MIRA INFORM REPORT

Report Date :

06.11.2013

IDENTIFICATION DETAILS

Name :	NINGXIA TAIRUI PHARMACEUTICAL CO., LTD.
Registered Office :	Wangyuan Economic Development Zone, Yongning County, Yinchuan, Ningxia, 750101 PR
Country :	China
Financials (as on) :	31.12.2011
Date of Incorporation :	21.01.2000
Com. Reg. No.:	640000200004472
Legal Form :	Shares Limited Company
Line of Business :	Manufacturing and Selling of Livestock Antibiotic.
No. of Employees :	1,850

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 – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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 2012 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 under 8% for 2012. An economic slowdown in Europe contributed to China's, and is expected to further drag Chinese growth in 2013. 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

NINGXIA TAIRUI PHARMACEUTICAL CO., LTD.

WANGYUAN ECONOMIC DEVELOPMENT ZONE, YONGNING COUNTY,

YINCHUAN, NINGXIA, 750101 PR CHINA

TEL: 86 (0) 951-8462677

FAX: 86 (0) 951-8462577

EXECUTIVE SUMMARY

INCORPORATION DATE : JANUARY 21, 2000

REGISTRATION NO. : 640000200004472

REGISTERED LEGAL FORM : Shares limited company

CHIEF EXECUTIVE : MR. WANG YI (CHAIRMAN and general manager)

STAFF STRENGTH : 1,850

REGISTERED CAPITAL : CNY 234,642,857

BUSINESS LINE : MANUFACTURING AND SELLING

TURNOVER : CNY 709,300,000 (AS OF DEC. 31, 2011)

EQUITIES : CNY 949,230,000 (AS OF DEC. 31, 2011)

PAYMENT : AVERAGE

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : fairly stable

OPERATIONAL TREND : STEADY

GENERAL REPUTATION : AVERAGE

EXCHANGE RATE : CNY 6.09707 = 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 liabilities company at local Administration for Industry & Commerce (AIC - The official body of issuing and renewing business license) on January 21, 2000, and has been under present legal form since 2010.

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 and selling of Non-sterile API (tiamulin fumarate, tylosin tartrate, tylosin phosphate, tylosin, tilmicosin, thiocyanate red enzyme), feed additive (betaine (I), betaine hydrochloride (I)), premix, powder, single feed, thiocyanate red enzyme chemical intermediates, hydrochloric acid gold enzyme, spectinomycin hydrochloride enzyme, soil enzyme intermediates; exporting its products and technology; importing raw materials, machines, components and related technology for its production, excluding the items limited or prohibited by the state; supplying heating (in accordance with the business scope on the qualification certificate).

SC is mainly engaged in manufacturing and selling livestock antibiotic.

Mr. Wang Yi is legal representative, chairman and general manager of SC at present.

SC is known to have approx. 1,850 employees at present.

SC is currently operating at the above stated address, and this address houses its operating office and factory in the economic development zone of Yongning County. SC’s accountant refused to release the detailed information of the area.

www.tairuiworld.com The design is professional and the content is well organized. At present the web site is both in Chinese and English versions.

E-mail: tairuiren0908@163.com

SC has passed the Certificate of Good Manufacturing Practices for Animal Drugs.

Changes of its registered information:

Date of change	Item	Before the change	After the change
Unknown	Registered no.	6400002202425	640000200004472
2010-9	Company name	Ningxia Duoweitairui Pharmaceutical Co., Ltd.	Ningxia Tairui Pharmaceutical Co., Ltd.
	Legal form	Limited Liabilities Company	Shares Limited Company
2011-7	Registered capital	CNY 139,860,000	Present amount
	Shareholdings	Wang Yi王义10% Qi Xiuping90%	Present ones

For the past two years there is no record of litigation.

MAIN SHAREHOLDERS:

Name % of Shareholding

Qi Xiuping 69.45

Wang Yi 8.45

Guangdong China Science Baiyun Venture Investment Co., Ltd. 5.12

Shenzhen Wei’erkexing Investment Co., Ltd. (in Chinese Pinyin) 2.5

Anhui Guofu Industry Investment Fund Management Co., Ltd. 2.56

Ma Changjiang 1.69

Other shareholders 10.17

l Legal representative, chairman and general manager:

Mr. Wang Yi, born in 1970. He is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as legal representative, chairman and general manager.

SC is mainly engaged in manufacturing and selling livestock antibiotic.

Brand: Tairui.

SC’s products mainly include: Vitamin B12 Feed agent, Salinomycin premixes, Tylosin premix, etc.

SC sources its materials 60% from domestic market and 40% from oversea market. SC sells 40% of its products in domestic market, and 60% 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 T/T, L/C and Credit of 30-60 days.

Note: SC declined to release its major suppliers and clients.

Ningxia Duowei Pharmaceutical Co Ltd.

Incorporation date: January 4, 1999

Registration no.: 640121200001542

SC has a marketing department in Beijing: (according to SC’s website)

Tel: +86-10-82684966

Fax: +86-10-82684961

Note: The subsidiaries information about SC is unknown.

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 did not provide any name of trade/service suppliers and we have no other sources to conduct the enquiry at present.

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.

SC’s management declined to release its bank details.

Balance Sheet

Unit: CNY’000

	as of Dec. 31, 2010	as of Dec. 31, 2011
Cash & bank	75,190	20,870
Inventory	50,480	89,440
Accounts receivable	35,090	78,230
Advances to suppliers	142,480	58,150
Other receivables	82,610	211,720
Other current assets	1,170	6,470
	------------------	------------------
Current assets	387,020	464,880
Fixed assets net value	563,210	1,049,780
Long-term investment	10,000	207,650
Projects under construction	255,070	213,390
Intangible and other assets	50,030	30,730
	------------------	------------------
Total assets	1,265,330	1,966,430
	=============	=============
Short loans	271,000	430,000
Accounts payable	56,650	44,640
Advances from clients	14,830	5,610
Taxes payable	61,730	64,460
Other Accounts payable	13,660	167,380
Other current liabilities	5,570	41,530
	------------------	-----------------
Current liabilities	423,440	753,620
Long term liabilities	317,890	263,580
	------------------	------------------
Total liabilities	741,330	1,017,200
Shareholders equities	524,000	949,230
	------------------	------------------
Total liabilities & equities	1,265,330	1,966,430
	=============	=============

Income Statement

Unit: CNY’000	as of Dec. 31, 2010	as of Dec. 31, 2011
Turnover	540,770	709,300
Cost of goods sold	281,840	408,260
Sales expense	10,510	12,370
Management expense	34,620	50,170
Finance expense	19,270	34,330
Investment income	-2,840	0
Profit before tax	189,850	217,050
Less: profit tax	17,290	28,860
Profits	172,560	188,190

Note: SC’s financial details for Yr2012 are not available at present.

Important Ratios

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

	As of Dec. 31, 2010	As of Dec. 31, 2011
*Current ratio	0.91	0.62
*Quick ratio	0.79	0.50
*Liabilities to assets	0.59	0.52
*Net profit margin (%)	31.91	26.53
*Return on total assets (%)	13.64	9.57
*Inventory /Turnover ×365	35 days	47 days
*Accounts receivable/Turnover ×365	24 days	41 days
*Turnover/Total assets	0.43	0.36
* Cost of goods sold/Turnover	0.52	0.58

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears fairly good and it increased in 2011.

l SC’s net profit margin is good in both years.

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

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

LIQUIDITY: FAIR

l The current ratio of SC is maintained in a fair level in both years.

l SC’s quick ratio is maintained in a fair level in both years.

l The inventory of SC is average in both years.

l The accounts receivable of SC is average in both years.

l The short-term loan of SC is fairly large in both years.

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: Fairly stable.

SC is considered large-sized in its line with fairly stable financial conditions. Taking into consideration of SC’s general performance, reputation as well as market conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.79
UK Pound	1	Rs.98.66
Euro	1	Rs.83.42

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.