MIRA INFORM REPORT

Report No. :	502234
Report Date :	11.04.2018

IDENTIFICATION DETAILS

Name :	SESODA CORPORATION
Registered Office :	23F., No.99, Sec. 2, Tun Hwa S. Rd., Da-An District, Taipei City 106, Taiwan (R.O.C.)
Country :	Taiwan
Financials (as on) :	31.12.2016
Date of Incorporation :	02.03.1957
Com. Reg. No.:	11384405
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and Sale of Chemicals, etc.
No. of Employees :	About 133 (As of 2017-3-30)

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A+

Credit Rating	Explanation	Rating Comments
A+	Low Risk	Business dealings permissible with low risk of default

Status :	Good
Payment Behaviour :	Regular
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

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
Taiwan	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

TAIWAN - ECONOMIC OVERVIEW

Taiwan has a dynamic capitalist economy that is driven largely by industrial manufacturing, and especially exports of electronics, machinery, and petrochemicals. This heavy dependence on exports exposes the economy to fluctuations in global demand. Taiwan's diplomatic isolation, low birth rate, rapidly aging population, and increasing competition from China and other Asia Pacific markets are other major long-term challenges.

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 of that year, 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 uncertain. President TSAI since taking office in May 2016 has promoted greater economic integration with South and Southeast Asia through the New Southbound Policy initiative and has also expressed interest in Taiwan joining the Trans-Pacific Partnership as well as bilateral trade deals with partners such as the US. These overtures have likely played a role in increasing Taiwan’s total exports, which rose 11% during the first half of 2017, buoyed by strong demand for semiconductors.

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 with many economies, including China and the US, 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 and has also secured greater market access for its investors on 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 renminbi (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 opportunities for Taiwan’s economy but also pose challenges as political differences remain unresolved and China’s economic growth is slowing. President TSAI’s administration has made little progress on the domestic economic issues that loomed large when she was elected, including concerns about stagnant wages, high housing prices, youth unemployment, job security, and financial security in retirement. TSAI has made more progress on boosting trade with South and Southeast Asia, however, which may help insulate Taiwan’s economy from a fall in mainland demand should China’s growth slow in 2018.

Source : CIA

Contact Points

Company Name:	SESODA CORPORATION
Supplied Name:	SESODA CORPORATION
Trading Address:	23F., No.99, Sec. 2, Tun Hwa S. Rd., Da-An District, Taipei City 106, Taiwan (R.O.C.)
Supplied Address:	23RD FLOOR NO. 99 TUN HWA S.RD., SEC.2, TAIPEI, TAIWAN
Telephone Number:	+886-2-2704-7272
Fax Number:	+886-2-2709-9640

Notes: The exact name and address are as above.

Company Identification Details

Registered Name:	Sesoda Corporation
Registered Address:	23F., No.99, Sec. 2, Tun Hwa S. Rd., Da-An District, Taipei City 106, Taiwan (R.O.C.)
Date of Foundation:	1957-3-2
Registration Number:	11384405
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 2,280,000,000 (USD68,400,000) (As of 2018.01, 1 NTD = 0.03 USD)
Paid-up Capital:	NTD 2,014,478,660 (USD 60,434,360)
Legal Representatives:	Rongyuan Chen
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sale of chemicals, etc.
Staff:	About 133 Employees (As of 2017-3-30)
Listed at Stock Exchange:	Yes; Stock Symbol: 1708
Date of Last Annual Return:	2017-8-10

Note: The staff number information was obtained from subject’s annual report.

History

Subject was incorporated on 1957-3-2 with registered number 11384405 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 1986-6-16.

Corporate Structure

Related Companies

Huan Yu Holdings Limited

Sesoda Steamship Corporation

Southeast Shipping Corporation

SE Harmony Corporation

SE Bulker Corporation

Sesoda Investment (BVI) Ltd.

Southeast Marine Globe Corporation

SE Delta Corporation

SE Peace Corporation

Factories

1
Name:	Su Ao General Factory
Address:	No. 120, Xincheng 1^st Rd., Suao Town, Yilan County, Taiwan
Telephone Number:	+886-3-990-5121
2
Name:	Changhua Factory
Address:	No. 1-6, Gongxi 1^st Rd., Quanxing Industrial Park, Shengang Xiang, Changhua County, Taiwan
Telephone Number:	+886-4-798-8931
3
Name:	Taichung Factory
Address:	No. 12, Gong 10^th Rd., Youshi Industrial Park, Dajia Dist., Taichung City, Taiwan
Telephone Number:	+886-4-2681-6685

Shareholders

Major Shareholders

Name	Subscription Shares
Zhengbang Investment Co., Ltd. (Literal Translation)
13,014,408
Sincere Industrial Corporation	3,021,097
Zhifu Investment Co., Ltd. (Literal Translation)	9,543,182
Ya lan investment consultant co., ltd (Literal Translation)	3,381,243
Sande International Investment Co., Ltd. (Literal Translation)	4,380,479

Management Information

Core Management

Directors

1
Name		Rongyuan Chen
Position		Chairman of the Board
2
Name	Zhengde Chen
Position		Vice Chairman of the Board
3
Name	Kaiyuan Chen
Position		Director
4
Name	Lide Chen
Position		Director
5
Name	Yingbiao Zhu
Position		Director
6
Name	Xinrong Zhao
Position		Director
7
Name	Zhongli Wu
Position		Director
8
Name	Zhengxin Lu
Position		Independent Director
9
Name	Ming Cao
Position		Independent Director
10
Name	Yinfan Qian
Position		Supervisor
11
Name	Bofu Li
Position		Supervisor
9
Name	Chunsheng Fu
Position		Manager
Date of Appointment:		2011-1-1

Personnel Structure

Total Employees

About 133 Employees (As of 2017-3-30)

Operation Information

Offices & Factories

	Headquarters
Add	23F., No.99, Sec. 2, Tun Hwa S. Rd., Da-An District, Taipei City 106, Taiwan (R.O.C.)

Production Information

Subject is engaged in manufacturing of chemicals, etc.

Subject has factories in Taiwan for production.

Subject has obtained the certification of ISO9001 and CNS 12681.

Purchase Information

The registered activities of subject:

Business Code	Details
C801010	Basic chemical industry
C801110	Manufacturing of fertilizer
C802990	Manufacturing of Other Chemical Products
C802090	Manufacturing of Cleaning supplies
C802200	Manufacturing of Coatings, paints, dyes and pigments
F113010	Wholesales of Machinery
C701010	Printing Industry
C702010	Plate-making industry
G801010	Warehousing
F103010	Wholesales of feed
J101050	Environmental testing services industry
F107050	Wholesales of fertilizer
F107100	Wholesales of Basic chemical materials
F107070	Wholesales of Animal drugs
F107080	Wholesales of Environmental agents
F107110	Wholesales of Petrochemical feedstock
F111020	Wholesales of Cement and concrete products
C901050	Manufacturing of Cement and concrete products
F112020	Wholesales of Coal and coal products
F107130	Wholesales of synthetic resin
F115020	Wholesales of ore
F119010	Wholesales of Electronic Materials
F219010	Retailing of Electronic Materials
F102130	Wholesales of Condiment
F107010	Wholesales of paints, coatings
F107020	Wholesales of dyes, pigments
F107170	Wholesales of Industrial additives
F401010	International trade
F106010	Wholesales of Hardware
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

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

Subject also import some finished products for trading business.

Sales Information

Subject is engaged in sale of chemicals, etc.

The major products manufactured by the subject are granular potassium sulfate, powder potassium sulfate, liquid calcium chloride, hydrochloric acid, etc. and the trading products such as soda ash, sugar, sodium bicarbonate, sodium chloride (salt), mixed calcium phosphate, solid calcium chloride, ammonium bicarbonate, pearl luster pigment, etc.

Subject’s sales regions include domestic market, Japan, Korea, India, Southeast Asia, Australia, America, etc.

Subject’s major customers are manufacturers of chemical products, etc.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

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

Import

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

Sales

Domestic Markets

Product	Chemicals, etc.
Selling Terms	T/T, Cash, etc.

Export

Product	Chemicals, etc.
Selling Terms	L/C, T/T, etc.

Balance Sheet

Unit: NTD/000

Consolidated	2016-12-31	2015-12-31
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	627,585	660,663
Notes receivable, net
Notes receivable, net	174,498	137,060
Accounts receivable, net
Accounts receivable, net	492,334	538,766
Other receivables due from related parties
Other receivables due from related parties, net	675	0
Inventories
Total inventories	336,239	512,907
Other current assets
Other current financial assets	16,187	13,681
Other current assets, others	74,638	84,370
Total other current assets	90,825	98,051
Total current assets	1,722,156	1,947,447
Non-current assets
Non-current available-for-sale financial assets
Non-current available-for-sale financial assets, net	4,477	13,466
Non-current financial assets at cost
Non-current financial assets at cost, net	215,418	255,479
Investments accounted for using equity method
Investments accounted for using equity method, net	328,136	0
Property, plant and equipment
Total property, plant and equipment	5,891,353	5,487,866
Intangible assets
Total intangible assets	22,791	0
Deferred tax assets	2,153	5,362
Other non-current assets
Prepayments for business facilities	1,338,151	1,297,234
Guarantee deposits paid	8,444	10,512
Other non-current assets, others
Other non-current assets, others	2,201	1,387
Total other non-current assets, others	2,201	1,387
Total other non-current assets	1,348,796	1,309,133
Total non-current assets	7,813,124	7,071,306
Total assets	9,535,280	9,018,753
Liabilities and equity
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	684,875	480,375
Notes payable
Total notes payable	13,269	29,153
Accounts payable
Total accounts payable	282,006	333,879
Other payables
Total other payables	208,818	234,351
Current tax liabilities	24,579	112,884
Other current liabilities
Long-term liabilities, current portion
Long-term borrowings, current portion	288,800	293,994
Total long-term liabilities, current portion	288,800	293,994
Other current liabilities, others	42,633	30,626
Total other current liabilities	331,433	324,620
Total current liabilities	1,544,980	1,515,262
Non-current liabilities
Long-term borrowings
Total long-term borrowings	2,210,691	1,996,182
Deferred tax liabilities
Total deferred tax liabilities	416,898	445,786
Other non-current liabilities
Net defined benefit liability, non-current	17,151	16,264
Total other non-current liabilities	17,151	16,264
Total non-current liabilities	2,644,740	2,458,232
Total liabilities	4,189,720	3,973,494
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	1,918,551	1,827,191
Total capital stock	1,918,551	1,827,191
Capital surplus
Total capital surplus	10,789	10,798
Retained earnings
Legal reserve	797,391	752,119
Special reserve	132,006	132,062
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	2,338,701	2,003,634
Total retained earnings	3,268,098	2,887,815
Other equity interest
Exchange differences on translation of foreign financial statements
Total exchange differences on translation of foreign financial statements	143,331	189,668
Unrealized gains (losses) on available-for-sale financial assets
Total unrealized gains (losses) on available-for-sale financial assets	-1,855	424
Total other equity interest	141,476	190,092
Total equity attributable to owners of parent	5,338,914	4,915,896
Non-controlling interests	6,646	129,363
Total equity	5,345,560	5,045,259
Total liabilities and equity	9,535,280	9,018,753
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	2016	2015
Operating revenue
Net sales revenue
Sales revenue
Total sales revenue	4,114,685	4,594,088
Net sales revenue	4,114,685	4,594,088
Total operating revenue	4,114,685	4,594,088
Operating costs
Cost of sales
Cost of sales	2,874,499	3,118,333
Total cost of sales	2,874,499	3,118,333
Total operating costs	2,874,499	3,118,333
Gross profit (loss) from operations	1,240,186	1,475,755
Gross profit (loss) from operations	1,240,186	1,475,755
Operating expenses
Selling expenses
Total selling expenses	340,223	336,895
Administrative expenses
Total administrative expenses	238,343	202,738
Research and development expenses
Total research and development expenses	5,714	3,581
Total operating expenses	584,280	543,214
Net operating income (loss)	655,906	932,541
Non-operating income and expenses
Other income
Total other income	1,055	1,724
Other gains and losses
Other gains and losses, net	123,704	-283,147
Finance costs
Finance costs, net	58,861	40,697
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	735	0
Total non-operating income and expenses	66,633	-322,120
Profit (loss) from continuing operations before tax	722,539	610,421
Tax expense (income)
Total tax expense (income)	95,744	127,792
Profit (loss) from continuing operations	626,795	482,629
Profit (loss)	626,795	482,629
Other comprehensive income
Components of other comprehensive income that will not be reclassified to profit or loss
Gains (losses) on remeasurements of defined benefit plans	-9,137	-253
Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	0	0
Components of other comprehensive income that will not be reclassified to profit or loss	-9,137	-253
Components of other comprehensive income that will be reclassified to profit or loss
Exchange differences on translation	-50,062	89,587
Unrealised gains (losses) on valuation of available-for-sale financial assets	-2,279	400
Income tax related to components of other comprehensive income that will be reclassified to profit or loss	-3,725	5,841
Components of other comprehensive income that will be reclassified to profit or loss	-48,616	84,146
Other comprehensive income, net	-57,753	83,893
Total comprehensive income	569,042	566,522
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	572,140	452,715
Profit (loss), attributable to non-controlling interests	54,655	29,914
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	514,387	536,673
Comprehensive income, attributable to non-controlling interests	54,655	29,849
Basic earnings per share
Total basic earnings per share	2.98	2.36
Diluted earnings per share
Total diluted earnings per share	2.96	2.34

Cash Flows

Unit: NTD/000

Consolidated	2016	2015
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	722,539	610,421
Profit (loss) before tax	722,539	610,421
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	284,152	327,599
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	-108	-203
Interest expense	58,861	40,697
Interest income	-853	-1,299
Dividend income	-161	-425
Share-based payments	1,790	766
Share of loss (profit) of associates and joint ventures accounted for using equity method	-735	0
Loss (gain) on disposal of property, plan and equipment	7,929	6,322
Property, plan and equipment transferred to expenses	30,201	28,067
Loss (gain) on disposal of investments	-2,234	-34,088
Loss (gain) on disposal of investments accounted for using equity method	-278,274	0
Impairment loss on non-financial assets	171,418	332,777
Other adjustments to reconcile profit (loss)	10,267	6,816
Total adjustments to reconcile profit (loss)	282,253	707,029
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in notes receivable	-37,438	10,239
Decrease (increase) in accounts receivable	36,165	7,022
Decrease (increase) in other receivable due from related parties	-675	0
Decrease (increase) in inventories	175,359	25,095
Decrease (increase) in other current assets	9,732	-21,402
Decrease (increase) in other financial assets	-2,384	5,681
Total changes in operating assets	180,759	26,635
Changes in operating liabilities
Increase (decrease) in notes payable	-15,884	5,282
Increase (decrease) in accounts payable	-51,873	-65,444
Increase (decrease) in other payable	-21,726	29,210
Increase (decrease) in other current liabilities	12,007	-19,014
Increase (decrease) in net defined benefit liability	-8,161	-2,898
Total changes in operating liabilities	-85,637	-52,864
Total changes in operating assets and liabilities	95,122	-26,229
Total adjustments	377,375	680,800
Cash inflow (outflow) generated from operations	1,099,914	1,291,221
Interest received	853	1,529
Dividends received	39,729	425
Interest paid	-62,668	-39,670
Income taxes refund (paid)	-186,322	-185,561
Net cash flows from (used in) operating activities	891,506	1,067,944
Cash flows from (used in) investing activities
Acquisition of financial assets at fair value through profit or loss, designated as upon initial recognition	-5,000	-5,000
Proceeds from disposal of financial assets at fair value through profit or loss, designated as upon initial recognition	5,108	10,208
Acquisition of available-for-sale financial assets	0	-12,960
Proceeds from disposal of available-for-sale financial assets	8,849	0
Acquisition of financial assets at cost	0	0
Proceeds from disposal of financial assets at cost	0	36,811
Proceeds from capital reduction of financial assets at cost	4,965	8,205
Acquisition of investments accounted for using equity method	-250,116	0
Proceeds from disposal of investments accounted for using equity method	146,367	0
Acquisition of property, plant and equipment	-1,164,190	-867,268
Proceeds from disposal of property, plant and equipment	3,951	17,081
Increase in refundable deposits	0	-2,014
Decrease in refundable deposits	2,068	0
Increase in other non-current assets	-814	-275
Increase in prepayments for business facilities	-40,917	-443,002
Net cash flows from (used in) investing activities	-1,289,729	-1,258,214
Cash flows from (used in) financing activities
Increase in short-term loans	204,500	0
Decrease in short-term loans	0	-111,480
Proceeds from long-term debt	588,575	502,887
Repayments of long-term debt	-338,637	-288,360
Cash dividends paid	-91,360	-261,027
Change in non-controlling interests	27,019	-4,231
Other financing activities	-942	0
Net cash flows from (used in) financing activities	389,155	-162,211
Effect of exchange rate changes on cash and cash equivalents	-24,010	6,948
Net increase (decrease) in cash and cash equivalents	-33,078	-345,533
Cash and cash equivalents at beginning of period	660,663	1,006,196
Cash and cash equivalents at end of period	627,585	660,663
Cash and cash equivalents reported in the statement of financial position	627,585	660,663

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	INR 64.94
UK Pound	1	INR 91.75
Euro	1	INR 79.90
TWD	1	INR 2.23

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	TPT

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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