MIRA INFORM REPORT

Report Date :

18.12.2007

IDENTIFICATION DETAILS

Name :	NATIONAL PHARMACEUTICAL COMPANY NO.2
Registered Office :	No. 334 (Former No.136) To Hien Thanh Str, Ward 14, Dist 10, Hochiminh city
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	April 22^nd, 1993
Legal Form :	State Owned Company
Line of Business :	Import – export, trading and distributing pharmaceutical products, cosmetics, nutrition products, raw materials, medical equipments, etc.

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			NATIONAL PHARMACEUTICAL COMPANY NO.2
Vietnamese Name			CONG TY DUOC PHAM TRUNG UONG 2
Trade Name			CODUPHA
Type of Business			State Owned Company
Establishment Decision			No. 409/BYT-QD
Date of Issuance			April 22^nd, 1993
Place of Issuance			Ministry of Health
Former Business registration			No. 102654
Date of Issuance			May 10^th, 1993
Current Business registration			4106000298
Date of Issuance			September 11^th 2006
Place of Issuance			Planning and Investment Department of Hochiminh City
Current Registered Capital			66,632,937,611 VND
Former Registered Capital			66,633,000,000 VND
Tax Code			No. 0300483319
Total Employees			370 employees
Qualification			Qualified
Note: According to new business law of Vietnam (this law becomes effective from July 01^st, 2006), all state owned enterprises must be changed into joint stock company or single limited liability company. The subject will change to joint stock company in next year. - According to your given address, we make the report about the above company, the given name is not quite correct.
ADDRESS
Head Office:
Address			No. 334 (former No.136)To Hien Thanh Str, Ward 14, Dist 10, Hochiminh city
Country			Vietnam
Tel			(84 - 8) 865 0834, 865 8638, 863 7345, 865 0938
Fax			(84 - 8) 865 0750
Email			codupha@hcm.fpt.vn, ctdptw2@hcm.vnn.vn
Website			www.codupha.com.vn
Area			60,000 sq meters
Branch in Hanoi:
Address			No. 60B Nguyen Huy Tuong Str, Thanh Xuan Ward, Dong Da Dist, Hanoi
`Tel			(84 - 4) 858 6059
Fax			(84 - 4) 858 4368
Business registration No.			301999
Place of Issuance			Planning and Investment Department of Hanoi City
Tax code No.			0300483319-008
Chief of office			Mr. NGUYEN CONG TOAN
ID No			012365469
Area			3,000 sq meters
Branch in Can Tho:
Address			No. 132A Nguyen Van Cu Str, Can Tho City, Can Tho province
Country			Vietnam
Tel			(84-71) 899099 - 899398
Fax			(84-71) 8584368
Business registration			No. 305525
Chief of office			Mr. Bui Huu Hien
Tax code			0300483319-009
Area			5,000 sq meters
Branch in Dak lak:
Address			No. 95 Ngo Quyen Str, Tan Loi Ward, Dak Lak Dist,
Country			Vietnam
Tel			(84- 50) 951011
Business registration			No. 40.16.00049
Chief of office			Mr. Nguyen Huu Vu Quang
Tax code			0300483319-011
Branch in Vinh City:
Address			No. 23 Nguyen Sy Sach Str, K10, Ha Huy Tap Ward, Vinh City
Country			Vietnam
Tel			(84-383 ) 847163
Business registration			No. 2716000043
Chief of office			Mr. Le Xuan Hai
ID No			171477314
Tax code			0300483319-012
Wholesale, retail & exhibition drug chains
1. Address			No.90A Ly Thuong Kiet Str, Ward 14, Dist.10, Hochiminh.
Tel			(84 - 8) 864 2598
2. Address			No. 1A 3/2 Str.,Ward 15, Dist.10, Hochiminh
Tel			(84 - 8) 863 7760
3. Address			136 To Hien Thanh Str., Ward 14, Dist.10, Hochiminh
Country			Vietnam
Note: The subject has 4 other wholesales is located at Ho Chi Minh City and 1 wholesale in Tay Ninh province.
Factory in Laos:
Name			CODUPHA LAOS CO., LTD
Address			No. 1 Ban Phonsavanhtai, Sokpaluang Road, Vientiane
Country			Laos
Tel			008. 562135163
Fax			008. 5621223450
Tel/Fax of Factory			008. 5621480847
Investment Capital			2,000,000 USD
Employees			150 Employees
Investment duration			20 years
Director of factory			Mr. NGUYEN DOAN LINH
Email			Codupha_Lao@yahoo.com
Note: This is a joint venture between the subject and KPN Khampheng Nakhorn Phathana Co., Ltd.
DIRECTORS
1. NAME			Mr. LE VAN SON
Position			Director
Qualification			Management
ID No			024353738
Registered Resident			No. 385/5 Dien Bin Phu, Ward 4, Dist 3, Hochiminh City
Nationality			Vietnam
Tel of office			(84 - 8) 865 0750
Note: Mr. Nguyen Van Hoa has already been superannuation. Mr. Le Van Son replaced him since January 2007.
2. NAME			Mr. NGUYEN DOAN LINH
Position			Deputy Director
Qualification			Pharmacist
Resident			Laos
Nationality			Vietnamese
Note: Mr. Nguyen Doan Linh is a director of CODUPHA Laos Co., Ltd
3. NAME			Mr. PHAM ANH KIET
Position			Deputy Director – (Chief of business)
Resident			Hochiminh City
Nationality			Vietnamese
BUSINESS NATURE AND ACTIVITIES
CODUPHA’s core businesses: - Import – export, trading and distributing pharmaceutical products, cosmetics, nutrition products, raw materials, medical equipments, etc.
The subject registered in the following lines of business: + Import - export, trading, distributing, and marketing pharmaceutical formulations, pharmaceutical raw materials, cosmetics and nutritional products. + Import - export, trading, distributing, marketing oriental medicines, chemicals (excluding harmful and poisonous chemicals), excipients for production of preventive and curative medicines, pharmaceutical packaging materials and other medical products, hygienic products, essential oils, flavors, herbal and animal oils, medical equipments, pharmaceutical production machinery and equipment, bandages, sun glasses, optical glasses, diagnostics and testing chemicals. + Logistics and warehousing services. + Trading, processing pharmaceuticals with local and foreign companies and factories. + Import pharmaceutical oriental and western medicines, vaccines and immuno products, pharmaceutical raw materials and excipients, pharmaceutical packaging materials, cosmetics, nutritional products, chemicals; pharmaceutical production machines and equipments for pharmaceutical factories and medical instruments and apparatus for treatment units at all levels. + Participating in joint-venture projects, co-operating with foreign companies to develop the production and the distribution of medicines + Pharmaceutical packing of drug units in case of flood, natural calamities
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports pharmaceutical products and goods from USA, Canada, France, Spain, Italy, Netherlands, UK, Russia, Turkey, India, Thailand, China, Korea, Taiwan, and Japan.
EXPORT: Currently, the subject doesn’t export.
BANKERS
1. VIETNAM BANK FOR FOREIGN TRADE (VIETCOMBANK) – PHU THO BRANCH
Address			No. 527 To Hien Thanh Str, Ward 14, Hochiminh City
Tel			(84-8) 8642892
Fax			(84-8) 8624804
Telex			811234/5 VVB-VT
Swift			BFTVVBVX 042
2. BANK FOR INVESTMENT & DEVELOPMENT OF VIETNAM- HCM CITY BRANCH
Address			No. 134 Nguyen Cong Tru Str, Dist 1, Hochiminh city
Tel			(84-8) 8230057, 8297384
Fax			(84-8) 8298862
3. CITI BANK - BRANCH IN HOCHIMINH CITY
Address			No. 115 Nguyen Hue Str, Ben Nghe Ward, Dist 1, Hochiminh city
Tel			(84-8) 8242118
Fax			(84-8) 8242267
Swift			CITIVNVXHCM
4. DEUTSCHE BANK
Address			No. 65 Le Loi Str, Ben Nghe Ward, Dist 1, Hochiminh city
Tel			(84-8) 8222667
Fax			(84-8) 8293865
5. INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM (INCOMBANK) BRANCH NO. 2
Address			No. 93 - 95 Ham Nghi Str, Nguyen Thai Binh Ward, Dist 1, Hochiminh City
Tel			(84-8) 8215388 - 8210089
Fax			(84-8) 8290696
Swift			ICBVVNVX902
6. FAR EAST NATIONAL BANK
Address			No. 2a-4a Ton Duc Thang Str, Ben Nghe Ward, Dist 1, Hochiminh City
Tel			(84-8) 8220566
Fax			(84-8) 8220560
7. HONGKONG SHANGHAI BANK CORPORATION (HSBC)
Address			No.235 Dong Khoi Street, District 1
Province/City			Hochiminh City
Telephone			(84-8) 829 2288
Fax			(84-8) 823 0530
Swift			HSBCVNVX
SHAREHOLDERS
The Subject is a State owned enterprise. All its shares are owned by the State.
PAYMENT HISTORY AND EXPERIENCES
Trade Morality		Normal
Liquidity		Average
Previous Payments		Prompt
Payment status		Prompt
Past Financial Situation		Normal
Current Financial Situation		Fairly good
Litigation Data		No recorded
Bankruptcy		No recorded
Public opinion		Fairly good
Payment Methods		Direct payment or through its corresponding bank. Foreign remittance by letter of credit (L/C), by telegraphic transfer (T/T)
FINANCIAL DATA
BALANCE SHEET
Unit: 1VND
Balance sheet date				31/12/2006
Number of weeks				52
Consolidation code				Consolidated
ASSETS
A -	CURRENT ASSETS			570,397,685,803
I.	Cash and cash equivalents			30,628,672,748
1.	Cash			30,628,672,748
2.	Cash equivalents
II.	Short-term investments			0
1.	Short-term investments
2.	Provisions for short-term investment of short- term investments in securities
III.	Accounts receivable			244,063,582,049
1.	Receivable from customers			230,246,193,055
2.	Repayments to suppliers			6,006,012,882
3.	Inter- company receivable			1,771,931,326
4.	Receivable according to the process of construction contracts
5.	Other receivable			6,316,653,750
6.	Provisions for credit risk			-277,208,964
IV.	Inventories			290,476,388,993
1.	Inventories			292,222,844,593
2.	Provisions for devaluation of inventories			-1,746,455,600
V.	Other current assets			5,229,042,013
1.	Short-term repaid expenses			10,000,000
2.	Taxes receivable			5,219,042,013
3.	Other current assets
B -	LONG TERM ASSETS			24,251,997,481
I.	Long term accounts receivable			0
1.	Long term accounts receivable from customers
2.	Long term inter- company receivable
3.	Other long term receivable
4.	Provisions for bad debts
II.	Fixed assets			10,216,629,181
1.	Tangible assets			7,300,127,632
	Historical costs			39,372,151,050
	Accumulated depreciation			32,072,023,418
2.	Financial leasehold assets			0
	Historical costs
	Accumulated depreciation
3.	In-tangible assets			0
	Historical costs
	Accumulated depreciation
4.	Construction in progress			2,916,501,549
III.	Investment property			0
	History costs
	Accumulated depreciation
IV.	Long term investments			14,035,368,300
1.	Investments in affiliates
2.	Investments in business concerns and joint ventures			13,535,808,300
3.	Other long term investments			499,560,000
4.	Provisions for devaluation of investments in securities
V.	Other long term assets			0
1.	Long term repaid expenses
2.	Deferred income tax
3.	Other long term assets
	TOTAL ASSETS			594,649,683,284
LIABILITIES
A -	LIABILITIES			500,197,361,023
I.	Short term liabilities			498,227,875,609
1.	Short term debts and loans			298,001,632,533
2.	Payable to suppliers			157,812,173,844
3.	Advances from customers			9,904,605,993
4.	Taxes and other obligations to the State Budget			6,835,741,065
5.	Payable to employees			7,133,716,323
6.	Accrued expenses			221,437,871
7.	Inter- company payable			2,505,129,893
8.	Payable according to the progress of construction contracts
9.	Other payables			15,813,438,087
II.	Long term liabilities			1,969,485,414
1.	Long term account payable to suppliers
2.	Long term inter- company payable
3.	Other long term payable
4.	Long term debts and loans
5.	Deferred income tax			1,969,485,414
B -	OWNER’S EQUITY			94,452,322,261
I.	Owner’s equity			88,322,512,209
1.	Capital			58,683,696,443
2.	Share premiums
3.	Treasury stocks
4.	Differences on asset re-valuation
5.	Foreign exchange differences
6.	Business promotion fund			22,585,711,598
7.	Financial reserved fund			7,053,104,168
8.	Other funds
9.	Retained earnings			0
II.	Other sources and funds			6,129,810,052
1.	Bonus and welfare funds			6,129,810,052
2.	Sources of expenditure
3.	Funds to form fixed assets
	TOTAL LIABLITIES AND OWNER’S EQUITY			594,649,683,284
PROFIT & LOSE ACCOUNT (INCOME STATEMENT)
	Description			2006
1.	Sales			1,479,549,103,804
2.	Deductions			11,146,625,260
3.	Net sales			1,468,402,478,544
4.	Costs of goods sold			1,377,744,331,127
5.	Gross profit			90,658,147,417
6.	Financial income			3,632,781,730
7.	Financial expenses			27,227,330,423
	- In which: Loan interest expenses			22,866,970,126
8.	Selling expenses			39,627,240,854
9.	Administrative overheads			14,188,644,711
10.	Net operating profit			13,247,713,159
11.	Other income			478,408,200
12.	Other expenses
13.	Other profits			478,408,200
14.	Profit (loss) before tax			13,726,121,359
15.	Income tax			2,477,006,286
16.	Profit (loss) after tax			11,249,115,073

FINANCIAL FACTORS
Description	FY 2006
Current Liquidity Ratio	1.14
Quick Liquidity Ratio	0.56
Inventory Circle	4.74
Average Receive Period	60.67
Utilizing Asset Performance	2.47
Liability / Total Asset (%)	84.12
Liability / Owner's Equity (%)	529.58
Income Before Tax / Total Asset (%) ROA	2.31
Income Before Tax / Owner's Equity (%) ROE	14.53
Income Before Tax / Total Revenue (%) NPM	0.93
Gross Profit / Total Revenue (%) GPM	6.13
INTERPRETATION
CODUPHA is a State-owned pharmaceutical company. It is a member of Vietnam Pharmaceutical Corporation, which is under the direct supervision of the Ministry of Health. The subject will change into joint stock company in next year. The subject’s main activities are direct export and import, trading and distributing pharmaceutical products, cosmetics, nutritional products, raw materials.... The subject imports pharmaceutical products and goods from USA, Canada, France, Spain, Italy, Netherlands, UK, Russia, Turkey, India, Thailand, China, Korea, Taiwan and Japan. Its products are provided for domestic markets. The subject doesn’t export. The subject is considered as one of the effective State owned companies in the industry. The position in the industry of the subject is good. CODUPHA is ranked in the top ten companies in Vietnam pharmaceutical association with high revenue. The market share of the subject is fairly large. It has built a wide distribution system in many provinces nationwide. The subject has subordinate three branches and 8 Wholesale, retail & exhibition drug chains at Hochiminh City and one in Tay Ninh province. The subject has advantaged for distribution system and marketing. The competitiveness of the subject is strong. In overview, the subject is operating effectively and has good prospect for development. The subject total asset and annual revenue are high increasing. The payment capacity of subject is fairly good. The subject’s business status is very strong compare with others companies in the same fields. According to Vietnam new business law, all state owned enterprises in the country will be changed into joint stock company and one member state liability limited company. CODUPHA will equitize to joint stock company type in next year, this is advantage for the subject’s operation and development. The latest news, Vietnam police has seized smuggling goods including toothpastes, medicated oil, alcohol in warehouse of Codupha, this goods source is smuggling imported from China market. In June 3^rd 2006, Vietnam police seized container truck unloading of large amount goods, in which mainly goods made in China (No invoice, documents) and import CODUPHA’s No.14 warehouse including : kinds of cosmetic, bicycle key and vacuum-pump. The subject was arrested many batch of smuggling goods and ban goods in warehouse in August 21^st 2006 by Vietnam police. Since this problem, CODUPHA is being under investigation of Department of Natural Resources and Environment of Hochiminh City. This Government Department is investigating on CODUPHA’s management and use of real estate. According to legal document, People’s Committee of Hochiminh City rent the total area of more than 59,000 sq meters at No 334 (Former No. 136) To Hien Thanh Street for CODUPHA setting their office, factor and storage. In fact, CODUPHA has only used about 2,000 sq meters for their businesses. On last September 26^th 2007, The leadership of Vietnam Pharmaceutical Corporation (Ministry of Health) has dismissed two Deputy – Directors Mrs. Do Thi Su and Mr. Le Dinh An of CODUPHA about violated in renting and using warehouse money. In addition, they are expensed principle wrong and formed a false salary sheet for some member in Board of directors and Deputy managers.
The company has ADEQUATE capacity to meet financial commitments

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.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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