MIRA INFORM REPORT

Report No. :	347564
Report Date :	05.11.2015

IDENTIFICATION DETAILS

Name :	LEE CHI ENTERPRISES COMPANY LTD.
Registered Office :	No.112, Sec.1, Shipai Rd., Shipai Li, Changhua City, Changhua County 50080, R.O.C.
Country :	Taiwan
Financials (as on) :	31.12.2014
Date of Incorporation :	16.05.1973
Com. Reg. No.:	59008318
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and Sales of Bicycle Parts.
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	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. 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 the ECFA, including a signed agreement on trade in services and negotiations on trade in goods and dispute resolution, have stalled. In early 2014, the government bowed to public demand and proposed 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 nearly 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 (MOU) 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 Taiwan’s 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:	Lee Chi Enterprises Company Ltd.
Supplied Name:	LEE CHI ENTERPRISES CO LTD
Trading Address:	No.112, Sec.1, Shipai Rd., Shipai Li, Changhua City, Changhua County 50080, Taiwan, R.O.C.
Supplied Address:	NO.112,SEC.1,SHIPAI RD.,SHIPAI LI, CHANGHUA CITY, CHANGHUA COUNTY 50080,TAIWAN
Telephone Number:	+886-4-738-2121
Fax Number:	+886-4-738-2434
E-mail:	saleechi@leechi.com.tw
Website:	http://www.leechi.com.tw

Notes: The exact name and address are above.

Company Identification Details

Registered Name:	Lee Chi Enterprises Company Ltd.
Registered Address:	No.112, Sec.1, Shipai Rd., Shipai Li, Changhua City, Changhua County 50080, Taiwan, R.O.C.
Date of Foundation:	1973-05-16
Registration Number:	59008318
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 2,368,240,070 (USD 73,415,442.17) (As of 2015.10, 1 NTD = 0.031 USD)
Paid-up Capital:	NTD 2,368,240,070 (USD 73,415,442.17)
Legal Representatives:	Aping Lin
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sales of bicycle parts.
Staff:	About 500 Employees
Listed at Stock Exchange:	Yes; Stock Symbol:1517
Date of Last Annual Return:	2014-07-04

History

Subject was incorporated on 1973-05-16 with registered number 59008318 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 1995-11-14.

Corporate Structure

Factories

1
Address:	No.112, Sec.1, Shipai Rd., Shipai Li, Changhua City, Changhua County 50080, Taiwan, R.O.C.
Date of Foundation:	1969-01-01
Date of Registration:	1979-02-06
Factory Registration Number:	99645831
Factory Manager:	Aping Lin
Status:	In Production
Date of Last Annual Return:	2005-10-19
Major Products:	259 Other metal products 319 Unclassified other means of transport and its parts
2
Name:	Nangang Factory
Address:	No.8, S. Gongye 5th Rd., Yongfeng Li, Nnatou City, Nantou County, Taiwan
Date of Foundation:	1994-05-17
Date of Registration:	1994-06-28
Factory Registration Number:	99652157
Factory Manager:	Aping Lin
Status:	In Production
Date of Last Annual Return:	2012-05-07
Major Products:	312 Haulage motor and parts 313 Bicycle and parts 319 Unclassified other means of transport and its parts 254 Metal treatment

Related Companies

1
Name		Long Da Machinery Ltd. Co.
Address		Huanguan Middle Road, Songyuan Village, Guanlan Town, Shenzhen, Guangdong, China
Tel		+86-0755-2799-3399
Fax		+86-0755-2799-3032
E-mail		ldsales@szleechi.com
2
Name	Ever GloryMachinery (Kunshan) ltd. Co.
Address	No.1, Xinxing South Road, Kunshan City, Jiangsu, China
Tel	+86-(0521)-5761-3881/3882
Fax	+86-(0521)-5761-4097/3136
E-mail	market.g@public1.sz.js.cn

Sales Offices

1
Name	Promax USA Cycle Group Inc
Address	1580 N. Orangethorpe Way, Anaheim Ca 92801
Tel	+714-447-9197
Fax	+714-447-9337
2
Address	Norway
Tel	+47-5160-4500
Fax	+47-5167-5780
3
Address	Finland
Tel	+358-1128-06371
Fax	+358-1124-83102
4
Address	Units 4 & 5， Greenbank Ind., Park Atherton Rd., Hindley Green Wigan England, WN2 4SN, UK
Tel	+44-1942-254100
5
Address	Hassbergstrasse 45, D96148, Baunach Germany
Tel	+49-(0)9544-944445
Fax	+49-(0)9544-944440
6
Address	France
Tel	+33-1396-15921
Fax	+33-1396-19636
7
Address	Italy
Tel	+39-02-963-70635
Fax	+39-02-963-72876
8
Address	Spain
Tel	+34-945-135202
Fax	+34-945-139321
9
Address	Australia
Tel	+61-3-9580-7388
Fax	+61-3-9580-2702

Shareholders

Major Shareholders

Name	Subscription Shares
Kefu Investment Co., Ltd. (Literal Translation)
500,000
Yuxin Lin	6,018,760
Yixian Lin	9,049,036
Chun Lin	1,552,148

Management Information

Core Management

Directors

1
Name		Aping Lin
Position		Chairman of the Board
2
Name	Yuxin Lin
Position		Director
3
Name	Yixian Lin
Position		Director
4
Name	Ronghua Li
Position		Director
5
Name	Mingyang Zhu
Position		Director
6
Name	Zhengyi Zhang
Position		Director
7
Name	Zhiguan Lin
Position		Director
8
Name	Chun Lin
Position		Supervisor
9
Name	Rongting Chen
Position		Supervisor

Personnel Structure

Total Employees

About 500 Employees

Operation Information

Offices & Factories

	Headquarters
Add	No.112, Sec.1, Shipai Rd., Shipai Li, Changhua City, Changhua County 50080, Taiwan, R.O.C.

Production Information

Subject is engaged in manufacturing of bicycle parts, etc.

Subject has factories in Taiwan for production.

Subject obtained the certification of ISO 9001.

Purchase Information

The registered activities of subject:

Business Code	Details
--	Manufacturing, processing and sales of automobile, motorcycle and bicycle parts
--	General machinery manufacturing, processing and sales
--	Manufacturing, processing, sales, abrasive blasting (sand blasting), surface grinding, plating processing, anodizing, chemical conversion coating, stainless processing, gloss finish, coating, stoving varnish, etc.
JZ99050	Agency service
F106010	Hardware wholesaling
F106030	Module wholesaling
F107010	Paint and coating wholesaling
F107100	Basic chemical materials wholesaling
F107140	Plastic raw materials wholesaling
F107170	Industrial auxiliaries wholesaling
F109010	Book wholesaling
F109020	Stationery wholesaling
F112040	Petroleum product wholesaling
F113010	Machinery wholesaling
F113050	Transactional machinery and equipment wholesaling
F113070	Telecommunications equipment wholesaling
F118010	Information software wholesaling
ZZ99999	Besides licensed business, all other business items those are not banned or restricted

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

Sales Information

Subject is engaged in sales of bicycle parts, etc.

The major products are disk brake, seat post, seat post, stem, handle bar, etc.

Subject has its own brand “Promax”.

Subject’s sales regions include domestic market, Southeast Asia, America and Europe, etc.

Subject’s major customers are manufacturers of bicycles, etc.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

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

Import

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

Sales

Domestic Markets

Product	Bicycle parts, etc.
Selling Terms	T/T, Cash, etc.

Export

Product	Bicycle parts, 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	632,517	602,309
Current financial assets at fair value through profit or loss
Total current financial assets at fair value through profit or loss	39,052	12,062
Current available-for-sale financial assets
Current available-for-sale financial assets, net	356,150	475,788
Current bond investment without active market
Current bond investment without active market, net	1,005,172	856,466
Notes receivable, net
Notes receivable, net	191,706	217,689
Accounts receivable, net
Accounts receivable, net	962,243	912,263
Other receivables
Other receivables, net	22,565	48,397
Inventories
Total inventories	698,539	637,542
Other current assets
Total other current assets	84,888	93,361
Total current assets	3,992,832	3,855,877
Non-current assets
Non-current available-for-sale financial assets
Non-current available-for-sale financial assets, net	17,360	8,658
Non-current financial assets at cost
Non-current financial assets at cost, net	61,001	65,152
Non-current bond investment without active market
Non-current bond investment without active market, net	1,579	1,566
Property, plant and equipment
Total property, plant and equipment	1,550,489	1,525,943
Intangible assets
Goodwill	57,691	54,462
Total intangible assets	57,691	54,462
Deferred tax assets	65,293	47,769
Other non-current assets
Prepayments for business facilities	34,933	6,663
Guarantee deposits paid	7,313	3,380
Long-term prepaid rents	93,291	92,985
Other non-current assets, others
Total other non-current assets, others	2,627	4,373
Total other non-current assets	138,164	107,401
Total non-current assets	1,891,577	1,810,951
Total assets	5,884,409	5,666,828
Liabilities
Current liabilities
Current financial liabilities at fair value through profit or loss
Total current financial liabilities at fair value through profit or loss	390	0
Notes payable
Total notes payable	40,594	38,476
Accounts payable
Total accounts payable	584,133	511,243
Other payables
Total other payables	264,592	280,270
Current tax liabilities	40,218	63,265
Current provisions
Total current provisions	6,835	5,451
Other current liabilities
Advance receipts
Unearned revenue	63,414	61,388
Total advance receipts	63,414	61,388
Other current liabilities, others	32,286	46,665
Total other current liabilities	95,700	108,053
Total current liabilities	1,032,462	1,006,758
Non-current liabilities
Deferred tax liabilities
Total deferred tax liabilities	114,218	95,623
Other non-current liabilities
Long-term deferred revenue	551,650	595,407
Accrued pension liabilities	141,721	138,524
Guarantee deposits received	204	197
Total other non-current liabilities	693,575	734,128
Total non-current liabilities	807,793	829,751
Total liabilities	1,840,255	1,836,509
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	2,278,250	2,278,250
Total capital stock	2,278,250	2,278,250
Capital surplus
Capital surplus, additional paid-in capital
Capital surplus, additional paid-in capital arising from ordinary share	37,598	37,598
Total capital surplus, additional paid-in capital	37,598	37,598
Capital surplus, donated assets received
Total capital surplus, donated assets received	412	412
Total capital surplus	38,010	38,010
Retained earnings
Legal reserve	216,873	182,349
Special reserve	81,291	81,291
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	848,926	771,391
Total retained earnings	1,147,090	1,035,031
Other equity interest
Exchange differences on translation of foreign financial statements
Total exchange differences on translation of foreign financial statements	83,302	26,401
Unrealized gains (losses) on available-for-sale financial assets
Total unrealized gains (losses) on available-for-sale financial assets	20,233	20,355
Total other equity interest	103,535	46,756
Total equity attributable to owners of parent	3,566,885	3,398,047
Non-controlling interests	477,269	432,272
Total equity	4,044,154	3,830,319
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
Operating revenue
Net sales revenue
Sales revenue
Total sales revenue	3,846,362	3,838,703
Net sales revenue	3,846,362	3,838,703
Investment revenue (for investment business)
Total investment revenue (for investment business)	36,460	37,458
Total operating revenue	3,882,822	3,876,161
Operating costs
Cost of sales
Total cost of sales	3,263,969	3,218,147
Investment costs (for investment business)
Total investment costs (for investment business)	30,651	30,978
Total operating costs	3,294,620	3,249,125
Gross profit (loss) from operations	588,202	627,036
Gross profit (loss) from operations	588,202	627,036
Operating expenses
Selling expenses
Total selling expenses	101,372	91,595
Administrative expenses
Total administrative expenses	189,356	180,415
Research and development expenses
Total research and development expenses	56,637	62,430
Total operating expenses	347,365	334,440
Net operating income (loss)	240,837	292,596
Non-operating income and expenses
Other income
Interest income
Total interest income	37,900	21,090
Dividend income	1,330	2,221
Other income, others	78,842	191,313
Total other income	118,072	214,624
Other gains and losses
Gains on disposals of investments	15,191	4,652
Foreign exchange gains	645	29,472
Miscellaneous disbursements	5,139	8,005
Losses on disposals of property, plant and equipment	4,946	1,884
Other gains and losses, net	5,751	24,235
Total non-operating income and expenses	123,823	238,859
Profit (loss) from continuing operations before tax	364,660	531,455
Tax expense (income)
Total tax expense (income)	99,503	137,659
Profit (loss) from continuing operations	265,157	393,796
Profit (loss)	265,157	393,796
Other comprehensive income
Exchange differences on translation	70,394	75,853
Unrealised gains (losses) on valuation of available-for-sale financial assets	-2,728	55,675
Actuarial gains (losses) on defined benefit plans	-6,114	-4,880
Income tax related to components of other comprehensive income	-1,039	-830
Other comprehensive income, net	62,591	127,478
Total comprehensive income	327,748	521,274
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	231,047	345,245
Profit (loss), attributable to non-controlling interests	34,110	48,551
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	282,751	438,082
Comprehensive income, attributable to non-controlling interests	44,997	83,192
Basic earnings per share
Basic earnings (loss) per share from continuing operations	1.01	1.52
Total basic earnings per share	1.01	1.52
Diluted earnings per share
Diluted earnings (loss) per share from continuing operations	1.01	1.50
Total diluted earnings per share	1.01	1.50

Cash Flows

Unit: NTD/000

Consolidated	2014	2013
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	364,660	531,455
Profit (loss) before tax	364,660	531,455
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	154,241	147,819
Provision (reversal of provision) for bad debt expense	3,260	3,414
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	368	866
Interest income	-37,900	-21,090
Loss (gain) on disposal of property, plan and equipment	4,946	1,884
Loss (gain) on disposal of investments	-15,191	-4,652
Impairment loss on financial assets	0	2,499
Impairment loss on non-financial assets	1,719	9,066
Unrealized foreign exchange loss (gain)	-8,225	-7,262
Other adjustments to reconcile profit (loss)	-61,164	-170,511
Total adjustments to reconcile profit (loss)	42,054	-37,967
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in notes receivable	30,722	-31,978
Decrease (increase) in accounts receivable	-38,315	102,163
Decrease (increase) in other receivable	23,533	-3,595
Decrease (increase) in inventories	-49,264	66,669
Decrease (increase) in other current assets	-26,547	-4,642
Decrease (increase) in other operating assets	9,873	14,673
Total changes in operating assets	-49,998	143,290
Changes in operating liabilities
Increase (decrease) in notes payable	1,765	-32,846
Increase (decrease) in accounts payable	58,596	-139,037
Increase (decrease) in other payable	-15,262	-13,283
Increase (decrease) in provisions	1,384	-710
Increase (decrease) in other current liabilities	-15,392	112
Increase (decrease) in accrued pension liabilities	-2,917	-2,808
Total changes in operating liabilities	28,174	-188,572
Total changes in operating assets and liabilities	-21,824	-45,282
Total adjustments	20,230	-83,249
Cash inflow (outflow) generated from operations	384,890	448,206
Interest received	37,954	22,467
Income taxes refund (paid)	-120,551	-79,976
Net cash flows from (used in) operating activities	302,293	390,697
Cash flows from (used in) investing activities
Acquisition of financial assets at fair value through profit or loss, designated as upon initial recognition	-551,881	-824,253
Proceeds from disposal of financial assets at fair value through profit or loss, designated as upon initial recognition	524,883	811,422
Acquisition of available-for-sale financial assets	-397,008	-1,067,052
Proceeds from disposal of available-for-sale financial assets	519,237	1,035,431
Acquisition of bond investments without active market	-2,081,705	-1,842,886
Proceeds from disposal of bond investments without active market	1,952,095	1,742,082
Increase in prepayments for investments	-3,043	0
Acquisition of property, plant and equipment	-119,365	-177,939
Proceeds from disposal of property, plant and equipment	5,165	1,375
Increase in refundable deposits	-300	-1,723
Decrease in refundable deposits	0	1,744
Decrease in other financial assets	7,380	0
Increase in prepayments for business facilities	-44,270	-12,431
Other investing activities	0	131,911
Net cash flows from (used in) investing activities	-188,812	-202,319
Cash flows from (used in) financing activities
Cash dividends paid	-113,913	-159,478
Change in non-controlling interests	0	-2,173
Net cash flows from (used in) financing activities	-113,913	-161,651
Effect of exchange rate changes on cash and cash equivalents	30,640	9,047
Net increase (decrease) in cash and cash equivalents	30,208	35,774
Cash and cash equivalents at beginning of period	602,309	566,535
Cash and cash equivalents at end of period	632,517	602,309
Cash and cash equivalents reported in the statement of financial position	632,517	602,309

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

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

Special Note

Interview Details

Name	Ms. Lin
Department	Sales Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.65.57
UK Pound	1	Rs.101.13
Euro	1	Rs.71.80

INFORMATION DETAILS

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