MIRA INFORM REPORT

Report No. :	321283
Report Date :	11.05.2015

IDENTIFICATION DETAILS

Name :	SAN FU CHEMICAL CO., LTD.
Registered Office :	5F., No.21, Chung Shan N. Rd., Sec.2, Jhongshan Dist., Taipei 104
Country :	Taiwan
Financials (as on) :	31.12.2014
Date of Incorporation :	17.03.2003
Com. Reg. No.:	80170651
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and Sales of Chemical Materials.
No. of Employee :	About 300 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 – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
Taiwan	A2	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:	SAN FU CHEMICAL CO., LTD.
Supplied Name:	SANFU CHEMICAL CO. LTD
Trading Address:	7 F, 21 Chung Shan N. Rd., Sec.2, Taipei City 104, Taiwan, R.O.C.
Supplied Address:	7TH FLOOR, 21, CHUNG-SHAN N.ROAD. SEC-2, TAIPEI 10419, TAIWAN
Telephone Number:	+886-2-2542-6789
Fax Number:	+886-2-2581-8686

Notes: The exact name and address are as above.

Company Identification Details

Registered Name:	San Fu Chemical Co., Ltd.
Registered Address:	5F., No.21, Chung Shan N. Rd., Sec.2, Jhongshan Dist., Taipei 104, Taiwan, R.O.C.
Date of Foundation:	2003-03-17
Registration Number:	80170651
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 1,200,000,000 (USD 39,000,000) (As of 2015.5, 1 NTD = 0.0325 USD)
Paid-up Capital:	NTD 892,220,000 (USD 28,997,150)
Legal Representatives:	Xinhong Wu
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sales of chemical materials.
Staff:	About 300 Employees
Listed at Stock Exchange:	Yes; Stock Number: 4755
Date of Last Annual Return:	2015-04-01

History

Subject was incorporated on 2003-03-17 with registered number 80170651 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 2013-11-27.

Corporate Structure

Factories

1
Name:	Shanhua Factory
Address:	No. 340, Xiaoxin Ying, Xiaoxin Li, Shanhua Dist., Tai Nan City, Taiwan.
Date of Foundation:	1970-11-01
Date of Registration:	1970-11-01
Factory Registration Number:	99657738
Factory Manager:	Xinhong Wu
Status:	In Production
Date of Last Annual Return:	2014-08-06
Major Products:	181 Basic Chemical Material 231 Glass and Glass Product
2
Name:	Liuke Factory
Address:	No.1, Sec. 1 E. Huanyuan Rd., Danong Li, Liuying Dist., Tai Nan City, Taiwan.
Date of Registration:	2014-01-28
Factory Registration Number:	67000805
Factory Manager:	Xinhong Wu
Status:	In Production
Date of Last Annual Return:	2014-07-04
Major Products:	181 Basic Chemical Material
3
Name:	Kaohsiung Factory
Address:	No. 45, Zhongheng Street, Longfeng Li, Xiaogang Dist., Kaohsiung City, Taiwan.
Date of Foundation:	1989-08-14
Date of Registration:	1990-06-20
Factory Registration Number:	64004603
Factory Manager:	Tianbao Su
Status:	In Production
Date of Last Annual Return:	2015-01-07
Major Products:	199 Other Chemical Product

Offices

1
Name:	Shanghai Office
Address:	No.999, Zhoushanxilu, Huawenguoji Office Tower Unit 302, Shanghai Province, China.
Tel:	+86-21-3250-3558
Fax:	+86-21-5238-9711
2
Name:	Taichung Office
Address:	9, Kung-Yeh 3rd Rd., Industrial Zone, Taichung, Taiwan 407
Tel:	+886-4-2359-1299
Fax:	+886-4-2350-0143
3
Name:	Shan-Hua Office
Address:	340, Hsiao-Hsin Li, Shan-Hua, Taiwan 741
Tel:	+886-6-583-7608
Fax:	+886-6-583-9498
4
Name:	Kaohsiung Office
Address:	45, Chung-Heng St., Hsiao Kang Dist, Kaohsiung, Taiwan 812
Tel:	+886-7-871-3471
Fax:	+886-7-871-4233

Shareholders

Major Shareholders

Name	Subscription Shares
Xinhong Wu
3,421,750
San Fu Global Co., Ltd.	22,116,689
Tianbao Su	150,000
Yizong Zhang	255,341
Yaoming Wang	300,000
Pilot Keymark SDN. BHD	19,929,000

Shareholder Information:

Registered Name:	San Fu Global Co., Ltd.
Registered Address:	4F, No.97, Jing Ye 1st Road, Chung Shan Dist., Taipei 104.
Date of Foundation:	2004-03-29
Registration Number:	27234298
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 1,390,683,460 (USD 45,197,212) (As of 2014.5, 1 NTD = 0.0325 USD)
Paid-up Capital:	NTD 1,390,683,460 (USD 45,197,212)
Legal Representatives:	Chunming Zhang
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2015-04-17

Management Information

Core Management

Directors

1
Name		Xinhong Wu
Position		Chairman of the Board
2
Name	Chunming Zhang
Position		Director
3
Name	Tianbao Su
Position		Director
4
Name	Yizong Zhang
Position		Director
5
Name	Yaoming Wang
Position		Director
6
Name	Guoyuan Liang
Position		Director
7
Name	Zhongxi Li
Position		Independent Director
8
Name	Yuzheng Huang
Position		Independent Director
9
Name	Dongming Wu
Position		Independent Director
10
Name	Susheng Zhong
Position		Supervisor
11
Name	Shengfu You
Position		Supervisor
12
Name	Mingfu Huang
Position		Supervisor

Personnel Structure

Total Employees

About 300 Employees

Operation Information

Offices & Factories

	Headquarters
Add	7 F, 21 Chung Shan N. Rd., Sec.2, Taipei City 104, Taiwan, R.O.C.

Production Information

Subject is engaged in manufacturing of chemical materials, etc.

Subject has factories in Taiwan for production.

Subject has obtained the certifications of ISO 22000 and HACCP.

Purchase Information

The registered activities of subject:

Business Code	Details
F401010	International Trade
F207100	Basic Chemical Materials Retailing
C801010	Basic Chemical Materials Manufacturing
F107100	Basic Chemical Materials Retailing
F107110	Petrochemical Materials Wholesaling
C801020	Petrochemical Materials Manufacturing
F207110	Petrochemical Materials Retailing
F107060	Toxic Chemical Substance Wholesaling
F107990	Other Chemicals (Aniline) Wholesaling
C801070	High Pressure Gas Manufacturing
C802150	Dyestuff and Pigments Manufacturing
F107020	Dyestuff and Pigments Wholesaling
F207020	Dyestuff and Pigments Retailing
C802100	Cosmetics Manufacturing
F108040	Cosmetics Retailing
C109010	Flavorings Manufacturing
F102130	Flavoring Wholesaling
C801040	Synthetic Resin Manufacturing
F107130	Synthetic Resin Wholesaling
F207130	Synthetic Resin Retailing
C901020	Glass And Glass Products Manufacturing
CA04010	Surface Treatment Industry
C199990	Other Unclassified Food Manufacturing
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

The raw materials for production are purchased from both home and abroad.

Sales Information

Subject is engaged in sales of chemical material

The major products are PHBA, Praraben, Sorbitol, CHA, DCHA, Acid, Base, Solvent, Polishing solution and glass slimming, developer, etchant, stripper, thinner

Subject also has drinking and capsule of health products.

Subject’s sales regions are domestic market, Middle East Asia, America

Subject’s major customers are manufacturers of sanitary wares, electronics, pharmaceutics and cosmetics

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

Products	Raw materials
Payment Terms	T/T, Cash

Import

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

Sales

Domestic Markets

Product	Chemical materials
Selling Terms	T/T, Cash

Export

Product	Chemical materials
Selling Terms	L/C, T/T

Balance Sheet

Unit: NTD/000

Consolidated	2014-12-31	2013-12-31
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	139,261	162,236
Notes receivable, net
Notes receivable, net	89,677	65,969
Notes receivable due from related parties, net
Notes receivable due from related parties, net	40,800	0
Accounts receivable, net
Accounts receivable, net	801,868	786,941
Accounts receivable due from related parties, net
Accounts receivable due from related parties, net	9,072	9,451
Construction contracts receivable	37,995	950
Inventories
Inventories, manufacturing business
Inventories, manufacturing business, net	545,887	574,036
Total inventories	545,887	574,036
Prepayments
Total prepayments	68,378	26,769
Other current assets
Total other current assets	30,276	21,386
Total current assets	1,763,214	1,647,738
Non-current assets
Non-current financial assets at cost
Non-current financial assets at cost, net	82,463	89,062
Investments accounted for using equity method
Investments accounted for using equity method, net	449,547	440,556
Property, plant and equipment
Total property, plant and equipment	859,637	901,107
Intangible assets
Acquired special technology, net
Acquired special technology	40	40
Acquired special technology, net	40	40
Total intangible assets	40	40
Deferred tax assets	31,717	32,720
Other non-current assets
Prepayments for business facilities	58,233	88,886
Guarantee deposits paid	3,676	5,523
Other non-current assets, others
Total other non-current assets, others	0	0
Total other non-current assets	61,909	94,409
Total non-current assets	1,485,313	1,557,894
Total assets	3,248,527	3,205,632
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	230,000	276,841
Short-term notes and bills payable
Total short-term notes and bills payable	49,921	49,915
Notes payable
Total notes payable	3,836	0
Accounts payable
Total accounts payable	260,613	244,172
Accounts payable to related parties
Total accounts payable to related parties	5,451	8,891
Construction contracts payable	15,331	10,747
Other payables
Total other payables	112,568	134,819
Current tax liabilities	15,939	17,364
Other current liabilities
Long-term liabilities, current portion
Total long-term liabilities, current portion	19,192	38,556
Other current liabilities, others	3,260	1,619
Total other current liabilities	22,452	40,175
Total current liabilities	716,111	782,924
Non-current liabilities
Long-term borrowings
Total long-term borrowings	19,192	38,384
Deferred tax liabilities
Total deferred tax liabilities	1,890	126
Other non-current liabilities
Accrued pension liabilities	114,655	112,751
Other non-current liabilities, others	0	0
Total other non-current liabilities	114,655	112,751
Total non-current liabilities	135,737	151,261
Total liabilities	851,848	934,185
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	892,230	880,000
Total capital stock	892,230	880,000
Capital surplus
Capital surplus, additional paid-in capital
Total capital surplus, additional paid-in capital	627,293	611,529
Capital surplus, employee share options	16,038	22,253
Total capital surplus	643,331	633,782
Retained earnings
Legal reserve	76,027	62,925
Unappropriated retained earnings (accumulated deficit)
Accumulated profit and loss	611,324	544,936
Current profit and loss	144,613	143,923
Total unappropriated retained earnings (accumulated deficit)	755,937	688,859
Total retained earnings	831,964	751,784
Other equity interest
Exchange differences on translation of foreign financial statements
Total exchange differences on translation of foreign financial statements	29,154	5,881
Total other equity interest	29,154	5,881
Total equity attributable to owners of parent	2,396,679	2,271,447
Total equity	2,396,679	2,271,447
Number of share capital awaiting retirement	0	0
Equivalent issue shares of advance receipts for ordinary share	0	0
Number of shares in entity held by entity and by its subsidiaries	0	0

Profit and Loss Account

Unit: NTD/000

Consolidated	2014	2013
Statement of comprehensive income
Operating revenue
Net sales revenue
Net sales revenue	3,310,351	3,221,961
Construction and engineering revenue
Total construction and engineering revenue	173,578	0
Total operating revenue	3,483,929	3,221,961
Operating costs
Cost of sales
Total cost of sales	2,983,029	2,844,839
Cost of construction and engineering service sales
Total cost of construction and engineering service sales	173,578	0
Total operating costs	3,156,607	2,844,839
Gross profit (loss) from operations	327,322	377,122
Gross profit (loss) from operations	327,322	377,122
Operating expenses
Selling expenses
Total selling expenses	158,754	144,789
Administrative expenses
Total administrative expenses	85,342	93,966
Research and development expenses
Total research and development expenses	19,854	18,558
Total operating expenses	263,950	257,313
Net operating income (loss)	63,372	119,809
Non-operating income and expenses
Other income
Interest income
Total interest income	902	503
Dividend income	1,605	963
Other income, others	55,325	22,394
Total other income	57,832	23,860
Other gains and losses
Gains on disposals of property, plant and equipment	108	0
Gains on disposals of investments	42,044	0
Foreign exchange gains	19,323	10,495
Miscellaneous disbursements	626	857
Foreign exchange losses	0	0
Impairment loss
Impairment loss recognised in profit or loss, intangible assets other than goodwill	0	1,787
Total impairment loss	0	1,787
Other gains and losses, net	60,849	7,851
Finance costs
Interest expense	4,179	5,160
Finance costs, net	4,179	5,160
Share of profit (loss) of associates and joint ventures accounted for using equity method
Share of profit of associates and joint ventures accounted for using equity method	0	31,044
Share of loss of associates and joint ventures accounted for using equity method	5,901	0
Share of profit (loss) of associates and joint ventures accounted for using equity method, net	-5,901	31,044
Total non-operating income and expenses	108,601	57,595
Profit (loss) from continuing operations before tax	171,973	177,404
Tax expense (income)
Total tax expense (income)	27,360	46,388
Profit (loss) from continuing operations	144,613	131,016
Profit (loss)	144,613	131,016
Other comprehensive income
Exchange differences on translation	23,273	13,342
Actuarial gains (losses) on defined benefit plans	-5,534	-524
Income tax related to components of other comprehensive income	-941	-89
Other comprehensive income, net	18,680	12,907
Total comprehensive income	163,293	143,923
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	144,613	131,016
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	163,293	143,923
Basic earnings per share
Total basic earnings per share	1.63	1.62
Diluted earnings per share
Total diluted earnings per share	1.61	1.58

Cash Flows

Unit: NTD/000

Consolidated	2014	2013
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	171,973	177,404
Profit (loss) before tax	171,973	177,404
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	189,181	173,651
Amortization expense	0	0
Provision (reversal of provision) for bad debt expense	444	-25,179
Interest expense	4,179	5,160
Net (loss) gain arising from derecognition of financial assets measured at amortised cost	0	0
Interest income	-902	-503
Dividend income	-1,605	-963
Share-based payments	9,549	12,917
Share of loss (profit) of associates and joint ventures accounted for using equity method	5,901	-31,044
Loss (gain) on disposal of property, plan and equipment	-108	0
Loss (gain) on disposal of investments	-42,044	0
Loss (gain) on disposal of investments accounted for using equity method	0	0
Impairment loss on non-financial assets	0	1,787
Reversal of impairment loss on non-financial assets	1,056	-1,699
Total adjustments to reconcile profit (loss)	165,651	134,127
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in notes receivable	-23,708	16,882
Decrease (increase) in notes receivable due from related parties	-40,800	0
Decrease (increase) in accounts receivable	-15,371	20,141
Decrease (increase) in accounts receivable due from related parties	379	5,323
Decrease (increase) in construction contracts receivable	-37,045	1,945
Decrease (increase) in inventories	27,093	-56,418
Decrease (increase) in prepayments	-41,609	24,500
Decrease (increase) in other current assets	-8,634	107,456
Decrease (increase) in other operating assets	0	68
Total changes in operating assets	-139,695	119,897
Changes in operating liabilities
Increase (decrease) in notes payable	3,836	-4,554
Increase (decrease) in accounts payable	16,441	-108,232
Increase (decrease) in accounts payable to related parties	-3,440	-12,734
Increase (decrease) in construction contracts receivable	4,584	6,985
Increase (decrease) in other payable	1,200	-47,467
Increase (decrease) in other current liabilities	1,641	114
Increase (decrease) in accrued pension liabilities	-3,630	-321
Increase (decrease) in other operating liabilities	0	-68
Total changes in operating liabilities	20,632	-166,277
Total changes in operating assets and liabilities	-119,063	-46,380
Total adjustments	46,588	87,747
Cash inflow (outflow) generated from operations	218,561	265,151
Interest received	902	503
Dividends received	2,181	1,827
Interest paid	-3,992	-3,651
Income taxes refund (paid)	-25,329	-68,725
Net cash flows from (used in) operating activities	192,323	195,105
Cash flows from (used in) investing activities
Proceeds from disposal of financial assets at cost	52,171	0
Acquisition of investments accounted for using equity method	0	-44,500
Acquisition of property, plant and equipment	-73,786	-20,550
Proceeds from disposal of property, plant and equipment	197	0
Increase in refundable deposits	1,847	-69
Acquisition of intangible assets	0	-40
Increase in prepayments for business facilities	-66,999	-225,027
Other investing activities	0	0
Net cash flows from (used in) investing activities	-86,570	-290,186
Cash flows from (used in) financing activities
Decrease in short-term loans	-46,841	62,962
Increase in short-term notes and bills payable	6	9,919
Proceeds from long-term debt	-19,364	-17,606
Repayments of long-term debt	-19,192	-43,278
Cash dividends paid	-59,840	-51,797
Proceeds from issuing shares	0	232,000
Exercise of employee share options	12,230	0
Net cash flows from (used in) financing activities	-133,001	192,200
Effect of exchange rate changes on cash and cash equivalents	4,273	464
Net increase (decrease) in cash and cash equivalents	-22,975	97,583
Cash and cash equivalents at beginning of period	162,236	64,653
Cash and cash equivalents at end of period	139,261	162,236
Cash and cash equivalents reported in the statement of financial position	139,261	162,236

Bankers

Name	First Commercial Bank

Public Record

Mortgage

1
Case Type:	Chattel Mortgage
File No.:	092168
Debtor Name:	San Fu Chemical Co., Ltd.
Document Number:	09605162650
Date of Registration:	2007-10-03
Date of Alteration:	2010-05-19
2
Case Type:	Chattel Mortgage
File No.:	089793
Debtor Name:	San Fu Chemical Co., Ltd.
Document Number:	09605065250
Date of Registration:	2007-01-12

Lawsuit

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

Special Note

Interview Details

Name	Mr. Wu
Position	Sales Manager
Department	Sales Department
E-mail	ybwu@sfchen.com.tw

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.64.05
UK Pound	1	Rs.99.04
Euro	1	Rs.71.76

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	ANK

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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