MIRA INFORM REPORT

Report Date :

19.04.2012

IDENTIFICATION DETAILS

Name :	DONG-A PHARMACEUTICAL CO., LTD.
Registered Office :	252, Yongdu-dong, Dongdaemun-gu, Seoul, Korea, Zip Code 130-823
Country :	South Korea
Financials (as on) :	31.12.2011
Date of Incorporation :	09.08.1949
Com. Reg. No.:	204-81-00130
Legal Form :	Listed Company
Line of Business :	Manufacture of Finished Medicaments
No. of Employees :	2,303

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 :	Exists

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, 2012

Country Name	Previous Rating (31.12.2011)	Current Rating (31.03.2012)
South korea	a1	a1

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

Basic

Company Name	DONG-A PHARMACEUTICAL CO., LTD. (Korean Company Name : “동아제약(주)”)
Registered Address	252, Yongdu-dong, Dongdaemun-gu, Seoul, Korea
Zip Code	130-823
Tel	+82-2-920-8114
Fax	+82-2-920-8719
E-mail	scshin@donga.co.kr
Website	www.donga.co.kr
Trading Address	252, Yongdu-dong, Dongdaemun-gu, Seoul, Korea (CPO BOX 550)
Tel	+82-2-920-8114
Fax	+82-2-920-8719
Other Address-Cheonan Factory	19B, Industrial Complex Ⅲ, 404, Chaam-dong, Seobuk-gu, Cheonan-si, Chungcheongnam-do, Korea
Tel	+82-41-621-1500
Fax	+82-41-621-3344
Other Address-Icheon Cosmetic Factory	240-1, Saeum-dong, Icheon-si, Gyeonggi-do, Korea
Tel	+82-31-644-2800
Fax	+82-31-634-6263
Other Address-Banwol Factory	434-3, Mongnae-dong, Danwon-gu, Ansan-si, Gyeonggi-do, Korea
Tel	+82-31-494-2980~3
Fax	+82-31-494-2988
Other Address-R&D Center	47-5, Sanggal-dong, Giheung-gu, Yongin-si, Gyeonggi-do, Korea
Tel	+82-31-280-1400
Type	Export/Import
Industry	Manufacture of Finished Medicaments
Main Business	Robustness Internal Medicine, Synthesis Cold Medicine, Dyeing Medicine, Dyeing Medicine
Established (mm/dd/yyyy)	08/09/1949

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Hair care supplies(53131602)
Sell	Mouth fresheners(53131509)
Sell	Antiulcer and related gastrointestinal GI drugs(51171900)
Sell	Thrombolytic drugs and platelet aggregation inhibitors(51131700)
Sell	Lip balm(53131630)
Sell	Dietary supplements and nutritional therapy products(51191900)
Sell	Clinical and diagnostic analyzer reagents(41116000)
Sell	Cough and cold and antiallergy products(51161800)
Sell	Antifungal drugs(51101800)

CEO’s

Name	Kim Won-Bae
Date of Birth	08/01/1947
Title	President & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

55,675,000,000

Employees

2,303

Formation

Listed Company (Korea Stock Exchange : 000640) as of 02/10/1970

A Company of Dong-A Socio Group

Bank Details

Woori bank-Shinsul Dong Branch

Corporate Registered No.

110111-0017990

Business Registered No.

204-81-00130

Permit & Licenses

Int’l Trade No. : 7206700

Shareholder Position

Name	Shares	%
KANG SHIN-HO	572,510	4.90
DM Bio Limited	558,246	4.77
YOU CHOONG-SIK	292,604	2.50
GLAXO GROUP	1,103,674	9.44
NATIONAL PENSION SERVICE(110171-0007134)	1,045,322	8.94
OTHERS	8,120,890	69.45
TOTAL	11,693,246	100.00

Company History

08/09/1949 Incorporated as the present name

Management

Job Description	Title	Name	Nationality	Date of Birth	Education
President & CEO	Mr.	Kim Won-Bae	Korean	1947.08.01	Seoul National University, Korea
CEO	Mr.	Kang Jung-Seok	Korean	1964.10.30	Sungkyunkwan University, Korea
Sr. Executive Director	Mr.	Park Chan-Il	Korean	1955.09.20	Seoul National University, Korea
Sr. Executive Director	Mr.	Hur Joong-Koo	Korean	1957.03.15	Chungang University, Korea
Director	Mr.	You Choong-Sik	Korean	1936.07.19	Seoul National University, Korea
Director	Mr.	Kim Jin-Ho	Korean	1950.03.10	Columbia University, Korea
Outside Director	Mr.	Kang Kyung-Bo	Korean	1967.05.05	Korea University, Korea
Outside Director	Mr.	Seo Young-Je	Korean	1950.01.01	Pitsburg University, USA
Outside Director	Mr.	Kim Dae-Kyung	Korean	1955.04.24	Tokyo University, Japan
Auditor	Mr.	Park In-Sun	Korean	1955.04.24	Gangwon Univeristy, Korea

Financials

Year / Unit : KRW	Sales	Assets	Net Income
(*)2011	907,293,509,515	1,236,760,039,964	60,653,872,856
(*)2010	846,821,956,631	1,100,300,323,981	66,031,560,911
2009	801,060,166,350	1,000,034,971,496	63,263,266,742
2008	702,315,777,392	731,614,686,540	43,375,192,843
2007	635,933,662,329	670,969,164,362	-3,077,166,882
2006	571,162,442,382	595,077,406,817	27,766,906,708
2005	533,624,667,386	577,649,250,464	26,336,097,944

(*)2010 and 2011’s figures are based on the K-IFRS Accounting System.

Financial Description

Authorized Capital(KRW)	150,000,000,000
Paid-Up Capital(KRW)	55,675,000,000
Total Issues Shares	11,693,246

Balance Sheet
Unit : Korean Won	As of 12/31/2011	As of 12/31/2010	As of 12/31/2009
Total Assets	1,236,760,039,964	1,100,300,323,981
Current Assets	466,160,765,564	379,968,921,573
Cash & Cash Equivalents	154,559,322,987	132,599,777,441
Deposits	40,000,000,000	0
Trade Receivables	143,619,866,083	128,183,418,769
Other Receivables	2,855,309,915	703,306,002
Current Financial Instruments	113,076,889	22,705,000
Inventories	120,392,516,740	115,039,527,584
Other Current Assets	4,620,672,950	3,420,186,777
Non-Current Assets	770,599,274,400	720,331,402,408
Deposits	20,500,000	20,500,000
Trade Receivables	290,663,423	159,409,901
Other Receivables	7,752,838,508	8,083,154,780
Current Financial Instruments	37,971,980,606	17,087,818,820
Tangibles	544,749,077,036	522,349,513,143
Intangibles	17,017,488,064	15,305,401,201
Investment_Real Estates	37,045,262,385	31,067,791,811
Investment_Related Companies	49,204,286,911	49,703,786,911
Investment_Subsidiaries	76,535,225,956	76,535,225,956
Other Non-Current Assets	11,951,511	18,799,885
Total Liabilities	504,351,034,816	423,395,069,471
Current Liabilities	365,222,620,835	232,650,701,209
Trade Payables	59,031,242,061	41,135,046,658
Other Payables	88,740,938,872	70,633,357,994
Short-Term Borrowings	191,803,841,146	99,661,646,396
Other Current Financial Debts	834,863,895	370,500,000
Provisions	9,501,673,447	8,668,057,953
Other Current Liabilities	1,052,940,009	1,775,191,917
Accrued Income Tax	14,257,121,405	10,406,900,291
Non-Current Liabilities	139,128,413,981	190,744,368,262
Other Payables	6,645,737,119	6,067,230,043
Long-Term Borrowings	86,234,396,392	142,895,450,626
Other Non-Current Financial Debts	60,000,000	340,323,730
Provision for Severance & Retirement	18,858,466,020	14,684,048,209
Other Non-Current Debts	123,098,473	80,152,192
Deferred Income Tax Credit	27,206,715,977	26,677,163,462
Capital Stock	55,675,000,000	55,675,000,000
Capital Surplus	73,906,181,491	73,906,181,491
Treasury Stock	-3,518,635,213	-14,584,986,628
Others	233,974,942,425	232,735,005,883
Profit Surplus	372,371,516,445	329,174,053,764
Total Equity	732,409,005,148	676,905,254,510
Liab. & Shareholder’s Equity	1,236,760,039,964	1,100,300,323,981

Balance Sheet
Unit : Korean Won	As of 12/31/2010	As of 12/31/2009	As of 12/31/2008
Total Assets	1,160,417,843,091	1,000,034,971,496	731,614,686,540
Current Assets	380,381,736,619	294,691,061,810	292,703,980,851
-Quick Assets	264,632,732,382	176,441,689,954	183,698,544,774
-Inventories	115,749,004,237	118,249,371,856	109,005,436,077
Fixed Assets	780,036,106,472	705,343,909,686	438,910,705,689
-Investment	232,928,544,726	237,015,240,436	115,804,388,523
-Tangibles	522,509,373,508	447,397,910,560	285,795,554,089
-Intangibles	3,538,571,297	2,888,567,817	2,610,015,360
-Others	21,059,616,941	18,042,190,873	34,700,747,717
Total Liabilities	431,561,249,134	419,965,702,236	381,404,180,052
Current Liabilities	222,145,205,980	316,016,548,944	249,133,568,448
Fixed Liabilities	209,416,043,154	103,949,153,292	132,270,611,604
Capital Stock	55,675,000,000	52,280,000,000	51,265,000,000
Capital Surplus	199,783,511,308	113,722,300,285	107,980,324,643
Profit Surplus	329,978,824,033	268,167,878,436	212,850,554,832
Capital Adjustment	143,419,258,616	145,899,090,539	-21,885,372,987
Total Equity	728,856,593,957	580,069,269,260	350,210,506,488
Liab. & Shareholder’s Equity	1,160,417,843,091	1,000,034,971,496	731,614,686,540

Current Liabilities	222,145,205,980	316,016,548,944	249,133,568,448
Trade Payables	41,135,046,658	30,834,077,008	29,900,569,536
Short-Term Borrowings	45,024,906,020	78,197,426,708	77,251,489,908
Current Portion of Long-Term Debts	12,000,000,000	19,000,000,000	33,579,913,607
Current Portion of Debentures	38,000,000,000	20,000,000,000	23,000,000,000
Current Portion of Exchangeable Bonds	-	73,408,020,000	-
Account Payables	37,590,848,416	43,846,882,847	35,978,343,852
Advance Receipts	1,445,660,418	119,140,560	182,360,682
Accrued Expenses	7,685,082,358	3,540,372,262	503,059,620
Accrued Income Tax	10,406,900,291	13,259,213,159	15,219,938,240
Withholdings	8,365,106,574	14,243,541,850	13,508,187,348
Taxes Withhold	1,482,197,120	1,147,545,509	1,004,335,960
VAT Withhold	10,341,400,172	9,976,271,917	7,947,747,584
Provision for Refund	8,668,057,953	9,481,572,185	10,054,804,811
Derivatives	-	381,395,665	1,002,817,300
Fixed Liabilities	209,416,043,154	103,949,153,292	132,270,611,604
Long-Term Borrowings	36,293,052,140	18,308,985,070	24,324,112,620
Debentures	10,000,000,000	38,000,000,000	10,000,000,000
Exchangeable Bonds	-	-	73,408,020,000
Bond With Warrant	100,000,000,000	-	-
Provision for Severance & Retirement	75,153,011,740	64,457,308,310	58,943,709,680
Leasehold Deposit Received	6,485,504,000	6,307,187,000	5,900,487,000
Derivatives	340,323,730	1,646,627,000	553,748,372
Non-Current Portion of Deferred Income Tax Credit	36,671,855,047	19,012,639,290	-

Income Statement
Unit : Korean Won	As of 12/31/2011	As of 12/31/2010	As of 12/31/2009
Sales	907,293,509,515	846,821,956,631
Cost of Sold Goods	403,257,141,321	342,593,885,501
Gross Profit	504,036,368,194	504,228,071,130
Selling & Admin. Expenses	405,247,802,218	395,914,919,643
Other Operating Income	10,225,635,429	11,653,520,772
Other Operating Expenses	13,999,025,160	7,055,429,482
Operating Income	95,015,176,245	112,911,242,777
Finance Income	6,566,673,647	7,875,449,269
Finance Expenses	15,086,848,560	29,722,746,165
Income Before Taxes	86,495,001,332	91,063,945,881
Income Taxes Expenses	25,841,128,476	25,032,384,970
Net Income	60,653,872,856	66,031,560,911

Income Statement
Unit : Korean Won	As of 12/31/2010	As of 12/31/2009	As of 12/31/2008
Sales	846,821,956,631	801,060,166,350	702,315,777,392
Cost of Sold Goods	345,565,506,282	323,170,526,886	259,185,901,745
Gross Profit	501,256,450,349	477,889,639,464	443,129,875,647
Selling & Admin. Expenses	402,729,211,533	385,964,390,096	361,422,235,656
Operating Income	98,527,238,816	91,925,249,368	81,707,639,991
Non-Operating Income	35,234,321,956	23,507,708,092	33,015,451,598
Non-Operating Expenses	37,634,395,581	30,338,589,501	43,715,922,582
Ordinary Income	96,127,165,191	85,094,367,959	71,007,169,007
Special Income	-	-	-
Income Before Taxes	96,127,165,191	85,094,367,959	71,007,169,007
Income Taxes Expenses	25,716,783,672	21,831,101,217	27,631,976,164
Net Income	70,410,381,519	63,263,266,742	43,375,192,843

Cash Flows
Unit : Korean Won	As of 12/31/2011	As of 12/31/2010	As of 12/31/2009
Cash Flows from Operating	113,019,097,833	123,939,416,320
Net Income	60,653,872,856	66,031,560,911
Adjustment	93,539,569,729	107,251,901,901
Changes in Asset/ & Liability	-21,228,873,383	-34,394,196,264
Income Taxes	-19,945,471,369	-14,949,850,228
Cash Flows from Investing	-112,502,170,284	-95,916,364,963
Cash Inflow from Investing	17,200,930,325	26,222,886,352
Cash Outflows for Investing	-129,703,100,609	-122,139,251,315
Cash Flows from Financing	21,081,786,773	59,459,775,444
Cash Inflows from Financing	141,102,323,102	257,759,713,420
Cash Outflows from Financing	-120,020,536,329	-198,299,937,976
Increase/Decrease in Cash	21,598,714,322	87,482,826,801
Cash at the Beginning of Year	132,599,777,441	44,584,225,538
Cash at the End of Year	154,559,322,987	132,599,777,441

Cash Flows
Unit : Korean Won	As of 12/31/2010	As of 12/31/2009	As of 12/31/2008
Cash Flows from Operating	118,901,791,349	89,926,657,728	53,249,450,331
-Net Income	70,410,381,519	63,263,266,742	43,375,192,843
-Exp. without Cash Outflow	80,984,524,789	62,305,387,197	56,574,384,793
-Revenue without Cash Inflows	-17,826,922,667	-12,809,210,368	-6,636,156,281
-Changes in Asset/ & Liability	-14,666,192,292	-22,832,785,843	-40,063,971,024
Cash Flows from Investing	-98,488,311,711	-92,146,248,938	-72,667,642,546
-Cash Inflow from Investing	23,957,539,604	7,966,096,301	10,919,082,963
-Cash Outflows for Investing	-122,445,851,315	-100,112,345,239	-83,586,725,509
Cash Flows from Financing	67,429,551,577	2,549,536,529	12,695,343,570
-Cash Inflows from Financing	253,098,067,024	163,487,426,708	129,183,284,540
-Cash Outflows from Financing	-185,668,515,447	-160,937,890,179	-116,487,940,970
Increase/Decrease in Cash	87,843,031,215	329,945,319	-6,722,848,645
Cash at the Beginning of Year	44,781,652,246	44,451,706,927	51,174,555,572
Cash at the End of Year	132,624,683,461	44,781,652,246	44,451,706,927

Products, Technologies, Services Description

Main Products & Services

Robustness Internal Medicine, Synthesis Cold Medicine, Dyeing Medicine, Dyeing Medicine

Trade Partners & Competitors

Competitors

YUHAN CORPORATION(110111-0014409) 49-6, DAEBANG-DONG, DONGJAK-GU, SEOUL, KOREA TEL:+82-2-828-0181 FAX:+82-2-828-0050 HANMI PHARM CO., LTD.(110111-0014409) 893-5, HAJEO-RI, PALTAN-MYEON, HWASEONG-SI, GYEONGGI-DO, KOREA TEL:+82-31-356-3311 FAX:+82-31-356-5151 GREEN CROSS CORPORATION(110111-0109854) 303, BOJEONG-DONG, GIHEUNG-GU, YONGIN-SI, GYEONGGI-DO, KOREA TEL:+82-31-260-9300 FAX:+82-31-260-9413

Related Parties

(Subsidiaries, Joint-Venture & Affiliates)

Affiliates-Domestic	DONG-A OTSUKA CO., LTD.(134111-0007761) (49.99% held by the subject company) YONGMA LOGIS CO., LTD.(110111-0245369) (97.69% held by the subject company) SOO-SEOK CO., LTD.(110111-0107973) (100.00% held by the subject company) SOO-SEOK FARM CO., LTD.(164511-0016114) (100.00% held by the subject company) KOREA SINTO CO., LTD.(130111-0010792) (50.00% held by the subject company) DONG-A PHRAMTEC CO., LTD.(110111-2615578) (33.72% held by the subject company) SOO SEOK TRADING CO., LTD.(110111-0634231) DIGITAL OCEAN CO., LTD.(110111-1574874) GAEA SOFT CORP.(110111-1574874) SOOSEOK INDUSTRIAL DEVELOPMENT CO. LTD.(160111-0117790) DA INFORMATION CO., LTD.(110111-3479478) MOPEED CO., LTD.(110111-3372979) SOOSEOK MILLENNIUM CO., LTD.(180111-0453710)
Affiliates-Overseas	DAC CO., LTD. (100.00% held by the subject company) SUZOU DONGA BEVERAGE CO., LTD.(CHINA) (45.00% held by the subject company) JINA GLASS CO., LTD. (17.86% held by the subject company)
Cooperative Enterprise	-Strategic Alliance GSK(GLAXO SMITH KLEIN) -Technical support to DR. FALK(GERMANY) TRIUS THERAPEUTICS(USA)

Sales by Region

(Activity & Markets)

Sales/ Unit :Thousand KRW	2010	2009	2008
Export	801,896,533	763,724,531	676,184,898
Domestic	44,925,424	37,335,635	26,130,879
Total	846,821,957	801,060,166	702,315,777

The Subject deals with the companies in Brazil, Japan, Mexico, Pakistan and USA.

Court Action

Case No.	Court	Plaintiff(s)/ Creditor(s)/ Applicant(s)	Defendant(s)/ Debtor(s)/ Respondent(s)	Cause	Amount (Thousand KRW)	Status
	Suwon District Court	Lee Young-Ho & Others(5)	The Subject Company	Related to Retirement Salaries	1,140,000	1st round is proceeding
	Seoul Seobu District Court	National Health Insurance	The Subject Company	Claim for Compensation from Damages	949,202	1st round is proceeding
	Seoul Seobu District Court	National Health Insurance	The Subject Company	Claim for Compensation from Damages	50,000	1st round is proceeding
	Seoul High Court	Kim Chang-Soo	The Subject Company	-	492,149	3rd round is proceeding
	Patent Court	Loon Too Back	The Subject Company	Related to patents	50,000	2nd round is proceeding
	Seoul District Court	sanofi-aventis	The Subject Company	Patent Infringement	10,000	1st round is proceeding
	Suwon District Court	Lim Byung-Hak & Others(1)	The Subject Company	Related to Retirement Salaries	364,465	1st round is proceeding

News Clipping

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FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.51.50
UK Pound	1	Rs.81.99
Euro	1	Rs.67.54

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%)

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

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