MIRA INFORM REPORT

Report No. :	321285
Report Date :	12.05.2015

IDENTIFICATION DETAILS

Name :	T.N.C. INDUSTRIAL CO., LTD.
Registered Office :	19FL., No.1071, Chung Cheng Rd., Taoyuan Dist., Taoyuan City 330
Country :	Taiwan
Financials (as on) :	31.12.2014
Date of Incorporation :	38033305
Com. Reg. No.:	30.06.1954
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and sale of chemical products
No. of Employee :	About 200 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 :	Exist

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:	T.N.C. Industrial Co., Ltd.
Supplied Name:	TNC INDUSTRIAL CO. LTD.
Trading Address:	19FL., No.1071, Chung Cheng Rd., Taoyuan Dist., Taoyuan City 330, Taiwan (R.O.C.)
Supplied Address:	19FL., NO.1071, CHUNG CHENG ROAD TAOYUAN TAIWAN
Telephone Number:	+886-3-3566289
Fax Number:	+886-3-3562400
E-mail:	crystalh@tnc.com.tw, sams@tnc.com.tw

Note: The exact name and address are as above.

Company Identification Details

Registered Name:	T.N.C. Industrial Co., Ltd.
Registered Address:	19FL., No.1071, Chung Cheng Rd., Taoyuan Dist., Taoyuan City 330, Taiwan (R.O.C.)
Date of Foundation:	1954-6-30
Registration Number:	38033305
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 2,500,000,000 (USD 81,250,000) (As of 2015.5, 1 NTD = 0.0325 USD)
Paid-up Capital:	NTD 1,278,139,000 (USD 41,539,518)
Legal Representatives:	Hongxin Lin
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sale of chemical products.
Staff:	About 200 employees
Listed at Stock Exchange:	Yes, Stock Code: 1724
Date of Last Annual Return:	2014-7-17

History

Subject was incorporated on 1954-6-30 with registered number 38033305 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 1995-03-30

Corporate Structure

Factory

Name:	Taoyuan plant
Address:	29-35, Kengkou Village, Xuzhu Town, Taoyuan County, Taiwan
Tel:	+886-3-324-1126
Fax:	+886-3-324-9341

Related Companies

1
Name	China Nitrocellulose Company (Hong Kong)
2
Name	Xinxiang TNC Chemical Ltd. (Mainland China)
2
Name	Korea CNC Ltd. (Korea)

Shareholders

Major Shareholders

Name	Subscription Shares
Hongxin Lin	2,979,981
Yuchuan Lin
1,761,412
Lixing Investment Co., Ltd (literal translation)	4,182,961
Fumei Linqiu	770,955
Kuang Ming Enterprise Co., Ltd.	50,721,783
Zhengyi Xu	622,101
Yicen Lin	1,078,051
Guoyan Ye	150,141

Shareholder Information:

1
Registered Name:	Lixing Investment Co., Ltd (literal translation)
Registered Address:	2/F., No. 56, Sec. 2, Dunhua South Rd., Daan Dist., Taipei City, Taiwan
Date of Foundation:	1992-11-9
Registration Number:	86925419
Registry:	Taipei City Government
Registered Capital:	NTD 50,000,000 (USD 1,625,000) (As of 2015.5, 1 NTD = 0.0325 USD)
Paid-up Capital:	NTD 50,000,000 (USD 1,625,000)
Legal Representatives:	Chongyi Wu
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2014-4-11
2
Registered Name:	Kuang Ming Enterprise Co., Ltd.
Registered Address:	No.211, Sec.2, Hai Shan Rd., Luzhu Dist., Taoyuan City 338, Taiwan (R.O.C.)
Date of Foundation:	1973-5-14
Registration Number:	43645121
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 500,000,000 (USD 16,250,000) (As of 2015.5, 1 NTD = 0.0325 USD)
Paid-up Capital:	NTD 497,952,000 (USD 16,183,440)
Legal Representatives:	Yuchuan Lin
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2011-8-1

Management Information

Core Management

Directors

1
Name	Hongxin Lin
Position	Board Chairman
2
Name	Yuchuan Lin
Position	Executive Director
3
Name	Chongyi Wu
Position	Executive Director
4
Name	Fumei Linqiu
Position	Director
5
Name	Wenqing Zheng
Position	Director
6
Name	Qinghe Wang
Position	Director
7
Name	Zhengyi Xu
Position	Director
8
Name	Wenxin Xu
Position	Director
9
Name	Zheming Zhang
Position	Director
10
Name	Gengbu Lin
Position	Supervisor
10
Name	Yicen Lin
Position	Supervisor
12
Name	Guoyan Ye
Position	Supervisor

Personnel Structure

Total Employees

About 200 employees

Operation Information

Offices & Factories

	Headquarters
Add	19Fl., No.1071, Chung Cheng Road, Taoyuan City, Taoyuan County 330, Taiwan, R.O.C.

Production Information

Subject is engaged in manufacturing of chemical products.

It is introduced that subject has a factory in Taoyuan, Taiwan for production.

It is introduced that subject has obtained the certification of ISO 9001－2008.

Purchase Information

The registered activities of subject:

Business Code	Details
C801010	Manufacturing of basic chemical
C801020	Manufacturing of petrochemical materials
C801030	Manufacturing of precision chemical materials
C801100	Manufacturing of synthetic resin and plastic
C802090	Manufacturing of cleaning supplies
C802120	Manufacturing of industrial additives
C802130	Manufacturing of industrial use explosives
C802200	Manufacturing of coating, paint, dyes and pigments
CC01110	Manufacturing of computer and its peripheral equipment
F401010	International trade business
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

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

Sales Information

Subject is engaged in sale of chemical products.

Subject’s products are mainly applied in integrated circuits, transistor-liquid crystal displays, flat panel displays and rectifier diodes

Subject’s sales regions cover Taiwan domestic market, Asia Pacific, USA and Middle East

Major Products

Types	Products
Coating chemicals	nitrocellulose, cotton pulp and maleic resin
Electronic chemicals	high concentration monomer acid, etchant, monomer acid and mixed acid
Other chemical	ammonia water and hydrogen peroxide.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

Products	Raw material
Payment Terms	T/T, Cash

Import

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

Sales

Domestic Markets

Product	Chemical products
Selling Terms	T/T, Cash

Export

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

Balance Sheet

Unit: NTD/000

	2014-12-31	2013-12-31
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	180,870	242,647
Notes receivable, net
Notes receivable, net	20,866	10,932
Notes receivable due from related parties, net
Notes receivable due from related parties, net	45	40
Accounts receivable, net
Accounts receivable, net	337,906	108,706
Accounts receivable due from related parties, net
Accounts receivable due from related parties, net	5,703	8
Other receivables
Other receivables, net	8,112	160,421
Inventories
Total inventories	248,641	162,403
Prepayments
Total prepayments	22,601	12,050
Total current assets	824,744	697,207
Non-current assets
Non-current financial assets at cost
Non-current financial assets at cost, net	24,042	25,271
Investments accounted for using equity method
Investments accounted for using equity method, net	80,964	117,065
Property, plant and equipment
Total property, plant and equipment	1,219,949	1,214,523
Investment property, net
Investment property, net	300,929	306,390
Intangible assets
Total intangible assets	193	403
Deferred tax assets	51,317	46,075
Other non-current assets
Total other non-current assets	19,998	21,800
Total non-current assets	1,697,392	1,731,527
Total assets	2,522,136	2,428,734
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	320,000	250,000
Short-term notes and bills payable
Total short-term notes and bills payable	0	59,956
Notes payable
Total notes payable	90,731	95,725
Notes payable to related parties
Total notes payable to related parties	57,173	19,643
Accounts payable
Total accounts payable	39,897	16,858
Accounts payable to related parties
Total accounts payable to related parties	24,239	25,253
Other payables
Total other payables	70,550	56,900
Current tax liabilities	8,231	1,557
Total current liabilities	610,821	525,892
Non-current liabilities
Deferred tax liabilities
Total deferred tax liabilities	41,218	41,294
Other non-current liabilities
Total other non-current liabilities	79,900	87,395
Total non-current liabilities	121,118	128,689
Total liabilities	731,939	654,581
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	1,278,139	1,278,139
Total capital stock	1,278,139	1,278,139
Capital surplus
Total capital surplus	9,826	9,826
Retained earnings
Legal reserve	158,795	155,136
Special reserve	40,365	36,784
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	305,531	297,849
Total retained earnings	504,691	489,769
Other equity interest
Total other equity interest	-2,459	-3,581
Total equity attributable to owners of parent	1,790,197	1,774,153
Non-controlling interests	0	0
Total equity	1,790,197	1,774,153
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

Profit and Loss Account

Unit: NTD/000

	2014	2013
Operating revenue
Total operating revenue	1,350,162	1,450,914
Operating costs
Total operating costs	1,170,819	1,240,882
Gross profit (loss) from operations	179,343	210,032
Gross profit (loss) from operations	179,343	210,032
Operating expenses
Selling expenses
Total selling expenses	75,627	90,087
Administrative expenses
Total administrative expenses	40,491	49,421
Research and development expenses
Total research and development expenses	22,585	21,627
Total operating expenses	138,703	161,135
Net other income (expenses)
Net other income (expenses)	9,246	9,491
Net operating income (loss)	49,886	58,388
Non-operating income and expenses
Other income
Total other income	5,483	11,703
Other gains and losses
Other gains and losses, net	35,922	3,391
Finance costs
Finance costs, net	3,551	3,249
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	-37,452	-17,300
Total non-operating income and expenses	402	-5,455
Profit (loss) from continuing operations before tax	50,288	52,933
Tax expense (income)
Total tax expense (income)	9,431	16,274
Profit (loss) from continuing operations	40,857	36,659
Profit (loss)	40,857	36,659
Other comprehensive income
Actuarial gains (losses) on defined benefit plans	-448	10,307
Share of other comprehensive income of associates and joint ventures accounted for using equity method
Total share of other comprehensive income of associates and joint ventures accounted for using equity method	1,352	-3,428
Income tax related to components of other comprehensive income	154	1,170
Other comprehensive income, net	750	5,709
Total comprehensive income	41,607	42,368
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	40,857	36,584
Profit (loss), attributable to non-controlling interests	0	75
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	41,607	42,293
Comprehensive income, attributable to non-controlling interests	0	75
Basic earnings per share
Total basic earnings per share	0.32	0.29
Diluted earnings per share
Total diluted earnings per share	0.32	0.28

Cash Flows

Unit: NTD/000

	2014	2013
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	50,288	52,933
Profit (loss) before tax	50,288	52,933
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	167,691	135,950
Amortization expense	210	339
Provision (reversal of provision) for bad debt expense	1,137	-3,822
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	0	1,774
Interest expense	3,478	3,125
Share of loss (profit) of associates and joint ventures accounted for using equity method	37,452	17,300
Loss (gain) on disposal of property, plan and equipment	7,344	69,343
Loss (gain) on disposal of investments	0	-30,580
Other adjustments to reconcile profit (loss)	-1,441	1,067
Total adjustments to reconcile profit (loss)	215,871	194,496
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in financial assets held for trading	0	6,890
Decrease (increase) in notes receivable	-9,934	26,429
Decrease (increase) in notes receivable due from related parties	-5	-8
Decrease (increase) in accounts receivable	-230,337	320,314
Decrease (increase) in accounts receivable due from related parties	-5,695	5,576
Decrease (increase) in other receivable	150,202	-145,111
Decrease (increase) in inventories	-84,797	103,136
Decrease (increase) in prepayments	-10,551	10,558
Total changes in operating assets	-191,117	327,784
Changes in operating liabilities
Increase (decrease) in notes payable	29,825	-59,590
Increase (decrease) in notes payable to related parties	37,530	-72,734
Increase (decrease) in accounts payable	23,039	-24,643
Increase (decrease) in accounts payable to related parties	-1,014	1,326
Increase (decrease) in other payable	13,692	-17,532
Increase (decrease) in other operating liabilities	-7,943	-17,676
Total changes in operating liabilities	95,129	-190,849
Total changes in operating assets and liabilities	-95,988	136,935
Total adjustments	119,883	331,431
Cash inflow (outflow) generated from operations	170,171	384,364
Interest paid	-3,520	-3,020
Income taxes refund (paid)	-6,121	-40,842
Net cash flows from (used in) operating activities	160,530	340,502
Cash flows from (used in) investing activities
Proceeds from capital reduction of financial assets at cost	1,229	0
Proceeds from disposal of subsidiaries	0	27,849
Acquisition of property, plant and equipment	-209,819	-289,386
Proceeds from disposal of property, plant and equipment	0	62
Increase in other non-current assets	0	-691
Decrease in other non-current assets	1,802	0
Net cash flows from (used in) investing activities	-206,788	-262,166
Cash flows from (used in) financing activities
Increase in short-term loans	1,650,000	1,282,000
Decrease in short-term loans	-1,580,000	-1,089,970
Increase in short-term notes and bills payable	0	59,956
Decrease in short-term notes and bills payable	-59,956	0
Repayments of long-term debt	0	-75,000
Cash dividends paid	-25,563	-127,814
Net cash flows from (used in) financing activities	-15,519	49,172
Effect of exchange rate changes on cash and cash equivalents	0	-228
Net increase (decrease) in cash and cash equivalents	-61,777	127,280
Cash and cash equivalents at beginning of period	242,647	115,367
Cash and cash equivalents at end of period	180,870	242,647
Cash and cash equivalents reported in the statement of financial position	180,870	242,647

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 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

Trial Number:	2006, Taolaojian, 10
Date of Trial:	2006-11-29
Reason:	Payment of retirement allowance
Claimant:	Not Stated
Defendant:	T.N.C. Industrial Co., Ltd.

Special Note

Interview Details

Name	Mr. Zhang
Department	Sales Department

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 :	KAR
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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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.