MIRA INFORM REPORT

Report Date :

30.10.2014

IDENTIFICATION DETAILS

Name :	REWARD WOOL INDUSTRY CORPORATION
Registered Office :	12th Fl., No.310, Sec.4, Chung Hsiao E. Rd., Taipei
Country :	Taiwan
Financials (as on) :	30.06.2014
Date of Incorporation :	23.07.1964
Com. Reg. No.:	11311608
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and Sale of Wool Tops
No of Employees :	About 100

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 – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Taiwan	A2	A2

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:	Reward Wool Industry Corporation
Supplied Name:	Reward Wool Industry Corporation
Trading Address:	12th Fl., No.310, Sec.4, Chung Hsiao E. Rd., Taipei, Taiwan
Supplied Address:	12th Floor Kuang Fu Building 310 Sec-4 Chung Hsiao East Taipei 106
Telephone Number:	+886-2-2781-1161
Fax Number:	+886-2-2711-4312/2-2752-1193
E-mail:	reward@reward.com.tw

Company Identification Details

Registered Name:	Reward Wool Industry Corporation
Registered Address:	12th Fl., No.310, Sec.4, Chung Hsiao E. Rd., Taipei, Taiwan
Date of Foundation:	1964-7-23
Registration Number:	11311608
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 1,793,000,000 (USD 58,989,700) (As of 2014.10, 1 NTD = 0.0329 USD)
Paid-up Capital:	NTD 1,750,000,000 (USD 57,575,000)
Legal Representatives:	Rouer Ying
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sale of wool tops.
Staff:	About 100 Employees
Listed at Stock Exchange:	Yes; Stock Code: 1423
Date of Last Annual Return:	2014-6-26

History

Subject was incorporated on 1964-7-23 with registered number 11311608 as Joint Stock Company in Taiwan.

Subject is listed on the Taiwan Stock Exchange on 1979-04-02.

Corporate Structure

Factories

1
Name:	Xinwu Factory
Address:	No. 309, Sec. 2, Zhongshan East Rd., Touzhou Village, Xinwu Xiang, Taoyuan County, Taiwan
Date of Foundation:	1969-1-1
Date of Registration:	1976-5-14
Factory Registration Number:	99626741
Factory Manager:	Rouer Ying
Status:	In Production
Date of Last Annual Return:	2002-9-12
Major Products:	111 spinning
2
Name:	Liudu Factory
Address:	No. Gongjian S. Rd., Liudu Li, Qidu Dist., Jilong City, Taiwan
Date of Foundation:	1969-1-1
Date of Registration:	1969-9-30
Factory Registration Number:	99667206
Factory Manager:	Rouer Ying
Status:	In Production
Date of Last Annual Return:	2013-10-23
Major Products:	115 textile

Shareholders

Major Shareholders

Name	Subscription Shares
Zhongcheng Investment Co., Ltd. (Literal Translation)
25,971,338
Yongfu Investment Co., Ltd. (Literal Translation)	416,039
Shin Ho Sing Ocean Enterprise Co., Ltd.	3,104,203

Shareholder Information:

1
Registered Name:	Zhongcheng Investment Co., Ltd. (Literal Translation)
Registered Address:	12th Fl., No.310, Sec.4, Chung Hsiao E. Rd., Taipei, Taiwan
Date of Foundation:	1983-1-20
Registration Number:	20950696
Registry:	Taipei City Government
Registered Capital:	NTD 150,000,000 (USD 4,935,000) (As of 2014.10, 1 NTD = 0.0329 USD)
Paid-up Capital:	NTD 150,000,000 (USD 4,935,000)
Legal Representatives:	Rouer Ying
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2012-6-8
2
Registered Name:	Yongfu Investment Co., Ltd. (Literal Translation)
Registered Address:	11F-1, No. 9, Sec. 3, Xinyi Rd., Daan Dist., Taipei City, Taiwan
Date of Foundation:	1986-12-16
Registration Number:	22419021
Registry:	Taipei City Government
Registered Capital:	NTD 100,000,000 (USD 3,290,000) (As of 2014.10, 1 NTD = 0.0329 USD)
Paid-up Capital:	NTD 100,000,000 (USD 3,290,000)
Legal Representatives:	Fu Wang
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2014-7-16
3
Registered Name:	Shin Ho Sing Ocean Enterprise Co., Ltd.
Registered Address:	9th Fl., No.560, Sec.4, Chung Hsiao E. Rd., Taipei Taiwan
Date of Foundation:	1966-4-7
Registration Number:	07448315
Registry:	Taipei City Government
Registered Capital:	NTD 198,610,080 (USD 6,534,271.63) (As of 2014.10, 1 NTD = 0.0329 USD)
Paid-up Capital:	NTD 198,610,080 (USD 6,534,271.63)
Legal Representatives:	Qingfeng Wu
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2014-7-4

Management Information

Core Management

Directors

1
Name	Rouer Ying
Position	Chairman of the Board
2
Name	Chaoming Chen
Position	Director & Manager
Date of Appointment of the Manager	1993-7-1
3
Name	Minghao Ying
Position	Director
4
Name	Meilan Yu
Position		Director
5
Name	Musheng Cao
Position		Director
6
Name	Xiangyi Yao
Position		Director
7
Name	Guanzhi Wang
Position		Director
8
Name	Lianghong Wu
Position		Supervisor
9
Name	Zhicheng Hong
Position		Supervisor

Personnel Structure

Total Employees

About 100 Employees

Operation Information

Offices & Factories

	Headquarters
Add	12th Fl., No.310, Sec.4, Chung Hsiao E. Rd., Taipei, Taiwan

Production Information

Subject is engaged in manufacturing of wool tops, etc.

Subject has factories in Taiwan for production.

It is introduced that subject has about 100 sets of machines for production.

It is introduced that subject’s capacity are as follows:

Products	Capacity
Wool Tops	700MT/Month
Superwash Tops	200MT/Month
Wool Grease	77MT/Month

Purchase Information

The registered activities of subject:

No.	Details
1	Manufacturing and sales of wool top(including carbonized wool)
2	Processing of other wool’s shrinkproof and dyeing and finishing
3	Import and export related mentioned business
4	Warehouse of related raw materials

The raw materials of the subject for production are mainly purchased from abroad like Australia, etc.

Sales Information

Subject is engaged in sale of wool tops

The major products sold by the subject include wool tops, superwash tops, wool grease

Subject’s sales regions are mainly domestic markets, and some products are sold to Japan, Korea

Subject’s major customers are manufacturers of wool products

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

Subject has little domestic purchase.

Import

Products	Raw materials
Payment Terms	L/C, T/T

Sales

Domestic Markets

Product	Wool tops
Selling Terms	T/T, Cash

Export

Product	Wool tops
Selling Terms	L/C, T/T

Balance Sheet

Unit: NTD/000

	2014-06-30	2013-06-30
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	224,721	342,180
Current financial assets at fair value through profit or loss
Total current financial assets at fair value through profit or loss	0	100
Current bond investment without active market
Current bond investment without active market, net	483,510	285,900
Accounts receivable, net
Accounts receivable, net	39,904	35,565
Other receivables
Other receivables, net	4,692	5,093
Current tax assets
Total current tax assets	1,350	705
Inventories
Total inventories	595,989	634,908
Prepayments
Total prepayments	1,812	23,771
Other current assets
Total other current assets	6,877	12,398
Total current assets	1,358,855	1,340,620
Non-current assets
Non-current available-for-sale financial assets
Non-current available-for-sale financial assets, net	303,955	264,371
Investments accounted for using equity method
Investments accounted for using equity method, net	370,421	408,550
Property, plant and equipment
Total property, plant and equipment	381,267	397,033
Investment property, net
Investment property, net	432,170	434,426
Deferred tax assets	31,614	31,010
Other non-current assets
Total other non-current assets	34	34
Total non-current assets	1,519,461	1,535,424
Total assets	2,878,316 (USD 94,696,596.40)	2,876,044 (USD 94,621,847.60)
Liabilities
Current liabilities
Accounts payable
Total accounts payable	3,605	2,916
Other payables
Total other payables	11,879	17,455
Other current liabilities
Advance receipts
Total advance receipts	71	5,896
Other current liabilities, others	264	282
Total other current liabilities	335	6,178
Total current liabilities	15,819	26,549
Non-current liabilities
Deferred tax liabilities
Total deferred tax liabilities	193,164	193,170
Other non-current liabilities
Accrued pension liabilities	32,677	23,780
Guarantee deposits received	2,332	2,092
Total other non-current liabilities	35,009	25,872
Total non-current liabilities	228,173	219,042
Total liabilities	243,992	245,591
Equity
Share capital
Ordinary share	1,750,000	1,750,000
Total capital stock	1,750,000	1,750,000
Capital surplus
Total capital surplus	118,304	118,304
Retained earnings
Legal reserve	74,186	74,186
Special reserve	539,600	539,600
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	-151,008	-115,649
Total retained earnings	462,778	498,137
Other equity interest
Exchange differences on translation of foreign financial statements
Total exchange differences on translation of foreign financial statements	2,829	3,183
Unrealized gains (losses) on available-for-sale financial assets
Total unrealized gains (losses) on available-for-sale financial assets	300,413	260,829
Total other equity interest	303,242	264,012
Treasury shares	0	0
Total equity	2,634,324 (USD 86,669,259.60)	2,630,453 (USD 86,541,903.70)
Number of share capital awaiting retirement	0	0
Equivalent issue shares of advance receipts for ordinary share	0	0
Number of shares in entity held by entity and by its subsidiaries	0	0

(As of 2014.10, 1 NTD = 0.0329 USD)

Profit and Loss Account

Unit: NTD/000

	2014-1-1~2014-6-30	2013-1-1~2013-6-30
Operating revenue
Net sales revenue
Net sales revenue	323,199 (USD 10,633,247.10)	434,088 (USD 14,281,495.20)
Other operating revenue
Other operating revenue, net	11,513	12,030
Total operating revenue	334,712	446,118
Operating costs
Cost of sales
Total cost of sales	342,127	443,197
Other operating costs	5,249	7,795
Total operating costs	347,376	450,992
Gross profit (loss) from operations	-12,664	-4,874
Gross profit (loss) from operations	-12,664	-4,874
Operating expenses
Selling expenses
Total selling expenses	5,332	5,399
Administrative expenses
Total administrative expenses	13,197	12,509
Total operating expenses	18,529	17,908
Net operating income (loss)	-31,193	-22,782
Non-operating income and expenses
Other income
Total other income	11,077	9,380
Other gains and losses
Other gains and losses, net	-2,669	-302
Finance costs
Finance costs, net	16	16
Share of profit (loss) of associates and joint ventures accounted for using equity method
Share of profit (loss) of associates and joint ventures accounted for using equity method, net	-11,993	-11,011
Total non-operating income and expenses	-3,601	-1,949
Profit (loss) from continuing operations before tax	-34,794	-24,731
Tax expense (income)
Total tax expense (income)	9,851	-8,203
Profit (loss) from continuing operations	-44,645	-16,528
Profit (loss)	-44,645	-16,528
Other comprehensive income
unrealized gains (losses) on valuation of available-for-sale financial assets	11,076	430
Share of other comprehensive income of associates and joint ventures accounted for using equity method
Total share of other comprehensive income of associates and joint ventures accounted for using equity method	-3,323	19,958
Income tax related to components of other comprehensive income	0	0
Other comprehensive income, net	7,753	20,388
Total comprehensive income	-36,892	3,860
Basic earnings per share
Total basic earnings per share	-0.26	-0.09

(As of 2014.10, 1 NTD = 0.0329 USD)

Cash Flows

Unit: NTD/000

	2014-1-1~2014-6-30	2013-1-1~2013-6-30
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	-34,794	-24,731
Profit (loss) before tax	-34,794	-24,731
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	10,503	11,569
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	0	-100
Interest expense	16	16
Interest income	-3,306	-2,577
Share of loss (profit) of associates and joint ventures accounted for using equity method	11,993	11,011
Total adjustments to reconcile profit (loss)	19,206	19,919
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in accounts receivable	-14,730	-6,659
Decrease (increase) in other receivable	-853	990
Decrease (increase) in inventories	55,450	127,410
Decrease (increase) in prepayments	20,002	-22,163
Decrease (increase) in other current assets	3,298	5,439
Total changes in operating assets	63,167	105,017
Changes in operating liabilities
Increase (decrease) in accounts payable	426	-222
Increase (decrease) in other payable	-1,322	-8,834
Increase (decrease) in receipts in advance	43	3,613
Increase (decrease) in other current liabilities	-124	-112
Increase (decrease) in accrued pension liabilities	260	-31,152
Total changes in operating liabilities	-717	-36,707
Total changes in operating assets and liabilities	62,450	68,310
Total adjustments	81,656	88,229
Cash inflow (outflow) generated from operations	46,862	63,498
Interest received	3,299	2,571
Interest paid	-16	-16
Income taxes refund (paid)	-329	529
Net cash flows from (used in) operating activities	49,816	66,582
Cash flows from (used in) investing activities
Acquisition of bond investments without active market	-483,510	-285,900
Proceeds from disposal of bond investments without active market	437,800	38,400
Acquisition of property, plant and equipment	-2,074	-1,549
Decrease in other non-current assets	1,169	0
Net cash flows from (used in) investing activities	-46,615	-249,049
Cash flows from (used in) financing activities
Increase in guarantee deposits received	82	121
Net cash flows from (used in) financing activities	82	121
Net increase (decrease) in cash and cash equivalents	3,283	-182,346
Cash and cash equivalents at beginning of period	221,438	524,526
Cash and cash equivalents at end of period	224,721	342,180
Cash and cash equivalents reported in the statement of financial position	224,721	342,180

Note: We can only obtain the above financial information for your reference. The above information belongs to the form of after adopting IFRSs.

Bankers

Name	Bank of Taiwan

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	Ms. Yu
Department	Sales Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.32
UK Pound	1	Rs.99.00
Euro	1	Rs.78.14

INFORMATION DETAILS

Analysis Done by :	SUB
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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