MIRA INFORM REPORT

Report Date :

16.01.2008

IDENTIFICATION DETAILS

Name :	STADA VIETNAM JOINT VENTURE COMPANY LIMITED
Registered Office :	K63/1, Nguyen Thi Soc Str, My Hoa 2 hamlet, Xuan Thoi Dong commune, Hoc Mon Dist, Hochiminh city
Country :	Vietnam
Financials (as on) :	31.12.2006
Date of Incorporation :	2002
Legal Form :	Joint Venture Company
Line of Business :	Producer of Pharmaceuticals.

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		STADA VIETNAM JOINT VENTURE COMPANY LIMITED
	Vietnamese name		CONG TY LIEN DOANH TNHH STADA VIETNAM
	Trade Name		STADA VN CO., LTD
	Founded		2002
	Type of Business		Joint Venture Company
	Business Registration No.		No. 2271/GP
	Date of Issuance		September 4th, 2002
	Place of Issuance		Ministry of Planning and Investment
	Current Investment Capital		20,000,000 USD
	Former Investment Capital		14,000,000 USD
	Legal Capital		6,112,000 USD
	Investment Duration		45 years
	Tax Code		0302737671
	Total Employees		360 employees of the whole company
	Qualification		Qualified
	Note: The subject has increased investment capital from 14,000,000 USD to 20,000,000 USD on February 1^st, 2007
	ADDRESS
	Head Office and factory No.1
	Address		K63/1, Nguyen Thi Soc Str, My Hoa 2 hamlet, Xuan Thoi Dong commune, Hoc Mon Dist, Hochiminh city.
	Country		Vietnam
	Tel		(84-8) 7181154/ 7182141
	Fax		(84-8) 7182140
	Email		stada@hcm.vnn.vn stadavn@hcm.vnn.vn
	Website		http://stadavn.net
	Land area		9,248m2
	Factory No.2:
	Address		No.40 Tu Do Boulevard, Vietnam - Singapore Industrial Park, Thuan An Dist., Binh Duong Province.
	Tel		(84-650) 767471/ 767470
	Fax		(84-650) 767469
	Total Land Area		34,300m2
	Manager		Mr. ONG VAN DUNG
	DIRECTORS
	1. NAME		Mr. CHOO YAN HO
	Position		Chairman
	Qualification		Management
	Current Resident		Hochiminh City
	Nationality		Chinese
	2. NAME		Mr. ONG VAN DUNG
	Position		General Director
	ID No.		022059079
	Qualification		Management
	Nationality		Vietnamese
	3. NAME		Mr. PHAN HUY
	Position		Deputy General Director
	Qualification		Pharmacist
	Nationality		Vietnamese
	4. NAME		Mrs. HUYNH THI SU
	Position		Financial Director
	Qualification		Bachelor
	Nationality		Vietnamese
	5. NAME		Ms. NGUYEN NGOC DIEM HUYEN
	Position		Assistant
	Resident		Hochiminh city
	Nationality		Vietnamese
	BUSINESS NATURE AND ACTIVITIES
	The subject is specializing in producing pharmaceuticals.
	IMPORT & EXPORT ACTIVITIES
	IMPORT: The principal materials of the subject are imported from France, India and Germany
	EXPORT: The subject exports its products to Hong Kong, Thailand and Senegal.
	BANKERS
	1. HONGKONG SHANGHAI BANK CORPORATION (HSBC)
	Address		No. 235, Dong Khoi Str, Dist 1, Hochiminh city
	Country		Vietnam
	Tel		(84-8) 829 2288
	Fax		(84-8) 823 0530
	Swift		HSBCVNVX
	2. INDUSTRIAL AND COMMERCIAL BANK OF VIETNAM (INCOMBANK) - BRANCH NO. 11
	Address		No. 1445-1447-1449, Str 3/2, Ward 16, Dist 11, Hochiminh city
	Country		Vietnam
	Tel		(84-8) 960 4134
	Fax		(84-8) 969 3877
	Swift		ICBVVNVX942
	SHAREHOLDERS
	1. Name		M.S.T PHARMACEUTICALS TRADING CO., LTD
	Address		K63/1, Nguyen Thi Soc Str, My Hoa 2 Hamlet, Xuan Thoi Dong Commune, Hoc Mon Dist, Hochiminh City
	Country		Vietnam
	Share		50%
	2. Name		STADA PHARMACEUTICALS (ASIA) LTD
	Address		2208-2209, Paul Y Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong
	Share		50%
	Website		www.stada.de/english
	PAYMENT HISTORY AND EXPERIENCES
	Trade Morality		Good
	Liquidity		Fair
	Previous Payments		Prompt
	Payment status		Prompt
	Past Financial Situation		Fair
	Current Financial Situation		Fairly Good
	Litigation Data		No recorded
	Bankruptcy		No recorded
	Public opinion		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			31/12/2005			31/12/2004
	Number of weeks			52			52			52
	ASSETS
	A - CURRENT ASSETS			224,507,876,624			179,944,215,082			119,639,837,000
	I. Cash and cash equivalents			8,092,615,315			7,553,413,947			39,498,081,000
	1. Cash			611,980,410			505,311,926			39,498,081,000
	2. Cash equivalents			7,480,634,905			7,048,102,021			0
	II. Short-term financial investments			0			0			0
	1. Short-term investments			0			0			0
	2. Provisions for devaluation of short-term investment stocks			0			0			0
	III. Accounts receivables			57,756,549,244			79,240,956,709			30,346,514,000
	1. Receivable from customers			53,187,804,443			54,686,413,279			28,246,854,000
	2. Prepayment to suppliers			3,797,797,178			24,305,018,993			928,601,000
	3. Inter- company receivables			770,947,623			249,524,437			360,559,000
	4. Progress receipts due from construction contract			0			0			0
	5. Other receivables			0			0			810,500,000
	6. Provisions for bad debts			0			0			0
	IV. Inventories			158,251,474,513			88,727,574,053			46,524,601,000
	1. Raw materials, spare parts,			161,090,263,018			91,354,315,645			47,114,195,000
	2. Provisions for devaluation of inventories			-2,838,788,505			-2,626,741,592			-589,594,000
	V. Other current assets			407,237,552			4,422,270,373			3,270,641,000
	1. Short-term prepaid expenses			0			0			392,010,000
	2. Value added tax deducted			407,237,552			4,422,270,373			2,878,631,000
	3. Taxes receivables			0			0			0
	4. Other current assets			0			0			46,524,601,000
	B -LONG TERM ASSETS			145,898,529,651			55,383,892,515			24,913,948,000
	I. Long term accounts receivable			92,904,763,782			0			0
	1. Long term accounts receivable from customers			0			0			0
	2. Long term inter- company receivable			92,904,763,782			0			0
	3. Other long term accounts receivables			0			0			0
	4. Provisions for bad debts			0			0			0
	II. Fixed assets			52,396,898,274			54,771,626,611			24,913,948,000
	1. Tangible fixed assets			41,184,287,867			26,051,951,440			22,813,649,000
	Historical costs			52,894,218,862			33,257,895,646			27,026,332,000
	Accumulated depreciation			11,709,930,995			7,205,944,206			4,212,683,000
	2. Finance lease assets			0			0			0
	Historical costs			0			0			0
	Accumulated depreciation			0			0			0
	3. Intangible assets			11,212,610,407			25,169,151,120			2,100,299,000
	Historical costs			11,466,077,848			25,314,716,400			2,195,956,000
	Accumulated depreciation			253,467,441			145,565,280			95,657,000
	4. Construction in progress			0			3,550,524,051			0
	III. Investment property			0			0			0
	Historical costs			0			0			0
	Accumulated depreciation			0			0			0
	IV. Long term financial investments			0			0			0
	1. Investments subsidiary company			0			0			0
	2. Investments in business concerns and joint ventures			0			0			0
	3. Other long term investments			0			0			0
	4. Provisions for devaluation of long-term investments stock			0			0			0
	V. Other long term assets			596,867,595			612,265,904			0
	1. Long term prepaid expenses			596,867,595			612,265,904			0
	2. Deferred income tax assets			0			0			0
	3. Other long term assets			0			0			0
	TOTAL ASSETS			370,406,406,275			235,328,107,597			144,553,785,000
	LIABILITIES
	A -LIABILITIES			202,770,666,670			109,100,117,785			96,305,671,000
	I. Short term liabilities			150,100,211,244			55,205,584,859			80,697,671,000
	1. Short term debts and borrowings			16,048,000,000			26,193,750,000			60,249,570,000
	2. Payable to suppliers			3,372,260,914			3,612,803,351			2,421,981,000
	3. Advances from customers			0			0			0
	4. Taxes and other accounts payable to the State Budget			698,061,846			1,210,367,716			170,920,000
	5. Payable to employees			0			0			0
	6. Accrued expenses			76,157,003,295			4,517,843,017			1,544,080,000
	7. Payable to inter- company			53,824,885,189			19,670,820,775			16,201,327,000
	8. Progress payments due to construction contract			0			0			0
	9. Other payables			0			0			109,793,000
	10. Provision for short term payable			0			0			0
	II. Long term liabilities			52,670,455,426			53,894,532,926			15,608,000,000
	1. Long term account payable to suppliers			0			0			0
	2. Long term inter-company payables			0			0			0
	3. Other long term payables			0			0			0
	4. Long term debts and borrowings			50,818,781,250			52,387,500,000			15,608,000,000
	5. Deferred income tax liabilities			0			0			0
	6. Provision for unemployment			1,851,674,176			1,507,032,926			0
	7. Provision for long term payable			0			0			0
	B -OWNER’S EQUITY			167,635,739,605			126,227,989,812			48,248,114,000
	I. Owner’s equity			167,635,739,605			126,227,989,812			48,248,114,000
	1. Owners' Investment capital			96,509,849,556			96,391,949,556			15,379,942,000
	2. Share premiums			0			0			0
	3. Other owners’ capital			0			0			0
	4. Treasury shares			0			0			0
	5. Differences upon asset revaluation			0			0			0
	6. Foreign exchange differences			0			0			0
	7. Business promotion fund			0			0			0
	8. Financial reserved fund			0			0			0
	9. Other funds			0			0			0
	10. Undistributed earnings			71,125,890,049			29,836,040,256			32,868,172,000
	11. Investment construction capital			0			0			0
	II. Other sources and funds			0			0			0
	1. Bonus and welfare funds			0			0			0
	2. Sources of expenditure			0			0			0
	3. Funds used to acquire fixed assets			0			0			0
	TOTAL LIABLITIES AND OWNER’S EQUITY			370,406,406,275			235,328,107,597			144,553,785,000
	PROFIT & LOSE ACCOUNT (INCOME STATEMENT)
	Description				F/Y 2006			F/Y 2005			F/Y 2004
	1. Revenue from sales of goods and rendering of services				260,504,809,458			151,066,538,000			98,231,582,000
	2. Deductible items				0			0			0
	3. Net revenue from sales of goods and rendering of services				260,504,809,458			151,066,538,000			98,231,582,000
	4. Costs of goods sold				180,751,539,564			98,945,989,000			67,699,390,000
	5. Gross profit				79,753,269,894			52,120,549,000			30,532,192,000
	6. Income from financial activities				201,913,747			210,221,000			161,027,000
	7. Expenses from financial activities				4,743,894,096			4,447,132,000			1,861,866,000
	In which: Loan Interest expenses				3,571,396,708			0			0
	8. Selling expenses				15,123,853,321			8,740,625,000			3,946,546,000
	9. General & administration expenses				14,757,762,761			7,602,160,000			4,147,864,000
	10. Net operating profit				45,329,673,463			31,540,853,000			20,736,943,000
	11. Other incomes				269,047,741			14,000,000			129,863,000
	12. Other expenses				128,257,219			0			0
	13. Other profits				140,790,522			14,000,000			129,863,000
	14. Profit (loss) before tax				45,470,463,985			31,554,853,000			20,866,806,000
	15. Income tax				4,171,250,504			2,916,985,000			0
	16. Profit (loss) after tax				41,299,213,481			28,637,868,000			20,866,806,000
	FINANCIAL FACTORS
	Description					FY 2006			FY 2005			FY 2004
	Current Liquidity Ratio					1.50			3.00			1.48
	Quick Liquidity Ratio					0.44			1.39			0.91
	Inventory Circle					1.46			1.46			1.46
	Average Receive Period					80.92			154.56			112.76
	Utilizing Asset Performance					0.70			0.64			0.68
	Liability / Total Asset (%)					54.74			46.38			66.62
	Liability / Owner's Equity (%)					120.96			86.48			199.61
	Income Before Tax / Total Asset (%) ROA					12.28			13.41			14.44
	Income Before Tax / Owner's Equity (%) ROE					27.12			25.00			43.25
	Income Before Tax / Total Revenue (%) NPM					17.45			20.89			21.24
	Gross Profit / Total Revenue (%) GPM					30.61			34.50			31.08
	INTERPRETATION ON THE SCORES
	STADA VIETNAM is specializing in the production of pharmaceuticals. The subject’s products are mineral vitamins, antibiotic, antiviral, reducing blood pressure medicine. The subject is a Joint Venture company between M.S.T Pharmaceuticals Trading Co., Ltd of Vietnam (50%) and Stada Pharmaceuticals (Asia) Ltd of Hong Kong (50%). It was established in 2002 and started operation at the same year. Originally, the subject’s legal capital and investment capital were US$ 1,000,000 and US$ 3,000,000 respectively. Currently, legal capital of the subject is US$ 6,112,000 and investment capital is US$ 20,000,000. The subject’s foreign partner in legal form is Stada Pharmaceuticals (Asia) Ltd - belonged to Stada Group in Germany. The premises of the subject are standard. It has two factories located on a large area. At present, the subject has 360 employees. The subject has just produced three kinds of AIDS drugs including Stadvudine Stada, Lamzidivir Stada and Nevirapine Stada. These drugs are manufactured in domestic market so it will be much cheaper than imported ones. This is a good achievement of the subject to help the patient in curing disease. This goal brings the subject a higher position in the health industry and brings the subject much more profit. Now, the principal materials sources of the subject are imported from France, India and Germany. In 2003, Stada – VN started to exports its products to Cambodia, Thailand, Malaysia, Hong Kong, Philippines… The subject’s exportation was realized by STADA Import Export (Hong Kong). During development process, the subject has gained some great achievements. Its position in the industry is higher and higher. It is considered as one of the well running enterprises in Vietnam recently. Operation of the subject is being improved and widened well. Its management is good. The subject has active and creative staffs. Furthermore, it also gets support from foreign investor - Stada Group in technology. According to business result of the subject, the financial capacity is fair. Its total revenue increased year after year. In 2004, turnover of the subject was 98 billion VND, in there, the after tax profit was 20.8 billion VND. In 2005, turnover was 151 billion VND, increased 54.08 percent in comparison with 2004 and in 2006, total revenue of the subject was 260 billion VND, a 72.18 percent higher than 2005. In short, the subject is operating effectively. It has capacity to meet financial commitments. No caution needed for small and normal business transactions.
	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%)

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