HISTORY OGšTHE COMPANY

Pharmaceutical company FRA-M, Ltd. was established inš1997šbyšmeans ofšreorganization ofšprivately owned enterprise FRA-M, Ltd. According tošsales mix, the Company initially directed its efforts toward domestic producers asšatšthat time competitive field was rather wide and mainly turned tošašforeign producer, and nošproper attention was given tošdomestic producers. Atšthat time its average monthly turnover was about $75,000. Byš2000šFRA-M, Ltd. has occupied key positions atšthe market ofšdomestic drugs and started tošbešactively engaged inšdistribution ofšimported drugs. Atšthat period the average monthly turnover ofšthe Company was approximately $1,000,000. Ifšinš2000šin the distributors’ rating ofšimported drugs the enterprise entered into the third tens, inš2005šrating FRA-M, Ltd. ranks 5thš— 7th place asšregards importation. The average monthly turnover ofšthe Company inš2005šexceeded $6,000,000. The import quota inšthe Company’sšsales mix for the last two years has increase byšašfactor ofš2.5šand atšthe present isšabout 70% that practically conforms tošthe current pharmaceutical market structure ofšUkraine.

MANAGEMENT STRUCTURE OFšTHE ENTERPRIZE

Structurally FRA-M, Ltd. isšcomposed ofštwo warehouses located inšDonetsk and Dnepropetrovsk and ašhead office located inšDonetsk. Inšorder tošimprove its managing ability, with the purpose ofšreducing costs and increasing business safety, the following enterprises were established byšFRA-M, Ltd Tomash, Ltd. (Kharkov) UFK-Fra-M, Ltd. (Kiev) Pharmacy-346, Ltd. (Makeevka) The principle activities ofšKharkov and Kiev enterprises are wholesale distribution ofšmedicines, and the Pharmacy inšMakeevka isšašretail subdivision ofšthe Company. All organization departments ofšthe enterprises are linked byšašsingle information system. The enterprise has its own auto park consisting ofšmore than 50švehicles ready tošdeliver goods tošour customers atšany time.

INFORMATION-TECHNOLOGICAL SYSTEM OFšTHE ENTERPRISE

To fulfill qualitatively problems set tošthe enterprise the ERP-operation manager «Microsoft Navision Axapta 3.0» was introduced. Itšenables tošmonitor all ofšthe processes within the multicompany schedule and gives possibility tošmeet the challenge onšmanagement ofšthe enterprise sale, range and inventory, logistics and tošbešengaged inšplanning and budgeting.

ENTERPRISE EDUCATIONAL PROGRAM

In 2001šthe enterprise established FRA-M, Ltd. Distributors’ Quality Center. Ašgreat contribution inšits development was made byšthe public inspectorate ofšquality control the employees ofšwhich for one and ašhalf year together with the Company’sšprofessionals every day worked out quality assurance arrangements. High emphasis isšplaced onšthe Company’sšmanagement. All ofšthe enterprise managers have higher education, 67špersons are employed inšthe subdivisions that are directly connected with backing ofšmovement ofšmedications, 82% ofšthem have higher pharmaceutical and 13% higher medical education. Each quarter wešlead trainings-seminars for managers ofšall ofšthe groups. Every year the Company selects two students-scholars ofšmedical institutions ofšhigher education whom itšguarantees job placement inšthe Company. More than 10šemployees under assignment ofšthe enterprise are giving the second higher education. All ofšthe employees have the opportunity tošstudy English. Mean age ofšthe Company’sšemployees isš35, and mean age management staff isš32.

PRIORITY LINES INšTHE COMPANY’SšACTIVITY

Beginning from 2004šFRA-M, Ltd. starts actively develop hospital segment ofšthe pharmaceutical market. The main goal inšfulfilling ofšthis project was gain inšsales ofšOTC medications while decreasing their portion inšthe Company’sšportfolio. This task was successfully realized: during 2005šthe portion ofšhospital group medications has increased more than byšašfactor ofš2.

THE MOST IMPORTANT PARTNERS OFšFRA-M, Ltd.

The most important domestic suppliers are: «BCPP», «Darnitsa», «Farmak», «Kievmedpreparat», «Galichpharma», «Stirol». The most important foreign partners are: «KRKA tovarna zdravil, d.d., , Slovenia», «Sandoz, Germany», «Sanofi-Aventis company, Franse», «Pliva Horvatska, Croatia», «Zentiva international», «Ivax pharmaceuticals, Czech», «Shering A.G., Germany», «Ranbaxi Laboratories., India», «Alkon pharmaceuticals., Switzerland», «Boehringer Ingelhaim, Austria», «Astellas, The Netherlands», «Solvay pharmaceuticals., Switzerland», «Ratiopharm, Germany», «Herbs trading, Austria», «MM-Pharma, Bulgaria», «Novartis Consumer, Switzerland».