	2,357,629,414	2,506,000,000	1,831,000,000
8. Selling expenses	18,055,831,429	18,630,000,000	12,601,000,000
9. Administrative overheads	12,068,325,885	13,832,000,000	10,997,000,000
10. Net operating profit	24,651,772,317	31,612,000,000	19,758,000,000
11. Other income	721,017,048	993,000,000	1,878,000,000
12. Other expenses	263,790,509	0	1,000,000
13. Other profit /(loss)	457,226,539	993,000,000	1,877,000,000
14. Total accounting profit before tax	25,108,998,856	32,605,000,000	21,635,000,000
15. Current corporate income tax	3,783,451,620	5,706,000,000	5,409,000,000
16. Deferred corporate income tax	0	0	0
17. Interest from subsidiaries/related companies	0		0
18. Profit after tax	21,325,547,236	26,899,000,000	16,226,000,000

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2012	FY2011	FY2010	Average Industry
Current liquidity ratio	1.55	2.18	1.23	1.60
Quick liquidity ratio	0.80	1.17	0.90	1.01
Inventory circle	5.34	14.54	18.87	4.95
Average receive period	34.43	18.23	52.29	82.44
Utilizing asset performance	2.58	6.25	3.82	1.54
Liability by total assets	54.75	37.97	72.86	55.94
Liability by owner's equity	121.01	61.22	268.48	179.34
Ebit / Total assets (ROA)	20.46	37.13	19.72	12.32
Ebit / Owner's equity (ROE)	45.22	59.86	72.67	29.75
Ebit / Total revenue (NPM)	7.94	5.94	5.17	8.43
Gross profit / Total revenue (GPM)	15.26	10.72	9.73	20.73
Note: The Average Industry was calculated by VietnamCredit based on our own statistical data

PAYMENT HISTORY & PERFORMANCE EXPERIENCES
Trade Morality	Good
Liquidity	Medium
Payment status	Above Average
Financial Situation	Above Average
Development trend	Positive
Litigation data	No Record
Bankruptcy	No Record
Payment Methods	T/T, L/C, D/A, D/P
Sale Methods	To contracts
Public opinion	Well-known

INTERPRETATION ON THE SCORES

Established in 1978, the subject was a state owner enterprise with initial name QUANG NINH PINE ENTERPSISE. In 2004, the subject was equitized to become a joint stock company but People’s Committee of Quang Ninh Province still owned a large amount number of shares of the company. Now the subject has chartered capital of VND 24 billion, increased from VND 10 billion in 2011.

Subject company is known as one of the leading companies in the field business of exploiting, processing and trading pine resin. Turpentine oil and gum rosin of the company are exported to many countries over the world. Main business of the subject is Japan, Korea, Thailand… and now it is trying to focus more on EU countries. About 90% products of the company is consumed for foreign customers, the rest is for domestic market. Said by Mr. Nguyen Khiem, the subject’s export manager, the subject is supplying to 70% total capacity of Vietnam in pine resin now.

The head office of the subject is located at Yen Thanh Ward, Uong Bi Town, Quang Ninh Province. It has a subsidiary company named Quang Phu Pine Joint Stock Company in the center province of Quang Tri (the subject holds 60% shares of this company). Quang Phu has main function of manufacturing pine resin and then the subject trading them. Now subject company has about 400 employees. Its premises and facilities are fair good.

Financially, the subject has dropped in the both of revenue and profit in the year 2012. In detail, revenue of the subject reported VND 346,146 million, reduced 41.43% from 2011 and profit after tax represented VND 21,325 million, by 79.27% value in the last year. Although the subject has downtrend in result business but it is still positive comparison with other company in the field business. Financial structure of the company is sustainable with low debt ratios and the solvency is fair. Specially, the subject’s operating ratios are really higher than average industry.

In general, the company plays an important role in the field business and it has prestige, experience in the markets. Its financial strength is quite good. No caution needed for small and normal business transaction with the subject company.

------------ 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)
	2012	2011
Agriculture, Forestry and Fishing	2.72	4.00	8,887		24,362.9	95,227
Industry and Construction	4.52	5.53	95,217		10,718.9	3,641,376
Trade and Services	6.42	6.69	187,195		15,270.2	6,957,082
ECONOMIC INDICATORS
			2012	2011		2010
Population (Million person)			88.78	87.84		86.93
Gross Domestic Products (USD billion)			136	119		102.2
GDP Growth (%)			5.03	5.89		6.78
GDP Per Capita (USD/person/year)			1,540	1,300		1,160
Inflation (% Change in Composite CPI)			9.21	18.58		11.75
State Budget Deficit compared with GDP (%)			4.8	4.9		5.8
SERVICE TRADE PERFORMANCE
Billion USD			2012	2011		2010
Exports			114.6	96.3		72.2
Imports			114.3	105.8		84.8
Trade Balance			0.3	-9.5		-12.6

Source: General Statistics Office

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.39
UK Pound	1	Rs.82.32
Euro	1	Rs.69.54

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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