MIRA INFORM REPORT

Report No. :	304631
Report Date :	29.01.2015

IDENTIFICATION DETAILS

Name :	QUALIPOLY CHEMICAL CORPORATION
Registered Office :	No.2, Yeong Gong 5^th Rd., Yong'an Dist., Kaohsiung City 828
Country :	Taiwan
Financials (as on) :	31.12.2013
Date of Incorporation :	25.11.1978
Com. Reg. No.:	75975242
Legal Form :	Joint Stock Company
Line of Business :	· engaged in Manufacturing & sales of Synthetic Resin such as UV Curable Materials, Unsaturated Polyester Resins, and Coating Resins Engaged as supplier of Polyurethane Resins, Wire Enamels & Insulating Varnish
No of Employees :	About 280 Employees

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 – 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:	Qualipoly Chemical Corporation
Supplied Name:	QUALIPOLY CHEMICAL CORPORAION
Trading Address:	No.2, Yeong Gong 5^th Rd., Yong'an Dist., Kaohsiung City 828, Taiwan (R.O.C.)
Supplied Address:	NO.2, YEONG GROUP 5TH RD, YEONG AN DIST, KAOHIUNG CITY 828, TAIWAN R.O.C,
Telephone Number:	+886-7-623-6199
Fax Number:	+886-7-624-1972
E-mail:	customer@qualipoly.com.tw

Notes: The exact address is as above.

Credit Summary

Credit Opinion:

Business connections are permissible.

Company Identification Details

Registered Name:	Qualipoly Chemical Corporation
Registered Address:	No.2, Yeong Gong 5^th Rd., Yong'an Dist., Kaohsiung City 828, Taiwan (R.O.C.)
Date of Foundation:	1978-11-25
Registration Number:	75975242
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 960,000,000 (USD 30,720,000) (As of 2015.01, 1 NTD = 0.0320 USD)
Paid-up Capital:	NTD 882,468,180 (USD 28,238,981.76)
Legal Representatives:	Youliang Cai
Legal Form:	Joint Stock Company
Principal Activities:	· engaged in Manufacturing & sales of Synthetic Resin such as UV Curable Materials, Unsaturated Polyester Resins, and Coating Resins Engaged as supplier of Polyurethane Resins, Wire Enamels & Insulating Varnish
Staff:	About 280 Employees
Listed at Stock Exchange:	Yes; Stock Symbol: 4722
Date of Last Annual Return:	2014-7-29

History

Subject was incorporated on 1978-11-25 with registered number 75975242 as Joint Stock Company in Taiwan.

Subject was listed on Taiwan Stock Exchange on 2012-8-15.

Shareholders

Name	Subscription Shares
Youliang Cai	3,674,889
Hongrong Gao
865,932
Nvzhu Qiu	1,120,918
Kuanping Li	932,291
Haicheng Wang	1,069,460
Feixiong Xiong	22,078
Wenliang Zeng	312,957
Chunyu Zheng	1,188,933
Zhongyao Xu	765,573
Hong Ren Investment Co., Ltd. (Literal Translation)	871,120

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

Major Shareholder Information:

Registered Name:	Hong Ren Investment Co., Ltd. (Literal Translation)
Registered Address:	3F-6, No. 54, Sec. 4, Minsheng East Rd., Songshan Dist., Taipei City, Taiwan
Date of Foundation:	2006-7-10
Registration Number:	28200492
Registry:	Taipei City Government
Registered Capital:	NTD 3,000,000 (USD 96,000) (As of 2015.01, 1 NTD = 0.0320 USD)
Paid-up Capital:	NTD 3,000,000 (USD 96,000)
Legal Representatives:	Anting Chen
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2012-11-19

Corporate Structure

Factory

Name:	Yong An Factory
Address:	No.2, Yeong Gong 5^th Rd., Yong'an Dist., Kaohsiung City 828, Taiwan
Date of Foundation:	1990-12-31
Date of Registration:	1990-12-31
Factory Registration Number:	99662431
Factory Manager:	Youliang Cai
Status:	In Production
Date of Last Annual Return:	2003-11-4
Major Products:	184 synthetic resin, plastics and rubbers, etc.

Related Company

Name	Qualipoly Technology (Guang Dong) Corp.
Address	No.20, Huanzhen Road, Du Ruan Longbang Industrial Zone, Jiangmen City, Guangdong Province, China
Tel	+86-750-822-6969
Fax	+86-750-822-6963
Staff:	About 160 Employees

Offices

1
Name	Taipei Office
Address	7F-4, No.20, Lane 609, Chung-Hsin Road, Sec. 5, San-Chung, Taiwan, R.O.C.
2
Name	Taichung Office
Address	No.729, Chaun Ming South Road, South District, Taichung, Taiwan, R.O.C.

Personnel Information

Core Management

Directors

1
Name	Youliang Cai
Position	Board Chairman
2
Name	Hongrong Gao
Position	Director
3
Name	Nvzhu Qiu
Position	Director
4
Name	Kuanping Li
Position	Director
5
Name	Haicheng Wang
Position	Director
6
Name	Feixiong Xiong
Position	Independent Director
7
Name	Wenliang Zeng
Position	Independent Director
8
Name	Zhongyao Xu
Position	Supervisor
9
Name	Chunyu Zheng
Position	Supervisor
10
Name	Hong Ren Investment Co., Ltd. (Literal Translation)
Position	Supervisor

Personnel Structure

Total Employees

About 280 Employees

Operation Information

Offices & Factories

	Headquarters
Add	No.2, Yeong Gong 5^th Rd., Yong'an Dist., Kaohsiung City 828, Taiwan (R.O.C.)

Production Information

l Subject is engaged in manufacturing of synthetic resin

l Subject has factories in Kaohsiung City of Taiwan and Jiangmen City, Guangdong province of the Mainland of China for production.

l Subject obtained the certifications of ISO 9001, ISO 14001, OHSAS 18001, and CIVIC 114, etc.

l We obtained Kaohsiung factory’s production capacity as followed for reference.

Product	Annual production capacity
Unsaturated Polyester Resin	30,000 tons
Coating Resin	3,600 tons
UV Light Curing Resin	19,200 tons

Purchase Information

l The registered activities of subject:

Business Code	Details
C801100	Manufacturing of synthetic resin and rubber
C801990	Manufacturing of other chemical materials
C802120	Manufacturing of industrial additives
C802200	Manufacturing of painting, coating, dye and pigment
C802990	Manufacturing of other chemical products
C805070	Manufacturing of reinforced plastic products
C805990	Manufacturing of other plastic products
F107010	Wholesale of painting and coating
F107170	Wholesale of industrial additives
F107200	Wholesale of chemical materials
F207010	Retail of painting and coating
F207170	Retail of industrial additives
F207200	Retail of chemicals
F401010	International trade business
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

l It is introduced that subject imports some technology from abroad such as NESTE (Finland), ASHLAND (USA), SOAB (Sweden), BECKER (Sweden), SCHENECTADY (USA).

l The raw materials for production are purchased from both home and abroad. We obtained the detail information for reference.

Raw material	Supplier
Styrene	Yuan Jen Enterprises Co., Ltd. Grand Pacific Petrochemical Corporation
Phthalic Anhydride	Nan Ya Plastic Corporation UPC Technology Corporation
Maleic Anhydride	Yuan Jen Enterprises Co., Ltd.
Acrylic Acid	Yuan Jen Enterprises Co., Ltd.
Diethylene Glycol	Nan Ya Plastic Corporation Evermore Trading Corporation
Trimethylolpropane	Perstorp Holding AB
Xylene	Hoong Yang Enterprises, Inc. Camay Chemical Ind Co., Ltd.
Propylene Glycol	LyondellBasell
Isobutyl Alcohol	Dairen Chemical Corporation Nan Ya Plastic Corporation

Major Suppliers Information

1
Name	Yuan Jen Enterprises Co., Ltd.
Address	3^rd Fl., 54, Sec. 4, Min Sheng E. Rd., Taipei , Taiwan , R.O.C.
Tel	+886-2-2717-2222
Fax	+886-2-2546-1546
2
Name	Grand Pacific Petrochemical Corporation
Address	10^th Floor, No.1, Sec 4, Nanjing East Road, Songshan District, Taipei City, Taiwan
Tel	+886-2-8770-4567
Fax	+886-2-2545-8760
3
Name	Nan Ya Plastic Corporation
Address	3F, 201 Tung-Hwa North Road, Taipei, Taiwan
Tel	+886-2-2717-8305
Fax	+886-2-27136421
4
Name	UPC Technology Corporation
Address	9^th Fl., Building A, No.209 Nan Gang Rd., Sec.1, Nan Gang Dist., Taipei, 115, Taiwan
Tel	+886-2-2651-7889
Fax	+886-2-2651-5818
5
Name	Evermore Trading Corporation
Address	11F-3, No.106, Chang-An West Road, Taipei 10351, Taiwan, R.O.C.
Tel	+886-2-2552-2926
Fax	+886-2-2552-2109
6
Name	Perstorp Holding AB
Address	Industriparken, 284 80 Perstorp, Sweden
Tel	+46-435-38000
7
Name	Hoong Yang Enterprises, Inc.
Address	No.68, Qixian 2nd Rd., Xinxing Dist., Kaohsiung City 800, Taiwan (R.O.C.)
8
Name	Camay Chemical Ind Co., Ltd.
Address	8F-2, No. 21, Chung Ching S. Rd., Sec. 2, Taipei Taiwan
Tel	+886-2-2392-5606
9
Name	Dairen Chemical Corporation
Address	9^th Floor, No. 301, Songjiang road, Zhongshan District, Taipei City, Taiwan
Tel	+886-2-7743-1500

Sales Information

l Subject is engaged in sales of synthetic resin

l The major products sold by subject are UV curable materials, unsaturated polyester resins, and coating resins

l Engaged as supplier of Polyurethane Resins, Wire Enamels & Insulating Varnish

l Subject’s sales regions include Southeast Asia, Japan, Europe, Australia, and Middle East, etc.

l Subject has a proportion of 39% for domestic sale and 61% for foreign sale.

l Subject has their own brand “QualiCure”.

l The products sold by subject are applied to automobile components, household appliances, packaging materials, etc.

l Subject’s major customers are “Feng Ching Metal Corporation”, “MAIDA GROUP”, ”NATIONAL REGENT”, and ”VINAUSTRADE”, etc.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

1. Domestic Purchase

Products	Raw materials
Payment Terms	T/T, Cash, etc.

2. Import

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

Sales

1. Domestic Markets

Product	Synthetic resin, etc.
Selling Terms	T/T, Cash, etc.

2. Export

Product	Synthetic resin, etc.
Selling Terms	L/C, T/T, etc.

Balance Sheet

Unit: NTD/000

Consolidated	2013-12-31	2012-12-31
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	105,832	94,512
Current available-for-sale financial assets
Current available-for-sale financial assets, net	0	0
Notes receivable, net
Notes receivable	235,462	196,607
Notes receivable, net	235,462	196,607
Accounts receivable, net
Accounts receivable, net	825,515	818,798
Other receivables
Other receivables, net	16,679	18,502
Inventories
Inventories, manufacturing business
Inventories, manufacturing business, net	729,537	655,343
Total inventories	729,537	655,343
Other current assets
Other current financial assets	0	1,163
Other current assets, others	45,283	54,999
Total other current assets	45,283	56,162
Total current assets	1,958,308	1,839,924
Non-current assets
Non-current available-for-sale financial assets
Non-current available-for-sale financial assets, net	132,131	95,375
Property, plant and equipment
Total property, plant and equipment	981,100	964,342
Intangible assets
Computer software, net
Computer software, net	3,040	4,515
Goodwill	69,651	67,863
Other intangible assets, net
Other intangible assets, net	15,751	0
Total intangible assets	88,442	72,378
Deferred tax assets	7,769	9,909
Other non-current assets
Prepayments for business facilities	33,940	68,179
Guarantee deposits paid	291	275
Long-term prepaid rents	27,454	26,574
Total other non-current assets	61,685	95,028
Total non-current assets	1,271,127	1,237,032
Total assets	3,229,435	3,076,956
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	626,727	664,510
Short-term notes and bills payable
Total short-term notes and bills payable	249,724	249,626
Current financial liabilities at fair value through profit or loss
Total current financial liabilities at fair value through profit or loss	0	94
Notes payable
Total notes payable	106,980	190,804
Accounts payable
Total accounts payable	224,380	240,270
Other payables
Total other payables	90,752	106,738
Current tax liabilities	7,505	25,687
Other current liabilities
Long-term liabilities, current portion
Bonds payable, current portion	0	102
Long-term borrowings, current portion	63,487	71,437
Total long-term liabilities, current portion	63,487	71,539
Other current liabilities, others	3,724	6,658
Total other current liabilities	67,211	78,197
Total current liabilities	1,373,279	1,555,926
Non-current liabilities
Bonds payable
Total bonds payable	0	0
Long-term borrowings
Total long-term borrowings	111,450	124,887
Deferred tax liabilities
Total deferred tax liabilities	28,166	21,127
Other non-current liabilities
Accrued pension liabilities	11,654	23,384
Total other non-current liabilities	11,654	23,384
Total non-current liabilities	151,270	169,398
Total liabilities	1,524,549	1,725,324
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	882,469	732,469
Total capital stock	882,469	732,469
Capital surplus
Total capital surplus	250,901	101,771
Retained earnings
Total retained earnings	477,407	471,035
Other equity interest
Total other equity interest	94,109	46,357
Treasury shares	0	0
Total equity attributable to owners of parent	1,704,886	1,351,632
Total equity	1,704,886	1,351,632
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

Consolidated	2013	2012
Operating revenue
Net sales revenue
Sales revenue
Total sales revenue	4,872,659	4,863,341
Sales returns	12,904	5,174
Sales discounts and allowances	1,576	1,782
Net sales revenue	4,858,179	4,856,385
Total operating revenue	4,858,179	4,856,385
Operating costs
Total operating costs	4,303,531	4,298,843
Gross profit (loss) from operations	554,648	557,542
Gross profit (loss) from operations	554,648	557,542
Operating expenses
Selling expenses
Total selling expenses	269,555	262,741
Administrative expenses
Total administrative expenses	99,946	102,234
Research and development expenses
Total research and development expenses	32,722	26,291
Total operating expenses	402,223	391,266
Net operating income (loss)	152,425	166,276
Non-operating income and expenses
Other income
Interest income
Total interest income	2,848	317
Total other income	2,848	317
Other gains and losses
Other gains and losses, net	44,939	79,592
Finance costs
Finance costs, net	16,393	19,817
Total non-operating income and expenses	31,394	60,092
Profit (loss) from continuing operations before tax	183,819	226,368
Tax expense (income)
Total tax expense (income)	43,781	40,628
Profit (loss) from continuing operations	140,038	185,740
Profit (loss)	140,038	185,740
Other comprehensive income
Exchange differences on translation	15,467	-10,306
Unrealized gains (losses) on valuation of available-for-sale financial assets	35,895	-39,833
Actuarial gains (losses) on defined benefit plans	-1,525	-4,847
Income tax related to components of other comprehensive income	3,381	-12,395
Other comprehensive income, net	46,456	-42,591
Total comprehensive income	186,494	143,149
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	140,038	185,740
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	186,494	143,149
Basic earnings per share
Basic earnings (loss) per share from continuing operations	1.63	2.54
Total basic earnings per share	1.63	2.54
Diluted earnings per share
Diluted earnings (loss) per share from continuing operations	1.62	2.53
Total diluted earnings per share	1.62	2.53

Cash Flows

Unit: NTD/000

Consolidated	2013	2012
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	183,819	226,368
Profit (loss) before tax	183,819	226,368
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	59,208	55,228
Amortization expense	4,610	2,425
Provision (reversal of provision) for bad debt expense	229	14,290
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	0	94
Interest expense	16,393	19,817
Interest income	-2,848	-317
Loss (gain) on disposal of property, plan and equipment	-271	-87
Loss (gain) on disposal of investments	0	-66,367
Impairment loss on non-financial assets	11,868	7,010
Total adjustments to reconcile profit (loss)	89,189	32,093
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in notes receivable	-38,855	13,860
Decrease (increase) in accounts receivable	-12,518	-155,855
Decrease (increase) in other receivable	1,823	-11,008
Decrease (increase) in inventories	-92,875	-111,745
Decrease (increase) in other current assets	9,716	16,994
Total changes in operating assets	-132,709	-247,754
Changes in operating liabilities
Increase (decrease) in notes payable	-83,824	-5,256
Increase (decrease) in accounts payable	-15,890	-46,071
Increase (decrease) in other payable	17,119	-10,617
Increase (decrease) in other current liabilities	-2,609	-408
Increase (decrease) in accrued pension liabilities	-13,255	-4,714
Increase (decrease) in other operating liabilities	-94	6,078
Total changes in operating liabilities	-98,553	-60,988
Total changes in operating assets and liabilities	-231,262	-308,742
Total adjustments	-142,073	-276,649
Cash inflow (outflow) generated from operations	41,746	-50,281
Interest received	2,848	317
Interest paid	-16,981	-20,923
Income taxes refund (paid)	-56,164	-24,924
Net cash flows from (used in) operating activities	-28,551	-95,811
Cash flows from (used in) investing activities
Proceeds from disposal of available-for-sale financial assets	0	84,934
Acquisition of property, plant and equipment	-69,550	-176,802
Proceeds from disposal of property, plant and equipment	517	370
Decrease in refundable deposits	0	783
Acquisition of intangible assets	-18,211	-152
Decrease in other financial assets	1,163	343
Net cash flows from (used in) investing activities	-86,081	-90,524
Cash flows from (used in) financing activities
Decrease in short-term loans	-37,783	-22,722
Decrease in short-term notes and bills payable	98	219,702
Repayments of bonds	-104	0
Proceeds from long-term debt	120,000	100,000
Repayments of long-term debt	-141,387	-27,677
Decrease in notes and bonds issued under repurchase agreement	-132,370	-73,247
Proceeds from issuing shares	299,130	0
Net cash flows from (used in) financing activities	107,584	196,056
Effect of exchange rate changes on cash and cash equivalents	18,368	7,444
Net increase (decrease) in cash and cash equivalents	11,320	17,165
Cash and cash equivalents at beginning of period	94,512	77,347
Cash and cash equivalents at end of period	105,832	94,512
Cash and cash equivalents reported in the statement of financial position	105,832	94,512

Note: Subject didn’t submit its individual financial information; we obtained its consolidated financials as above 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

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

Interview Details

Name	Ms. Wang
Department	Sales Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.41
UK Pound	1	Rs.93.18
Euro	1	Rs.69.82

INFORMATION DETAILS

Analysis Done by :	RAS
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%)

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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.