MIRA INFORM REPORT

Report Date :

04.05.2007

IDENTIFICATION DETAILS

Name :	DA NANG PHARMACEUTICAL MEDICAL EQUIPMENT JOINT STOCK COMPANY
Registered Office :	No. 2, Phan Dinh Phung Str., Hai Chau Dist., Da Nang City
Country :	Vietnam
Financials (as on) :	31.12.2005
Date of Incorporation :	1976
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing & trading in pharmaceutical products Importing, exporting and trading on machines, equipment and tools for medical programs, activities; cosmetics, nutritious food & nutrition with vitamins Installing, maintaining & warranty to medical equipment.

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
Current name				DA NANG PHARMACEUTICAL MEDICAL EQUIPMENT JOINT STOCK COMPANY
Vietnamese name				CONG TY CO PHAN DUOC - THIET BI Y TE DA NANG
Former name				DANANG PHARMACEUTICAL COMPANY
Trade name				DAPHARCO
Current Type of Business				Joint Stock Company
Former Type of Business				State Owned Enterprise
Founded				1976
Re-Established Decision				No. 177/QDUB
Issued on				March 04^th, 1993
Issued by				People’s Committee of Da Nang City
Equitized Decision				No. 195/2004/QDUB
Issued on				December 8^th, 2004
Issued by				People’s Committee of Da Nang City
Business registration				No. 3203000578
Dated on				March 22^nd, 2005
Issued by				Planning and Investment Department of Da Nang City
Registered Capital				8,000,000,000 VND
Tax code				0400101404
Total Employees				485 employees
Qualification				Normal
ADDRESS
Head Office
Address				No. 2, Phan Dinh Phung Str., Hai Chau Dist., Da Nang City, Vietnam
Tel				(84-511) 821 642
Fax				(84-511) 891 752
Email				daphaco@dng.vnn.vn
Manufacture Workshop
Address				Binh Thai Hamlet, Hoa Tho Commune, Hoa Vang Dist, Da Nang Province, Vietnam.
Tel				(84-511) 671 722
Director workshop				Mr. Pham Van Manh
Branch in Hanoi City
Address				Floor 1^st, A5, Thanh Cong Hotel, No. 101, Lang Ha Str, Lang Ha Ward, Dong Da Dist, Hanoi City
Tel				(84-4) 562 3453
Fax				(84-4) 562 3514
Chief of branch				Mr. Dang Van Nam
Branch in Ho Chi Minh City
Address				796/15 Su Van Hanh Str., Ward 12, Dist. 10, Hochiminh City, Vietnam
Tel				(84-8) 863 1018
Fax				(84-8) 862 9834
Chief of branch				Mr. Tran Nhan Triet
Branch in Quang Nam Province
Address				No. 377, Phan Chu Trinh Str, Tam Ky Town, Quang Nam Province, Vietnam
Tel				(84-510) 812859
Fax				(84-510) 820450
Chief of branch				Mr. Truong Phu Trinh
DIRECTORS
1. NAME				Mr. PHAN THINH
Position				Director
Date of Birth				August 20^th, 1945
Ident No				200005880
Issued on				June 20^th, 2000
Issued by				Da Nang Police
Resident				137 Nguyen Van Linh Str, Thanh Khe Dist, Da Nang City
Qualification				Pharmacist
Office Tel				(84-511) 822 247
Nationality				Vietnamese
2. NAME				Mr. TONG VIET PHAI
Position				Deputy Director
Date of Birth				October 5, 1959
Ident No				201492403
Issued by				Da Nang Police
Resident				No. 27, Hoang Dieu Str., Hai Chau Dist., Da Nang City, Vietnam
Qualification				Pharmacist
Nationality				Vietnamese
3. NAME				Mr. VO VAN CHIN
Position				Deputy Director
Date of Birth				April 15, 1952
Ident No				020007500
Issued by				Da Nang Police
Resident				No. 57, Duy Tan Str., Hai Chau Dist, Da Nang City, Vietnam.
Qualification				Pharmacist
Nationality				Vietnamese
BUSINESS NATURE AND ACTIVITIES
The subject is specializing in following activities:
Manufacturing & trading in pharmaceutical products · Importing, exporting and trading on machines, equipment and tools for medical programs, activities; cosmetics, nutritious food & nutrition with vitamins · Installing, maintaining & warranty to medical equipment. · The subject also provide consulting service and trainings for Vietnamese health agencies; actively involved in the heal and sanitary program of the government
IMPORT & EXPORT ACTIVITIES
IMPORT: The Subject imports medical equipments, pharmaceutical products from South Korea, India, Taiwan, France, Japan, USA, Singapore, Hungary and Germany, etc.
EXPORT: The Subject doesn’t export.
BANKERS
1. INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM (INCOMBANK) - BRANCH IN DA NANG
Address		No. 172, Nguyen Van Linh Str, Thanh Khe Dist., Da Nang City, Vietnam
Tel		(84-511) 821 990
Fax		(84-511) 825 528
2. MEKONG DELTA BANK FOR HOUSING DEVELOPMENT- BRANCH IN DA NANG
Address		No. 129, Le Loi Str, Hai Chau Dist., Da Nang City, Vietnam
Tel		(84-511) 817 855
Fax		(84-511) 817 823
SHAREHOLDERS
The current shareholders of the subject as follows:
1. Name		Mr. PHAN THINH
Position		Director
Nationality		Vietnamese
Date of Birth		August 20^th, 1945
Ident No		200005880
Issued on		June 20^th, 2000
Issued by		Da Nang Police
Resident		137 Nguyen Van Linh Str, Thanh Khe Dist, Da Nang City
Share		26%
2. Name		Mr. LE QUYNH NHU
Nationality		Vietnamese
Date of Birth		December 22^th, 1979
Ident No		201433889
Issued by		Da Nang Police
Resident		421/ 15 Le Duan Str, Thanh Khe Dist, Da Nang City, Vietnam
Share		25 %
3. Name		Mr. VO VAN CHIN
Position		Deputy director
Nationality		Vietnamese
Date of Birth		April 15, 1952
Ident No		020007500
Issued by		Da Nang Police
Resident		No. 57, Duy Tan Str., Hai Chau Dist, Da Nang City, Vietnam.
Share		0.21625 %
4. Name		Mr. TONG VIET PHAI
Position		Deputy director
Nationality		Vietnamese
Date of Birth		October 5, 1959
Ident No		201492403
Issued by		Da Nang Police
Resident		No. 27, Hoang Dieu Str., Hai Chau Dist., Da Nang City, Vietnam
Share		0.15 %
5. Name		Mr. NGUYEN HUU CONG
Nationality		Vietnamese
Date of Birth		October 21, 1961
Ident No		201390069
Issued by		Da Nang Police
Resident		No. 91, Tran Phu Str., Hai Chau Dist, Da Nang City, Vietnam
Share		0.135%
6. Name	Mr. TRAN NHAN TRIET
Nationality	Vietnamese
Date of Birth	November 8, 1958
Ident No	201358828
By	Da Nang Police
Resident	No. 21, Ham Nghi str., Thanh Khe Dist., Da Nang City, Vietnam
Share	0.15 %
7. Name	Mr. DANG VAN NAM
Nationality	Vietnamese
Date of Birth	November 3, 1957
Ident No	200828938
Issued by	Da Nang Police
Resident	Hoa Tho Commune, Hoa Vang Dist, Da Nang City, Vietnam
Share	0.2 %
8. Name	Mr. LE NGOC BO
Nationality	Vietnamese
Date of Birth	May 10^th, 1964
Ident No	201083163
By	Da Nang Police
Resident	Binh Hien Ward, Hai Chau Dist., Da Nang City, Vietnam
Share	0.115 %
9. Name	533 OTHER SHAREHOLDERS
Nationality	Vietnamese
Share	48.03 %
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			Fairly
Legal Action			No recorded
Bankruptcy			No recorded
Public Opinion			Fairly good
Mode of payment			Through its bank, L.C or TT
FINANCIAL DATA
BALANCE SHEET
Unit: Million VND
Balance sheet date					31/12/2005	31/12/2004		31/12/2003
Number of weeks					52	52		52
ASSETS
A. Working assets & short-term Investment					119,673	99,111		97,593
I. Cash and cash equivalents					707	820		685
II. Short-term investment					0	0		0
1. Short-term securities investment					0	0		0
2. Other short-term investment					0	0		0
3. Provision for short-term investment					0	0		0
III. Receivables					75,226	56,079		57,640
1. Receivables from customers					65,102	48,642		51,856
2. Prepayment for providers					0	0		0
3. Value-added tax deducted					5,893	0		0
4. Internal receivables					0	5,449		4,916
5. Other receivables					4,231	1,988		952
6. Provision for bad receivables					0	0		-84
IV. Inventory					43,509	41,372		38,608
1. Purchased goods in transit					0	0		0
2. Raw materials					309	170		249
3. Instrument, tools					0	0		31
4. Cost for production and business in process					0	0		0
5. End products					78	120		83
6. Goods					43,122	41,082		38,245
7. Goods on consignment					0	0		0
8. Provision for devaluation of stocks					0	0		0
V. Other current assets					231	840		660
1. Advances					231	639		362
2. Prepaid expenses					0	0		0
3. Pending expenses for transfer					0	34		50
4. Pending assets					0	0		0
5. Mortgage, collateral and short run collateral					0	167		248
VI. Administrative					0	0		0
1. Administrative expenses for previous year					0	0		0
2. Administrative expenses for current year					0	0		0
B. Fixed assets & Long term investment					8,008	6,647		4,871
I. Fixed assets					8,008	6,647		4,871
1. Tangible fixed assets					2,941	2,964		3,053
+ Original cost					4,920	4,846		4,599
+ Accumulated depreciation value					-1,979	-1,882		-1,546
2. Financial leasing fixed assets					0	0		0
+ Original cost					0	0		0
+ Accumulated depreciation value					0	0		0
3. Intangible fixed assets					5,067	3,683		1,818
+ Original cost					5,067	3,683		1,818
+ Accumulated depreciation value					0	0		0
II. Long term investment					0	0		0
1. Long-term securities investment					0	0		0
2. Joint-venture capital contribution					0	0		0
3. Other long-term investment					0	0		0
4. Provision for long-term investment devaluation					0	0		0
III. Capital construction in process					0	0		0
IV. Other					0	0		0
TOTAL ASSETS					127,681	105,758		102,464
LIABILITIES
A. Payable loans					120,846	98,749		97,525
I. Short term payables					120,846	98,695		97,525
1. Short-term borrowings					34,680	28,924		24,940
2. Due long-term liabilities					0	0		0
3. Payables to supplier					80,687	67,061		111,387
4. Prepayment of buyer					0	0		0
5. Taxes and accounts dutiable					73	-502		618
6. Employee payments					364	716		1,155
7. Internal payables					1,250	925		708
8. Other payables					3,792	1,571		-41,283
II. Long term loans					0	0		0
1. Long-term borrowings					0	0		0
2. Long-term payables					0	0		0
III. Other payables					0	54		0
1. Payable expenses					0	0		0
2. Pending assets					0	0		0
3. Receipts long-term collateral and deposit					0	54		0
B. Owner’s Equity					6,835	7,009		4,939
I. Capital and Funds					6,673	6,488		4,600
1. Working capital					5,380	5,543		3,883
2. Differences from asset revaluation					0	0		0
3. Exchange rate differences					0	0		-10
4. Development investment funds					985	702		520
5. Reserved funds					308	243		207
6. Retained profit					0	0		0
7. Construction capital sources					0	0		0
II. Other administrative and fund sources					162	521		339
1. Provident funds for unemployment					0	241		148
2. Reward and welfare funds					162	280		191
3. Management funds of higher level					0	0		0
4. Functional operation funds					0	0		0
5. Fund sources formed by fixed assets					0	0		0
TOTAL LIABILITY AND EQUITY					127,681	105,758		102,464
PROFIT & LOSE ACCOUNT (INCOME STATEMENT)
Description					FY 2005		FY 2004	FY 2003
Total revenue					313,604		324,965	276,984
Deductions Items					817		1,604	1,101
- Discount					817		0	0
- Devaluation					0		0	0
- Return of sold goods					0		1,585	1,077
- Turnover tax, Luxury tax & Export tax					0		19	24
1. Net revenue					312,787		323,361	275,883
2. Cost of goods sold					296,609		306,753	261,024
3. Gross Profit					16,178		16,608	14,859
4. Sales expenses					8,727		9,169	7,210
5. Enterprise administrative expenses					3,964		5,699	5,348
6. Net income from business activities					3,487		1,740	2,301
Income from financial activities					266		79	468
Expenditure from financial activities					2,884		3,216	2,272
7. Net income from financial operation					-2,618		-3,137	-1,804
Irregular income					598		2,220	303
Irregular expenditure					22		33	31
8. Irregular Profit					576		2,187	272
9. Total pre-tax profit					1,445		790	769
10. Income tax					405		221	246
11. After tax profit					1,040		569	523
FINANCIAL FACTORS
Description					FY 2005		FY 2004		FY 2003
Current Liquidity Ratio					0.99		1.00		1.00
Quick Liquidity Ratio					0.63		0.59		0.60
Inventory Circle					13.63		7.67		6.76
Average Receive Period					87.78		63.30		76.26
Utilizing Asset Performance					2.45		3.06		2.69
Liability / Total Asset (%)					94.65		93.37		95.18
Liability / Owner's Equity (%)					1,768.05		1,408.89		1,974.59
Income Before Tax / Total Asset (%) ROA					1.13		0.75		0.75
Income Before Tax / Owner's Equity (%) ROE					21.14		11.27		15.57
Income Before Tax / Total Revenue (%) NPM					0.46		0.24		0.28
Gross Profit / Total Revenue (%) GPM					5.16		5.11		5.36
INTERPRETATION
The subject was founded in 1976 and re-established in 1993 with name as Da Nang Pharmaceutical Company. In December 8^th 2004, the subject’s equitization decision was approved by People’s committee of Da Nang city and in March 2005, the subject began running as joint stock company. The subject now specializes in trading in pharmaceutical and medical equipments. The premises and facilities of the subject are fairly. Management capability of the subject is limited. Now, the subject runs as a joint stock company but the state still owned 51% shares of it, so the subject has received much supports from people’s committee of Da Nang city in seeking clients. Main clients of the subject are other units of People’s committee of Da Nang city specialized in pharmacy. Its products are mainly consumed in Central and Central Highland areas of Vietnam. Financial situation of the subject is above average. There is a slight decrease of NPM and GPM ratios from 2002 to 2004 but it was increase in 2005. Solvency is average. Within three years of 2005, 2004 and 2003, liabilities occupied more than 90% in total assets, so it was fairly risky for credit institutions. Profitability of the subject is also low. Operation and financial situation of the subject in 2005 was not much improved compared with the past years. During development process, the subject has attained some achievements such as Vietnam high quality product in 6 consecutive years. Its director named Mr. Phan Thinh was chosen as one of the most typical businessmen in 2006. In short, the subject has been operating at medium scale company. It is capable to meet small and normal commitments. Caution needed for big 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
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%)

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