MIRA INFORM REPORT

Report No. :	500141
Report Date :	31.03.2018

IDENTIFICATION DETAILS

Name :	TSEC CORPORATION
Registered Office :	8F., No.225, Sec. 3, Beixin Rd., Xindian Dist., New Taipei City 23143, Taiwan (R.O.C.)
Country :	Taiwan
Financials (as on) :	31.12.2017
Date of Incorporation :	24.06.2010
Com. Reg. No.:	28997300
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and Sales of Solar Cell, etc.
No. of Employees :	About 1,102

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	Acceptable Risk	Business dealings permissible with moderate risk of default

Status :	Satisfactory
Payment Behaviour :	Slow but correct
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:	TSEC CORPORATION
Supplied Name:	TSEC CORPORATION
Trading Address:	8F., No.225, Sec. 3, Beixin Rd., Xindian Dist., New Taipei City 23143, Taiwan (R.O.C.)
Supplied Address:	8F, NO. 225, SEC 3, BEIXIN RD, XINDIAN DIST., NEW TAIPEI CITY 231
Telephone Number:	+886-2-2912-2199
Fax Number:	+886-2-2917-5399

Company Identification Details

Registered Name:	TSEC Corporation
Registered Address:	8F., No.225, Sec. 3, Beixin Rd., Xindian Dist., New Taipei City 23143, Taiwan (R.O.C.)
Date of Foundation:	2010-06-24
Registration Number:	28997300
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 5,000,000,000 (USD 170,000,000) (As of 2018.3, 1 NTD = 0.034 USD)
Paid-up Capital:	NTD 4,768,550,000 (USD 162,130,700)
Legal Representatives:	Guorong Liao
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sales of solar cell, etc.
Staff:	About 1,102 Employees (As of 2017.04.30)
Listed at Stock Exchange:	Yes; Stock Code: 6443
Date of Last Annual Return:	2017-12-18

History

Subject was incorporated on 2010-06-24 with registered number 28997300 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Stock Exchange on 2015-10-01.

Corporate Structure

Factory

Name:	Hsinchu Factory
Address:	No. 85 and No. 87, North Guangfu Road, Hukou Hsiang, Hsinchu County, Hsinchu City, Taiwan
Date of Registration:	2011-08-18
Factory Registration Number:	04000087
Factory Manager:	Guorong Liao
Status:	In Production
Date of Last Annual Return:	2011-08-18
Major Products:	264 Optical material and parts

Related Company

Name:	TSEC AMERICA INC.
Address:	1235 N Harbor Blvd Ste 240 Fullerton, CA 92832, United States.
Tel:	+1-714-449-0966

Oversea Office

Address:	279, Srinakarin Rd., Nong Bon, Prawet, Bangkok 10250 Thailand
Tel:	+66-2747-3999

Offices

1
Address:	No. 85, North Guangfu Road, Hukou Hsiang, Hsinchu County, Hsinchu City, Taiwan
Tel:	+886-3-696-0707
2
Address:	3B, 9/F., No. 37, Huashan Road, Zhanghua Dist., Zhanghua City, Taiwan
Tel:	+886-4-726-5085
3
Address:	No. 166, Guosheng St., Yongkang Dist., Tainan City, Taiwan
Tel:	+886-6-253-1780
4
Address:	1/F., No. 102, North Zhanqian Rd., Zuoying Dist., Kaohsiung City, Taiwan
Tel:	+886-7-581-1058

Shareholders

Major Shareholders

Name	Subscription Shares
Weiren Investment Co., Ltd. (Literal translation)
15,000,528
Anchuan Industrial Co. Ltd. (Literal translation)	65,450
Baichuan International Investment Co., Ltd. (Literal translation)	4,818,600
Yuanxiong International Investment Co., Ltd. (Literal translation)	11,187,088
Chengxi Investment Co., Ltd. (Literal translation)	4,265,000
Jiaen Wu	18,837
Chenxing Lin	1,618,600
Longchun Lin	5,137,000
Fuxing Investment Co., Ltd. (Literal translation)	2,266,974

Management Information

Core Management

Directors

1
Name		Guorong Liao
Position		Board Chairman
2
Name	Weiran Liao
Position		Director
3
Name	Guanbai Chen
Position		Director
4
Name	Zhihong Huang
Position		Director
5
Name	Ziqiang Xu
Position		Director
6
Name	Zhengji Xu
Position		Director
7
Name	Jiaen Wu
Position		Independent Director
8
Name	Huaide Jiang
Position		Independent Director
9
Name	Chenxing Lin
Position		Supervisor
10
Name	Longchun Lin
Position		Supervisor
Name	Sanqian Tu
Position		Supervisor

Personnel Structure

Total Employees

About 1,102 Employees (As of 2017.04.30)

Operation Information

Offices & Factories

	Headquarters
Add	8F., No.225, Sec. 3, Beixin Rd., Xindian Dist., New Taipei City 23143, Taiwan (R.O.C.)

Production Information

Subject is engaged in manufacturing of solar cell, etc.

Subject has a factory in Taiwan for production.

Subject obtained the certification of MCS and JET, etc.

Purchase Information

The registered activities of subject:

Business Code	Details
I501010	Products design
IG03010	Energy technology service
F106030	Mold wholesale
F113110	Battery wholesale
F119010	Electronic materials wholesale
F113010	Machinery wholesale
F113020	Electrical appliance wholesale
F113030	Precision instrument wholesale
F113990	Other machinery instrument wholesale
F118010	Information software wholesale
CC01080	Electronic components manufacturing
CC01090	Battery manufacturing
CC01990	Other electrical machinery manufacturing
CQ01010	Mold manufacturing
D401010	Thermal energy supply
E601010	Electrical appliance installation
ZZ99999	Besides licensed business, all other business items those are not banned or restricted

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

Sales Information

Subject is engaged in sales of solar cell, etc.

The major products V-Cell Mono Series, V-Cell Multi Series, E-Cell Mono Series, E-Cell Multi Series, etc.

Subject can also provide the installation service for customers in Taiwan.

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

Subject’s major partners are SEKINO Corporation and SPOWER Corporation, etc.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

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

Import

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

Sales

Domestic Markets

Product	Solar cell, etc.
Selling Terms	T/T, Cash, etc.

Export

Product	Solar cell, etc.
Selling Terms	L/C, T/T, etc.

Balance Sheet

Unit: NTD/000

Consolidated	2017-12-31	2016-12-31
Assets
Current assets
Cash and cash equivalents
Total cash and cash equivalents	1,012,237	1,095,642
Current financial assets at fair value through profit or loss
Total current financial assets at fair value through profit or loss	10,023	0
Accounts receivable, net
Accounts receivable	351,562	198,279
Lease payments receivable	1,917	1,807
Accounts receivable, net	353,479	200,086
Accounts receivable due from related parties, net
Accounts receivable due from related parties, net	0	12,596
Other receivables
Other receivables, net	56,060	70,565
Current tax assets
Total current tax assets	168	136
Inventories
Total inventories	751,309	829,251
Other current assets
Total other current assets	66,440	103,382
Total current assets	2,249,716	2,311,658
Non-current assets
Non-current financial assets at cost
Non-current financial assets at cost, net	9,744	9,744
Investments accounted for using equity method
Investments accounted for using equity method, net	0	7,294
Property, plant and equipment
Total property, plant and equipment	7,215,628	5,863,002
Intangible assets
Total intangible assets	8,339	13,385
Deferred tax assets	155,338	155,516
Other non-current assets
Other non-current assets, others
Total other non-current assets, others	631,434	935,860
Total other non-current assets	631,434	935,860
Total non-current assets	8,020,483	6,984,801
Total assets	10,270,199	9,296,459
Liabilities and equity
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	1,253,129	1,217,218
Short-term notes and bills payable
Total short-term notes and bills payable	58,134	29,800
Notes payable
Total notes payable	2,116	3,904
Accounts payable
Total accounts payable	696,563	708,223
Other payables
Total other payables	321,570	276,804
Current tax liabilities	519	198
Other current liabilities
Long-term liabilities, current portion
Total long-term liabilities, current portion	899,733	463,354
Other current liabilities, others	26,729	36,153
Total other current liabilities	926,462	499,507
Total current liabilities	3,258,493	2,735,654
Non-current liabilities
Long-term borrowings
Total long-term borrowings	2,683,116	1,886,212
Non-current provisions
Total non-current provisions	1,901	911
Deferred tax liabilities
Total deferred tax liabilities	11,835	3,835
Total non-current liabilities	2,696,852	1,890,958
Total liabilities	5,955,345	4,626,612
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	4,768,550	4,268,550
Total capital stock	4,768,550	4,268,550
Capital surplus
Total capital surplus	332,452	302,152
Retained earnings
Legal reserve	78	0
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	-950,261	783
Total retained earnings	-950,183	783
Other equity interest
Total other equity interest	29	797
Total equity attributable to owners of parent	4,150,848	4,572,282
Non-controlling interests	164,006	97,565
Total equity	4,314,854	4,669,847
Total liabilities and equity	10,270,199	9,296,459

Profit and Loss Account

Unit: NTD/000

Consolidated	2017	2016
Operating revenue
Total operating revenue	6,635,957	7,754,501
Operating costs
Total operating costs	6,818,314	7,283,424
Gross profit (loss) from operations	-182,357	471,077
Unrealized profit (loss) from sales	0	-43
Realized profit (loss) on from sales	-43	-100
Gross profit (loss) from operations	-182,400	471,020
Operating expenses
Selling expenses
Total selling expenses	164,623	95,830
Administrative expenses
Total administrative expenses	168,411	174,946
Research and development expenses
Total research and development expenses	91,082	75,311
Total operating expenses	424,116	346,087
Net other income (expenses)
Net other income (expenses)	-216,981	-183
Net operating income (loss)	-823,497	124,750
Non-operating income and expenses
Other income
Interest income
Total interest income	1,783	1,608
Rent income	0	8
Other income, others	4,669	1,637
Total other income	6,452	3,253
Other gains and losses
Foreign exchange gains	34,421	14,951
Gains on financial assets (liabilities) at fair value through profit or loss	461	134
Miscellaneous disbursements	27	238
Impairment loss
Impairment loss on financial assets	0	12,831
Other impairment loss	3,981	0
Total impairment loss	3,981	12,831
Other gains and losses, net	30,874	2,016
Finance costs
Finance costs, net	142,025	109,703
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	-3,503	-2,792
Total non-operating income and expenses	-108,202	-107,226
Profit (loss) from continuing operations before tax	-931,699	17,524
Tax expense (income)
Total tax expense (income)	8,842	-224
Profit (loss) from continuing operations	-940,541	17,748
Profit (loss)	-940,541	17,748
Other comprehensive income
Components of other comprehensive income that will be reclassified to profit or loss
Exchange differences on translation	-1,158	-123
Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss
Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss	233	-437
Income tax related to components of other comprehensive income that will be reclassified to profit or loss	-157	-95
Components of other comprehensive income that will be reclassified to profit or loss	-768	-465
Other comprehensive income, net	-768	-465
Total comprehensive income	-941,309	17,283
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	-950,966	12,922
Profit (loss), attributable to non-controlling interests	10,425	4,826
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	-951,734	12,457
Comprehensive income, attributable to non-controlling interests	10,425	4,826
Basic earnings per share
Basic earnings (loss) per share from continuing operations	-2.20	0.03
Total basic earnings per share	-2.20	0.03
Diluted earnings per share
Diluted earnings (loss) per share from continuing operations	-2.20	0.03
Total diluted earnings per share	-2.20	0.03

Cash Flows

Unit: NTD/000

Consolidated	2017	2016
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	-931,699	17,524
Profit (loss) before tax	-931,699	17,524
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	703,998	587,854
Amortization expense	7,492	5,949
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	-461	-134
Interest expense	142,025	109,703
Interest income	-1,783	-1,608
Share-based payments	5,300	9,000
Share of loss (profit) of associates and joint ventures accounted for using equity method	3,503	2,792
Loss (gain) on disposal of property, plant and equipment	0	183
Impairment loss on financial assets	0	12,831
Impairment loss on non-financial assets	220,962	0
Unrealized profit (loss) from sales	0	-43
Realized loss (profit) on from sales	43	100
Unrealized foreign exchange loss (gain)	24,331	25,100
Total adjustments to reconcile profit (loss)	1,105,410	751,727
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in financial assets held for trading	-9,562	134
Decrease (increase) in accounts receivable	-156,490	95,578
Decrease (increase) in accounts receivable due from related parties	12,445	-9,207
Decrease (increase) in construction contracts receivable	1,794	-530
Decrease (increase) in other receivable	14,402	-5,184
Decrease (increase) in inventories	77,346	-51,166
Decrease (increase) in other current assets	44,506	-85,512
Total changes in operating assets	-15,559	-55,887
Changes in operating liabilities
Increase (decrease) in notes payable	-1,788	-9,410
Increase (decrease) in accounts payable	-7,673	-173,481
Increase (decrease) in other payable	34,547	1,999
Increase (decrease) in provisions	990	0
Increase (decrease) in other current liabilities	-9,398	25,055
Total changes in operating liabilities	16,678	-155,837
Total changes in operating assets and liabilities	1,119	-211,724
Total adjustments	1,106,529	540,003
Cash inflow (outflow) generated from operations	174,830	557,527
Interest received	1,783	1,608
Interest paid	-146,524	-104,370
Income taxes refund (paid)	-115	-154
Net cash flows from (used in) operating activities	29,974	454,611
Cash flows from (used in) investing activities
Acquisition of property, plant and equipment	-1,856,582	-1,975,795
Increase in refundable deposits	-8,202	-14,940
Acquisition of intangible assets	-2,446	-7,681
Increase in other non-current assets	-14,460	0
Decrease in other non-current assets	0	5,031
Increase in prepayments for business facilities	-82,820	0
Net cash flows from (used in) investing activities	-1,964,510	-1,993,385
Cash flows from (used in) financing activities
Increase in short-term loans	47,433	704,347
Increase in short-term notes and bills payable	28,500	30,000
Proceeds from long-term debt	1,871,078	779,884
Repayments of long-term debt	-637,795	-576,569
Proceeds from issuing shares	525,000	900,000
Change in non-controlling interests	56,016	14,136
Net cash flows from (used in) financing activities	1,890,232	1,851,798
Effect of exchange rate changes on cash and cash equivalents	-39,101	-15,749
Net increase (decrease) in cash and cash equivalents	-83,405	297,275
Cash and cash equivalents at beginning of period	1,095,642	798,367
Cash and cash equivalents at end of period	1,012,237	1,095,642
Cash and cash equivalents reported in the statement of financial position	1,012,237	1,095,642

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.

Banker

Name	Chang Hwa Commercial Bank, Ltd.

Public Record

Mortgage

1
Case Type:	Chattel Mortgage
Registered Number:	044336
Debtor Name:	TSEC Corporation
Registry:	MOEA Central Office
Name of Mortgagee:	IBT Leasing Co., Ltd.
Date of Registration:	2018-01-30
Amount of Secure Claims:	NTD 30,720,000
Type of Mortgage:	Machinery equipment or tool
2
Case Type:	Chattel Mortgage
Registered Number:	043956
Debtor Name:	TSEC Corporation
Registry:	MOEA Central Office
Name of Mortgagee:	Jih Sun International Leasing & Finance Co., Ltd.
Date of Registration:	2017-08-16
Amount of Secure Claims:	NTD 85,680,000
Type of Mortgage:	Machinery equipment or tool
3
Case Type:	Chattel Mortgage
Registered Number:	043846
Debtor Name:	TSEC Corporation
Registry:	MOEA Central Office
Name of Mortgagee:	ORIX Taiwan Corporation
Date of Registration:	2017-07-03
Amount of Secure Claims:	NTD 41,796,000
Type of Mortgage:	Machinery equipment or tool
4
Case Type:	Chattel Mortgage
Registered Number:	043834
Debtor Name:	TSEC Corporation
Registry:	MOEA Central Office
Name of Mortgagee:	Co-operative Assets Management Co., Ltd.
Date of Registration:	2017-07-03
Amount of Secure Claims:	NTD 104,400,000
Type of Mortgage:	Machinery equipment or tool
5
Case Type:	Chattel Mortgage
Registered Number:	043767
Debtor Name:	TSEC Corporation
Registry:	MOEA Central Office
Name of Mortgagee:	Yiho International Co., Ltd.
Date of Registration:	2017-05-19
Amount of Secure Claims:	NTD 60,000,000
Type of Mortgage:	Machinery equipment or tool

Crediteyes Note: There are 19 mortgage records from local registry of the subject, and we supply the above 5 records for reference.

Lawsuit

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

Special Note

Interview Details

Name	Mr. Lu
Department	Sales Department
E-mail	Jackson.lu@tsecpv.com

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 65.04
UK Pound	1	INR 92.28
Euro	1	INR 80.62
TWD	1	INR 2.25

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

INFORMATION DETAILS

Analysis Done by :	NIS
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.