MIRA INFORM REPORT

Report No. :	347387
Report Date :	31.10.2015

IDENTIFICATION DETAILS

Name :	GOODWAY MACHINE CORP.
Registered Office :	No.13, Industry Park 5th Road, Taichung City
Country :	Taiwan
Financials (as on) :	31.12.2014
Date of Incorporation :	28.09.1975
Com. Reg. No.:	52353530
Legal Form :	Joint Stock Company
Line of Business :	Subject is engaged in manufacturing of computer numerical control (CNC) lathes and processing machines.
No. of Employees :	About 350

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

Company name and address

Company Name:	Goodway Machine Corp.
Supplied Name:	Goodway Machine Corp
Trading Address:	No.13, Industry Park 5th Road, Taichung City, Taiwan R.O.C.
Supplied Address:	13, 5th Road, Taichung Ind, Park Talchung
Telephone Number:	+886-4-2359-1226
Fax Number:	+886-4-2359-4702
E-mail:	1566@goodwaycnc.com.tw

Note: The exact name and address are as above.

Company Identification Details

Registered Name:	Goodway Machine Corp.
Registered Address:	No.13, Industry Park 5th Road, Taichung City, Taiwan R.O.C.
Date of Foundation:	1975-9-28
Registration Number:	52353530
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 1,200,000,000 (USD 36,840,000) (As of 2015.10, 1 NTD = 0.0307 USD)
Paid-up Capital:	NTD 1,000,323,390 (USD 30,709,928)
Legal Representatives:	Dehua Yang
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sale of computer numerical control (CNC) lathes and processing machines.
Staff:	About 350 employees
Listed at Stock Exchange:	Yes, Stock Symbol 1583
Date of Last Annual Return:	2015-7-28

History

Subject was incorporated on 1975-9-28 with registered number 52353530 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 2008-01-24

Corporate Structure

Branches

1
Name	Goodway Machine Corp., Central Taiwan Science Park Branch
Address	No.38, Keyuan Rd., Central Taiwan Science Park, Situn District, Taiwan, R.O.C.
Tel.	+886-4-2463-6000
Fax	+886-4-2463-6500
Registration Number	29182346
Date of Registration	2007-7-2
Status	Live
2
Name	Goodway Machine Corp., Dongguan Branch
Address	No. 185, Xiaobian Zhenan E. Road, Changan Town, Dongguan City, Guangdong Province, China
Tel.	+86-769-8166-6903
Fax	+86-769-8584-5510

Major Related Companies

Name	Goodway Machine (Wujiang) Co., Ltd. (literal translation)
Address	No. 4888, Dong Tai Lake Avenue, Wujiang Economic & Technological Development Zone
Tel.	+86-512-8286-8680
Fax	+86-512-8286-8620

Shareholders

Major Shareholders

Name	Subscription Shares
Dehua Yang	42,040,234
Fuzhu Xu
244,383
Desheng Yang	794,364
Zhiyuan Investment Co., Ltd. (literal translation)	6,401,853

Shareholder Information:

1
Registered Name:	Zhiyuan Investment Co., Ltd. (literal translation)
Registered Address:	1/F., No. 86, Baoan 3^rd St., Nantun Dist., Taichung City, Taiwan
Date of Foundation:	2010-3-9
Registration Number:	70719928
Registry:	Taichung City Government
Registered Capital:	NTD 50,000,000 (USD 1,535,000) (As of 2015.10, 1 NTD = 0.0307 USD)
Paid-up Capital:	NTD 50,000,000 (USD 1,535,000)
Legal Representatives:	Qiguan Zeng
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2015-4-21

Management Information

Core Management

Directors

1
Name		Dehua Yang
Position		Board Chairman
2
Name	Fuzhu Xu
Position		Director
3
Name	Xingshu Ke
Position		Independence Director
4
Name	Yixian Yun
Position		Independence Director
5
Name	Desheng Yang
Position		Supervisor
6
Name	Jianwen Kang
Position		Supervisor

Personnel Structure

Total Employees

About 350 employees

Operation Information

Offices & Factories

	Headquarters
Add	No.13, Industry Park 5th Road, Taichung City, Taiwan R.O.C.

Production Information

Subject is engaged in manufacturing of computer numerical control (CNC) lathes and processing machines.

It is introduced that subject has a factory in Taiwan for production, but detail cannot be available from the subject, local registry or any other resources.

Purchase Information

The registered activities of subject:

Business Code	Details
CB01010	Manufacturing of mechanical equipment
CB01990	Manufacturing of other machinery
CD01060	Manufacturing of aircraft and parts
CP01010	Manufacturing of hand tools
F113010	Wholesale of machineries
F213080	Retail of mechanical appliances
F401030	Manufacturing output industry
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

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

It is introduced that subject’s major suppliers are Toshiba and Mitsui Seiki.

Subject also purchases some products from the factory of related company in Mainalnd China.

Sales Information

Subject is engaged in sale of computer numerical control (CNC) lathes and processing machines.

The subject can provide five categories of products: horizontal turning, vertical turning, swiss turning, tapping center and automation turning.

Subject’s products are mainly applied in the processing and production of ceramic products, mechanical parts, automobile components, wind power devices and gear.

Subject’s sales regions include Asia, Europe, America and Africa.

It is introduced that subject has about 37 overseas distributors.

Subject’s major customers are manufacturers of electronic products, mold and automotive part.

Major products

Types	Products
Horizontal turning	GMS series/tool spindle type 5-axis turning centers, GA series/high performance turning centers
Vertical turning	GV-500 series/ high speed vertical turning centers, GV-1 series/heavy duty vertical turning centers
Automation turning	Bar feeders, gantry loading systems and other automation accessories.

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	Computer numerical control (CNC)
Selling Terms	T/T, Cash

Export

Product	Computer numerical control (CNC)
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	1,484,801	1,132,452
Current financial assets at fair value through profit or loss
Total current financial assets at fair value through profit or loss	24,473	22,369
Notes receivable, net
Notes receivable, net	580,084	426,706
Notes receivable due from related parties, net
Notes receivable due from related parties, net	0	58
Accounts receivable, net
Accounts receivable, net	1,993,229	1,278,954
Accounts receivable due from related parties, net
Accounts receivable due from related parties, net	8,947	0
Other receivables
Other receivables, net	73,260	13,110
Other receivables due from related parties
Other receivables due from related parties, net	221	5
Current tax assets
Total current tax assets	0	2,909
Inventories
Inventories, manufacturing business
Inventories, manufacturing business, net	3,350,855	3,301,039
Total inventories	3,350,855	3,301,039
Prepayments
Total prepayments	178,043	93,165
Other current assets
Total other current assets	27,993	37,469
Total current assets	7,721,906	6,308,236
Non-current assets
Non-current financial assets at cost
Non-current financial assets at cost, net	25,450	25,450
Property, plant and equipment
Total property, plant and equipment	3,427,504	2,703,485
Investment property, net
Investment property, net	294,456	295,696
Intangible assets
Goodwill	90,444	89,802
Other intangible assets, net
Other intangible assets, net	8,266	9,250
Total intangible assets	98,710	99,052
Deferred tax assets	81,057	78,912
Other non-current assets
Prepayments for business facilities	45,469	6,793
Guarantee deposits paid	8,098	10,760
Non-current prepayments for investments	0	188,141
Long-term prepaid rents	78,032	78,533
Other non-current assets, others
Other non-current assets, others	2,282	0
Total other non-current assets, others	2,282	0
Total other non-current assets	133,881	284,227
Total non-current assets	4,061,058	3,486,822
Total assets	11,782,964	9,795,058
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	2,235,775	1,972,948
Short-term notes and bills payable
Total short-term notes and bills payable	871,158	719,173
Notes payable
Total notes payable	1,056,044	704,045
Notes payable to related parties
Notes payable to related parties	331	47
Other notes payable to related parties	0	16,366
Total notes payable to related parties	331	16,413
Accounts payable
Total accounts payable	413,706	277,145
Accounts payable to related parties
Total accounts payable to related parties	876	47
Other payables
Total other payables	416,081	368,676
Current tax liabilities	138,453	51,503
Current provisions
Total current provisions	53,996	43,071
Other current liabilities
Advance receipts
Total advance receipts	302,381	186,886
Long-term liabilities, current portion
Total long-term liabilities, current portion	326,552	279,829
Other current liabilities, others	92,794	37,953
Total other current liabilities	721,727	504,668
Total current liabilities	5,908,147	4,657,689
Non-current liabilities
Long-term borrowings
Total long-term borrowings	488,607	532,090
Deferred tax liabilities
Total deferred tax liabilities	333,705	157,146
Other non-current liabilities
Long-term deferred revenue	45,057	45,936
Accrued pension liabilities	79,927	67,094
Guarantee deposits received	16,389	19,685
Total other non-current liabilities	141,373	132,715
Total non-current liabilities	963,685	821,951
Total liabilities	6,871,832	5,479,640
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	1,000,323	967,430
Total capital stock	1,000,323	967,430
Capital surplus
Capital surplus, additional paid-in capital
Total capital surplus, additional paid-in capital	423,886	423,524
Capital surplus, gain on disposals of property, plant and equipment	1,260	1,260
Capital surplus, changes in equity of associates and joint ventures accounted for using equity method	53	587
Capital surplus, employee share options	82	27
Total capital surplus	425,281	425,398
Retained earnings
Legal reserve	381,936	342,928
Special reserve	188,846	203,129
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	1,348,312	1,004,725
Total retained earnings	1,919,094	1,550,782
Other equity interest
Exchange differences on translation of foreign financial statements
Total exchange differences on translation of foreign financial statements	67,396	25,406
Total other equity interest	67,396	25,406
Treasury shares	0	0
Total equity attributable to owners of parent	3,412,094	2,969,016
Non-controlling interests	1,499,038	1,346,402
Total equity	4,911,132	4,315,418
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
Total operating revenue	7,817,221	5,882,764
Operating costs
Total operating costs	5,740,018	4,365,494
Gross profit (loss) from operations	2,077,203	1,517,270
Gross profit (loss) from operations	2,077,203	1,517,270
Operating expenses
Selling expenses
Total selling expenses	760,207	585,603
Administrative expenses
Total administrative expenses	272,513	233,989
Research and development expenses
Total research and development expenses	146,196	114,183
Total operating expenses	1,178,916	933,775
Net operating income (loss)	898,287	583,495
Non-operating income and expenses
Other income
Total other income	160,214	33,042
Other gains and losses
Other gains and losses, net	86,710	104,288
Finance costs
Finance costs, net	47,306	40,149
Total non-operating income and expenses	199,618	97,181
Profit (loss) from continuing operations before tax	1,097,905	680,676
Tax expense (income)
Total tax expense (income)	246,393	146,625
Profit (loss) from continuing operations	851,512	534,051
Profit (loss)	851,512	534,051
Other comprehensive income
Exchange differences on translation	52,385	73,829
Actuarial gains (losses) on defined benefit plans	-11,792	10,397
Income tax related to components of other comprehensive income	-994	1,756
Other comprehensive income, net	41,587	82,470
Total comprehensive income	893,099	616,521
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	685,834	390,078
Profit (loss), attributable to non-controlling interests	165,678	143,973
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	721,464	452,805
Comprehensive income, attributable to non-controlling interests	171,635	163,716
Basic earnings per share
Total basic earnings per share	6.88	3.92
Diluted earnings per share
Total diluted earnings per share	6.81	3.86

Cash Flows

Unit: NTD/000

Consolidated	2014	2013
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	1,097,905	680,676
Profit (loss) before tax	1,097,905	680,676
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	166,967	171,055
Amortization expense	4,303	5,558
Provision (reversal of provision) for bad debt expense	8,484	29,876
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	-4,612	-2,054
Interest expense	47,306	40,149
Interest income	-5,028	-4,473
Dividend income	-353	-308
Share-based payments	417	572
Loss (gain) on disposal of property, plan and equipment	16,681	-7,280
Loss (gain) on disposal of investments	-158	-583
Total adjustments to reconcile profit (loss)	234,007	232,512
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in notes receivable	-157,248	-105,134
Decrease (increase) in notes receivable due from related parties	58	-58
Decrease (increase) in accounts receivable	-705,837	186,272
Decrease (increase) in accounts receivable due from related parties	-8,947	0
Decrease (increase) in other receivable	-60,134	708
Decrease (increase) in other receivable due from related parties	-216	0
Decrease (increase) in inventories	6,738	-208,538
Decrease (increase) in prepayments	-83,107	-24,478
Decrease (increase) in other current assets	10,399	4,618
Decrease (increase) in other operating assets	-4,619	9,114
Total changes in operating assets	-1,002,913	-137,496
Changes in operating liabilities
Increase (decrease) in notes payable	344,171	-66,601
Increase (decrease) in notes payable to related parties	284	47
Increase (decrease) in accounts payable	120,094	52,402
Increase (decrease) in accounts payable to related parties	829	47
Increase (decrease) in other payable	67,475	-4,187
Increase (decrease) in provisions	10,925	-8,409
Increase (decrease) in receipts in advance	115,478	38,584
Increase (decrease) in other current liabilities	54,718	9,449
Increase (decrease) in accrued pension liabilities	267	-50
Total changes in operating liabilities	714,241	21,282
Total changes in operating assets and liabilities	-288,672	-116,214
Total adjustments	-54,665	116,298
Cash inflow (outflow) generated from operations	1,043,240	796,974
Interest received	5,028	4,473
Income taxes refund (paid)	-124,629	-203,347
Net cash flows from (used in) operating activities	923,639	598,100
Cash flows from (used in) investing activities
Acquisition of financial assets at fair value through other comprehensive income	-228	-40
Proceeds from disposal of financial assets at fair value through other comprehensive income	2,894	102
Acquisition of investments accounted for using equity method	-66,636	-21,006
Increase in prepayments for investments	0	-188,141
Net cash flow from acquisition of subsidiaries	3,070	0
Acquisition of property, plant and equipment	-418,611	-550,179
Proceeds from disposal of property, plant and equipment	3,693	21,218
Decrease in refundable deposits	3,422	1,226
Acquisition of intangible assets	-1,927	-3,303
Decrease in prepayments for business facilities	-38,676	2,047
Dividends received	353	308
Net cash flows from (used in) investing activities	-512,646	-737,768
Cash flows from (used in) financing activities
Increase in short-term loans	171,827	583,341
Increase in short-term notes and bills payable	151,985	229,393
Proceeds from long-term debt	3,240	-7,392
Increase in guarantee deposits received	-3,296	-15,430
Increase in other payables to related parties	-16,366	4,770
Cash dividends paid	-261,206	-195,936
Exercise of employee share options	3,870	3,720
Interest paid	-47,692	-39,359
Change in non-controlling interests	0	-100,427
Other financing activities	-102,554	-80,035
Net cash flows from (used in) financing activities	-100,192	382,645
Effect of exchange rate changes on cash and cash equivalents	41,548	41,039
Net increase (decrease) in cash and cash equivalents	352,349	284,016
Cash and cash equivalents at beginning of period	1,132,452	848,436
Cash and cash equivalents at end of period	1,484,801	1,132,452
Cash and cash equivalents reported in the statement of financial position	1,484,801	1,132,452

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	Mr. Yang
Department	Sales Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.65.22
UK Pound	1	Rs.99.93
Euro	1	Rs.71.67

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	TRU

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.