MIRA INFORM REPORT

 

 

Report No. :

303331

Report Date :

22.01.2015

 

IDENTIFICATION DETAILS

 

Name :

MUSTEK SYSTEMS INC.

 

 

Registered Office :

No.25, R&D Rd. II, Science-Based Industrial Park, Hsinchu

 

 

Country :

Taiwan

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

15.10.1988

 

 

Com. Reg. No.:

23117191

 

 

Legal Form :

Joint Stock Company

 

 

Line of Business :

engaged in Manufacturing and sales of Electronic Products including Document Scanner, High Speed ADF Scanners, High Speed A3 And A4 Flatbed Scanners, Handheld Scanners, Personal Photo Scanners, iPhone and iPad docking scanners, and the Wi-Fi Mobile Scanners which are compatible with various Smartphones, Tablets and Computers.

 

 

No of Employees :

About 64 Employees (Taiwan)

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

Payment Behaviour :

Slow but Correct

Litigation :

-----

 

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

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:

Mustek Systems Inc.

Supplied Name:

MUSTEK SYSTEMS INC

Trading Address:

No.25, R&D Rd. II, Science-Based Industrial Park, Hsinchu, Taiwan, R.O.C.

Supplied Address:

NO.25,R&D ROAD II,SCIENCE BASED INDUSTRIAL PARK,HSIN-CHU,TAIWAN

Telephone Number:

+886-3-577-9373

Fax Number:

+886-3-578-3328

Notes: The exact name and address are as above.

 

 

Credit Summary

 

Credit Opinion:

Business connections are permissible.

 

 

Company Identification Details

 

Registered Name:

Mustek Systems Inc.

Registered Address:

No.25, R&D Rd. II, Science-Based Industrial Park, Hsinchu, Taiwan, R.O.C.

Date of Foundation:

1988-10-15

Registration Number:

23117191

Registry:

Science Park Administration, MOST

Registered Capital:

NTD 5,500,000,000 (USD 170,500,000)

(As of 2015.01, 1 NTD = 0.031 USD)

Paid-up Capital:

NTD 724,633,830 (USD 22,463,649)

Legal Representatives:

Wencong Chen

Legal Form:

Joint Stock Company

Principal Activities:

engaged in Manufacturing and sales of Electronic Products including Document Scanner, High Speed ADF Scanners, High Speed A3 And A4 Flatbed Scanners, Handheld Scanners, Personal Photo Scanners, iPhone and iPad docking scanners, and the Wi-Fi Mobile Scanners which are compatible with various Smartphones, Tablets and Computers.

Staff:

About 64 Employees (Taiwan)

(As of 2014-3-31)

Listed at Stock Exchange:

Yes; stock symbol: 2361

Date of Last Annual Return:

2014-6-25

 

 

History

 

Subject was incorporated on 1988-10-15 with registered number 23117191 as Joint Stock Company in Taiwan.

 

Subject listed on Taiwan Stock Exchange on 1997-1-31.

 

 

Corporate Structure

 

Factories

1

Address:

No.25, R&D Rd. II, Science-Based Industrial Park, Hsinchu, Taiwan, R.O.C.

Date of Registration:

1990-2-27

Factory Registration Number:

95A00146

Factory Manager:

Wencong Chen

Status:

In production

Date of Last Annual Return:

2010-4-13

Major Products:

271 computer and related equipment

273 audio visual electronic products

2

Address

Xi Nan Zone, Shi Jie Town, Dong Guan, Guang Dong, China

Tel

+86-769-86631068

Fax

+86-769-86360390

 

Subsidiary Companies

Mustek Inc.

8 Corporate Park, Suite 300, Irvine CA 92606,USA

Tel: +1-949-790-3800

Fax: +1-949-247-8940

 

MUST International B.V.

Celsiusweg 32-58, 5928 PR Venlo,

The Netherlands

Tel: +31 773030 640

Fax: +31 773030 641

 

 

Shareholders

 

Major Shareholders

Name

Subscription Shares

Wencong Chen

2,741,792         

Ximin Chen

204

Li De Investment Co., Ltd (Liberal Translation)

6,954,165

Qingfu Zhong

14,174

Suzhen Pu

238,989

 

Shareholder Information:

Registered Name:

Li De Investment Co., Ltd (Liberal Translation)

Registered Address:

No. 278, Zhongshan Road, Xinhua District, Tainan City, Taiwan

Date of Foundation:

1997-4-18

Registration Number:

97428439

Registry:

Tainan City Governmen

Registered Capital:

NTD 9,000,000 (USD 279,000)

(As of 2015.01, 1 NTD = 0.031 USD)

Paid-up Capital:

NTD 9,000,000 (USD 279,000)

Legal Representatives:

Suzhen Pu

Legal Form:

Joint Stock Company

Date of Last Annual Return:

2014-4-22

 

Management Information

 

Core Management

Directors

1

Name

Wencong Chen

Position

Board Chairman

2

Name

Ximin Chen

Position

Director

3

Name

Aide Chen

Position

Director

4

Name

Jiahua Chen

Position

Director

5

Name

Qingfu Zhong

Position

Director

6

Name

Suzhen Pu

Position

Supervisor

7

Name

Jinlong Chen

Position

Supervisor

8

Name

Wencong Chen

Position

Manager

Date of Appointment

2008-8-5

 

Personnel Structure

Total Employees

About 64 Employees (Taiwan)

(As of 2014-3-31)

 

 

Operation Information

 

Offices & Factories

 

Headquarters

Add

No.25, R&D Rd. II, Science-Based Industrial Park, Hsinchu, Taiwan, R.O.C

 

Production Information

l  Subject is a trader of electronic products without any production activities 

l  Subject has two factories in Taiwan and Dongguan City, Guangdong Province, the mainland of China for production.

 

Purchase Information

l  The registered activities of subject:

Business Code

Details

CC01050

Manufacturing of equipment for handling with files and storage of files.

CC01080

Manufacturing of electronic components.

F401021

Importing of radio-frequency equipment under telecommunication regular.

Developing, researching, producing, manufacturing and selling:

1.

Scanners

2.

Image Processing/Tra nsmission Computer Turnkey Systems

3.

Digital Image Processing/Transmission Devices Systems

4.

Digital Still Camera/Video Camera

5.

LCD Projictor

6.

High Density Optical Disc Machine

7.

Photo Printer

Operating company’s related importing and exporting business.

 

l  It introduced that subject purchases its components and etc both at home and abroad.

 

Sales Information

l  Subject is engaged in sale of electronic products

l  The major products include Document Scanner, High Speed ADF Scanners, High Speed A3 And A4 Flatbed Scanners, Handheld Scanners, Personal Photo Scanners, iPhone and iPad docking scanners, and the Wi-Fi Mobile Scanners which are compatible with various Smartphones, Tablets and Computers.  

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

l  Subject’s major customers are manufacturers and traders of computers accessories and etc.

l  Subject can provide the OEM and ODM services.

 

Import and export right:

Import right

Yes

Export right

Yes

 

 

Settlements

 

Purchase

1.     Domestic Purchase

Products

Components and etc

Payment Terms

Cash, T/T and etc

 

2.     Import

Products

Components and etc

Payment Terms

L/C, T/T and etc

 

Sales

1.     Domestic Markets

Product

Electronic products and etc

Selling Terms

Cash, T/T and etc

 

2.     Export

Product

Electronic products and etc

Selling Terms

L/C, T/T and etc

 

Balance Sheet

 

Unit: NTD/000

 

2013-12-31

2012-12-31

  Assets

 

 

   Current assets

 

 

    Cash and cash equivalents

 

 

     Total cash and cash equivalents

41,149

28,927

    Current available-for-sale financial assets

 

 

     Current available-for-sale financial assets, net

0

0

    Current bond investment without active market

 

 

     Current bond investment without active market, net

53,031

52,954

    Accounts receivable, net

 

 

     Accounts receivable, net

23,828

43,691

    Other receivables

 

 

     Other receivables, net

3,339

20,100

    Inventories

 

 

     Total inventories

53,279

65,288

    Other current assets

 

 

     Total other current assets

10,653

14,166

    Total current assets

185,279

225,126

   Non-current assets

 

 

    Non-current financial assets at cost

 

 

     Non-current financial assets at cost

0

5,734

     Non-current financial assets at cost, net

0

5,734

    Property, plant and equipment

 

 

     Buildings and structures, net

 

 

      Buildings and structures, cost

323,508

331,864

      Buildings and structures, net

323,508

331,864

     Machinery and equipment, net

 

 

      Machinery and equipment, cost

1,336

9,056

      Machinery and equipment, net

1,336

9,056

     Molding equipment, net

 

 

      Molding equipment, cost

0

190

      Molding equipment, net

0

190

     Testing equipment, net

 

 

      Testing equipment, cost

0

125

      Testing equipment, net

0

125

     Transportation equipment, net

 

 

      Transportation equipment, cost

124

371

      Transportation equipment, net

124

371

     Office equipment, net

 

 

      Office equipment, cost

752

941

      Office equipment, net

752

941

     Leased assets, net

 

 

      Leased assets, cost

769

2,163

      Leased assets, net

769

2,163

     Other facilities, net

 

 

      Other facilities, cost

99

200

      Other facilities, net

99

200

     Total property, plant and equipment

326,588

344,910

    Intangible assets

 

 

     Computer software, net

 

 

      Computer software

1,314

1,944

      Computer software, net

1,314

1,944

     Other intangible assets, net

 

 

      Other intangible assets

0

3,823

      Other intangible assets, net

0

3,823

     Total intangible assets

1,314

5,767

    Other non-current assets

 

 

     Guarantee deposits paid

2,614

9,009

     Other non-current assets, others

 

 

      Other non-current assets, others

16,950

16,950

      Total other non-current assets, others

16,950

16,950

     Total other non-current assets

19,564

25,959

    Total non-current assets

347,466

382,370

   Total assets

532,745

607,496

  Liabilities

 

 

   Current liabilities

 

 

    Short-term borrowings

 

 

     Bank loan

132,459

196,736

     Other short-term borrowings

170,000

50,000

     Total short-term borrowings

302,459

246,736

    Accounts payable

 

 

     Accounts payable

38,763

53,932

     Total accounts payable

38,763

53,932

    Other payables

 

 

     Other payables, others

49,194

77,525

     Total other payables

49,194

77,525

    Current tax liabilities

274

2,794

    Current provisions

 

 

     Current provisions for employee benefits

0

0

     Short-term warranty provision

484

0

     Short-term provision for sales returns and discounts

1,260

1,260

     Total current provisions

1,744

1,260

    Other current liabilities

 

 

     Other current liabilities, others

9,598

11,346

     Total other current liabilities

9,598

11,346

    Total current liabilities

402,032

393,593

   Non-current liabilities

 

 

    Other non-current liabilities

 

 

     Guarantee deposits received

5,258

3,845

     Total other non-current liabilities

5,258

3,845

    Total non-current liabilities

5,258

3,845

   Total liabilities

407,290

397,438

  Equity

 

 

   Equity attributable to owners of parent

 

 

    Share capital

 

 

     Ordinary share

724,634

724,634

     Total capital stock

724,634

724,634

    Retained earnings

 

 

     Unappropriated retained earnings (accumulated deficit)

 

 

      Accumulated profit and loss

-577,381

-540,392

      Total unappropriated retained earnings (accumulated deficit)

-577,381

-540,392

     Total retained earnings

-577,381

-540,392

    Other equity interest

 

 

     Other equity, others

 

 

      Other equity, others

-21,798

25,816

      Total other equity, others

-21,798

25,816

     Total other equity interest

-21,798

25,816

    Total equity attributable to owners of parent

125,455

210,058

   Non-controlling interests

0

0

   Total equity

125,455

210,058

   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

 

 

Profit and Loss Account

 

Unit: NTD/000

 

2013

2012

  Operating revenue

 

 

   Net sales revenue

 

 

    Sales revenue

 

 

     Sales revenue

284,989

653,604

     Total sales revenue

284,989

653,604

    Net sales revenue

284,989

653,604

   Total operating revenue

284,989

653,604

  Operating costs

 

 

   Cost of sales

 

 

    Cost of sales

219,652

505,030

    Total cost of sales

219,652

505,030

   Total operating costs

219,652

505,030

  Gross profit (loss) from operations

65,337

148,574

  Unrealized profit (loss) from sales

0

0

  Realized profit (loss) on from sales

0

0

  Gross profit (loss) from operations

65,337

148,574

  Operating expenses

 

 

   Selling expenses

 

 

    Other expenses

43,146

59,973

    Total selling expenses

43,146

59,973

   Administrative expenses

 

 

    Other expenses

80,909

87,833

    Total administrative expenses

80,909

87,833

   Research and development expenses

 

 

    Other expenses

42,664

62,247

    Total research and development expenses

42,664

62,247

   Total operating expenses

166,719

210,053

  Net operating income (loss)

-101,382

-61,479

  Non-operating income and expenses

 

 

   Other income

 

 

    Other income, others

35,455

53,676

    Total other income

35,455

53,676

   Other gains and losses

 

 

    Foreign exchange gains

49,797

-24,750

    Losses on disposals of investments

4,189

-26,944

    Impairment loss

 

 

     Other impairment loss

2,688

1,557

     Total impairment loss

2,688

1,557

    Other gains and losses, net

42,920

637

   Finance costs

 

 

    Finance costs, net

12,803

10,221

   Total non-operating income and expenses

65,572

44,092

  Profit (loss) from continuing operations before tax

-35,810

-17,387

  Tax expense (income)

 

 

   Current tax expense (income)

1,179

1,805

   Total tax expense (income)

1,179

1,805

  Profit (loss) from continuing operations

-36,989

-19,192

  Profit (loss)

-36,989

-19,192

  Other comprehensive income

 

 

   Exchange differences on translation

-47,614

25,816

   Unrealised gains (losses) on valuation of available-for-sale financial assets

0

-1,105

   Other comprehensive income, net

-47,614

24,711

  Total comprehensive income

-84,603

5,519

  Profit (loss), attributable to:

 

 

   Profit (loss), attributable to owners of parent

-36,989

-19,192

   Profit (loss), attributable to non-controlling interests

0

0

  Comprehensive income attributable to:

 

 

   Comprehensive income, attributable to owners of parent

-84,603

5,519

   Comprehensive income, attributable to non-controlling interests

0

0

  Basic earnings per share

 

 

   Basic earnings (loss) per share from continuing operations

-0.51

-0.26

   Total basic earnings per share

-0.51

-0.26

  Diluted earnings per share

 

 

   Diluted earnings (loss) per share from continuing operations

-0.51

-0.26

   Total diluted earnings per share

-0.51

-0.26

 

 

Cash Flows

 

Unit: NTD/000

 

2013

2014

Cash flows from (used in) operating activities, indirect method

 

 

   Profit (loss) from continuing operations before tax

-35,810

-17,387

   Profit (loss) before tax

-35,810

-17,387

   Adjustments

 

 

    Adjustments to reconcile profit (loss)

 

 

     Depreciation expense

11,888

34,494

     Amortization expense

630

3,011

     Provision (reversal of provision) for bad debt expense

-678

9,696

     Interest expense

12,803

10,221

     Interest income

-3,003

-2,626

     Share of loss (profit) of associates and joint ventures accounted for using equity method

0

276

     Loss (gain) on disposal of property, plan and equipment

-2,073

244

     Loss (gain) on disposal of investments

0

-723

     Unrealized foreign exchange loss (gain)

1,111

10,125

     Other adjustments to reconcile profit (loss)

4,670

-26,221

     Total adjustments to reconcile profit (loss)

25,348

38,497

    Changes in operating assets and liabilities

 

 

     Changes in operating assets

 

 

      Decrease (increase) in accounts receivable

22,001

108,115

      Decrease (increase) in other receivable

2,261

1,735

      Decrease (increase) in inventories

12,009

97,371

      Decrease (increase) in other current assets

7,353

9,769

      Total changes in operating assets

43,624

216,990

     Changes in operating liabilities

 

 

      Increase (decrease) in accounts payable

-15,903

-155,189

      Increase (decrease) in other payable

-30,181

-25,415

      Increase (decrease) in other current liabilities

-2

-12,945

      Total changes in operating liabilities

-46,086

-193,549

     Total changes in operating assets and liabilities

-2,462

23,441

    Total adjustments

22,886

61,938

   Cash inflow (outflow) generated from operations

-12,924

44,551

   Income taxes refund (paid)

-2,925

-1,805

  Net cash flows from (used in) operating activities

-15,849

42,746

  Cash flows from (used in) investing activities

 

 

   Proceeds from disposal of available-for-sale financial assets

0

4,639

   Proceeds from disposal of financial assets at cost

16,351

12,873

   Proceeds from capital reduction of investments accounted for using equity method

0

18

   Acquisition of property, plant and equipment

-309

-530

   Proceeds from disposal of property, plant and equipment

8,766

358

   Decrease in refundable deposits

6,395

327

   Acquisition of intangible assets

0

-6,351

   Interest received

2,800

2,799

   Net cash flows from (used in) investing activities

34,003

14,133

  Cash flows from (used in) financing activities

 

 

   Decrease in short-term loans

53,733

-79,224

   Increase in guarantee deposits received

1,415

-1,514

   Interest paid

-13,499

-10,229

   Net cash flows from (used in) financing activities

41,649

-90,967

  Effect of exchange rate changes on cash and cash equivalents

-47,581

27,387

  Net increase (decrease) in cash and cash equivalents

12,222

-6,701

  Cash and cash equivalents at beginning of period

28,927

35,628

  Cash and cash equivalents at end of period

41,149

28,927

   Cash and cash equivalents reported in the statement of financial position

41,149

28,927

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 cannot obtain the relevant information, either.

 

Public Record

 

Mortgage

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

 

Lawsuit

1

Trial Number:

1997, Zi, 53

Date of Trial:

2003-1-10

Reason:

Breach of reputation

Claimant:

Mustek Systems Inc.

Defendant:

Not stated

2

Trial Number:

2012, Su, 589

Date of Trial:

2014-11-12

Reason:

Payment for goods

Claimant:

TaiSol Electronics Co.,Ltd.

Defendant:

Mustek Systems Inc.

3

Trial Number:

2013, Chongsu, 68

Date of Trial:

2014-3-31

Reason:

Payment for damages

Claimant:

Mustek Systems Inc.

Defendant:

DHL Supply Chain (Taiwan) Co., Ltd.

4

Trial Number:

2012, Bu, 1003

Date of Trial:

2012-11-22

Reason:

Payment for damages

Claimant:

DHL Supply Chain (Taiwan) Co., Ltd.

Defendant:

Mustek Systems Inc.

5

Trial Number:

2012, Bu, 430

Date of Trial:

2012-6-8

Reason:

Payment for goods

Claimant:

TaiSol Electronics Co.,Ltd.

Defendant:

Mustek Systems Inc.

 

 

Special Note

 

Interview Details

Department

Sales Department


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.61

UK Pound

1

Rs.93.49

Euro

1

Rs.71.38

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

MNL

 

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.