MIRA INFORM REPORT

Report No. :	511170
Report Date :	28.05.2018

IDENTIFICATION DETAILS

Name :	HUNAN YUXIN PHARMACEUTICAL CO., LTD.
Registered Office :	Team 13 Zhuxi Community, Longxutang Office, Shuangqing District, Shaoyang, Hunan Province
Country :	China
Financials (as on) :	30.06.2017
Date of Incorporation :	26.03.2002
Unified Social Credit Code :	91430500740619423N
Legal Form :	Limited Liabilities Company
Line of Business :	Registered business scope includes manufacturing chemical products & apis, and medical & chemical materials; importing and exporting commodities and technology; technology research and development, technology consulting, and technology transfer
No. of Employees :	370

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A

Credit Rating	Explanation	Rating Comments
A	Acceptable Risk	Business dealings permissible with moderate risk of default

Status :	Good
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

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
China	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	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. China has implemented reforms in a gradualist fashion, resulting in efficiency gains that have contributed to a more than tenfold increase in GDP since 1978. Reforms began with the phaseout 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 continues to pursue an industrial policy, state support of key sectors, and a restrictive investment regime. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2016 stood as the largest economy in the world, surpassing the US in 2014 for the first time in modern history. China became the world's largest exporter in 2010, and the largest trading nation in 2013. Still, China's per capita income is below the world average.

After keeping its currency tightly linked to the US dollar for years, China in July 2005 moved to an exchange rate system that references a basket of currencies. From mid-2005 to late 2008, the renminbi appreciated more than 20% against the US dollar, but the exchange rate remained virtually pegged to the dollar from the onset of the global financial crisis until June 2010, when Beijing announced it would allow a resumption of gradual liberalization. From 2013 until early 2015, the renminbi (RMB) appreciated roughly 2% against the dollar, but the exchange rate fell 13% from mid-2015 until end-2016 amid strong capital outflows in part stemming from the August 2015 official devaluation; in 2017 the RMB resumed appreciating against the dollar – roughly 7% from end-of-2016 to end-of-2017. From 2013 to 2017, China had one of the fastest growing economies in the world, averaging slightly more than 7% real growth per year. In 2015, the People’s Bank of China announced it would continue to carefully push for full convertibility of the renminbi, after the currency was accepted as part of the IMF’s special drawing rights basket. However, since late 2015 the Chinese Government has strengthened capital controls and oversight of overseas investments to better manage the exchange rate and maintain financial stability.

The Chinese Government faces numerous economic challenges including: (a) reducing its high domestic savings rate and correspondingly low domestic household consumption; (b) managing its high corporate debt burden to maintain financial stability; (c) controlling off-balance sheet local government debt used to finance infrastructure stimulus; (d) facilitating higher-wage job opportunities for the aspiring middle class, including rural migrants and college graduates, while maintaining competitiveness; (e) dampening speculative investment in the real estate sector without sharply slowing the economy; (f) reducing industrial overcapacity; and (g) raising productivity growth rates through the more efficient allocation of capital and state-support for innovation. Economic development has progressed further in coastal provinces than in the interior, and by 2016 more than 169.3 million migrant workers and their dependents had relocated to urban areas to find work. One consequence of China’s population control policy known as the “one-child policy” - which was relaxed in 2016 to permit all families to have two children - 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 urbanization. The Chinese Government is seeking to add energy production capacity from sources other than coal and oil, focusing on natural gas, nuclear, and clean energy development. In 2016, China ratified the Paris Agreement, a multilateral agreement to combat climate change, and committed to peak its carbon dioxide emissions between 2025 and 2030.

The government's 13th Five-Year Plan, unveiled in March 2016, emphasizes the need to increase innovation and boost domestic consumption to make the economy less dependent on government investment, exports, and heavy industry. However, China has made more progress on subsidizing innovation than rebalancing the economy. Beijing has committed to giving the market a more decisive role in allocating resources, but the Chinese Government’s policies continue to favor state-owned enterprises and emphasize stability. Chinese leaders in 2010 pledged to double China’s GDP by 2020, and the 13th Five Year Plan includes annual economic growth targets of at least 6.5% through 2020 to achieve that goal. 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. Chinese leaders also have undermined some market-oriented reforms by reaffirming the “dominant” role of the state in the economy, a stance that threatens to discourage private initiative and make the economy less efficient over time. The slight acceleration in economic growth in 2017—the first such uptick since 2010—gives Beijing more latitude to pursue its economic reforms, focusing on financial sector deleveraging and its Supply-Side Structural Reform agenda, first announced in late 2015.

Source : CIA

COMPANY NAME AND ADDRESS

COMPANY NAME	Hunan Yuxin Pharmaceutical Co., Ltd.
CURRENT ADDRESS	Longxutang, Shuangqing District, Shaoyang, Hunan Province 422000 PR China
REGISTERED ADDRESS	Team 13 Zhuxi Community, Longxutang Office, Shuangqing District, Shaoyang, Hunan Province
TEL. NO.	86 (0) 739-5270828/5271168
FAX NO.	86 (0) 739-5271610

EXECUTIVE SUMMARY

Date of Registration : march 26, 2002

Unified social credit code : 91430500740619423N

LEGAL FORM : limited liabilities Company

CHIEF EXECUTIVE : shen yuliang (LEGAL REPRESENTATIVE)

REGISTERED CAPITAL : CNY 21,400,000

staff : 370

BUSINESS CATEGORY : manufacturing & TRADING

REVENUE : CNY 102,410,000 (FROM JAN. 1, 2017 TO JUN. 30, 2017)

EQUITIES : CNY 104,870,000 (AS OF JUN. 30, 2017)

WEBSITE : www.steroidchem.com

E-MAIL : info@steroidchem.com & sun@steroidchem.com

PAYMENT : NO COMPLAINTS

MARKET CONDITION : AVERAGE

FINANCIAL CONDITION : FAIRly stable

OPERATIONAL TREND : fairly steady

GENERAL REPUTATION : AVERAGE

Adopted abbreviations (as follows)

SC - Subject Company (the company inquired by you)

N/A – Not available

CNY – China Yuan Ren Min Bi

OPERATIONAL TREND & GENERAL REPUTATION

This section aims at indicating the relative positions of SC in respect of its operational trend & general reputation

Operational Trend:- General Reputation:-

Upward Excellent

Steady Good

Fairly Steady Fairly Good

Ordinary Average

Fair Fair

Stagnant Detrimental

Downward Not known

Not known Not yet be determined

Not yet be determined

LEGAL STATUS & HISTORY

SC was established as a limited liabilities company of PRC with State Administration of Industry & Commerce (SAIC) under Unified Social Credit Code: 91430500740619423N.

SC’s Import and Export Enterprise Code: 4300740619423

SC’s registered capital: CNY 21,400,000

SC’s paid-in capital: CNY 21,400,000

Registration Change Record:-

Date	Change of Contents	Before the change	After the change
2016-2-1	Registration No./ Unified Social Credit Code	430500000005686	91430500740619423N
2017-12-15	Shareholder (s)	Shen Yuliang73.3664% Xiangjiang Industry Investment Co., Ltd.20.2336% Li Shuilong2% Shen Yujun1.4% Shu Zhijian1% Cao Chunyu1% Zheng Liangbin0.6% Shen Yuqi0.4%	Shen Yuliang73.3664% Xiangjiang Industry Investment Co., Ltd.20.2336% Li Shuilong2% Shen Yujun1.4% Shu Zhijian1% He Ping1% Zheng Liangbin0.6% Shen Yuqi0.4%

Current Co search indicates SC’s shareholders & chief executives are as follows:-

Name of Shareholder (s)	% of Shareholding
Shen Yuliang	73.3664
Xiangjiang Industry Investment Co., Ltd.	20.2336
Li Shuilong	2
Shen Yujun	1.4
Shu Zhijian	1
He Ping	1
Zheng Liangbin	0.6
Shen Yuqi	0.4

SC’s Chief Executives:-

Position	Name
Legal Representative and Chairman	Shen Yuliang
General Manager and Director	Cao Chunyu
Director	Shen Yujun
Supervisor	Shu Zhijian

RECENT DEVELOPMENT

No recent development was found during our checks at present.

SHAREHOLDER CHART & BACKGROUND

Name % of Shareholding

Shen Yuliang 73.3664

Xiangjiang Industry Investment Co., Ltd. 20.2336

Li Shuilong 2

Shen Yujun 1.4

Shu Zhijian 1

He Ping 1

Zheng Liangbin 0.6

Shen Yuqi 0.4

Xiangjiang Industry Investment Co., Ltd.

--------------------------------------------------

Unified Social Credit Code: 914300006895481557

Legal Form: Limited Liabilities Company

Registered Capital: CNY 2,000,000,000

Legal Representative: Cai Shenyuan

MANAGEMENT

Shen Yuliang, Legal Representative and Chairman

------------------------------------------------------------------------------

Ø Gender: M

Ø Nationality: China

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as legal representative and chairman

Cao Chunyu, General Manager and Director

----------------------------------------------------------------------

Ø Gender: M

Ø Nationality: China

Ø Qualification: University

Ø Working experience (s):

At present, working in SC as general manager and director

Shen Yujun, Director

---------------------------------------

Ø Gender: M

Ø Nationality: China

Ø Qualification: University

Ø Working experience (s):

At present, as director of SC

Shu Zhijian, Supervisor

--------------------------------------------

Ø Gender: M

Ø Nationality: China

Ø Qualification: University

Ø Working experience (s):

At present, as supervisor of SC

BUSINESS OPERATION

SC’s registered business scope includes manufacturing chemical products & APIs, and medical & chemical materials; importing and exporting commodities and technology; technology research and development, technology consulting, and technology transfer.

SC is mainly engaged in manufacturing and selling chemical products & APIs, and medical & chemical materials.

SC’s products mainly include:

Steroid APIs

Steroid Intermediate

Non-Steroids

Trademark:

SC sources its materials 100% from domestic market. SC sells 80% of its products in domestic market, and 20% to overseas market.

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

Staff & Office:

--------------------------

SC is known to have approx. 370 staff at present.

SC rents an area as its operating office and factory, but the detailed information is unknown.

RELATED COMPANY

SC is known to have the following subsidiaries and branches at present,

Hunan Middle-South Pharmaceutical Co., Ltd.

Hunan Steroidchem Pharmaceutical Co., Ltd.

Hunan Yuxin Pharmaceutical Co., Ltd. Changsha Branch

Hunan Yuxin Pharmaceutical Co., Ltd. Changsha Technology R & D Branch

PAYMENT

Overall payment appraisal:

( ) Excellent ( ) Good (X) Average ( ) Fair ( ) Poor ( ) Not yet be 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 records 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.

BANKING

Basic Bank

Huarong Xiangjiang Bank Shaoyang Plaza Sub-branch

AC#: 78647112010900019927

FINANCIALS

Balance Sheet

Unit: CNY’000	As of Dec. 31, 2014	As of Dec. 31, 2015	As of Dec. 31, 2016
Cash	20,380	17,030	20,590
Notes receivable	150	0	0
Accounts receivable	36,970	38,380	32,380
Advances to suppliers	3,270	4,320	12,480
Other receivable	5,360	14,750	8,960
Inventory	106,450	97,850	79,550
Prepaid expenses	0	0	0
Other current assets	0	0	0
	------------------	------------------	------------------
Current assets	172,580	172,330	153,960
Long-term investment	88,350	88,350	88,350
Fixed assets	32,330	33,860	32,210
Construction in progress	710	2,350	13,220
Intangible assets	11,180	10,920	16,120
Long-term prepaid expenses	0	0	0
Deferred income tax assets	0	0	0
Other non-current assets	1,120	3,580	0
	------------------	------------------	------------------
Total assets	306,270	311,390	303,860
	=============	=============	=============
Short-term loans	142,090	170,230	147,080
Notes payable	41,170	16,670	20,590
Accounts payable	15,160	20,210	16,040
Wages payable	1,560	90	1,120
Taxes payable	-280	-160	-330
Advances from clients	620	630	580
Other payable	1,940	-9,700	11,680
Accrued expenses	0	0	0
Other current liabilities	0	0	0
	------------------	------------------	------------------
Current liabilities	202,260	197,970	196,760
Non-current liabilities	1,000	1,000	3,250
	------------------	------------------	------------------
Total liabilities	203,260	198,970	200,010
Equities	103,010	112,420	103,850
	------------------	------------------	------------------
Total liabilities & equities	306,270	311,390	303,860
	=============	=============	=============

Income Statement

Unit: CNY’000	As of Dec. 31, 2014	As of Dec. 31, 2015	As of Dec. 31, 2016
Revenue	229,050	262,370	200,870
Cost of sales	199,920	219,300	184,580
Taxes and surcharges	580	1,460	980
Sales expense	2,070	2,300	2,180
Management expense	19,150	19,440	19,200
Finance expense	12,020	8,620	11,870
Profit before tax	60	13,160	-9,180
Less: profit tax	10	1,970	0
Profits	50	11,190	-9,180

Financial Summary

Unit: CNY’000	As of Jun. 30, 2017
Total assets	315,440
	-------------
Total liabilities	210,570
Equities	104,870
	-------------
	From Jan. 1, 2017 to Jun. 30, 2017
Revenue	102,410
Profits	1,020

Important Ratios

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

	As of Dec. 31, 2014	As of Dec. 31, 2015	As of Dec. 31, 2016	As of Jun. 30, 2017
*Current ratio	0.85	0.87	0.78	--
*Quick ratio	0.33	0.38	0.38	--
*Liabilities to assets	0.66	0.64	0.66	0.67
*Net profit margin (%)	0.02	4.26	-4.57	1.00
*Return on total assets (%)	0.02	3.59	-3.02	0.32
*Inventory / Revenue ×365	170 days	137 days	145 days	--
*Accounts receivable / Revenue ×365	59 days	54 days	59 days	--
*Revenue / Total assets	0.75	0.84	0.66	0.32
*Cost of sales / Revenue	0.87	0.84	0.92	--

FINANCIAL COMMENTS

PROFITABILITY: FAIR

l The revenue of SC appears fairly good in its line.

l SC’s net profit margin is fair in 2016.

l SC’s return on total assets is fair in 2016.

l SC’s cost of sales is average, comparing with its revenue.

LIQUIDITY: FAIR

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

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

l The inventory of SC appears large.

l The accounts receivable of SC appears average.

l The short-term loans of SC appear large.

l SC’s revenue 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.

CONCLUSIONS

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 68.26
UK Pound	1	INR 91.22
Euro	1	INR 79.88
CNY	1	INR 10.54

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	VIV
Report Prepared by :	SYL

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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.