MIRA INFORM REPORT

Report Date :

02.11.2007

IDENTIFICATION DETAILS

Name :	TRAPHACO JOINT- STOCK COMPANY
Registered Office :	No. 75, Yen Ninh Str, Quan Thanh Ward, Ba Dinh Dist, Hanoi
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	1972
Legal Form :	Joint - Stock Company
Line of Business :	Research, development, production and sale modern and traditional pharmaceutical products. Distribution of products of other pharmaceutical manufacturer in Vietnam. Processing and sale of pharmaceutical materials, mainly medicinal herbs.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM
English Name				TRAPHACO JOINT- STOCK COMPANY
Vietnamese name				CONG TY CO PHAN TRAPHACO
Brand name				TRAPHACO
Founded				1972
Current Type of Business				Joint - Stock Company
Former Type of Business				State Owned Enterprise
Equitization				1999
Equitization decision				No. 2566/1999QD-BGTVT
Issued on				September 27^th 1999
Issued by				Ministry of Transportation of Vietnam
Business registration				No. 058437
Issued on				November 15^th, 1999
Issued by				Hanoi Department of Planning and Investment.
Current Registered Capital				62,400 Million VND
Former Registered Capital				19,800 Million VND
Tax code				0100108656
Total Employees				820 employees (including staffs & workers)
Qualification				Qualified
Note: The Subject has just increased its registration capital from 19,800 Million VND to 620,400 Million VND in May 2^nd, 2007.
ADDRESSES
Head Office
Address				No. 75, Yen Ninh Str, Quan Thanh Ward, Ba Dinh Dist, Hanoi
Country				Vietnam
Tel				(84-4) 845 4813, 734 1797, 843 0076
Fax				(84-4) 734 1798; 843 0009
Email				traphaco@fpt.vn; traphacopl@hn.vnn.vn
Website				www.traphaco.com.vn
Branch in Da Nang city
Address				No.255 Ton Duc Thang Str, Hoa Minh ward, Lien Chieu Dist, Da Nang city
Country				Vietnam
Business registration				No. 3213000998
Issued by				Da Nang Department of Planning and Investment.
Tax code				No. 0100108656-015
Tel				(84-511) 767 750/ 767 752
Fax				(84-511) 767 751
Branch in Hochiminh
Address				108/14/28 – 3/2 Road, Ward No.14, Dist 10, Hochiminh city
Country				Vietnam
Business registration				No. 4113007612
Issued on				April 18^th, 2002
Issued by				Hochiminh City Department of Planning and Investment.
Tax code				No. 0100108656-013
Tel				(84-8) 866 1771
Fax				(84-8) 863 9322
Email				traphacohcm@hcm.fpt.vn
Director of branch				Mr. NONG HUU DUC
Resident				No.40 Group, O Cho Rua Ward, Dong Da Dist., Hanoi City
Hoang Liet Pharmaceutical Factory
Address				Hoang Liet Ward, Hoang Mai Dist, Hanoi city
Country				Vietnam
Operation year				2004
Investment capital				60 billion VND
Tel				(84-4) 681 0724
Fax				(84-4) 681 1542
Contact person (manager)				Ms. TRAN BICH NGOC
Qualification				Pharmacist
Note: besides, the subject also has other 06 Rep. offices in Hanoi city. 1. C2 - No. 148 Giang Vo Str., Ba Dinh Dist., Hanoi city 2. C9 – No. 148 Giang Vo Str., Ba Dinh Dist., Hanoi City. 3. No. 95 Lang Ha Str., Dong Da Dist., Hanoi City 4. No. 168 Ngoc Khanh Str., Ba Dinh Dist., Hanoi City. 5. No. 102 Thai Thinh Distr., Dong Da Dist., Hanoi City 6. No. 260 Cau Giay Distr., Cau Giay Dist., Hanoi City.
Traphaco High Technology Joint-Stock Company (Factory)
Address				Binh Duong Ward, Tan Quang Commune, Van Lam Dist, Hung Yen Province
Country				Vietnam
Tel				(84- 321) 991 791
Fax				(84- 321) 991 790
Total Employees				230 employees (including staffs & workers)
Director				Mr. TRAN TUC MA
Note: This factory was started building in 2004 with the investment capital of 70 billion VND. It has separated and independently operated as a joint stock company on January 1st 2007. However, its main shareholders are shareholders of Traphaco in Hanoi.
TraphacoSapa Co., Ltd
Address				Sa Pa town, Sa Pa Dist, Lao Cai province
Country				Vietnam
Tel				(84-20) 871 813
Fax				(84-20) 871 813
Contact person (Director)				Mr.LE VAN KHOAI
Note: This is a joint - venture company between the subject and Lao Cai pharmaceutical company (the subject is main shareholder). It plays function of growing, exploiting and processing medicinal herbs according to GAP process.
DIRECTORS
1. NAME				Ms. VU THI THUAN
Position				President & CEO
Qualification				Master
Date of Birth				January 25^th, 1956
ID No.				010104497
Issued on				September 9^th, 2004
Issued by				Hanoi City Police
Resident				Room 302, No.4 Bld., Phap Van Apartment Group, Hoang Mai Dist., Hanoi City.
Nationality				Vietnamese
2. NAME				Ms. NGUYEN THI MUI
Position				Vice president - Chief of financial department
Qualification				Bachelor
Date of Birth				1955
Resident				Group 71, Hoang Cau, O Cho Dua Ward, Dong Da Dist, Hanoi
Nationality				Vietnamese
3. NAME				Ms. HOANG THI RUOC
Position				Member of Board of Management – Chief of Administrative
Qualification				Pharmacist
Resident				Hanoi city
Nationality				Vietnam
4. NAME				Ms. PHAM THI PHUONG
Position				Deputy director of production
Qualification				Pharmacist
Resident				Hanoi city
Nationality				Vietnam
5. NAME				Mr. NGUYEN HUY VAN
Position				Deputy director of research - Member of Board of Management
Qualification				Pharmacist
Resident				Hanoi city
Nationality				Vietnam
6. NAME				Mr. TRAN TUC MA
Position				Deputy director of trading - Member of Board of Management
Qualification				Pharmacist
Resident				Hanoi City
Nationality				Vietnamese
Telephone				(84-4) 681 0724
BUSINESS NATURE AND ACTIVITIES
The subject specializes in the following activities: Research, development, production and sale modern and traditional pharmaceutical products. Distribution of products of other pharmaceutical manufacturer in Vietnam. Processing and sale of pharmaceutical materials, mainly medicinal herbs. Transfer R&D results and/ or patents for new drugs and provision of research services on a contract basis. Besides, it produces wine (Sapamua), beauty products (Evita face – cream)
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports medical equipments, pharmaceutical materials from France, Germany India, China, Singapore, Thailand and Korea.
EXPORT: The Subject exports its products to Russia, Ukraine, Belgium, Switzerland and Africa. The subject has just sent product introduction profile to Southeast Asian countries, such as Cambodia, Myanmar.
BANKERS
1. INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM – BA DINH BRANCH
Address			No. 126, Doi Can Str, Ba Dinh Dist, Hanoi City, Vietnam
Phone Number			(84-4) 845 2826/823 1681
Fax			(84-4) 826 7112
Account number in VND			10201 000 000 4158
SHAREHOLDERS
The subject is a joint-stock company. Following is its shareholders:
1. NAME			STATE OWNED SHARES
Position			Controller
Representative person			Ms. VU THI THUAN
Share			2,667,120 Shares
2. NAME			STAFFS OF ITS COMPANY AND OTHERS
Position			Shareholders
Share			3,572,880 Share s
PAYMENT HISTORY AND EXPERIENCES
Trade Morality			Good
Liquidity			Fairly
Previous payment status			Promptly
Current payment status			Good
Financial Situation			Good
Development Trend			Good
Legal Action			No recorded
Bankruptcy			No recorded
Reputation			Good
Sales methods			Directly sell to its clients or through its agents
Payment methods			Mostly are T/T, L/C
FINANCIAL DATA
BALANCE SHEET
Unit: 1 Million VND
Balance Sheet Date					31/12/2006	31/12/2005	31/12/2004	31/12/2003
Number of Weeks					52	52	52	52
ASSETS
A. Current assets & Short term Investment					188,885	123,026	88,121	75,705
I. Cash and cash equivalents					5,558	11,814	4,881	6,118
II. Short term investment					0	0	0	0
III. Receivables					105,398	48,112	37,438	38,327
1. Receivables from customers					78,604	46,992	34,311	34,021
2. Prepaid for providers					6,023	1,067	3,416	4,730
3. Value-added tax deducted					0	0	0	0
4. Internal receivables					7	7	6	7
5. Other receivables					21,436	761	420	154
6. Provision for bad receivables					-672	-715	-715	-585
IV. Inventory					77,929	57,943	41,201	28,219
1. Purchased goods in transit
0	0	0	0
2. Inventory raw materials					0	26,416	21,420	13,029
3. Inventory appliance					0	0	0	0
4. Cost of production and business in process					0	9,593	5,885	4,004
5. Inventory finished products					0	17,151	12,496	8,852
6. Inventory cargoes					77,929	4,783	2,713	2,741
7. Entrusted goods for sale					0	0	0	0
8. Provision for devaluation of stocks					0	0	-1,313	-407
V. Other current assets					0	3,345	3,057	1,483
1. Advances
0	3,345	2,926	1,372
2. Prepaid expenses					0	0	0	34
3. Pending expenses for transfer					0	0	0	77
4. Pending assets					0	0	0	0
5. Hypothecation, collateral and short run collateral					0	0	131	0
VI. Administrative					0	1,812	1,544	1,558
1. Administrative expenses for previous year					0	69	69	0
2. Administrative expenses for current year					0	1,743	1,475	1,558
B. Fixed assets & Long term investment					45,347	68,167	63,437	54,727
I. Fixed assets					42,422	51,349	54,451	29,189
1. Tangible fix assets					42,422	51,349	54,451	29,189
+ Original cost					82,022	82,660	75,241	42,690
+ Accumulated depreciation value					-39,600	-31,311	-20,790	-13,501
2. Financial leasing fixed assets					0	0	0	0
3. Intangible fix assets					0	0	0	0
II. Long term investment					2,925	675	675	675
1. Long-term securities investment					0	0	0	0
2. Joint-venture capital contribution					675	675	675	675
3. Other long-term investment					2,250	0	0	0
4. Provision for long-term investment devaluation					0	0	0	0
III. Construction in progress					0	16,143	8,311	24,863
IV. Others					0	0	0	0
TOTAL ASSETS					234,232	191,193	151,558	130,432
LIABILITIES
A. Payables					131,644	116,593	93,468	79,720
I. Short term payables					128,016	104,036	71,431	52,370
1.Short-term borrowings					58,300	56,852	28,385	21,454
2. Due long-term liabilities					0	0	0	0
3. Payable to seller					39,464	22,176	16,342	12,049
4. Prepayment for buyer					4,063	5,903	6,126	2,742
5. Taxes and accounts dutiable					6,246	6,491	4,075	1,179
6. Employee payments					19,716	12,501	16,380	11,128
7. Internal payments					214	13	13	13
8. Other payables					13	100	110	3,805
II. Long term payables					3,628	10,149	20,302	25,723
1. Long-term borrowing					3,628	10,149	20,302	25,723
2. Long-term loans					0	0	0	0
III. Other liabilities					0	2,408	1,735	1,627
1. Disbursement payable					0	2,408	1,735	1,627
2. Pending assets					0	0	0	0
3. Receipts long-term collateral and deposit					0	0	0	0
B. Owner’s Equity:					102,588	74,600	58,090	50,712
I. Capital and Funds					101,718	71,220	54,658	47,750
1. Working capital					20,000	40,790	41,304	11,830
2. Differences from assets revaluation					0	0	0	0
3. Exchange rate differences					0	0	0	0
4. Business development fund					16,320	7,127	400	18,135
5. Reserved fund					4,172	3,274	2,602	1,944
6. Retained profit					20,236	20,029	10,352	15,841
7. Construction capital sources					40,990	0	0	0
II. Other administrative and fund sources					870	3,380	3,432	2,962
1. Provident funds for unemployment					0	0	0	0
2. Welfare and reward funds					616	1,300	1,351	846
3. Management funds of higher level					0	0	0	0
4. Functional operation funds					254	2,080	2,081	2,116
- Previous year - functional operation funds					0	739	739	772
- Current year – functional operation funds					0	1,341	1,342	1,344
5. Fund sources formed by fixed assets					0	0	0	0
TOTAL LIABILITY AND EQUITY					234,232	191,193	151,558	130,432
PROFIT & LOSE ACCOUNTS
Description					FY 2006	FY 2005	FY 2004	FY 2003
Total revenue					362,591	262,240	189,862	141,048
Export revenue					0	0	0	0
Deducted Items					2,351	1,013	2,553	1,214
- Discount					0	0	0	0
- Devaluation of sale price					0	0	0	60
- Return of sold goods					2,351	920	2,513	1,154
- Turnover tax, excise tax, import and export duties to be paid					0	93	40	0
1. Net revenue					360,240	261,227	187,309	139,834
2. Original rate of goods for sale					226,842	148,150	101,676	70,535
3. Combined Profit					133,398	113,077	85,633	69,299
4. Sales costs					63,896	48,837	38,836	27,647
5. Enterprise administrative costs					38,790	30,180	27,402	20,934
6. Net income from business operation					30,712	34,060	19,395	20,718
Income from financial activities					980	649	147	154
Cost of financial activities					6,751	6,371	4,382	1,601
7. Net income from financial operation					-5,771	-5,722	-4,235	-1,447
Irregular income					165	1,400	160	981
Irregular expenditure					16	80	-168	23
8. Irregular Profit					149	1,320	328	958
9. Total pre-tax profit					25,090	29,658	15,488	20,229
10. Income tax					7025	8,304	4,336	6,474
11. After tax profit					18,065	21,354	11,152	13,755
FINANCIAL FACTORS
Description					FY 2005	FY 2005	FY 2004	FY 2003
Current Liquidity Ratio					1.48	1.18	1.23	1.45
Quick Liquidity Ratio					0.87	0.63	0.66	0.91
Inventory Circle					3.34	2.99	2.93	2.50
Average Receivable Period (days)					106.79	67.22	72.95	100.04
Utilizing Asset performance					1.54	1.37	1.24	1.07
Liabilities / Total Assets (%)					56.20	60.98	61.67	61.12
Liabilities / Owner’s Equity (%)					128.32	156.29	160.90	157.20
Income before tax/ Total assets (%) ROA					10.71	15.51	10.22	15.51
Income before tax/ Owner’s Equity (%) ROE					24.46	39.76	26.66	39.89
Income before tax / Total revenues (%) NPM					6.92	11.31	8.16	14.34
Gross Profit / Total revenue (%) GPM					36.79	43.12	45.10	49.13
INTERPRETATION
The subject was a State Owned Enterprise established on November 28^th, 1972. At that time, it was a small medicinal manufacturing Unit of the Ministry of Transportation. It was equitized in 1999 according to the decision of the Ministry of Transport. The subject officially changed its name into ‘’Traphaco Joint Stock Company ‘’ in early 2000. The subject is one of the most popular pharmaceutical enterprises in Vietnam and it is on the way of development after equitization. Its current capital now is 62,400 Million VND. The subject has two factories specializing in manufacture of medicine. One of them is operating and the other is in process of manufacturing and improving in Hung Yen province. The subject is also the main shareholder of TraphacoSapa Company Limited in Lao Cai province where has convenient weather for planting pharmaceutical trees. Therefore, TraphacoSapa supplies many importance pharmaceutical materials for the subject. Beside the domestic material source, the subject has to import medical materials and equipments from foreign countries, such as India, China, Thailand, Singapore, Germany, France…. Currently, its brand name is very popular and takes a large share in the market. The subject has wide distribution system including some agents and many stores in all provinces, 1 branch office in Hochiminh City and 1 branch office in Danang City. Although, the directors are woman, they all have ability. The staff has good qualification. The subject also focuses on research to produce new products and to seek the new market. In general, annual growth rate of the subject after equitization is fairly good (25 –30 percent). The financial status and operation seem to be stable and solid. The revenue and total pre – tax profit are fairly high. In 2005, the subject’s owner equity was 74 billion VND, its total revenue was about 262 billion VND and its pretax profit in 2005 was 29 billion VND. Its total revenue in 2006 reached 360,240 Million VND, a 37.9 percent higher than 2005. In the first 9 months of 2007, the subject has attained 399 Billion VND revenue, in which the after tax profit is 30 Billion VND. This sign shows the good development and right way of operation of the subject. On Sep 22^nd 2007, the subject and VNS Securities Stock Company signed an co-operation agreement. Follow which, the subject will contribute capital to VNS company when this company increases capital. The subject’s profit mainly comes from domestic market. The future prospect of the subject seems fairly bright. And there is no caution needed for small & normal business transactions. A little 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.	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