MIRA INFORM REPORT

Report Date :

3^rd May 2006

IDENTIFICATION DETAILS

Name :	CENTRAL PHARMACEUTICAL COMPANY NO.3
Registered Office :	No. 115 Ngo Gia Tu Str, Hai Chau Dist, Da Nang city, Vietnam
Date of Incorporation :	1969
Line of Business :	Engaged in the business of : Trading in material and medicines products Trading in oriental medicines, medical equipment Manufacturing some kinds of simple medicines Trading in vaccine, biology finished products

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 :	Regular
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM
English Name	CENTRAL PHARMACEUTICAL COMPANY NO.3
Vietnamese name	CONG TY DUOC TRUNG UONG 3
Trade Name	CENTERPHACO
Type of Business	State Owned Enterprise
Foundation	1969
Establishment Decision	No 392/BYT-QD
Date of Issuance	April 20^th 1993
Business Registration	No. 104040
Issued on	May 15^th 1993
Issued by	Da Nang Department of Planning & Investment
Original Registered Capital	VND 3,181,000,000
Current Registered Capital	VND 4,405,000,000
Tax Code	No. 0400102077
Total Employees	175 Employees
Qualification	Fairly
Note: The Subject was founded in 1969 as a small factory to serve for Vietnamese people to fight against invader. It was re-established in 1976. In 1993, it became one of subsidiaries of Vietnam Pharmaceutical Corporation. At the moment, the management board is submitting documents to increase its registered capital to VND 18,400,000,000.
ADDRESS
Head Office
Former address	No 237, Nguyen Chi Thanh Str., Hai Chau Dist, Da Nang city,
Country	Vietnam
Current address	No. 115 Ngo Gia Tu Str, Hai Chau Dist, Da Nang city, Vietnam
Tel	(84-511) 897866
Fax	(84-511) 822767
Branch in Hanoi City
Former Address		No. 31, Lang Ha Str., Dong Da Dist., Hanoi City, Vietnam
Current Address		No. 95, Lang Ha Str., Dong Da Dist., Hanoi City, Vietnam
Tel		(84-4) 856 2365 / 5141881
Fax		(84-4) 856 2584
Branch in Ho Chi Minh City
Address		No. 178, Dien Bien Phu Str., Ward 6, Dist. 3, Ho Chi Minh City, Vietnam
Tel		(84-8) 822 5351
Fax		(84-8) 820 3354
DIRECTORS
1. NAME	Mr. PHAM HUNG THINH
Position	Director
Qualification	Pharmacist
Office Tel	(84-511) 816688
Contact address	Hai Chau Dist, Da Nang city, Vietnam
Nationality	Vietnamese
2. NAME	Ms. PHAM THI OANH
Position	Vice Director
Qualification	Pharmacist
Contact address	No.80/2 Tran Phu Str, Hai Chau Dist, Da Nang city, Vietnam
Nationality	Vietnamese
3. NAME	MR. PHAM XUAN KHANH
Position	Chief Accountant
Office Tel	(84-511) 822745
Resident	Da Nang City
Nationality	Vietnamese
BUSINESS NATURE AND ACTIVITIES
The subject registered in the following lines of business:
Trading in material and medicines products Trading in oriental medicines, medical equipment
Manufacturing some kinds of simple medicines
Trading in vaccine, biology finished products
Note: The Subject’s main products are Beberin, Cloroquin, Quinin SO4, Cloramin B...
IMPORT & EXPORT ACTIVITIES
IMPORT: The Subject imported medicines, medical equipment and material for pharmaceutical industry from Europe, USA, Korea, India, Taiwan, etc.
EXPORT: The Subject mainly exports oriental medicines to Czech Public.
Note: The value of export is not very high.
BANKERS
1. INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM (INCOMBANK) – Da Nang branch
Address			No.172, Nguyen Van Linh str, Thanh Khe dist, Da Nang city
Country			Vietnam
Tel			(84-511) 821990/821993
Fax			(84-511) 825528
Account No.			701A 00849
2. BANK FOR AGRICULTURE AND RURAL DEVELOPMENT OF VIETNAM – Da Nang branch
Address			No.20, Yen Bai Str, Hai Chau Dist, Da Nang city
Country			Vietnam
Tel			(84-511) 892087
Note			Vietnam Bank for Agriculture and Rural Development is other name of this bank. The subject does not have relation with Bank for Agriculture and Rural Development of Vietnam – Ho Chi Minh Branch as client gave.
SHAREHOLDERS
The Subject is a State Owned Enterprise with 100 percent of State owned share. It is represented by VIETNAM PHARMACEUTICAL CORPORATION.
PARENT COMPANY PROFILE
NAME			VIETNAM PHARMACEUTICAL CORPORATION
Address			No.138B, Giang Vo Str, Ba Dinh Dist, Hanoi city
Country			Vietnam
Tel			(84-4) 8452784 / 8443151
Fax			(84-4) 8443665
General Director			Mr. NGUYEN QUY SON
Note: The parent company is the largest corporation in manufacturing and trading in pharmaceuticals in Vietnam. Its net profit in the first half of 2004 was about 84.2 billion VND.
PAYMENT HISTORY AND EXPERIENCES
Trade Morality			FAIRLY GOOD
Liquidity			ABOVE AVERAGE
Previous Payments			AVERAGE
Payment status			ABOVE AVERAGE
Past Financial Situation			ABOVE AVERAGE
Current Financial Situation			DEVELOPING
Litigation Data			NO RECORD
Bankruptcy			NO RECORD
Public opinion			FAIRLY GOOD
Payment Method			L/C AT SIGHT (FOR 90 PERCENT OF IMPORT VALUE)
FINANCIAL DATA
BALANCE SHEET
Unit: Million VND
Balance sheet date					31/12/2004			31/12/2003
Number of weeks					52			52
ASSETS
A. Working assets & short-term Investment					57,341			37,727
I. Cash and cash equivalents					5,362			2,767
II. Short-term investment					0			20
1. Short-term securities investment					0			20
2. Other short-term investment					0			0
3. Provision for short-term investment					0			0
III. Receivables					34,817			17,404
1. Receivables from customers					30,639			12,291
2. Prepayment for providers					2,215			3,343
3. Value-added tax deducted					1,231			965
4. Internal receivables					499			489
5. Other receivables					231			314
6. Provision for bad receivables					2			2
IV. Inventory					14,792			15,824
1. Purchased goods in transit					0			0
2. Raw materials					527			486
3. Instrument, tools					527			7
4. Cost for production and business in process					90			39
5. End products					571			911
6. Goods					13,077			14,381
7. Goods on consignment					0			0
8. Provision for devaluation of stocks					0			0
V. Other current assets					2,370			1,712
1. Advances					224			181
2. Prepaid expenses					0			0
3. Pending expenses for transfer					0			5
4. Pending assets					0			0
5. Mortgage, collateral and short run collateral					2,146			1,526
VI. Administrative					0			0
1. Administrative expenses for previous year					0			0
2. Administrative expenses for current year					0			0
B. Fixed assets & Long term investment					17,622			15,070
I. Fixed assets					1,429			1,110
1. Tangible fixed assets					1,429			1,110
+ Original cost					3,250			2,774
+ Accumulated depreciation value					-1,821			-1,664
2. Financial leasing fixed assets					0			0
+ Original cost					0			0
+ Accumulated depreciation value					0			0
3. Intangible fixed assets					0			0
+ Original cost					0			0
+ Accumulated depreciation value					0			0
II. Long term investment					0			0
1. Long-term securities investment					0			0
2. Joint-venture capital contribution					0			0
3. Other long-term investment					0			0
4. Provision for long-term investment devaluation					0			0
III. Capital construction in process					16,193			13,960
IV. Other					0			0
TOTAL ASSETS					74,963			52,797
LIABILITIES
A. Payable loans					57,629			37,229
I. Short term payables					52,626			34,503
1. Short-term borrowings					17,668			7,527
2. Due long-term liabilities					0			0
3. Payables to supplier					26,445			19,412
4. Prepayment of buyer					6,016			5,223
5. Taxes and accounts dutiable					1,412			977
6. Employee payments					168			441
7. Internal payables					499			484
8. Other payables					418			439
II. Long term loans					4,965			2,726
1. Long-term borrowings					4,965			2,726
2. Long-term payables					0			0
III. Other payables					38			0
1. Payable expenses					0			0
2. Pending assets					0			0
3. Receipts long-term collateral and deposit					38			0
B. Owner’s Equity:					17,334			15,568
I. Capital and Funds					16,788			15,051
1. Working capital					5,405			4,405
2. Differences from asset revaluation					0			0
3. Exchange rate differences					0			0
4. Development investment funds					481			481
5. Reserved funds					53			53
6. Retained profit					340			3
7. Construction capital sources					10,509			10,109
II. Other administrative and fund sources					546			517
1. Provident funds for unemployment					11			6
2. Reward and welfare funds					461			472
3. Management funds of higher level					74			39
4. Functional operation funds					0			0
5. Fund sources formed by fixed assets					0			0
TOTAL LIABILITY AND EQUITY:					74,963			52,797
PROFIT & LOSE ACCOUNT (INCOME STATEMENT)
Description						Fiscal year 2004	Fiscal year 2003
Total revenue						164,160	168,490
Deducted Items						104	313
- Discount						53	39
- Devaluation						0	0
- Return of sold goods						49	271
- Turnover tax, Luxury tax & Export tax						2	3
1. Net revenue						164,056	168,177
2. Cost of goods sold						159,319	164,330
3. Gross Profit						4,737	3,847
4. Sales expenses						2,130	1,764
5. Enterprise administrative expenses						2,485	1,698
6. Net income from business activities						122	385
Income from financial activities						158	98
Expenditure from financial activities						32	17
7. Net income from financial operation						126	81
Irregular income						96	2
Irregular expenditure						0	0
8. Irregular Profit						96	2
9. Total pre-tax profit						344	468
10. Income tax						95	149
11. After tax profit						249	319
FINANCIAL FACTORS
Description						Fiscal year 2004			Fiscal year 2003
Current Liquidity Ratio						1.09			1.09
Quick Liquidity Ratio						0.81			0.63
Inventory Circle						10.41			10.38
Average Receive Period						77.46			37.77
Utilizing Asset Performance						2.19			3.19
Liability / Total Asset (%)						76.88			70.51
Liability / Owner's Equity (%)						332.46			239.14
Income Before Tax / Total Asset (%) ROA						0.46			0.89
Income Before Tax/ Owner's Equity (%) ROE						1.98			3.01
Gross Profit / Total Revenue (%) GPM						2.89			0.28
Income Before tax/ Total Revenue (%) NPM						0.21			2.28
The following data is collected from Mr. PHAM XUAN KHANH, chief accountant of the subject
Turnover in 2005				VND 195,000,000,000
After tax Profit				VND 700,000,000
INTERPRETATION ON THE SCORES
THE SUBJECT IS A SUBSIDIARY OF STATE OWNED ENTERPRISE. ITS PARENT COMPANY IS VERY LARGE WITH MANY SUBSIDIARIES LOCATED IN ALL MOST PROVINCES IN VIETNAM. THE SUBJECT HAS A LONG TIME IN DEVELOPMENT. IN 1993, UNDER THE DECISION TO SET UP CORPORATION, THE SUBJECT BECAME MEMBER OF VIETNAM PHARMACEUTICAL CORPORATION. ITS OPERATION IS UNDER THE MANAGEMENT OF PARENT COMPANY. THUS, IT MAY DECREASE THE COMPETITION. CURRENTLY, SOME MEMBERS OF PARENT COMPANY ARE DEVELOPING AT A HIGH RATE AND GETTING GOOD PROFIT AFTER EQUITIZATION WHILE THE SUBJECT IS CONSIDERED AS A SLOW DEVELOPMENT RATE COMPANY IN COMPARISON WITH GOOD CONDITIONS AND HISTORY BACKGROUND.
THE SUBJECT PREMISES ARE LARGE. THEY ARE SITUATED IN DA NANG CITY, THE MIDDLE CITY OF VIETNAM. THIS PLACE IS ALSO THE LOCATION OF PHARMACEUTICAL FACTORY OF THE SUBJECT. THE PRODUCTS OF THE SUBJECT IS FAIRLY POOR WITH ABOUT 40 KINDS OF COMMON MEDICINES SUCH AS MEDICATED OIL, BALM, BEBERIN, ETC. THE MAIN BUSINESS LINE TO MAKE PROFIT IS IMPORTING AND TRADING IN PHARMACEUTICAL FOR THE LOCAL MARKET. TURNOVER OF THIS OPERATION OCCUPIES 85 PERCENT OF TOTAL TURNOVER OF THE SUBJECT. THE SUBJECT IS ONE OF THREE BIG STATE OWNED COMPANIES, WHICH ARE RESPONSIBLE FOR PRICE STABILIZATION OF MEDICINE IN CASE OF HARD FLUCTUATION OF PRICES. THE SUBJECT HAS MET THREE PHARMACEUTICAL STANDARDS, INCLUDING GMP, GSP AND GLP. THE MANAGEMENT CAPACITY IS NORMAL. IT WILL BE MORE DEVELOPED IF THE SUBJECT IMPROVE ITS MANAGEMENT. ITS SOLVENCY IS PROMPT. CAPITAL STRUCTURE IS ACCEPTABLE. HOWEVER, PROFITABILITY IS STILL LIMITED BECAUSE OF HIGH COST OF GOOD SOLD. THE SUBJECT WILL BE CONVERTED TO LIABILITY LIMITED COMPANY IN THE NEAR FUTURE.
IN THE NEXT TIME, THE SUBJECT’S MARKET IS RELATIVE STABLE DUE TO HIGH DEMAND IN PHARMACEUTICAL INDUSTRY. ITS PROFIT AND TURNOVER INCREASES SLIGHTLY. IN GENERAL, THE FINANCE AND OPERATION OF THE SUBJECT ARE REGARDED FAIRLY. NO CAUTION NEEDED FOR SMALL BUSINESS TRANSACTIONS.

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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

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