MIRA INFORM REPORT

Report No. :	343507
Report Date :	03.10.2015

IDENTIFICATION DETAILS

Name :	CSPC Zhongnuo Pharmaceutical (Shijiazhuang) CO., LTD.
Registered Office :	No. 188, Gongnong Road, Shijiazhuang City, Hebei Province, 050051 Pr
Country :	China
Financials (as on) :	31.12.2014
Date of Incorporation :	12.12.1997
Com. Reg. No.:	130000400000280
Legal Form :	Chinese-Foreign Equity Joint Venture Enterprise
Line of Business :	Manufacturing and Selling of various kinds of Bulk Drug.
No. of Employees :	3,000

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist

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, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
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, growth of the private sector, development of stock markets and a modern banking system, 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 considered important to "economic security," explicitly looking to foster globally competitive industries. After keeping its currency tightly linked to the US dollar for years, in July 2005 China 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. In 2014 the People’s Bank of China (PBOC) doubled the daily trading band within which the RMB is permitted to fluctuate. 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 2014 stood as the largest economy in the world, surpassing the US that year... 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 consumption; (b) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and increasing numbers of college graduates; (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 2014 more than 274 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.

Several factors are converging to slow China's growth, including debt overhang from its credit-fueled stimulus program, industrial overcapacity, inefficient allocation of capital by state-owned banks, and the slow recovery of China's trading partners. The government's 12th Five-Year Plan, adopted in March 2011 and reiterated at the Communist Party's "Third Plenum" meeting in November 2013, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent in the future on fixed investments, exports, and heavy industry. However, China has made only marginal progress toward these rebalancing goals. The new government of President XI Jinping has signaled a greater willingness to undertake reforms that focus on China's long-term economic health, including giving the market a more decisive role in allocating resources. In 2014 China agreed to begin limiting carbon dioxide emissions by 2030. China implemented several economic reforms in 2014, including passing legislation to allow local governments to issue bonds, opening several state-owned enterprises to further private investment, loosening the one-child policy, passing harsher pollution fines, and cutting administrative red tape.

Source : CIA

Company Name and address

CSPC Zhongnuo Pharmaceutical (Shijiazhuang) CO., LTD.

NO. 188, GONGNONG ROAD, SHIJIAZHUANG CITY,

HEBEI PROVINCE, 050051 PR CHINA

TEL: 86 (0) 311-88622795/88622756/67809666 FAX: 86 (0) 311-86827629

EXECUTIVE SUMMARY

INCORPORATION DATE : dec. 12, 1997

REGISTRATION NO. : 130000400000280

REGISTERED LEGAL FORM : CHINESE-FOREIGN EQUITY JOINT VENTURE ENTERPRISE

CHIEF EXECUTIVE : Mr. wang huaiyu (chairman)

STAFF STRENGTH : 3,000

REGISTERED CAPITAL : cny 906,300,300

BUSINESS LINE : manufacturing & TRADING

TURNOVER : CNY 3,141,060,000 (AS OF DEC. 31, 2014)

EQUITIES : CNY 2,508,130,000 (AS OF DEC. 31, 2014)

PAYMENT : REGULAR

MARKET CONDITION : COMPETITIVE

FINANCIAL CONDITION : stable

OPERATIONAL TREND : steady

GENERAL REPUTATION : WELL KNOWN

EXCHANGE RATE : CNY 6.21= 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 Ren Min Bi

Note: The (No. 47, Fengshou Road Shijiazhuang Hebei) was SC’s former operation address.

SC was registered as a Chinese-foreign equity joint venture enterprise at local Administration for Industry & Commerce (AIC-The official body of issuing and renewing business license) on Dec. 12, 1997.

Company Status: Chinese-foreign equity joint venture enterprise

This form of business in PR China is defined as a legal person. It is a limited co. jointly invested by one or more foreign companies and one or more PR China controlled companies within the territories of PR China according to a certain proportion of capital investment. The investing parties exercise business management, share profits and bear all risks and liabilities of the co. together. The equity joint venture law requires that foreign party contribute not less than 25% of the registered capital, with no maximum. The investing parties are free to agree on method of profit distribution and liabilities bearing according to the proportion of capital investment. Each investing parties contributes funds, tangible assets, technology & etc. The board of directors excises the high authority. The joint venture usually has a limited duration of 10 to 50 years. Enterprise with large investment, long construction periods, low investment returns, introducing of advanced technology & advanced technology products that have good competition position in international market may extend beyond the 50 years limit.

SC’s registered business scope includes manufacturing powder-injection, freeze-dried powder injection, sterile APIs; only for Zhongrun Branch: manufacturing sterile APIs, APIs, medical intermediates, immobilized penicillin G acylase, immobilized D - amino acid oxidase, immobilized glutaric acid - 7 - ACA acylation enzyme, cephalosporin esterase, powder-injection, medical production research, R&D pharmaceutical science & technology, semi-synthetic antibiotic agents; Only for Xinhua Pharmacy Branch: tablets, granules, hard capsule, eye drops, nose drops, rubber paste, oral solution, oral liquid, pill, dry suspension, API, health food, fructose products, auxiliary materials, protection wound materials; only for High-tech Branch: sterile APIs, APIs, pharmaceutical excipients hydroxypropyl-β- cyclodextrin, MAP, pharmaceutical intermediates hydroxypropyl glycine salt, glycine salt, hydroxy methyl phenyl glycine hydrochloride; Only for Development Zone Branch: powder-injection, tablet, hard capsule; sub-contract producing Guiwei Natural Vitamin E Soft, selling own products.

SC is mainly engaged in manufacturing and selling various kinds of bulk drug.

Mr. Wang Huaiyu is the legal representative & chairman of SC at present.

SC is known to have approx. 3,000 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 Shijiazhuang. Detailed premise information is unspecified.

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

Email: znbgs@mail.ecspc.com

SC has got the certificates of GMP, ISO 9001:2000, ISO 14001-2004 and GB/T28001-2001, etc.

Changes of SC’s registered information:

Date of change	Item	Before the change	After the change
Unknown	Registered number	1300001000275	Present one
Aug. 2009	Registered capital	CNY 463,490,300	CNY 513,490,300
Unknown	Registered capital	CNY 513,490,300	Present amount
	Legal representative	Cai Dongchen	Present one
	Shareholders & % of shareholding	CSPC Pharmaceutical Group Limited 0.71% China Pharmaceutical Group Limited (Hong Kong) 81.0809% Tin Lon Investment Limited (Hong Kong) 18.21%	Present ones
2012	Company’s name	CSPC Hebei Zhongrun Pharmaceutical Co., Ltd.	Present one

Organization Code: 601908022

Note: The new CSPC Zhongnuo Pharmaceutical (Shijiazhuang) Co., Ltd. has completed enterprise merger restructuring in Dec. of 2011, including the former CSPC Zhongnuo Pharmaceutical (Shijiazhuang) Co., Ltd. (Reg. No. 130100400003657), CSPC Hebei Zhongrun Pharmaceutical Co., Ltd., CSPC Shijiazhuang Gaoke Medical Technology Development Co., Ltd. and Hebei Hongyuan Chemical Co., Ltd.. The new company is operating with the present name changed from former CSPC Hebei Zhongrun Pharmaceutical Co., Ltd.

See below for SC as executive party (defendant).

Executed Party	SC
Court	Shijiazhuang City Chang’an District People's Court
Date of Case	2013-8-9
Case Number	(2013) 00404
Claim Amount	RMB 1,500,000
Case Status	In process

Executed Party	SC
Court	Shijiazhuang City Qiaodong District People's Court
Date of Case	2012-3-12
Case Number	(2012) 00352
Claim Amount	RMB 23,727
Case Status	Complete

Executed Party	SC
Court	Shijiazhuang City Chang’an District People's Court
Date of Case	2012-1-10
Case Number	(2012) 00056
Claim Amount	RMB 78,480
Case Status	Complete

Remark: Due to the lack of information, we are unable to provide the cause of action, judgment or other information.

MAIN SHAREHOLDERS:

Name Amount (CNY) % of Shareholding

CSPC Pharmaceutical Group Limited (Hong Kong) 804,993,100 88.82

Tin Lon Investment Limited (Hong Kong) 95,455,300 10.53

CSPC Pharmaceutical Group Limited 3,738,600 0.41

Shijiazhuang Development & Investment Co., Ltd. 1,761,000 0.20

CSPC Zhongqi Pharmaceutical Technology (Shijiazhuang)

Co., Ltd. 352,300 0.04

CSPC Pharmaceutical Group Limited (Hong Kong)

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

Registered number: 0362244

Incorporated date: Jun. 16, 1992

Legal form: Public company limited by shares

Tel: (852) 2802 3011

Web: http://www.irasia.com/listco/hk/cspc/

E-mail: info@cpg.hk

The company is listed in Hong Kong Stock Exchange with code 01093.HK

Note: the company was formerly known as China Pharmaceutical Group Limited and changed its name to the current one on March 1, 2013

Tin Lon Investment Limited (Hong Kong)

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

Registered number: 0538383

Incorporated date: Feb. 6, 1996

Legal from: Private company limited by shares

l Legal representative &Chairman:

Mr. Wang Huaiyu, born in 1963, with master’s degree. He is currently responsible for the overall management of SC.

Working Experience(s):

At present Working in SC as legal representative and chairman

Also working in CSPC Pharmaceutical Group Limited (Hong Kong) as executive director.

l General manager:

Mr. Wang Tao is currently responsible for the daily management of SC.

Working Experience(s):

At present Working in SC as general manager

Also working in CSPC Zhongnuo Pharmaceutical (Shijiazhuang) Co., Ltd. Xinhua Pharmacy Branch as principal.

l Directors:

Wang Zhenguo

Pan Weidong

Lu Jianmin

Lu Hua

l Supervisor:

Sun Jumin

SC is mainly engaged in manufacturing and selling various kinds of bulk drug.

SC’s products mainly include:

*RAW MATERIAL:

Penicillin G sodium (benzylpenicillin sodium)

Penicillin G potassium (benzylpenicillin potassium)

Amoxicillin trihydrate

Ampicillin trihydrate

Cefazolin sodium

Ceftriaxone sodium

*INTERMEDIATES:

Penicillin G potassium crude (benzylpenicillin potassium crude)

Cefazolin acid

SC sources its materials 100% from domestic market. SC sells its products 25% to overseas market, and 75% in domestic market.

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

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

Trademark & Patents

Registration No.	8984400	7300409	7300359
Registration Date	2012-1-7	2010-9-7	2010-9-7
Trademark Design

Branches

CSPC Zhongnuo Pharmaceutical (Shijiazhuang) Co., Ltd. Zhongrun Branch

CSPC Zhongnuo Pharmaceutical (Shijiazhuang) Co., Ltd. Xinhua Pharmacy Branch

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 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 refused to release its banking information.

Balance Sheet

Unit: CNY’000	as of Dec. 31, 2013	as of Dec. 31, 2014
Cash & bank	409,480	354,170
Note receivable	461,030	460,010
Inventory	644,540	540,670
Accounts receivable	674,750	694,720
Advances to suppliers	403,050	282,730
Other Accounts receivable	603,090	789,320
Other current assets	0	18,020
	------------------	------------------
Current assets	3,195,940	3,139,640
Fixed assets net value	886,600	896,670
Disposal of fixed assets	4,550	0
Projects under construction	84,820	59,150
Long term investment	363,390	345,190
Intangible assets	122,250	0
Long-term deferred expenses	17,920	0
Other assets	0	150,470
	------------------	------------------
Total assets	4,675,470	4,591,120
	=============	=============
Short loans	0	200,000
Note payable	129,250	143,720
Accounts payable	599,520	544,720
Advances from clients	42,280	29,040
Salaries payable	180,460	223,850
Dividends payable	540,080	140,770
Taxes payable	6,400	9,760
Other Accounts payable	844,890	721,520
Other current liabilities	0	30
	------------------	------------------
Current liabilities	2,342,880	2,013,410
Long term liabilities	375,200	69,580
	------------------	------------------
Total liabilities	2,718,080	2,082,990
Equities	1,957,390	2,508,130
	------------------	------------------
Total liabilities & equities	4,675,470	4,591,120
	=============	=============

Income Statement

Unit: CNY’000

	as of Dec. 31, 2013	as of Dec. 31, 2014
Turnover	3,223,830	3,141,060
Cost of goods sold	2,535,330	2,425,970
Sales expense	316,780	316,310
Management expense	162,860	182,230
Finance expense	7,090	11,920
Investment income	-22,460	26,800
Profit before tax	186,010	231,930
Less: profit tax	27,900	34,790
Profits	158,110	197,140

Important Ratios

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

	as of Dec. 31, 2013	as of Dec. 31, 2014
*Current ratio	1.36	1.56
*Quick ratio	1.09	1.29
*Liabilities to assets	0.58	0.45
*Net profit margin (%)	4.90	6.28
*Return on total assets (%)	3.38	4.29
*Inventory /Turnover ×365	73 days	63 days
*Accounts receivable/Turnover ×365	76 days	81 days
*Turnover/Total assets	0.69	0.68
* Cost of goods sold/Turnover	0.79	0.77

PROFITABILITY: FAIRLY GOOD

l The turnover of SC appears good.

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 average, 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 is maintained in an average level.

l The accounts receivable of SC appears in an average level.

l The short loans of SC appear average in 2014.

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 low.

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.65.55
UK Pound	1	Rs.99.17
Euro	1	Rs.73.08

INFORMATION DETAILS

Analysis Done by :	TRI
Report Prepared by :	TRU

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.