MIRA INFORM REPORT

Report No. :	327418
Report Date :	23.06.2015

IDENTIFICATION DETAILS

Name :	APACER TECHNOLOGY INC.
Registered Office :	1F., No.32, Zhongcheng Rd., Tucheng Dist., New Taipei City 23674
Country :	Taiwan
Financials (as on) :	31.12.2014
Date of Incorporation :	16.04.1997
Com. Reg. No.:	97444368
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and sales of memory module and digital storage products
No of Employees :	About 500 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 – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
Taiwan	A1	A1

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. However, follow-on components of ECFA, including a signed agreement on trade in services, negotiations 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 under 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 fifth largest, behind those of China, Japan, Saudi Arabia, 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, 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 decent entry-level jobs.

Source : CIA

Contact Points

Company Name:	Apacer Technology Inc.
Supplied Name:	APACER TECHNOLOGY INC.
Trading Address:	1F., No.32, Zhongcheng Rd., Tucheng Dist., New Taipei City 23674, Taiwan, R.O.C.
Supplied Address:	1F.,NO.32,ZHONGCHENG RD.,TUCHENG DIST.,NEW TAIPEI CITY 236,TAIWAN
Telephone Number:	+886-2-2267-8000
Fax Number:	+886-2-2267-2261

Credit Summary

Credit Opinion:

Business connections are permissible.

Company Identification Details

Registered Name:	Apacer Technology Inc.
Registered Address:	1F., No.32, Zhongcheng Rd., Tucheng Dist., New Taipei City 23674, Taiwan, R.O.C.
Date of Foundation:	1997-4-16
Registration Number:	97444368
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 2,000,000,000 (USD 65,000,000) (As of 2015.06, 1 NTD = 0.0325 USD)
Paid-up Capital:	NTD 1,515,437,420 (USD 49,251,716.15)
Legal Representatives:	Yishi Chen
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sales of memory module and digital storage products, etc.
Staff:	About 500 Employees
Listed at Stock Exchange:	Yes, Stock Code: 8271
Date of Last Annual Return:	2015-1-28

History

Subject was incorporated on 1997-4-16 with registered number 97444368 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 2010-12-29.

Corporate Structure

Factory

Address:	2F., 3F., No.32, Zhongcheng Rd., Tucheng Dist., New Taipei City 23674, Taiwan, R.O.C.
Date of Registration:	2013-8-16
Factory Registration Number:	65002430
Factory Manager:	Yishi Chen
Status:	In production
Date of Last Annual Return:	2013-8-16
Major Products:	269 Other electronic components 271 Computer and its peripheral equipment 274 Data storage media

Related Companies

1
Name	Apacer Electronic (Shanghai) Co., Ltd
Address	Room D, 22/FL, No.2, Lane 600, JieyunPlaza, Tianshan RD , Shanghai , 200051, China
Telephone Number	+86-21-6228-9939
2
Name	Apacer Technology Corp.
Address	5F, Matsura Bldg., 1-9-6 Shiba, Minato-Ku, Tokyo, 105-0014, Japan
Telephone Number	+81-3-5419-2668
Fax Number	+81-3-5419-0018
3
Name	Apacer Memory America, Inc.
Address	46732 Lakeview Blvd., Fremont, CA 94538
Telephone Number	+1-408-518-8699
Fax Number	+1-510-249-9568
4
Name	Apacer Technologies Pvt Ltd.
Address	# 535, 1st Floor, 8th cross, JP Nagar 3rd Phase, Bangalore – 560078, India
Telephone Number	+91-80-4152-9061~3
Fax Number	+91-80-4170-0215
5
Name	Apacer Technology B.V.
Address	Science Park Eindhoven 5051 5692 EB Son, The Netherlands
Telephone Number	+31-40-267-0000
Fax Number	+31-40-290-0686

Shareholders

Major Shareholders

Name	Subscription Shares
Yishi Chen	2,000,946
Jiakun Zhang	596,142
Xueru Luo	445,813
Lida Lv	11,927,323
Junyong Yang	866,716
Guangyi Wu	101,979
Shaohua Huang	1,801,554

Management Information

Core Management

Directors

1
Name		Yishi Chen
Position		Board Chairman
2
Name	Jiakun Zhang
Position		Director
3
Name	Xueru Luo
Position		Director
4
Name	Lida Lv
Position		Director
5
Name	Junyong Yang
Position		Director
6
Name	Xingcheng Hong
Position		Independent Director
7
Name	Guangyi Wu
Position		Independent Director
8
Name	Shaohua Huang
Position		Supervisor
9
Name	Zhongren Zheng
Position		Supervisor
10
Name	Renhong Huang
Position		Supervisor

Personnel Structure

Total Employees

About 500 Employees

Operation Information

Offices & Factories

	Headquarters
Add	1F., No.32, Zhongcheng Rd., Tucheng Dist., New Taipei City 23674, Taiwan, R.O.C.

Production Information

l Subject is engaged in manufacturing of memory module and digital storage products, etc.

l Subject has a factory in Taiwan for production.

Purchase Information

l The registered activities of subject:

Business Code	Details
CC01120	Manufacturing and duplicating of information storage media
CC01080	Manufacturing of electronic components
F401010	International trade business
F118010	Wholesale of information software
F119010	Wholesale of electronics material
F218010	Retail of information software
F219010	Retail of electronics material
I301010	Information software services
I301020	Data processing services
I301030	Electronic information supply services
CC01101	Manufacturing of controlled telecommunications radio-frequency devices
F401021	Input industry of controlled telecommunications radio-frequency devices
F113070	Wholesale of telecommunications equipment
F213060	Retail of telecommunications equipment
CC01030	Manufacturing of appliances and audio-visual electronic products
CC01110	Manufacturing of computer and peripheral equipment
E701040	Installation of simple telecom equipment
F113050	Wholesale of computer and transactional machine equipment
F113110	Wholesale of battery
F213110	Retail of battery
F399040	Retail without storefront
I501010	Product design
JE01010	Rental services
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

l The components and raw materials for production are purchased both at home and abroad.

Sales Information

l Subject is engaged in sale of memory module and digital storage products, etc.

l It is introduced that subject’s major products are applied to military / aerospace, networking / server, interactive device, medical implement, and personal computing, etc.

l Subject has its own brand “Apacer”.

l Subject’s sales regions include domestic market, Japan, Malaysia, Indonesia, South Africa, United States, Argentina, and Brazil, etc.

l Subject’s major customers are manufacturers of mobile phone, computer, digital camera, and wholesalers, etc.

Major Products

Types	Products
DRAM Module	Industrial desktop, industrial notebook, server memory
SATA SSD Series	2.5" SATA SSD, 1.8" SATA SSD, mSATA, SATA Disk Module, M.2 (NGFF), SATA Disk Chip
PATA SSD Series	2.5" PATA SSD, 1.8" PATA SSD, ATA Disk Module, ATA Disk Chip
Flash Card Series	Industrial CompactFlash, Industrial CFast Card, Industrial SD, Industrial microSD
USB SSD Series	USB Disk Module, USB Flash Drive
PCIe SSD Series	mini PCIe SSD, M.2 PCIe SSD
Innovative SSD Series	2.5" Ultra-Slim SATA SSD, Micro SATA Chip, 2.5" Combo SATA SSD

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

1. Domestic Purchase

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

2. Import

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

Sales

1. Domestic Markets

Product	Memory module and digital storage products, etc.
Selling Terms	T/T, Cash, etc.

2. Export

Product	Memory module and digital storage products, 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	878,466	772,147
Accounts receivable, net
Accounts receivable, net	984,376	794,010
Other receivables
Other receivables, net	51,681	57,003
Other receivables due from related parties
Other receivables due from related parties, net	96	0
Inventories
Total inventories	1,310,159	1,233,046
Other current assets
Total other current assets	20,443	22,997
Total current assets	3,245,221	2,879,203
Non-current assets
Non-current available-for-sale financial assets
Non-current available-for-sale financial assets, net	36,493	37,567
Non-current financial assets at cost
Non-current financial assets at cost, net	50,000	50,000
Investments accounted for using equity method
Investments accounted for using equity method, net	13,104	0
Property, plant and equipment
Total property, plant and equipment	718,861	715,264
Intangible assets
Total intangible assets	11,953	13,741
Deferred tax assets	22,518	24,729
Other non-current assets
Other non-current financial assets
Total other non-current financial assets	6,900	6,796
Other non-current assets, others
Total other non-current assets, others	640	1,268
Total other non-current assets	7,540	8,064
Total non-current assets	860,469	849,365
Total assets	4,105,690	3,728,568
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	344,328	119,672
Current financial liabilities at fair value through profit or loss
Total current financial liabilities at fair value through profit or loss	1,346	1,479
Accounts payable
Total accounts payable	723,707	779,102
Other payables
Total other payables	306,427	286,527
Current tax liabilities	61,975	104,303
Current provisions
Total current provisions	14,215	17,486
Other current liabilities
Total other current liabilities	20,601	26,489
Total current liabilities	1,472,599	1,335,058
Non-current liabilities
Deferred tax liabilities
Total deferred tax liabilities	156	460
Other non-current liabilities
Accrued pension liabilities	14,039	11,335
Guarantee deposits received	1,033	1,033
Total other non-current liabilities	15,072	12,368
Total non-current liabilities	15,228	12,828
Total liabilities	1,487,827	1,347,886
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	1,365,437	1,344,667
Total capital stock	1,365,437	1,344,667
Capital surplus
Total capital surplus	254,299	226,609
Retained earnings
Total retained earnings	1,037,354	820,146
Other equity interest
Total other equity interest	-39,227	-9,290
Treasury shares	0	1,450
Total equity attributable to owners of parent	2,617,863	2,380,682
Total equity	2,617,863	2,380,682
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	100,000

Profit and Loss Account

Unit: NTD/000

Consolidated	2014	2013
Operating revenue
Total operating revenue	10,218,111	9,835,612
Operating costs
Total operating costs	8,856,335	8,515,626
Gross profit (loss) from operations	1,361,776	1,319,986
Gross profit (loss) from operations	1,361,776	1,319,986
Operating expenses
Selling expenses
Total selling expenses	507,146	497,371
Administrative expenses
Total administrative expenses	155,730	155,255
Research and development expenses
Total research and development expenses	83,447	101,924
Total operating expenses	746,323	754,550
Net operating income (loss)	615,453	565,436
Non-operating income and expenses
Other income
Total other income	8,564	8,017
Other gains and losses
Other gains and losses, net	6,399	10,301
Finance costs
Finance costs, net	4,270	2,833
Share of profit (loss) of associates and joint ventures accounted for using equity method
Share of loss of associates and joint ventures accounted for using equity method	16,896	0
Share of profit (loss) of associates and joint ventures accounted for using equity method, net	-16,896	0
Total non-operating income and expenses	-6,203	15,485
Profit (loss) from continuing operations before tax	609,250	580,921
Tax expense (income)
Total tax expense (income)	117,861	133,711
Profit (loss) from continuing operations	491,389	447,210
Profit (loss)	491,389	447,210
Other comprehensive income
Exchange differences on translation	-913	-1,867
Unrealised gains (losses) on valuation of available-for-sale financial assets	-1,074	0
Actuarial gains (losses) on defined benefit plans	-3,967	-2,338
Income tax related to components of other comprehensive income	-673	-398
Other comprehensive income, net	-5,281	-3,807
Total comprehensive income	486,108	443,403
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	491,389	447,210
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	486,108	443,403
Basic earnings per share
Total basic earnings per share	3.63	3.33
Diluted earnings per share
Total diluted earnings per share	3.55	3.24

Cash Flows

Unit: NTD/000

Consolidated	2014	2013
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	609,250	580,921
Profit (loss) before tax	609,250	580,921
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	24,573	18,008
Amortization expense	8,114	5,246
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	16,734	3,477
Interest expense	4,270	2,833
Interest income	-4,050	-3,402
Share-based payments	5,600	6,897
Share of loss (profit) of associates and joint ventures accounted for using equity method	16,896	0
Loss (gain) on disposal of property, plan and equipment	-217	-363
Impairment loss on non-financial assets	176	0
Other adjustments to reconcile profit (loss)	631	632
Total adjustments to reconcile profit (loss)	72,727	33,328
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in financial assets held for trading	0	377,146
Decrease (increase) in notes receivable	-677	5
Decrease (increase) in accounts receivable	-189,689	-95,067
Decrease (increase) in other receivable	5,322	8,802
Decrease (increase) in other receivable due from related parties	-96	0
Decrease (increase) in inventories	-77,113	-412,757
Decrease (increase) in other current assets	2,770	3,213
Decrease (increase) in other operating assets	-3	-539
Total changes in operating assets	-259,486	-119,197
Changes in operating liabilities
Increase (decrease) in financial liabilities held for trading	-16,867	1,479
Increase (decrease) in notes payable	-2,423	2,517
Increase (decrease) in accounts payable	-52,972	227,064
Increase (decrease) in other payable	-3,542	14,801
Increase (decrease) in provisions	-3,271	-6,496
Increase (decrease) in other current liabilities	-5,888	-19,955
Increase (decrease) in accrued pension liabilities	-1,263	-7,326
Increase (decrease) in other operating liabilities	0	-1,560
Total changes in operating liabilities	-86,226	210,524
Total changes in operating assets and liabilities	-345,712	91,327
Total adjustments	-272,985	124,655
Cash inflow (outflow) generated from operations	336,265	705,576
Interest received	3,834	3,618
Interest paid	-4,148	-2,804
Income taxes refund (paid)	-134,753	-108,875
Net cash flows from (used in) operating activities	201,198	597,515
Cash flows from (used in) investing activities
Proceeds from capital reduction of available-for-sale financial assets	0	-12,117
Acquisition of financial assets at cost	0	-50,000
Acquisition of investments accounted for using equity method	-30,000	0
Acquisition of property, plant and equipment	-30,147	-692,474
Proceeds from disposal of property, plant and equipment	2,218	1,548
Acquisition of intangible assets	-6,497	-12,318
Decrease in other financial assets	26	907
Net cash flows from (used in) investing activities	-64,400	-764,454
Cash flows from (used in) financing activities
Increase in short-term loans	224,656	0
Decrease in short-term loans	0	-111,468
Increase in guarantee deposits received	0	1,033
Cash dividends paid	-270,887	-213,489
Exercise of employee share options	13,475	14,766
Treasury shares sold to employees	2,885	4,941
Net cash flows from (used in) financing activities	-29,871	-304,217
Effect of exchange rate changes on cash and cash equivalents	-608	-1,452
Net increase (decrease) in cash and cash equivalents	106,319	-472,608
Cash and cash equivalents at beginning of period	772,147	1,244,755
Cash and cash equivalents at end of period	878,466	772,147
Cash and cash equivalents reported in the statement of financial position	878,466	772,147

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 could not 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.

Special Note

Interview Details

Name	Mr. Li
Department	Sales Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 63.50
UK Pound	1	Rs. 100.93
Euro	1	Rs. 72.31

INFORMATION DETAILS

Analysis Done by :	RSM
Report Prepared by :	DPT

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.