MIRA INFORM REPORT

Report Date :

11.07.2011

IDENTIFICATION DETAILS

Correct Name :	DA NANG PHARMACEUTICAL - MEDICAL EQUIPMENT JOINT STOCK COMPANY
Formerly Known As :	Da Nang Pharmaceutical Company
Registered Office :	No. 2, Phan Dinh Phung Street - Hai Chau District - Da Nang City
Country :	Vietnam
Financials (as on) :	31.12.2010
Year of Establishment :	1976
Com. Reg. No.:	0400101404
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing & trading in pharmaceutical products

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2011

Country Name	Previous Rating (31.12.2010)	Current Rating (31.03.2011)
Vietnam	b1	b1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Bottom of Form

SUBJECT IDENTIFICATION & LEGAL FORM

Current legal status
English Name	DA NANG PHARMACEUTICAL - MEDICAL EQUIPMENT JOINT STOCK COMPANY
Vietnamese Name	CONG TY CP DUOC - THIET BI Y TE DA NANG
Short name	DAPHARCO
Type of Business	Joint stock company
Year Established	1976
Establishment Decision	195/2004/QDUB
Date of Issuance	09 Dec 2004
Place of Issuance	People’s Committee of Da Nang City
Business Registration No.	0400101404
Date of Registration	08 Jul 2010
Place of Registration	Planning and Investment Department of Da Nang City
Current registered capital	28,000,000,000 VND
Tax code	0400101404
Total Employees	500
Note:  The exact name of the subject is above.

Historical Identification & Legal form

List	Changed Items	Date of changes
1	Subject has got former Business Registration No: 3203000578 (22 Mar 2005) Changed to: 0400101404 (8 Jul 2010)	08 Jul 2010
2	Subject has got former Registered English Name: Da Nang Pharmaceutical Company Changed to: DA NANG PHARMACEUTICAL - MEDICAL EQUIPMENT JOINT STOCK COMPANY	Dec 2004

company ADDRESSES

Head Office
Address	No. 2, Phan Dinh Phung Street - Hai Chau District - Da Nang City - Vietnam
Telephone	(84-511) 381 0735/ 3821642
Fax	(84-511) 389 1752
Email	daphaco@dng.vnn.vn
Website	http://www.dapharco.com.vn
Notes: - The full address of the subject is above. - The given telephone is wrong. The right one is above.
Workshop Address
Address	Binh Thai Hamlet - Hoa Tho Commune - Hoa Vang District - Da Nang City - Vietnam
Telephone	(84-511) 3671 722
Manager	Mr. PHAN VAN MANH
Branch in Ha Noi
Address	Room 204A No. 78 Lang Ha Str. - Lang Ha Ward - Dong Da District - Ha Noi City - Vietnam
Telephone	(84-4) 3776 4900
Fax	(84-4) 3776 0383
Branch in Ho Chi Minh
Address	796/15 Su Van Hanh Str. - Ward 12 - 10 District - Ho Chi Minh City - Vietnam
Telephone	(84-8) 3863 1018
Fax	(84-8) 3862 9834
Manager	Mr. TRAN NHAN TRIET
Branch in Quang Nam
Address	No. 85 Tran Cao Van Str. - An Son Ward - Tam Ky City - Quang Nam Province - Vietnam
Telephone	(84-510) 381 2859
Fax	(84-510) 382 0450
Manager	Mr. NGUYEN HUU THOAI

DIRECTORS

1. NAME	Mr. PHAN THINH
Position	Chairman
Date of Birth	20 Aug 1945
ID Number/Passport	200005880
ID Issue Date	20 Jun 2000
ID Issue Place	Da Nang Police Station
Resident	No. 137 Nguyen Van Linh Street - Thanh Khe District - Da Nang City - Vietnam
Nationality	Vietnamese
Tel/Mobil phone	(84-511) 822 247
2. NAME	Mr. TONG VIET PHAI
Position	General Director
Date of Birth	05 Oct 1959
ID Number/Passport	201492403
ID Issue Place	Da Nang Police
Resident	No. 27 Hoang Dieu Street - Hai Chau District - Da Nang City - Vietnam
Nationality	Vietnamese
3. NAME	Mr. NGUYEN HUU CONG
Position	Deputy General Director
Resident	91 Tran Phu - Hai Chau District - Da Nang City - Vietnam
Nationality	Vietnamese
Tel/Mobil phone	(84-511) 3810735, ext: 106
Email	huucongdaphar@gmail.com
4. NAME	Mr. TRAN NHAN TRIET
Position	Deputy General Director
Date of Birth	08 Nov 1958
ID Number/Passport	201358828
Resident	No. 21 Ham Nghi Street - Thanh Khe District - Da Nang City - Vietnam
Nationality	Vietnamese

BUSINESS NATURE AND 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:
· Types of products	Medical equipments, pharmaceutical products
· Market	South Korea, India, Taiwan, France, Japan, USA, Singapore, Hungary and Germany, etc
· Ratio	N/A
· Mode of payment	L/C, T/T
EXPORT:
· Types of products	NA
Note: The Subject doesn’t export.

BANKERS

1. VIET NAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE DA NANG BRANCH
Address	No.172 Nguyen Van Linh - Thanh Khe District - Da Nang City - Vietnam
Telephone	(84-5113) 2691345
2. HOUSING BANK OF MEKONG DELTA DA NANG BRANCH
Address	No.129 Le Loi Str - Hai Chau District - Da Nang City - Vietnam
Telephone	(84-0511)3 817821
Fax	(84-0511)3 817823
3. VIETNAM EXPORT IMPORT COMMERCIAL JOINT STOCK BANK DA NANG BRANCH
Address	No.48 Tran Phu Street - - Da Nang City - Vietnam
Telephone	(84-511) 3830 889
Fax	(84-511) 3826 674

SHAREHOLDERS

1. NAME	STATE CAPITAL INVESTMENT CORPORATION
Business Registration	0101992921
Date of Registration	09 Jul 2010
Place of Registration	Ha Noi Planning and Investment Department
Representative	PHAN THINH
Registered Capital	19,000,000,000,000 VND
Tax code	0101992921
Address	No. 15A Tran Khanh Du Str., - Hoan Kiem District - Ha Noi City - Vietnam
Tel	(84-4) 62780126
Fax	(84-4) 62780136
Number of shares	1,020,000
2. NAME	Mr. VO VAN CHIN
Date of Birth	15 Apr 1952
ID Number/Passport	020007500
Issued Place	Da Nang Police
Resident	No. 57 Duy Tan Street - Hai Chau District - Da Nang City - Vietnam
Nationality	Vietnamese
Number of Shares	8,630
3. NAME	Mr. TONG VIET PHAI
Position	General Director
Date of Birth	05 Oct 1959
ID Number/Passport	201492403
Issued Place	Da Nang Police
Resident	No. 27 Hoang Dieu Street - Hai Chau District - Da Nang City - Vietnam
Nationality	Vietnamese
Number of Shares	7,280
4. NAME	Mr. NGUYEN HUU CONG
Date of Birth	21 Oct 1961
ID Number/Passport	201390069
Resident	No. 91 Tran Phu Str - Hai Chau District - Da Nang City - Vietnam
Number of Shares	6,010
5. NAME	Mr. TRAN NHAN TRIET
Position	Deputy General Director
Date of Birth	08 Nov 1958
ID Number/Passport	201358828
Resident	No. 21 Ham Nghi Street - Thanh Khe District - Da Nang City - Vietnam
Nationality	Vietnamese
Number of Shares	7,050
6. NAME	Mr. DANG VAN NAM
Date of Birth	03 Nov 1957
Resident	Hoa Tho Commune - Hoa Vang District - Da Nang City - Vietnam
Number of Shares	8,130

FINANCIAL DATA

The financial statement of the subject is audited by PKF Vietnam Auditing Co., Ltd.
BALANCE SHEET
Unit: One VND
Balance sheet date	31/12/2010	31/12/2009
Number of weeks	52	52
Audited situation	Audited	Audited
ASSETS
A – CURRENT ASSETS	433,047,842,071	331,829,552,316
I. Cash and cash equivalents	21,758,208,845	22,479,440,199
1. Cash	21,758,208,845	22,479,440,199
2. Cash equivalents	0	0
II. Short-term investments	0	0
1. Short-term investments	0	0
2. Provisions for devaluation of short-term investments	0	0
III. Accounts receivable	322,348,083,109	232,251,292,808
1. Receivable from customers	270,313,519,777	187,878,849,789
2. Prepayments to suppliers	51,623,577,218	44,145,414,459
3. Inter-company receivable	0	0
4. Receivable according to the progress of construction	0	0
5. Other receivable	1,410,986,114	227,028,560
6. Provisions for bad debts	-1,000,000,000	0
IV. Inventories	81,533,518,096	72,140,408,711
1. Inventories	81,533,518,096	72,140,408,711
2. Provisions for devaluation of inventories	0	0
V. Other Current Assets	7,408,032,021	4,958,410,598
1. Short-term prepaid expenses	0	0
2. VAT to be deducted	2,093,415,747	0
3. Taxes and other accounts receivable from the State	490,819	1,018,135,944
4. Other current assets	5,314,125,455	3,940,274,654
B. LONG-TERM ASSETS	23,181,472,889	24,304,610,933
I. Long term account receivable	0	0
1. Long term account receivable from customers	0	0
2. Working capital in affiliates	0	0
3. Long-term inter-company receivable	0	0
4. Other long-term receivable	0	0
5. Provisions for bad debts from customers	0	0
II. Fixed assets	21,767,480,407	22,518,164,114
1. Tangible assets	10,795,596,383	11,554,102,450
- Historical costs	15,596,508,914	15,391,999,823
- Accumulated depreciation	-4,800,912,531	-3,837,897,373
2. Financial leasehold assets	0	0
- Historical costs	0	0
- Accumulated depreciation	0	0
3. Intangible assets	10,971,884,024	10,964,061,664
- Initial costs	11,139,681,214	11,092,181,214
- Accumulated amortization	-167,797,190	-128,119,550
4. Construction-in-progress	0	0
III. Investment property	0	0
Historical costs	0	0
Accumulated depreciation	0	0
IV. Long-term investments	1,294,600,000	1,518,400,000
1. Investments in affiliates	0	0
2. Investments in business concerns and joint ventures	0	0
3. Other long-term investments	1,294,600,000	1,518,400,000
4. Provisions for devaluation of long-term investments	0	0
V. Other long-term assets	119,392,482	268,046,819
1. Long-term prepaid expenses	119,392,482	268,046,819
2. Deferred income tax assets	0	0
3. Other long-term assets	0	0
VI. Goodwill	0
1. Goodwill	0
TOTAL ASSETS	456,229,314,960	356,134,163,249
LIABILITIES
A- LIABILITIES	397,033,887,145	302,831,699,217
I. Current liabilities	392,357,696,596	297,423,006,339
1. Short-term debts and loans	69,165,056,219	57,680,869,987
2. Payable to suppliers	288,922,248,026	217,036,078,411
3. Advances from customers	18,303,376,068	15,878,383,966
4. Taxes and other obligations to the State Budget	3,285,650,800	804,947,718
5. Payable to employees	7,595,347,679	3,940,710,400
6. Accrued expenses	0	0
7. Inter-company payable	0	0
8. Payable according to the progress of construction contracts	0	0
9. Other payable	1,849,137,635	2,082,015,857
10. Provisions for short-term accounts payable	3,236,880,169	0
II. Long-Term Liabilities	4,676,190,549	5,408,692,878
1. Long-term accounts payable to suppliers	0	0
2. Long-term inter-company payable	0	0
3. Other long-term payable	32,000,000	0
4. Long-term debts and loans	3,266,662,000	4,387,554,000
5. Deferred income tax payable	0	0
6. Provisions for unemployment allowances	1,377,528,549	1,021,138,878
7. Provisions for long-term accounts payable	0	0
B- OWNER’S EQUITY	59,195,427,815	53,302,464,032
I. OWNER’S EQUITY	59,195,427,815	53,005,128,031
1. Capital	28,000,000,000	28,000,000,000
2. Share premiums	15,810,000,000	15,810,000,000
3. Other sources of capital	3,691,572,542	2,544,807,168
4. Treasury stocks	0	0
5. Differences on asset revaluation	0	0
6. Foreign exchange differences	-4,578,235,892	-5,636,762,977
7. Business promotion fund	5,623,251,419	3,941,301,970
8. Financial reserved fund	926,582,889	536,098,732
9. Other funds	0	0
10. Retained earnings	9,157,266,699	7,809,683,138
11. Construction investment fund	0	0
II. Other sources and funds	564,990,158	297,336,001
1. Bonus and welfare funds	564,990,158	297,336,001
2. Sources of expenditure	0	0
3. Fund to form fixed assets	0	0
MINORITY’S INTEREST	0	0
TOTAL LIABILITIES AND OWNER’S EQUITY	456,229,314,960	356,134,163,249

PROFIT & LOSS STATEMENT
Description	FY2010	FY2009
1. Total Sale	1,550,600,471,361	1,186,048,783,651
2. Deduction item	619,638,489	558,515,917
3. Net revenue	1,549,980,832,872	1,185,490,267,734
4. Costs of goods sold	1,449,063,672,990	1,103,028,044,814
5. Gross profit	100,917,159,882	82,462,222,920
6. Financial income	7,978,501,784	8,715,825,882
7. Financial expenses	54,000,890,644	47,736,200,722
- In which: Loan interest expenses	11,110,058,746	5,094,606,669
8. Selling expenses	24,339,364,250	22,780,650,738
9. Administrative overheads	22,828,215,069	14,151,483,238
10. Net operating profit	7,727,191,703	6,509,714,104
11. Other income	26,522,005,447	14,080,933,698

12. Other expenses	22,046,508,219	10,192,955,328
13. Other profit /(loss)	4,475,497,228	3,887,978,370
14. Total accounting profit before tax	12,202,688,931	10,397,692,474
15. Current corporate income tax	3,045,422,233	1,294,004,667
16. Deferred corporate income tax	0	0
17. Interest from subsidiaries/related companies	0
18. Profit after tax	9,157,266,698	9,103,687,807

FINANCIAL RATIOS AND AVERAGE INDUSTRY RATIOS
Description	FY2010	FY2009	Average Industry
Current liquidity ratio	1.10	1.12	1.74
Quick liquidity ratio	0.90	0.87	1.02
Inventory circle	17.77	15.29	3.74
Average receive period	75.91	71.51	76.97
Utilizing asset performance	3.40	3.33	1.31
Liability by total asset	87.03	85.03	49.32
Liability by owner equity	670.72	568.14	129.21
Ebit / Total asset (ROA)	5.11	4.35	8.55
Ebit / Owner's equity (ROE)	39.38	29.06	18.02
Ebit / Total revenue (NPM)	1.50	1.31	6.82
Gross profit / Total revenue (GPM)	6.51	6.95	21.89
Note: The Average Industry was calculated by Vietnam Credit based on our owned statistical data

CASH FLOW STATEMENT
(Direct method)
Items	FY2010	FY2009
I. Cash flows from operating activities
1.Cash received from customers	1,640,770,917,136	1,456,184,295,326
2. Cash paid to suppliers	-1,427,610,923,258	-1,390,011,727,050
3. Cash paid to employees	-19,869,321,779	-20,530,434,361
4. Interest paid	-6,771,939,788	-5,094,606,669
5. Income taxes paid	-1,807,075,127	-2,642,600,571
6. Other operating cash receipts	752,019,356,963	20,402,136,322
7. Other operating payments	-677,365,008,832	-59,116,859,825
Net cash flows from operating activities	259,366,005,315	-809,796,828
II. Cash flows from investing activities
1. Purchases and construction of fixed assets and other long-term assets	-252,009,091	-1,946,322,229
2. Gains from disposals and liquidation of fixed assets and other long-term assets	0	0
3. Loans given and purchases of debt instruments of other entities	0	0
4. Recovery of loans given and disposals of debt instruments of other entities	0	0
5. Investments into other entities	0	0
6. Withdrawals of investments in other entities	223,800,000	193,200,000
7. Receipts of loan interests, dividends and profit shared	21,000,000	63,750,000
Net cash flows from investing activities	-7,209,091	-1,689,372,229
III. Cash flows from financing activities
1. Gains from stock issuance and capital contributions from shareholders	0	458,580,675,238
2. Repayment for capital contributions and re-purchases of stocks already issues	0	-464,454,589,919
3. Short-term and long-term loans received	400,698,487,869	0
4. Loan principal amounts repaid	-656,578,401,078	0
5. Payments for financial leasehold assets	0	0
6. Dividends and profit already paid to the owners	-4,200,000,000	0
Net cash flows from financing activities	-260,079,913,209	-5,873,914,681
Net cash flows during the year	-721,116,985	-8,373,083,738
Beginning cash and cash equivalents	22,479,440,199	30,852,523,937
Effects of fluctuations in foreign exchange rates	-114,369	0
Ending cash and cash equivalents	21,758,208,845	22,479,440,199

PAYMENT HISTORY & PERFORMANCE EXPERIENCES

Trade Morality	Fair
Liquidity	Medium
Payment status	Average
Financial Situation	Above Average
Development trend	Uptrend
Litigation data	No
Bankruptcy	No
Payment Methods	Through its bank, L/C or T/T
Sale Methods	Retailer and Wholesaler

INTERPRETATION ON THE SCORES

The subject was established in 1976 as a state owned company under name "Da Nang Pharmaceutical Company". On December 2004, it made a its equitization to become joint stock company and its former name was changed into current name.

Currently, the subject operates according to the business registration No. 0400101404, granted by Da Nang Department of Planning and Investment with registered capital of VND 28 billion.

The subject's premises and facilities are fairly good. Besides the head office at No. 2, Phan Dinh Phung Street, Hai Chau District, Da Nang City, it also has branches in Hanoi City, Hochiminh City, Quang Nam province…

The subject now specializes in trading in pharmaceutical and medical equipments, nutrition food, vaccine, mosquito-repellent incense, … It has distribution network is fairly large. Its import market of the subject is large including South Korea, India, Taiwan, France, Japan, Singapore, USA, Germany and etc.

With the management capacity is fairly good, the subject was awarded many certificate of merit and accomplishment such as “Vietnam High Quality Goods”, “Thanh Giong Cup”…

Financial situation of the subject are fairly good and stable. In 2010, total revenue of it reached VND 1,550 billion, up 31% compared with 2009; and profit before tax increased by 17%. Remarkably, the proportion of costs of goods sold to total revenue was constant, which was 93% in the two latest years. The financial ratios of it were fairly good. Specially, in 2010, the cash flow from operating activities of subject was higher fairly much than in 2009

In general, the business of the subject is effective. It has a long time of operation and many supports from the State. No caution needed for the normal business transactions.

APPENDIXES

INDUSTRY DATA
Industry code	Growth speed (%)		Total employees 2009 (Thousand)		Total enterprises	Annual average capital of enterprises
	Predict 2010	2009
Agriculture, Forestry and Fishing	2.8	3.0	24,788.5		2,399	50,530
Trade and Services	7.5	11	10,517.9		79,181	1,754,973
Construction	7	11.3	2,692.8		17,783	248,268
Manufacturing	12	7.6	7,591.2		30,786	967,068
ECONOMIC INDICATORS
			2010	2009		2008
Population (Million person)			86.93	86.02		86.1
Gross Domestic Products (US$ billion)			102.2	91		84.9
GDP Growth (%)			6.78	5.32		6.2
GDP Per Capita (US$)			1,160	1,080		1,040
Inflation (% Change in Composite CPI)			11.75	6.88		24.4
SERVICE TRADE PERFORMANCE
Billion USD			2010	2009		2008
Exports			71.6	56.6		62.9
Imports			84	68.8		76.6
Trade Balance			-12.4	-12.2		-14.6

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.33
UK Pound	1	Rs.70.74
Euro	1	Rs.63.65

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	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
----	NB	New Business	----

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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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.