MIRA INFORM REPORT

Report Date :

27.12.2014

IDENTIFICATION DETAILS

Name :	NEXCOM INTERNATIONAL CO., LTD.

Registered Office :	9Fl., No.920, Chung-Cheng Rd., Zhonghe Dist., New Taipei City 23586

Country :	Taiwan

Financials (as on) :	31.12.2013

Date of Incorporation :	14.11.1992

Com. Reg. No.:	86891972

Legal Form :	Joint Stock Company

Line of Business :	Manufacturing and Sales of Computers and Related Equipment.

No. of Employee :	About 600

RATING & COMMENTS

MIRA’s Rating :

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 – September 30, 2014

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

Taiwan

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

TAIWAN - ECONOMIC OVERVIEW

Taiwan has a dynamic capitalist economy with gradually decreasing government guidance of investment and foreign trade. Exports, led by electronics, machinery, and petrochemicals have provided the primary impetus for economic development. This heavy dependence on exports exposes the economy to fluctuations in world demand. Taiwan's diplomatic isolation, low birth rate, and rapidly aging population are other major long-term challenges. Free trade agreements have proliferated in East Asia over the past several years, and following the landmark Economic Cooperation Framework Agreement (ECFA) signed with China in June 2010, Taiwan in July 2013 signed a free trade deal with New Zealand—Taipei’s first-ever with a country with which it does not maintain diplomatic relations—and in November inked a trade pact with Singapore. Negotiations continue on follow-on components of ECFA regarding trade in goods and a dispute resolution mechanism; a trade in services agreement is under review in the legislature. Taiwan's Total Fertility rate of just over one child per woman is among the lowest in the world, raising the prospect of future labor shortages, falling domestic demand, and declining tax revenues. Taiwan's population is aging quickly, with the number of people over 65 accounting for 11.2% of the island's total population as of 2012. The island runs a large overall trade surplus largely because of its surplus with China, and its foreign reserves are the world's sixth largest, behind China, Japan, Saudi Arabia, Russia, and Switzerland. In 2006 China overtook the US to become Taiwan's second-largest source of imports after Japan. China is also the island's number one destination for foreign direct investment. Taiwan since 2009 has gradually loosened rules governing Chinese investment on the island, and has also secured greater market access for its investors in the mainland. In August 2012, Taiwan Central Bank signed a memorandum of understanding on cross-Strait currency settlement with its Chinese counterpart. The MOU allows for the direct settlement of Chinese RMB and the New Taiwan dollar across the Strait, which could help develop Taiwan into a local RMB hub. Closer economic links with the mainland bring greater opportunities for the Taiwan economy, but also poses new challenges as the island becomes more economically dependent on China while political differences remain unresolved.

Source : CIA

Contact Points

Company Name:	NEXCOM INTERNATIONAL CO., LTD.
Supplied Name:	NEXCOM INTERNATIONAL CO LTD
Trading Address:	9Fl., No.920, Chung-Cheng Rd., Zhonghe Dist., New Taipei City 23586, Taiwan (R.O.C.)
Supplied Address:	9F No 920 Chung-Cheng Rd, Zhonghe Dist New Taipei City 235
Telephone Number:	+886-2-8226-7786
Fax Number:	+886-2-8226-7782
E-mail:	nexcom@nexcom.com.tw

Notes: The exact name and address are as above.

Company Identification Details

Registered Name:	Nexcom International Co., Ltd.
Registered Address:	9Fl., No.920, Chung-Cheng Rd., Zhonghe Dist., New Taipei City 23586, Taiwan (R.O.C.)
Date of Foundation:	1992-11-14
Registration Number:	86891972
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 1,800,000,000 (USD 56,520,000) (As of 2014.12, 1 NTD = 0.0314 USD)
Paid-up Capital:	NTD 1,380,454,720 (USD 43,346,278)
Legal Representatives:	Maochang Lin
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sales of computers and related equipment.
Staff:	About 600 Employees
Listed at Stock Exchange:	Yes, Stock Symbol: 8234
Date of Last Annual Return:	2014-11-17

History

Subject was incorporated on 1992-11-14 with registered number 86891972 as Joint Stock Company in Taiwan.

Change of Name

Former Chinese Name:	新漢電腦股份有限公司
Current Chinese Name:	新漢股份有限公司

Subject listed on Taiwan Over-The-Counter Securities Exchange on 2007-6-7.

Corporate Structure

Factory

Name:	Sanmin Factory
Address:	5F, 7F, 8F, 9F, 10F, 12F., No.63, Sec. 1, Sanmin Rd., Banqiao Dist., New Taipei City, Taiwan (R.O.C.)
Date of Registration:	2010-10-21
Factory Registration Number:	01000066
Factory Manager:	Maochang Lin
Status:	In Production
Date of Last Annual Return:	2014-7-31
Major Products:	269 Other electronic components 271 Computer and relating equipment 272 Communications equipment

Offices

1
Name	Taipei Office
Address	13F, No.920,Chung-Cheng Rd., Zhonghe Dist., New Taipei City, Taiwan 23586, R.O.C.
Telephone Number	+886-2-8226-7796
Fax Number	+886-2-8226-7792
2
Name	Taichung Office
Address	16F, No.250, Sec. 2, Chongde Rd., Beitun Dist., Taichung City 406, R.O.C.
Telephone Number	+886-4-2249-1179
Fax Number	+886-4-2249-1172

Major Related Companies

1
Name	Nexcom USA
Address	2883 Bayview Drive, Fremont CA 94538, USA
Telephone Number	+1-510-656-2248
Fax Number	+1-510-656-2158
2
Name	Nexcom Europe
Address	10 Vincent Avenue, Crownhill Business Centre, Milton Keynes, Buckinghamshire, MK8 0AB, United Kingdom
Telephone Number	+44-1908-267121
Fax Number	+44-1908-262042
3
Name	Nexcom Italia S.R.L
Address	Via Gaudenzio Ferrari 29, 21047 Saronno (VA), Italia
Telephone Number	+39 02 9628 0333
Fax Number	+39 02 9286 9215
4
Name	Nexcom China
Address	2F, Block 4, Venus Plaza, Bldg. 21, ZhongGuanCun Software Park, No. 8, Dongbeiwang West Rd., Haidian District, Beijing, 100193, China
Telephone Number	+86-10-8282-6599
Fax Number	+86-10-8282-5955

Shareholders

Major Shareholders

Name	Subscription Shares
Maochang Lin	9,984,844
Zhengtai Lin
780,656
Jianxing Yang	948,710
Guanwen Wang	633,596
Meijuan Huang	917,747

Management Information

Core Management

Directors

1
Name		Maochang Lin
Position		Board Chairman
2
Name	Zhengtai Lin
Position		Director
3
Name	Jianxing Yang
Position		Director & Manager
Date of Appointment of Manager		2006-7-18
4
Name	Qingyin Chen
Position		Independent Director
5
Name	Yongyao Wang
Position		Independent Director
6
Name	Wenchuan Chen
Position		Supervisor
7
Name	Guanwen Wang
Position		Supervisor
8
Name	Meijuan Huang
Position		Supervisor
9
Name	Yingzhe Zheng
Position		Manager
Date of Appointment		2010-4-20
10
Name	Luolong Wu
Position		Manager
Date of Appointment		2006-1-24
11
Name	Hongzhou Lin
Position		Manager
Date of Appointment		2006-1-24
12
Name	Shuling Du
Position		Manager
Date of Appointment		2009-7-22
13
Name	Shaoye Zhang
Position		Manager
Date of Appointment		2008-4-7
14
Name	Xingyao Yang
Position		Manager
Date of Appointment		2012-3-23
15
Name	Junjun Liu
Position		Manager
Date of Appointment		2011-8-1
16
Name	Wenjing Ding
Position		Manager
Date of Appointment		2012-3-23
17
Name	Shengyu Qiu
Position		Manager
Date of Appointment		2012-4-30
18
Name	Zhongke You
Position		Manager
Date of Appointment		2013-4-30
19
Name	Zongxi Huang
Position		Manager
Date of Appointment		2013-8-5
20
Name	Hongyi Liu
Position		Manager
Date of Appointment		2014-2-1
21
Name	Qianyi Shen
Position		Manager
Date of Appointment		2014-2-1
22
Name	Qifeng Peng
Position		Manager
Date of Appointment		2014-3-25
23
Name	Xiulian Fan
Position		Manager
Date of Appointment		2014-3-25
24
Name	Yuanbin Chen
Position		Manager
Date of Appointment		2014-3-25
25
Name	Junyi Li
Position		Manager
Date of Appointment		2014-10-28
26
Name	Baixu Chen
Position		Manager
Date of Appointment		2014-10-28

Personnel Structure

Total Employees

About 600 Employees

Operation Information

	Headquarters
Add	9Fl., No.920, Chung-Cheng Rd., Zhonghe Dist., New Taipei City 23586, Taiwan (R.O.C.)

Production Information

Subject is engaged in manufacturing of computers and related equipment, etc.

Subject has a factory in Taiwan for production.

Subject obtained the certification of TUV ISO 14001 and ISO 9001:2000, etc.

Purchase Information

The registered activities of subject:

Business Code	Details
CC01030	Appliances and audio-visual electronic products manufacturing
CC01060	Cable machinery equipment manufacturing industry
CC01070	Wireless communication equipment and apparatus manufacturing
CC01080	Electronic components manufacturing industry
CC01101	Controlled telecommunications radio-frequency equipment manufacturing industry
CC01110	Computer and peripheral equipment manufacturing industry
CC01990	Other electrical and electronic machinery and equipment manufacturing industry
CE01010	General equipment manufacturing industry
E605010	Computer equipment installation
E701040	Simple telecom equipment installation industry
EZ05010	Instrument, meter installation engineering industry
F113020	Electrical wholesale industry
F213010	Appliance retail
F213030	Computers and transactional machinery and equipment retail
F213060	Telecommunications equipment retail
F218010	Information software retail
F401010	The international trade
F401021	The controlled telecommunications radio-frequency devices of input industry
I301010	Information software services
I301020	Data processing services
I301030	Electronic information supply services
IG03010	Energy technology service industry
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

The components and raw materials for production are mostly purchased from domestic market and foreign market.

Sales Information

Subject is engaged in sale of computers and related equipment

It is introduced that subject has own its brand named “NEXCOM’.

It is introduced that subject has cooperated with many famous enterprises such as “AMD”, “Freescale”, “Intel”, “Microsoft”, “Texas Instruments”, “Intervalzero”, “Hilscher”, “Sprint”, “Milestone”, “APC Technology”

Subject’s selling territory covering all over the world.

The types of subject’s major customers are manufacturers, wholesalers and distributors of automobile accessories, computers

Subject’s major customers are Arecont Vision LLC, Flextronics International Ltd., and Nex Computers Inc..

Major Products

Products	Items
Industrial Computing Solutions	Embedded Computing Industrial Fanless Computer Industrial Rackmount Computer Industrial Wireless Solutions Machine Automation Panel PC PC-based Factory Automation Software Solution
Intelligent Digital Security	IP Camera NVR Hardware Platform
Mobile Computing Solutions	In-Vehicle PC Rugged Tablet PC Tizen IVI Platform Train PC Vehicle Mount Computer Vehicle Mount Display
Multi-Media Solutions	All-in-one Signage Display Solutions Bulletin Board Solutions Digital Signage Player In-Vehicle Signage Solutions Video Wall Signage Solutions
Network and Communication Solutions	Desktop Appliance Entry Level Appliance Freescale QorIQ Platform Industrial Firewall Solution Industrial-Grade Platform Mainstream Appliance Performance Appliance Telecom Carrier Platform

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

Products	Components and raw materials
Payment Terms	T/T, Cash

Import

Products	Components and raw materials
Payment Terms	L/C, T/T

Sales

Domestic Markets

Product	Computers and related equipment
Selling Terms	T/T, Cash

Export

Product	Computers and related equipment
Selling Terms	L/C, T/T

Balance Sheet

Unit: NTD/000

Consolidated	2013-12-31	2012-12-31
Current assets
Cash and cash equivalents	264,851	246,251
Financial assets measured at fair value through profit or loss - current	0	109
Notes receivable, net	2,195	3,123
Accounts receivable, net	866,873	896,629
Other accounts receivable, net	26,209	27,560
Inventories	603,375	644,734
Prepayments	66,490	51,194
Other current assets	2,097	2,072
Current assets	1,832,090	1,871,672
Non-current assets
Financial assets carried at cost - non-current, net	97,300	58,000
Real property, plant and equipment	1,518,156	230,140
Investment property, net	392,161	395,848
Intangible assets	18,034	24,433
Deferred income tax assets	43,880	38,015
Other non-current assets	40,771	338,350
Non-current assets	2,110,302	1,084,786
Assets	3,942,392	2,956,458
Current liabilities
Short-term borrowing	533,820	417,699
Financial liabilities measured at fair value through profit or loss - current	831	0
Notes payable	4,586	2,166
Account payable	439,583	469,825
Other accounts payable	197,660	167,806
Income tax liability	24,433	46,772
Liability reserve - current	24,521	24,521
Other current liabilities	73,215	17,166
Current liabilities	1,298,649	1,145,955
Non-current liabilities
Long-term borrowings	696,700	0
Deferred income tax liabilities	245	0
Other non-current liabilities	5,740	5,623
Non-current liabilities	702,685	5,623
Liabilities	2,001,334	1,151,578
Equity attributable to owners of parent
Share capital
Ordinary share	1,280,329	1,110,733
Capital collected in advance	2,930	400
Total capital stock	1,283,259	1,111,133
Capital surplus
Capital surplus - share premium	239,518	234,834
Capital surplus - treasury share transactions	2,880	2,880
Capital surplus - employee stock option	49,766	45,536
Capital surplus	292,164	283,250
Retained earnings
Legal reserve	149,172	126,147
Special reserve	3,769	0
Unappropriated retained earnings	219,466	288,119
Retained earnings	372,407	414,266
Other equity interest
Exchange differences on translation of foreign financial statements	-6,772	-3,769
Total other equity interest	-6,772	-3,769
Total equity attributable to owners parent	1,941,058	1,804,880
Non-controlling interests	0	0
Total equity	1,941,058	1,804,880
Advance share (equity) under the about when issuing shares (unit: share)	293,000	40,000
Number of treasury stock acquired by the company and subsidiaries (unit: share)	0	0

Profit and Loss Account

Unit: NTD/000

Consolidated	2013	2012
Total operating revenue	4,171,523	4,183,618
Total operating costs	3,110,434	3,052,456
Gross profit (loss) from operations	1,061,089	1,131,162
Gross profit (loss) from operations, net	1,061,089	1,131,162
Operating expenses
Selling expenses	533,307	492,875
Administrative expenses	84,227	85,201
Research and development expenses	277,745	256,447
Total operating expenses	895,279	834,523
Operating income (loss)	165,810	296,639
Total non-operating income and expenses
Other income	37,909	33,635
Other gains and losses, net	35,451	-22,638
Finance costs, net	14,239	5,343
Total non-operating income and expenses	59,121	5,654
Profit (loss) from continuing operations before tax	224,931	302,293
Total tax expense (income)	48,400	73,073
Profit (loss) from continuing operations	176,531	229,220
Profit (loss)	176,531	229,220
Other comprehensive profit and loss (net)
Exchange differences on translation	-3,003	-10,839
Actuarial gains (losses) on defined benefit plans	3,965	-1,628
Other comprehensive income, net	962	-12,467
Total comprehensive income	177,493	216,753
Net profit (loss) attributable to:
Profit (loss), attributable to owners of parent	176,531	229,795
Profit (loss), attributable to non-controlling interests	0	-575
Comprehensive income, attributable to:
Comprehensive income, attributable to owners of parent	177,493	217,328
Comprehensive income, attributable to non-controlling interests	0	-575
Basic earnings per share
Basic earnings (loss) per share from continuing operations	1.38	1.79
Total basic earnings per share	1.38	1.79
Diluted earnings per share
Diluted earnings (loss) per share from continuing operations	1.36	1.77
Total diluted earnings per share	1.36	1.77

Cash Flows

Unit: NTD/000

Consolidated	2013	2012
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	224,931	302,293
Profit (loss) before tax	224,931	302,293
Depreciation expense	73,630	57,443
Amortization expense	13,495	10,944
Provision (reversal of provision) for bad debt expense	2,126	6,876
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	3,516	-4,114
Interest expense	14,239	5,343
Interest income	-777	-2,301
Share-based payments	7,396	15,379
Loss (gain) on disposal of property, plant, equipment	0	204
Property, plant and equipment transferred to expenses	0	645
Non-cash gains and losses items	113,625	90,419
Decrease (increase) in held for trading financial assets	3,099	24,013
Decrease (increase) in notes receivable	928	-1,070
Decrease (increase) in accounts receivable	27,747	-151,285
Decrease (increase) in other receivable	1,459	-339
Decrease (increase) in inventories	41,359	2,912
Decrease (increase) in prepayment	-15,296	-565
Decrease (increase) in other current asset	0	744
Decrease (increase) in other operating assets	-4,256	-6,146
Total changes in operating assets	55,040	-131,736
Increase (decrease) in financial liabilities held for trading	-5,675	-677
Increase (decrease) in notes payable	2,420	769
Increase (decrease) in accounts payable	-30,242	132,658
Increase (decrease) in other payable	27,324	13,937
Increase (decrease) in other current liabilities	-7,251	-7,465
Total changes in operating liabilities	-13,424	139,222
Total changes in operating assets and liabilities	41,616	7,486
Total adjustments	155,241	97,905
Cash inflow (outflow) generated from operations	380,172	400,198
Interest received	669	2,090
Interest paid	-13,684	-5,335
Income taxes refund (paid)	-73,907	-84,537
Net cash flows from (used in) operating activities	293,250	312,416
Cash flows from (used in) investing activities
Acquisition of financial assets carried at cost	-39,300	-58,000
Acquisition of property, plant and equipment	-1,355,779	-56,661
Process from disposal of property, plant and equipment	829	1,221
Decrease in guaranteed deposits paid	303,965	-3,719
Acquisition of intangible assets	-7,096	-17,778
Increase in other financial assets	-25	-25
Net cash flows from (used in) investing activities	-1,097,406	-134,962
Cash flows from (used in) financing activities
Increase in short-term borrowings	116,121	-24,823
Long-term borrowing	800,000	0
Repayments of long-term debt	-40,000	0
Increase in guarantee deposit received	117	-132
Cash dividends paid	-55,589	-96,481
Employees stock options	6,878	6,359
Changes in non-controlling interests	0	733
Net cash flows from (used in) financing activities	827,527	-114,344
Effect of exchange rate changes on cash and cash equivalents	-4,771	-10,366
Net increase (decrease) in cash and cash equivalents	18,600	52,744
Cash and cash equivalents at beginning of period	246,251	193,507
Cash and cash equivalents at end of period	264,851	246,251
Cash and cash equivalents reported in the statement of financial position	264,851	246,251

Note: Subject didn’t submit its individual financial information; we obtained its consolidated financials as follows for reference.

The above financial figures are based on the IFRSs Accounting System.

Bankers

Subject declined to disclose its bank details; from other source we could not obtain the relevant information, either.

Public Record

Mortgage

No chattel mortgage record of subject has been found within the recent 3 months.

Lawsuit

Up to date of reporting, no existing or latent litigation of the subject has been found.

Special Note

Interview Details

Name	Mr. Qiu
Department	Sales Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.64
UK Pound	1	Rs.98.98
Euro	1	Rs.77.74

INFORMATION DETAILS

Analysis Done by :	RAS

Report Prepared by :	TPT

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%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.