MIRA INFORM REPORT

Report Date :

21.11.2012

IDENTIFICATION DETAILS

Name :	ZHEJIANG XIANJU PHARMACEUTICAL Co., Ltd.
Registered Office :	No. 1, Xianyao Road, Xianju County, Taizhou, Zhejiang Province, 317300 Pr
Country :	China
Financials (as on) :	30.09.2012
Date of Incorporation :	26.06.2000
Com. Reg. No.:	330000000001311
Legal Form :	Shares Limited Company
Line of Business :	Manufacturing and Selling of API and Pharmaceutical Preparation.
No. of Employees :	2,263

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

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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2011)	Current Rating (30.06.2012)
China	A2	A2

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

china - ECONOMIC OVERVIEW

Since the late 1970s China has moved from a closed, centrally planned system to a more market-oriented one that plays a major global role - in 2010 China became the world's largest exporter. Reforms began with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, creation of a diversified banking system, development of stock markets, rapid growth of the private sector, and opening to foreign trade and investment. China has implemented reforms in a gradualist fashion. In recent years, China has renewed its support for state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, in July 2005 China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. From mid 2005 to late 2008 cumulative appreciation of the renminbi against the US dollar was more than 20%, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing allowed resumption of a gradual appreciation. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2010 stood as the second-largest economy in the world after the US, having surpassed Japan in 2001. The dollar values of China's agricultural and industrial output each exceed those of the US; China is second to the US in the value of services it produces. Still, per capita income is below the world average. The Chinese government faces numerous economic challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has progressed further in coastal provinces than in the interior, and by 2011 more than 250 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of population control policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the North - is another long-term problem. China continues to lose arable land because of erosion and economic development. The Chinese government is seeking to add energy production capacity from sources other than coal and oil, focusing on nuclear and alternative energy development. In 2010-11, China faced high inflation resulting largely from its credit-fueled stimulus program. Some tightening measures appear to have controlled inflation, but GDP growth consequently slowed to near 9% for 2011. An economic slowdown in Europe is expected to further drag Chinese growth in 2012. Debt overhang from the stimulus program, particularly among local governments, and a property price bubble challenge policy makers currently. The government's 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals.

Source : CIA

Company Name and Address

ZHEJIANG XIANJU PHARMACEUTICAL Co., Ltd.

NO. 1, XIANYAO ROAD, XIANJU COUNTY, Taizhou,

ZHEJIANG PROVINCE, 317300 PR CHINA

TEL: 86 (0) 576-87731178 FAX: 86 (0) 576-8773118

EXECUTIVE SUMMARY

INCORPORATION DATE : JUNE 26, 2000

REGISTRATION NO. : 330000000001311

REGISTERED LEGAL FORM : SHARES LIMITED COMPANY

CHIEF EXECUTIVE : MR. JIN JINGDE (CHAIRMAN)

STAFF STRENGTH : 2,263

REGISTERED CAPITAL : CNY 341,400,000

BUSINESS LINE : MANUFACTURING

TURNOVER : CNY 1,423,580,000 (CONSOLIDATED, JAN. 1 TO SEP. 30, 2012)

EQUITIES : CNY 1,181,089,000 (CONSOLIDATED, AS OF SEP. 30, 2012)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : STABLE

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : well-known

EXCHANGE RATE : CNY 6.24 = USD 1

Adopted abbreviations:

ANS - amount not stated

NS - not stated

SC - Subject Company (the company inquired by you)

NA - not available

CNY - China Yuan Renminbi

SC was registered as a limited liability company at Zhejiang Provincial Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on June 26, 2000, and has been under present ownership since 2001.

Company Status: Shares limited co.

This form of business in PR China is defined as a legal person. Its registered capital is divided into shares of equal par value and the co. raises capital by issuing share certificates by promotion or by public offer. Shareholders bear limited liability to the extent of shareholding, and the co. is liable for its debts only to the extent of its total assets. The co has independent property of legal person and enjoys property rights of legal person. The characteristics of the shares limited co. are as follows:

The establishment of the co. requires at least two promoters and no more than 200, half of whom shall be domiciled in China. Natural person are allowed to serve as promoters.

The minimum registered capital of a co. is CNY 5M. while that of the co. with foreign investment is CNY 5M. The total capital of a co. which propose to apply for publicly listed must be no less than CNY 30M.

The board of directors must consist of five to nineteen directors.

If the co. raises capital by public offer, the promoters must not subscribe less than 35% of the total shares. the promoters’ shares are restricted to transfer- within one year of the offer.

A state-owned enterprise that is restructured into a shares limited co. must comply with the conditions & requirements specified under the law & administrative rule.

SC’s registered business scope includes manufacturing medicine and pharmaceutical intermediates, selling hardware, chemicals and packing materials; technology services, installing equipment; importing and exporting business.

SC is mainly engaged in manufacturing and selling API and pharmaceutical preparation.

Mr. Jin Jingde has been legal representative and chairman of SC since 2000.

SC is known to have approx. 2,263 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the industrial zone of Taizhou. The detailed information of the premise is unspecified.

http://www.xjpharma.com/ The design is professional and the content is well organized. At present it is in Chinese and English versions.

Email: online@xjpharma.com

Changes of its registered information:

Date	Item	Before the change	After the change
2001	Company name	Xianju Pharmaceutical Co., Ltd.	Present one
	Registered legal form	Limited Liability Company	Present one
2007-7-12	Registration number	3300001008383	Present one
2010-3-2	Registered capital	CNY 256,000,000	Present amount

SC is a listed company in Shenzhen Stock Exchange Market with the code of 002332.

Tax Registration Certificate No.: 331024704789222

Organization Code: 70478922-2

MAIN SHAREHOLDERS: (as of June 30, 2012)

Name % of Shareholding

Zhejiang Xianju Assets Administration & Management Corporation 21.55

Jin Jingde 10.41

Zhejiang Medicine Co., Ltd. 6.75

Wang Huanyong 2.95

National Council for Social Security Fund-switch into three 2.44

Gu Shiyun 1.90

Zhang Qi 1.84

New China Life Insurance Company Limited –

Dividend - Individual Dividend-018L-FH002 Shenzhen 1.47

Fan Minhua 1.44

Zhang Guoan 1.35

Other shareholders 47.90

Zhejiang Xianju Assets Administration & Management Corporation

==================================================

Registration No.: 331024000015429

Chairman: Chen Jian

Incorporation Date: June 17, 1993

Zhejiang Medicine Co., Ltd.

====================

Zhejiang Medicine Co., Ltd. consists of several enterprises and trading companies, such as Xinchang Pharmaceutical Factory, Vitamin Factory, Trading Company, Zhejiang Health Creation Bio-technology Co., Ltd., Shanghai Health Creation Bio-Pharmaceutical R&D Center.

Registration No.: 330000000048605

Chairman: Li Chunbo

Incorporation Date: May 16, 1997

http://www.china-zmc.com/

Add: 268 Dengyun Road, Gongshu District, Hangzhou, Zhejiang

Tel: (+86)-571-87220660 Fax: (+86)-571-87213793

l Legal representative and Chairman:

Mr. Jin Jingde, senior engineer, ID # 332624481002001, born in 1948, with university education. He is currently responsible for the overall management of SC.

Working Experience(s):

Mr. Jin Jingde was the representative of the 8th National People’s Congress and the senior engineer. Having injected significant vigor and vitality into the company’s development and prosperity, he has been conferred numerous glorious titles including “May-1” Labor’s Medal”, “National Outstanding Administrator & Manager”, and “Provincial Labour’s Model” respectively by National Trade Union, State Drug Administration, and the government of Zhejiang province. Meanwhile, he has also gained governmental personal subsidies from State Department of People’s Republic of China.

From 2000 to present Working in SC as chairman and legal representative

Also working in Zhejiang Tiantai Pharmaceutical Co., Ltd., Shanghai Sanhe Biotechnology Co., Ltd., Hangzhou Nengke Love Medical Technology Co., Ltd., Beijing Xianju Kechuang Gene Technology Co., Ltd. as legal representative and chairman, etc.

l General manager:

Mr. Zhang Yusong, engineer, ID # 330624700427001, born in 1970 with university education. He is currently responsible for the daily management of SC.

Working Experience(s):

From 2000 to present Working in SC as general manager

Also working in Zhejiang Xianju Pharmaceutical Sales Co., Ltd., Taizhou Haisheng Chemicals Co., Ltd., Taizhou Xianju Pharmaceutical Co., Ltd. as legal representative and chairman, etc.

SC is mainly engaged in manufacturing and selling API and pharmaceutical preparation.

SC’s products mainly include: corticoid, Androgen, Estradiol Benzate, Medroxy Progesterone Acetate, Progesterone, Freeze-drying injection, Dexamethasone Acetate, and Small capacity injection, etc. SC maintains an annual production scale of 100 tons of raw material, 100 million capsules and 30 million Aqua injections.

SC sources its materials 90% from domestic market, and 10% from overseas market, mainly USA and Europe. SC sells 70% of its products in domestic market, and 30% to overseas market, mainly Southeast Asian market.

The buying terms of SC include Check, T/T, L/C and Credit of 30-60 days. The payment terms of SC include Check, T/T, L/C and Credit of 30-60 days.

*Major Suppliers:

=============

Zhejiang Tiantai Pharmaceutical Co., Ltd.

Taizhou Xianju Pharmaceutical Co., Ltd.

*Major Customers:

==============

Hainan Huiyinbi Pharmaceutical Co., Ltd.

Tianjin Tianmao Technology Development Corp., Ltd.

Nanjing Su-kang Pharmaceutical Co., Ltd.

Branch

Zhejiang Xianju Pharmaceutical Co., Ltd. Shengnuo Branch

Principal: Wang Junzheng

Incorporation date: July 26, 2007

Registration No.: 331024000000664

SC is known to invest in the following companies:

Zhejiang Xianju International Co., Ltd.

Zhejiang Xianju Pharmaceutical Sales Co., Ltd.

Zhejiang Xianju Pharmaceutical Technology Development Co., Ltd.

Hangzhou Nengke Love Medical Technology Co., Ltd.

Taizhou Haisheng Chemicals Co., Ltd.

Zhejiang Tiantai Pharmaceutical Co., Ltd.

Zhejiang Xianju Sunshine Biological Products Co., Ltd.

Shanghai Sanhe Biotechnology Co., Ltd.

Taizhou Xianju Pharmaceutical Co., Ltd.

Beijing Xianju Kechuang Gene Technology Co., Ltd.

Etc.

Overall payment appraisal :

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet determined

The appraisal serves as a reference to reveal SC's payments habits and ability to pay. It is based on the 3 weighed factors: Trade payment experience (through current enquiry with SC's suppliers), our delinquent payment and our debt collection record concerning SC.

Trade payment experience : SC’s supplier declined to make any commends, so the trade reference is not available.

Delinquent payment record: None in our database.

Debt collection record: No overdue amount owed by SC was placed to us for collection within the last 6 years.

Industrial & Commercial Bank of China Xianju Sub-branch

AC#1207051109021018877

Bank of China Xianju Sub-branch

AC#11044608093001

Relationship: Normal.

Consolidated Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2011	as of Sep. 30, 2012
Cash & bank	437,235	360,393
Inventory	421,876	481,427
Accounts receivable	231,808	378,987
Advances to suppliers	32,150	36,229
Notes receivable	66,827	53,729
Other receivables	14,780	40,114
Dividends receivable	3,360	10,595
Other current assets	0	0
	------------------	------------------
Current assets	1,208,036	1,361,474
Fixed assets net value	353,271	381,469
Projects under construction	319,814	508,958
Long term investment	45,801	64,965
Investment real estate	26,997	26,429
Intangible assets	52,207	50,318
Deferred tax asset	3,173	3,358
Other assets	4,231	5,847
	------------------	------------------
Total assets	2,013,530	2,402,818
	=============	=============
Short loans	424,771	404,986
Accounts payable	195,167	230,248
Notes payable	33,250	103,312
Other payable	37,680	26,930
Advances from customers	9,240	18,701
Accrued payroll	17,955	12,957
Taxes payable	57,838	46,520
Interest payable	1,266	1,296
Other current liabilities	0	205,387
	------------------	------------------
Current liabilities	777,167	1,050,337
Long term liabilities	82,850	171,392
	------------------	------------------
Total liabilities	860,017	1,221,729
Equities	1,153,513	1,181,089
	------------------	------------------
Total liabilities & equities	2,013,530	2,402,818
	=============	=============

Consolidated Income Statement

Unit: CNY’000

	as of Dec. 31, 2011	Jan. 1 to Sep. 30, 2012
Turnover	1,689,210	1,423,580
Cost of goods sold	1,009,791	858,793
Taxes and additional of main operation	9,228	7,116
Sales expense	325,146	253,003
Management expense	162,934	142,798
Finance expense	19,359	29,108
Investment income	11,104	9,149
Asset impairment loss	10,293	10,716
Non-operating income	10,384	4,955
Non-operating expenses	6,669	5,426
Profit before tax	167,278	130,724
Less: profit tax	35,245	28,039
Profits	132,033	102,685

Important Ratios

=============

	as of Dec. 31, 2011	as of Sep. 30, 2012
*Current ratio	1.55	1.30
*Quick ratio	1.01	0.84
*Liabilities to assets	0.43	0.51
*Net profit margin (%)	7.82	7.21
*Return on total assets (%)	6.56	4.27
*Inventory /Turnover ×365	92 days	/
*Accounts receivable/Turnover ×365	51 days	/
*Turnover/Total assets	0.84	0.59
* Cost of goods sold/Turnover	0.60	0.60

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears good in its line.

l SC’s net profit margin is fairly good.

l SC’s return on total assets is fairly good.

l SC’s cost of goods sold is low, comparing with its turnover.

LIQUIDITY: AVERAGE

l The current ratio of SC is maintained in a normal level.

l SC’s quick ratio is maintained in a normal level.

l The inventory of SC appears fairly large.

l The accounts receivable of SC appears average.

l SC’s short-term loan appears fairly large.

l SC’s turnover is in a fair level, comparing with the size of its total assets.

LEVERAGE: AVERAGE

l The debt ratio of SC is average.

l The risk for SC to go bankrupt is average.

Overall financial condition of the SC: Stable.

SC is considered large-sized in its line with stable financial conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.91
UK Pound	1	Rs.87.38
Euro	1	Rs.70.24

INFORMATION DETAILS

Report Prepared by :

NIT

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.