MIRA INFORM REPORT

Report Date :

19.07.2014

IDENTIFICATION DETAILS

Name :	BUFFALO MACHINERY COMPANY LIMITED
Registered Office :	No.56, Ln. 318, Desheng Rd., Daya Dist., Taichung City 42846,
Country :	Taiwan
Date of Incorporation :	02.10.1979
Com. Reg. No.:	52541739
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturing and sales of machinery
No. of Employees	200

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, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
Taiwan	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	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

Company name and address

Company Name:	BUFFALO MACHINERY COMPANY LIMITED
Supplied Name:	BUFFALO MACHINERY CO LTD.
Trading Address:	No.56, Ln. 318, Desheng Rd., Daya Dist., Taichung City 42846, Taiwan (R.O.C.)
Supplied Address:	56, Lane 318, Der Sheng Road, Ta Ya, Taichung City
Telephone Number:	+886-4-2560-3759
Fax Number:	+886-4-2560-3769
E-mail:	info@mail.buffalo.com.tw

Notes: The exact name and address are as above.

Company Identification Details

Registered Name:	BUFFALO MACHINERY COMPANY LIMITED
Registered Address:	No.56, Ln. 318, Desheng Rd., Daya Dist., Taichung City 42846, Taiwan (R.O.C.)
Date of Foundation:	1979-10-2
Registration Number:	52541739
Registry:	Taichung City Government
Registered Capital:	NTD 180,000,000 (USD 6,120,000) (As of 2014.07, 1 NTD = 0.0340 USD)
Legal Representatives:	Jinfeng Zhang
Legal Form:	Private Limited Liability Company
Principal Activities:	Manufacturing and sales of machinery, etc
Staff:	About 200 Employees
Listed at Stock Exchange:	No
Date of Last Annual Return:	2012-12-10

History

Subject was incorporated on 1979-10-2 with registered number 52541739 as Private Limited Liability Company in Taiwan.

Shareholders

(Unit: NTD)

Name	Subscription Amount
Jinfeng Zhang	158,400,000
Qingkun Zhang
10,628,000

The information above is that of subject’s major shareholders.

Subsidiaries & Branches

Factories

1
Name:	The 1st Factory
Address:	No.56, Ln. 318, Desheng Rd., Daya District, Taichung City 42846, Taiwan (R.O.C.)
Date of Foundation:	1997-11-15
Date of Registration:	1999-3-29
Factory Registration Number:	99633177
Factory Manager:	Jinfeng Zhang
Status:	In Production
Date of Last Annual Return:	2001-6-29
Major Products:	293 general machinery
2
Name:	Zhongzheng 1st Factory
Address:	No.196, Zhongzheng Road, Daya District, Taichung City, Taiwan
Date of Registration:	2011-7-14
Factory Registration Number:	66000383
Factory Manager:	Jinfeng Zhang
Status:	In Production
Date of Last Annual Return:	2011-7-14
Major Products:	291 metal processing machinery 293 general machinery
3
Name:	Minsheng Factory
Address:	1/F., No.18, Lane 180, Sec 3, Minsheng Road, Daya District, Taichung City, Taiwan
Date of Registration:	2007-1-4
Factory Registration Number:	99704053
Factory Manager:	Jinfeng Zhang
Status:	In Production
Date of Last Annual Return:	2007-1-4
Major Products:	291 metal processing machinery 293 general machinery

Personnel Information

Core Management

Directors

1
Name	Jinfeng Zhang
Position	Board Chairman & Manager
Date of Appointment	1983-2-1
2
Name	Qingkun Zhang
Position	Director

Personnel Structure

Total Employees

About 200 Employees

Operation Information

Offices & Factories

	Headquarters
Add	No.56, Ln. 318, Desheng Rd., Daya Dist., Taichung City 42846, Taiwan (R.O.C.)

Production Information

Subject is engaged in manufacturing of machinery, etc.

Subject has factories in Taichung City, Taiwan for production and the total land area is about 44,800 square meters.

Subject’s monthly production capacity is about 140~150 sets of working machines.

Subject obtained the certifications of ISO 9001:2008 and ISO 14001:2004.

Purchase Information

The registered activities of subject:

1	Manufacturing, processing and sales of CNC machine tools
2	Manufacturing, processing and sales of machine parts
3	Import and export of above items
4	General import and export business (besides licensed business)

The components and raw materials for production are purchased from both home and abroad such as Taiwan, Japan and USA, etc.

Sales Information

Subject is engaged in sale of machinery, etc.

The major products sold by subject include horizontal turning machines, multitasking machines, vertical machining centers, high speed vertical machining centers, bridge mills and horizontal borers, etc.

Subject has its own brands “MICROCUT” and “Challenger”, etc.

Subject’s sales regions include Asia, Europe and America, etc.

One of subject’s major customers is Poreba North America LLC.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

Product	Terms	Proportion
Components and raw materials	T/T, Cash, etc	100%

Foreign Purchase

Product	Terms	Proportion
Components and raw materials	T/T, etc	100%

Sales

Domestic Markets

Product	Terms	Proportion
Machinery, etc	T/T, Cash, etc	100%

Export

Product	Terms	Proportion
Machinery, etc	L/C, T/T, etc	100%

Financial Information

Subject has no obligations to disclose its financial statements to the third party according to the relevant policy in Taiwan and the only source from which we can obtain the information is the subject itself.

Subject’s relevant staff Ms. Liao declined to disclose its financials citing the grounds of company’s confidentiality; from other source we can not obtain the relevant information, either.

Bankers

Subject declined to disclose any information about bankers, and we can not obtain the information from other source.

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.

Interview Details

Name	Ms. Liao
Department	Sales Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.33
UK Pound	1	Rs.103.18
Euro	1	Rs.81.58

INFORMATION DETAILS

Analysis Done by :	SUB
Report Prepared by :	NIS

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.