MIRA INFORM REPORT

Report Date :

22.10.2008

IDENTIFICATION DETAILS

Name :	DOMESCO MEDICAL IMPORT EXPORT JOINT STOCK COMPANY
Registered Office :	No. 66, Highway no. 30, My Phu Ward, Cao Lanh City, Dong Thap Province
Country :	Vietnam
Financials (as on) :	30.06.2008
Date of Incorporation :	1985
Com. Reg. No.:	5103000015
Legal Form :	Joint Stock Company
Line of Business :	Producing, Trading, Importing, Exporting medicine, material, additive to make medicine for people. Perfume, types of cosmetics made from local and imported materials

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 :	No Complaints
Litigation :	Clear

SUBJECT IDENTIFICATION & LEGAL FORM

English Name	DOMESCO MEDICAL IMPORT EXPORT JOINT STOCK COMPANY
Vietnamese name	CONG TY CO PHAN XUAT NHAP KHAU Y TE DOMESCO
Abbreviation name	DOMESCO
Stock Code	DMC
Listed On	HOSE
Type of Business	Joint Stock Company
Founded	1985
Business Registration	No. 5103000015
Date of Issuance	December 30^th, 2003 ( Last change on June 17^th , 2008 )
Place of Issuance	Department of Planning and Investment of Dong Thap Province
Registered capital	VND 137,699,990,000
Tax code	1400460395
Total Employees	About 920 employees
ADDRESS
Head Office
Address	No. 66, Highway no. 30, My Phu Ward, Cao Lanh City, Dong Thap Province
Country	Vietnam
Tel	(84-67) 852278
Fax	(84-67) 851270
Website	www.domesco.com
Branch in Ha Noi City
Address	No. 23 – N7A, Trung Hoa - Nhan Chinh, Thanh Xuan Dist., Ha Noi City
Country	Vietnam
Tel	(84-4) 5568557 / 5568558
Fax	(84-4) 5568559
Email	Hanoi@domesco.com
Branch in Vinh City
Address	No. 155, Phan Dinh Phung Str., Vinh City, Nghe An Province
Country	Vietnam
Tel	(84-383) 833968
Fax	(84-383) 580711
Email	tpvinh@domesco.com
Branch in Ho Chi Minh City
Address	No. 666/1, Ba Thang Hai Str., Dist. 10, Ho Chi Minh City
Country	Vietnam
Tel	(84-8) 8649030
Fax	(84-8) 8650447
Email	tphcm@domesco.com
Branch in Can Tho City
Address	No. 325B-325C, 91B Area, Ninh Kieu Dist., Can Tho City
Country	Vietnam
Tel	(84-710) 780359
Fax	(84-710) 252045
Email	cantho@domesco.com
Branch in Dong Thap Province
Address	No. 72, Road No. 3, My Phu Ward, Cao Lanh City, Dong Thap Province
Country	Vietnam
Tel	(84-67) 210231 / 210423
Fax	(84-67) 875761
Email	dongthap@domesco.com
Branch in Da Nang Province:
Address	Lot 23-24, B20, Group 26, Thanh Khe Dist, Danang City.
Country	Vietnam
Tel	(84-511) 3244810
Fax	(84-511) 3760790

DIRECTORS
1. NAME		Mr. HUYNH TRUNG CHANH
Position		General Director
Qualification		Pharmacist
Born		September 29^th, 1947
ID Number		340003406
Resident		No 58, Nguyen Dinh Chieu Str, Ward 2, Cao Lanh City, Dong Thap Province, Viet nam
Tel		(84-67) 856326
Nationality		Vietnamese
2. NAME		Mrs. NGUYEN THI TIEN
Position		Deputy General Director
Qualification		Bachelor
Date of Birth		January 1^st, 1056
Resident		No.88, Hung Vuong Str, Ward 2, Cao Lanh City, Dong Thap Province, Viet nam.
Tel		(84-67) 852278
Nationality		Vietnamese
3. NAME		Mrs. PHAM NGOC TUYEN
Position		Chief Accountant
Qualification		Bachelor
Date of Birth		February 21^st, 1969
Resident		No. 64/7, Group 10, Cao Lanh Town, Dong Thap Province, Vietnam
Nationality		Vietnamese
BUSINESS NATURE AND ACTIVITIES
The subject registered in the following lines of business:
- Producing, trading, importing, exporting medicine, material, additive to make medicine for people. - Producing, trading, importing, exporting perfume, types of cosmetics made from local and imported materials. - Producing, trading, importing, exporting processed foods, purified water, natural mineral water, medical drink, soft drinks. - Producing, trading, importing, exporting aquatic products, veterinary medicine, animal feed, poultry feed, aquatic feed.
IMPORT & EXPORT ACTIVITIES
IMPORT: The subject imports medical equipments, pharmaceutical products from eighteen countries, such as: France, India, Germany, Australia, Canada, China, Hong Kong, Italy, Japan, Korea, Malaysia, Netherlands, Singapore, Switzerland, Taiwan, and USA, etc.
EXPORT: The subject exports its products to main countries: Hong Kong, Japan, Laos, Cambodia, Myanmar, Philippines, Africa, etc.
BANKERS
1. EXIMBANK – HOCHIMINH CITY
Address		No.7 Le Thi Hong Gam Str, Dist No.1, Hochiminh City, Vietnam
Tel		(84-8) 821 0055
Fax		(84-8) 829 6063
2. VIETINBANK - BRANCH IN DONG THAP
Address		No. 87 Nguyen Hue Str, Ward 1, Cao Lanh Town, Dong Thap province
Country		Vietnam
Tel		(84-67) 851318
3. BANK FOR INVESTMENT & DEVELOPMENT OF VIETNAM – DONG THAP BRANCH
Address		No. 12/1 Road 30/4, Ward 1, Cao Lanh Town, Dong Thap Province
Country		Vietnam
Tel		(84-67) 851471
SHAREHOLDERS
The subject is a joint stock company. Following is its biggest shareholder:
I- THE STATE
1. Name		PEOPLE’S COMMITTEE OF DONG THAP PROVINCE
Address		No.12, 30/4 Str, Ward 1, Cao Lanh city, Dong Thap province
Representative by		Mr. HUYNH TRUNG CHANH
Nationality		Vietnamese
Share		38.61%
Value		VND 41,310,000,000
FINANCIAL DATA
BALANCE SHEET
Unit: Million VND
Balance sheet date			30/6/2008	31/12/2007		31/12/2006
Number of weeks			26	52		52
ASSETS
A -	CURRENT ASSETS		394,060	440,688		272,020
I.	Cash and cash equivalents		53,772	92,000		16,146
1.	Cash		53,772	92,000		16,146
2.	Cash equivalents		0	0		0
II.	Short-term financial investments		2,231	11,018		0
1.	Short-term investments		5,400	12,749		0
2.	Provisions for devaluation of short-term investment stocks		-3,169	-1,731		0
III.	Accounts receivables		154,099	119,850		90,431
1.	Receivable from customers		141,349	110,857		88,298
2.	Prepayment to suppliers		8,576	4,683		2,022
3.	Inter- company receivables		0	0		0
4.	Progress receipts due from construction contract		0	0		0
5.	Other receivables		4,659	4,800		604
6.	Provisions for bad debts		-485	-490		-493
IV.	Inventories		177,460	212,758		161,814
1.	Inventories		177,460	212,758		161,814
2.	Provisions for devaluation of inventories		0	0		0
V.	Other current assets		6,498	5,062		3,629
1.	Short-term prepaid expenses		2,231	1,558		1,098
2.	VAT deductible		2,249	2,319		1,358
3.	Tax and accounts receivable to State budget		0	0		0
4.	Other current assets		2,018	1,185		1,173
B -	LONG TERM ASSETS		250,099	150,721		108,592
I.	Long term accounts receivable		0	0		0
1.	Long term accounts receivable from customers		0	0		0
2.	Capital in subsidiary units		0	0		0
3.	Long term inter- company receivable		0	0		0
4.	Other long term accounts receivables		0	0		0
5.	Provisions for bad debts		0	0		0
II.	Fixed assets		157,636	130,548		105,241
1.	Tangible fixed assets		83,161	70,002		63,106
	Historical costs		132,255	111,428		91,567
	Accumulated depreciation		-49,094	-41,426		-28,461
2.	Finance lease assets		0	0		0
	Historical costs		0	0		0
	Accumulated depreciation		0	0		0
3.	Intangible assets		7,106	6,478		5,567
	Historical costs		7,175	6,478		5,567
	Accumulated depreciation		-69	0		0
4.	Construction in progress		67,369	54,068		36,568
III.	Investment property		0	0		0
	Historical costs		0	0		0
	Accumulated depreciation		0	0		0
IV.	Long term financial investments		89,538	19,348		959
1.	Investments subsidiary company		0	0		0
2.	Investments in associates and joint ventures		9,000	9,000		0
3.	Other long term investments		80,538	10,348		959
4.	Provisions for devaluation of long-term investments		0	0		0
V.	Other long term assets		2,925	825		2,392
1.	Long term prepaid expenses		2,925	825		2,392
2.	Deferred income tax assets		0	0		0
3.	Other long term assets		0	0		0
	TOTAL ASSETS		644,159	591,409		380,612
LIABILITIES
A -	LIABILITIES		177,906		128,728		159,294
I.	Short term liabilities		174,734		125,866		152,913
1.	Short term debts and borrowings		66,530		40		45,577
2.	Payable to suppliers		68,097		87,121		78,435
3.	Advances from customers		20,659		26,875		11,218
4.	Taxes and other account payables to the State Budget		5,388		-10,359		-383
5.	Payable to employees		9,948		13,283		12,396
6.	Accrued expenses		0		2,000		2,000
7.	Payable to inter- company		0		0		0
8.	Progress payments due to construction contracts		0		0		0
9.	Other payables		4,112		6,906		3,670
10.	Provision for short-term payables				0		0
II.	Long term liabilities		3,172		2,862		6,381
1.	Long term account payable to suppliers		0		0		0
2.	Long term inter-company payables		0		0		0
3.	Other long term payables		2,426		0		0
4.	Long term debts and borrowings		680		2,796		6,305
5.	Deferred income tax liabilities				0		0
6.	Reserved funds for unemployment		66		66		76
7.	Provision for long-term payables		0		0		0
B -	OWNER’S EQUITY		466,253		462,681		221,318
I.	Owner’s equity		465,805		461,990		220,830
1.	Owners' investment capital		137,699		137,700		107,000
2.	Share premiums		229,275		229,275		56,000
3.	Owners’ other 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		33,185		22,747		13,441
8.	Financial reserved fund		7,557		5,103		2,776
9.	Other funds				0		0
10.	Undistributed earnings		58,089		66,474		41,125
II.	Other sources and funds		448		691		488
1.	Bonus and welfare funds		448		691		488
2.	Sources of expenditure		0		0		0
3.	Funds used to acquire fixed assets		0		0		0
TOTAL LIABLITIES AND OWNER’S EQUITY			644,164		590,718		380,124
PROFIT & LOSE ACCOUNT
	Description		First half of 2008	FY 2007		FY 2006
1.	Revenue from sales of goods and rendering of services		448,527	813,193		661,954
2.	Deductible items		2,123	2,066		2,700
3.	Net revenue from sales of goods and rendering of services		446,404	811,127		659,254
4.	Costs of goods sold		327,739	638,387		526,117
5.	Gross profit		118,665	172,740		133,137
6.	Income from financial activities		3,182	10,616		2,368
7.	Expenses from financial activities		12,855	11,893		7,077
	- In which: Loan Interest expenses		1,114	3,376		3,379
8.	Selling expenses		40,582	55,386		36,761
9.	General & administration expenses		34,549	52,297		38,626
10.	Net operating profit		33,861	63,780		53,041
11.	Other incomes		341	2,486		3,151
12.	Other expenses		14	2,018		2,155
13.	Other profits		326	468		996
14.	Profit (loss) before tax		34,187	64,248		54,037
15.	Income tax		3,389	84		5,439
16.	Profit (loss) after tax		30,796	64,163		48,597

FINANCIAL FACTORS
Description		FY 2007	FY 2006
Current Liquidity Ratio		3.50	1.78
Quick Liquidity Ratio		1.81	0.72
Inventory Circle		3.41	3.25
Average Receive Period		53.93	50.07
Utilizing Asset Performance		1.37	1.73
Liability / Total Asset (%)		21.77	41.85
Liability / Owner's Equity (%)		27.82	71.98
Ebit / Total Asset (%) ROA		11.43	15.09
Ebit/ Owner's Equity (%) ROE		14.62	25.94
Ebit/ Total Revenue (%) NPM		8.32	8.67
Gross Profit / Total Revenue (%) GPM		21.24	20.11
PAYMENT HISTORY AND EXPERIENCES
Trade Morality	Good
Liquidity	Relative
Payment status	Prompt
Financial Situation	Fairly healthy
Litigation Data	No recorded
Bankruptcy	No recorded
Public opinion	Fairly good
Payment Methods	L/C, T/T
INTERPRETATION ON THE SCORES:
DOMESCO MEDICAL IMPORT EXPORT JSC was established in 1985 as a state owned company with name of Medical Equipment And Material Supply Company. Since its establishment, the subject’s name has been changed for 7 times. At the beginning of 2004, the subject operated as a joint stock company with new name as current. At the end of 2006, its shares were listed on Ho Chi Minh Stock Exchange. Now, the subject has registered capital of VND 137,699,990,000. Its current market value is VND 2,024,189,853,000. The subject specializes in manufacturing and trading medicine for people, medical equipment, cosmetics products, foodstuff and beverage. It is expanding to manufacture animal, poultry and aquatic feeds. At the moment, manufacturing and trading medical equipment and medicine bring 98.5% of annual turnover. The subject’s products are sold mainly in domestic market. Its products cover overall the country by operations of 5 branches and hundreds of pharmaceutical stores. Besides selling products, these branches also research market demand to help the subject to produce product meeting market demand. Now, the subject has four factories in which three ones produce medicine and one manufactures foodstuff and beverage. All medicine factories achieves standard of GMP-WHO, GSP and GLP. The subject’s products are exported to Japan, Hong Kong, Cambodia, Myanmar, etc. The export value and foreign market are increased and widen year after year. With good management capacity, clear developing strategies and well trained employees, the subject achieved good business result. The turnover was increased year after year. With high profit and share premiums, the assets in 2007 were sharply increased compared with that in 2006. The high share premiums are being used to invest to expand the capacity. At the end of 2007, the cash were big, so the solvency was prompt. At the end of the second quarter in 2008, the subject‘s business operating still good. Its profit after tax was VND 30, 796 Million. Because the owner’s equity increased hard, the debt ratio was decreased. The growth rate of profit was lower than that of total assets, so the profitability of 2007 was lower than that of 2006. The current position and prestige of the subject are fairly good. Its trademark is well known nationwide. The prospect is bright. In general, the subject is operating fairly effective. The development trend is good. The subject is capable to meet small and normal commitment. A little caution needed for big business transactions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.79
UK Pound	1	Rs.81.27
Euro	1	Rs.63.91

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