MIRA INFORM REPORT

Report No. :	326679
Report Date :	15.06.2015

IDENTIFICATION DETAILS

Name :	HTC CORPORATION
Formerly Known As :	HIGH TECH COMPUTER CORPORATION
Registered Office :	No.23, Xinghua Rd., Taoyuan City, Taoyuan County 330, (R.O.C.)
Country :	Taiwan
Financials (as on) :	31.12.2014 Consolidated
Date of Incorporation :	15.05.1997
Com. Reg. No.:	16003518
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and Sales of Electronic Products.
No. of Employees :	About 17,000 Employees (Group)

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
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 – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
Taiwan	A1	A1

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. However, negotiations on follow-on components of ECFA, including an agreement on trade in services, deals on trade in goods, and dispute resolution—have stalled. In early 2014, the government bowed to public demand for a new law governing the oversight of cross-Strait agreements, before any additional deals with China are implemented; the legislature has yet to vote on such legislation, leaving the future of ECFA up in the air as President MA enters his final full year in office. MA has portrayed ECFA as Taiwan’s key to greater participation in East Asia’s free trade networks. 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 expected to account for 20% of the island's total population by 2025. The island runs a trade surplus, largely because of its surplus with China, and its foreign reserves are the world's fourth largest, behind those of China, Japan, and Russia. 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, the 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 has helped Taiwan develop into a local RMB hub. Closer economic links with the mainland bring greater opportunities for the Taiwan economy, but also pose new challenges as the island becomes more economically dependent on China at a time when political differences remain unresolved. During 2014, the press paid increasing attention to domestic economic issues while pushing aside the debates over trade liberalization that were a hallmark of MA’s tenure. The media focused on the divide between Taiwan’s “haves” and “have nots,” providing extensive coverage of public frustration with stagnant wages, skyrocketing housing prices, and the difficulty of finding entry-level jobs.

Source : CIA

Contact Points

Company Name:	HTC Corporation
Supplied Name:	HTC Corporation
Trading Address:	No. 23, Xinghua Rd., Taoyuan City, Taoyuan County 330, Taiwan (R.O.C.)
Supplied Address:	No 23, Xinghua Road Taoyuan Country Taoyuan City 330
Telephone Number:	+886-3-375-3252
Fax Number:	+886-3-375-3251
E-mail:	Asia_pr@htc.com

Notes: The exact address is as above.

Company Identification Details

Registered Name:	HTC Corporation
Registered Address:	No.23, Xinghua Rd., Taoyuan City, Taoyuan County 330, Taiwan (R.O.C.)
Date of Foundation:	1997-5-15
Registration Number:	16003518
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 10,000,000,000 (USD 3,270,000,000) (As of 2015.6, 1 NTD = 0.0327 USD)
Paid-up Capital:	NTD 8,403,521,250 (USD 274,795,145)
Legal Representatives:	Xuehong Wang
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sales of electronic products, etc.
Staff:	About 17,000 Employees (Group)
Listed at Stock Exchange:	Yes (Public, TPE: 2498)
Date of Last Annual Return:	2015-5-26

History

Subject was incorporated on 1997-5-15 with registered number 16003518 as Joint Stock Company in Taiwan.

Subject listed on Taiwan stock exchange on 2002-3-26.

Change of Name

Former English Name	High Tech Computer Corporation
Current English Name	HTC Corporation

Shareholders

Name	Subscription Shares
Xuehong Wang	32,272,427
Wenqi Chen
22,391,389
Huotu Zhuo	96,530
Josef Felder	229,985
Weizhi Investment Co Ltd (Liberal Translation)	43,819,290

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

Subsidiaries & Branches

Related Companiers

1
Name	HTC America, Inc.
Address	13920 SE Eastgate Way, Suite 400 Bellevue, WA 98005, USA
Telephone Number	+1-425-679-5318
Fax Number	+1-425-679-5347
2
Name	HTC Electronics (Shanghai) Co., Ltd.
Address	No. 1000, Xinmiao Village, Kangqiao Town, Pudong New Area, Shanghai, China
Telephone Number	+86-21-6818-7999
Fax Number	+86-21-6818-7900
3
Name	HTC Europe Co., Ltd.
Address	Salamanca, Wellington Street, Slough, Berks SL1 1YP, United Kingdom.
Telephone Number	+44-1753-21-8960
Fax Number	+44-1753-21-8961/62

Offices

1
Name	Taipei Office One
Registered Address	NO. 88 Section 3, Zhongxing Road, Xindian District, New Taipei City 231, Taiwan, R.O.C.
Telephone Number	+886-2-8912-4138
Fax Numer	+886-2-89124137
2
Name	Taipei Office Two
Address	1F, No. 6-3, Baoqiang Road, Xindian District, New Taipei City 231, Taiwan, R.O.C.
Telephone Number	+886-2-8912-4138
Fax Numer	+886-2-8912-4137
3
Name	HTC Communication Beijing Office
Address	17F, Block 1 Bright China Chang An building 7 Jianguomen Nei Avenue, Dong Cheng District, Beijing, China
Telephone Number	+86-10-6517-1108
Fax Numer	+86-10-6517-1078
4
Name	HTC Communication Shanghai Office
Address	25F, West Building, 668 Beijing East Road, Shanghai, China
Telephone Number	+86-21-3376-0100
Fax Numer	+86-21-5308-8889

Factories

1
Name:	Xindian Factory
Address:	1, 3, 6, 7, 8, 9, 10F, No. 6-3, 3, 6, 7, 8, 9, 10F, No. 6-2, Baoqiang Rd., Xindian Dist., New Taipei City, Taiwan
Date of Registration:	2006-9-21
Factory Registration Number:	99695947
Factory Manager:	Xuehong Wang
Status:	In Production
Date of Last Annual Return:	2012-10-24
Major Products:	271 computer and related parts 272 communications equipment 275 measure, navigation, control equipment and clock 269 other electronic componenets
2
Name:	Taoyuan Factory
Address:	No. 23, Xinghua Rd., Dalin Li, Taoyuan Dist., Taoyuan City, Taiwan
Date of Foundation:	2001-4-17
Date of Registration:	2001-5-10
Factory Registration Number:	99621016
Factory Manager:	Xuehong Wang
Status:	In Production
Date of Last Annual Return:	2013-10-31
Major Products:	271 computer and related parts

Personnel Information

Core Management

Directors

1
Name	Xuehong Wang
Position	Board Chairman
2
Name	Wenqi Chen
Position	Director
3
Name	Huotu Zhuo
Position	Director
4
Name	David Bruce Yoffie
Position	Director
5
Name	Zhenguo Lin
Position	Independent Director
6
Name	Josef Felder
Position	Independent Director
7
Name	Huangjie Zhu
Position	Supervisor
8
Name	Weizhi Investment Co Ltd (Liberal Translation)
Position	Supervisor

Personnel Structure

Total Employees

About 17,000 Employees (Group)

Operation Information

Offices & Factories

	Headquarters
Add	No.23, Xinghua Rd., Taoyuan City, Taoyuan County 330, Taiwan (R.O.C.)

Production Information

· Subject is engaged in manufacturing of electronic products, etc.

· It is introduced that subject has production bases in Taiwan, Shanghai and Shenzhen, the mainland of China for production. But we cannot obtain the detail information.

· It is introduced that subject has obtained OHSAS18001:2007, ISO 14001:2004, ISO 14064-1:2006 and SO50001:2011 certifications.

Purchase Information

The registered activities of subject:

Business Code	Details
CC01080	Manufacturing of electronic components.
CC01101	Manufacturing of radio-frequency devices for the control of telecommunication.
CC01110	Manufacturing of computer and related equipment.
C805050	Manufacturing of industrial plastic products.
CC01120	Manufacturing and copying of medias for storing files.
E605010	Installing of computer.
E701040	Installing of simple telecommunication equipment.
E701020	Installing of satellite television and equipment for C channel.
E701030	Project of radio-frequency devices for the control of telecommunication.
F113030	Wholesales of precision instrument.
F113050	Wholesales of computers and equipment.
F113070	Wholesales of telecommunication materials.
F118010	Wholesales of information software.
F119010	Wholesales of electronic materials.
F213030	Retails of computers and equipment.
F213040	Retails of precision instrument.
F213060	Retails of telecommunication equipment.
F218010	Retails of information software.
F219010	Retails of electronic materials.
F401010	International trading business.
F401021	Importing of radio-frequency devices for the control of telecommunication.
G801010	Storing.
I301010	Serving of information software.
I301020	Serving of data processing.
I301030	Serving of supplying electronic information,
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

The components and raw materials of the subject are both purchased at home and abroad.

Sales Information

· Subject is engaged in sale of electronic products, etc.

· The major products of the subject include smart phones, tablet computer and their related components, etc.

· It is introduced that subject has its own brand named “HTC”.

· The selling territories of the subject include domestic market, Japan, Thailand, Singapore, USA, Europe, Middle East, etc.

· Subject’s major customers are distributors of electronics, etc.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

PURCHASE

Domestic Purchase

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

Import

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

SALES

Domestic Markets

Product	Electronics, etc.
Selling Terms	T/T, Cash, etc.

Export

Product	Electronics, etc.
Selling Terms	L/C, T/T, etc.

Balance Sheet

Unit: NTD/000

Consolidated	2014-12-31	2013-12-31
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	55,743,558	53,298,941
Current financial assets at fair value through profit or loss
Total current financial assets at fair value through profit or loss	262,544	162,297
Current bond investment without active market
Current bond investment without active market, net	7,918	0
Accounts receivable, net
Accounts receivable, net	29,140,284	23,371,172
Other receivables
Other receivables, net	584,936	2,137,653
Other receivables due from related parties
Other receivables due from related parties, net	0	0
Current tax assets
Total current tax assets	274,321	238,085
Inventories
Total inventories	17,213,060	23,599,558
Prepayments
Total prepayments	6,626,106	5,803,744
Other current assets
Other current financial assets	334,954	2,771,023
Other current assets, others	99,269	124,808
Total other current assets	434,223	2,895,831
Total current assets	110,286,950	111,507,281
Non-current assets
Non-current available-for-sale financial assets
Non-current available-for-sale financial assets, net	93	239
Non-current financial assets at cost
Non-current financial assets at cost, net	2,586,478	4,603,061
Investments accounted for using equity method
Investments accounted for using equity method, net	234,661	227,504
Property, plant and equipment
Total property, plant and equipment	23,435,556	25,561,399
Intangible assets
Total intangible assets	7,209,291	8,664,066
Deferred tax assets	8,452,707	8,665,235
Other non-current assets
Guarantee deposits paid	262,740	352,894
Long-term notes and accounts receivable
Long-term notes and accounts receivable, net	1,342,813	1,182,393
Non-current prepaid pension cost	109,138	125,715
Other non-current assets, others
Total other non-current assets, others	9,917,847	11,739,400
Total other non-current assets	11,632,538	13,400,402
Total non-current assets	53,551,324	61,121,906
Total assets	163,838,274	172,629,187
Liabilities
Current liabilities
Current financial liabilities at fair value through profit or loss
Total current financial liabilities at fair value through profit or loss	22,424	0
Accounts payable
Total accounts payable	43,803,343	46,275,851
Other payables
Total other payables	32,237,945	38,032,999
Current tax liabilities	210,714	1,040,128
Current provisions
Total current provisions	5,841,179	8,208,885
Other current liabilities
Total other current liabilities	1,143,134	956,127
Total current liabilities	83,258,739	94,513,990
Non-current liabilities
Deferred tax liabilities
Total deferred tax liabilities	202,932	151,122
Other non-current liabilities
Guarantee deposits received	43,230	256,415
Total other non-current liabilities	43,230	256,415
Total non-current liabilities	246,162	407,537
Total liabilities	83,504,901	94,921,527
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	8,349,521	8,423,505
Total capital stock	8,349,521	8,423,505
Capital surplus
Total capital surplus	15,140,687	15,360,307
Retained earnings
Legal reserve	18,149,350	18,149,350
Special reserve	0	854,138
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	41,381,753	47,282,820
Total retained earnings	59,531,103	66,286,308
Other equity interest
Total other equity interest	1,062,118	557,698
Treasury shares	3,750,056	12,920,158
Total equity attributable to owners of parent	80,333,373	77,707,660
Total equity	80,333,373	77,707,660
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	6,914,000	18,912,413

Profit and Loss Account

Unit: NTD/000

Consolidated	2014	2013
Operating revenue
Total operating revenue	187,911,200	203,402,648
Operating costs
Total operating costs	147,156,105	161,131,895
Gross profit (loss) from operations	40,755,095	42,270,753
Gross profit (loss) from operations	40,755,095	42,270,753
Operating expenses
Selling expenses
Total selling expenses	21,834,286	26,467,742
Administrative expenses
Total administrative expenses	5,204,788	7,230,081
Research and development expenses
Total research and development expenses	13,047,251	12,543,452
Total operating expenses	40,086,325	46,241,275
Net operating income (loss)	668,770	-3,970,522
Non-operating income and expenses
Other income
Total other income	834,124	1,164,948
Other gains and losses
Other gains and losses, net	506,194	2,421,266
Finance costs
Finance costs, net	16,983	8,405
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	-8,679	197,069
Total non-operating income and expenses	1,314,656	3,774,878
Profit (loss) from continuing operations before tax	1,983,426	-195,644
Tax expense (income)
Total tax expense (income)	500,380	1,128,141
Profit (loss) from continuing operations	1,483,046	-1,323,785
Profit (loss)	1,483,046	-1,323,785
Other comprehensive income
Exchange differences on translation	903,136	1,649,412
Unrealized gains (losses) on valuation of available-for-sale financial assets	-146	-11,738
Cash flow hedges	0	-194,052
Actuarial gains (losses) on defined benefit plans	-33,346	-17,106
Other comprehensive income	4,010	1,794
Other comprehensive income, net	873,654	1,428,310
Total comprehensive income	2,356,700	104,525
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	1,483,046	-1,323,785
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	2,356,700	104,525
Basic earnings per share
Total basic earnings per share	1.80	-1.60
Diluted earnings per share
Total diluted earnings per share	1.80	-1.60

Cash Flows

Unit: NTD/000

Consolidated	2014	2013
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	1,983,426	-195,644
Profit (loss) before tax	1,983,426	-195,644
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	2,952,892	2,916,699
Amortization expense	1,868,817	1,968,492
Provision (reversal of provision) for bad debt expense	3,875	1,010,405
Interest expense	16,983	8,405
Interest income	-403,155	-554,355
Dividend income	-26,381	-16,282
Share-based payments	269,013	26,742
Share of loss (profit) of associates and joint ventures accounted for using equity method	8,679	-197,069
Loss (gain) on disposal of property, plant and equipment	153,493	58
Property, plant and equipment transferred to expenses	0	2,995
Loss (gain) on disposal of intangible assets	0	-108,265
Loss (gain) on disposal of investments	-157,995	-29,735
Loss (gain) on disposal of investments accounted for using equity method	0	-2,637,673
Impairment loss on financial assets	373,257	0
Impairment loss on non-financial assets	695,945	1,281,518
Other adjustments to reconcile profit (loss)	0	-164,969
Total adjustments to reconcile profit (loss)	5,755,423	3,506,966
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in financial assets held for trading	-77,823	-155,347
Decrease (increase) in accounts receivable	-5,772,987	16,845,574
Decrease (increase) in other receivable	1,552,870	-607,949
Decrease (increase) in inventories	5,864,806	-207,347
Decrease (increase) in prepayments	-822,362	-1,360,194
Decrease (increase) in other current assets	25,539	-96,724
Decrease (increase) in other operating assets	1,779,567	-1,869,090
Total changes in operating assets	2,549,610	12,548,923
Changes in operating liabilities
Increase (decrease) in accounts payable	-2,472,508	-27,311,669
Increase (decrease) in other payable	-5,279,307	-427,233
Increase (decrease) in provisions	-2,367,706	-672,629
Increase (decrease) in other current liabilities	187,007	-822,489
Total changes in operating liabilities	-9,932,514	-29,234,020
Total changes in operating assets and liabilities	-7,382,904	-16,685,097
Total adjustments	-1,627,481	-13,178,131
Cash inflow (outflow) generated from operations	355,945	-13,373,775
Interest received	311,262	599,071
Interest paid	-16,983	-8,405
Income taxes refund (paid)	-990,083	-3,448,352
Net cash flows from (used in) operating activities	-339,859	-16,231,461
Cash flows from (used in) investing activities
Proceeds from disposal of available-for-sale financial assets	0	56,738
Acquisition of bond investments without active market	-7,918	0
Proceeds from repayments of held-to-maturity financial assets	0	100,000
Acquisition of financial assets at cost	-432,463	-197,684
Proceeds from disposal of financial assets at cost	2,358,135	0
Acquisition of investments accounted for using equity method	-15,836	0
Proceeds from disposal of investments accounted for using equity method	0	7,883,326
Proceeds from disposal of subsidiaries	0	4,643,189
Acquisition of property, plant and equipment	-1,372,934	-2,855,698
Proceeds from disposal of property, plant and equipment	16,017	2,609
Increase in refundable deposits	0	-166,428
Decrease in refundable deposits	90,154	0
Decrease in other receivables due from related parties	0	6,554,025
Acquisition of intangible assets	-244,588	-223,008
Proceeds from disposal of intangible assets	0	117,380
Decrease in other financial assets	2,436,069	3,790,421
Dividends received	26,381	661,896
Net cash flows from (used in) investing activities	2,853,017	20,366,766
Cash flows from (used in) financing activities
Increase in guarantee deposits received	0	196,416
Decrease in guarantee deposits received	-213,185	0
Cash dividends paid	0	-1,662,455
Payments to acquire treasury shares	0	-1,033,846
Net cash flows from (used in) financing activities	-213,185	-2,499,885
Effect of exchange rate changes on cash and cash equivalents	144,644	697,378
Net increase (decrease) in cash and cash equivalents	2,444,617	2,332,798
Cash and cash equivalents at beginning of period	53,298,941	50,966,143
Cash and cash equivalents at end of period	55,743,558	53,298,941
Cash and cash equivalents reported in the statement of financial position	55,743,558	53,298,941

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. Li

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.64.03
UK Pound	1	Rs.99.27
Euro	1	Rs.71.90

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	NIT

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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