MIRA INFORM REPORT

Report No. :	509524
Report Date :	29.05.2018

IDENTIFICATION DETAILS

Name :	ADDA CORP.
Registered Office :	No.6, East Section, Industry 6 Road, Pingtung City, Pingtung County 900, Taiwan, R.O.C.
Country :	Taiwan
Financials (as on) :	31.12.2017
Date of Incorporation :	19.07.1978
Com. Reg. No.:	90724033
Legal Form :	Joint Stock Company
Line of Business :	Manufacturing and Sale of Blower Fans, etc.
No. of Employees :	About 200

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 :	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:	ADDA CORP.
Supplied Name:	ADDA CORPORATION
Trading Address:	No.6, East Section, Industry 6 Road, Pingtung City, Pingtung County 900, Taiwan, R.O.C.
Supplied Address:	No. 6 East Section, Industry 6 Road, Ping Tung City
Telephone Number:	+886-8-755-0579
Fax Number:	+886-8-753-2815
E-mail:	adda@adda.com.tw
Website:	www.adda.com.tw

Notes: The exact name and address are as above.

Company Identification Details

Registered Name:	ADDA Corp.
Registered Address:	No.6, East Section, Industry 6 Road, Pingtung City, Pingtung County 900, Taiwan, R.O.C.
Date of Foundation:	1978-7-19
Registration Number:	90724033
Registry:	Department of Commerce, Ministry of Economic Affairs, R.O.C.
Registered Capital:	NTD 2,400,000,000 (USD 79,200,000) (As of 2018.5, 1 NTD = 0.033 USD)
Paid-up Capital:	NTD 1,200,000,000 (USD 39,600,000)
Legal Representatives:	Ruiyi Huang
Legal Form:	Joint Stock Company
Principal Activities:	Manufacturing and sale of blower fans, etc.
Staff:	About 200 Employees
Listed at Stock Exchange:	Yes; Stock Code: 3071
Date of Last Annual Return:	2017-10-5

Note: Subject declined to disclose the number of staff, and the above staff number is public files.

History

Subject was incorporated on 1978-7-19 with registered number 90724033 as Joint Stock Company in Taiwan.

Subject listed on Taiwan Over-The-Counter Securities Exchange on 2004-12-30.

Corporate Structure

Factory

Address:	No.6, East Section, Industry 6 Road, Pingtung City, Pingtung County 900, Taiwan, R.O.C.
Date of Foundation:	1985-12-12
Date of Registration:	1987-1-26
Factory Registration Number:	99665923
Factory Manager:	Zhenghong Cai
Status:	In Production
Date of Last Annual Return:	2016-7-5
Major Products:	264 Photoelectric materials and components 269 Other IC components 313 Bicycle and its components

Related Companies

1
Name	ADDA Gao Jing Electrical (ShenZhen) Co. Ltd
Address:	Ninety-Eight lndustrial City, Wanfeng Shajing, Baoan District, Shenzhen, China
Tel:	+86-755-29851308
Fax:	+86-755-29851108
2
Name	ADDA Zeng Da Electrical (Hui Zhou) Co. Ltd
Address:	Shangnan Industrial Park, Yuanzhou Rosd,Yuanzhod Town,Boluo County,Huizhou City,Guangdong,China.
Tel:	+86-752-6681279
Fax:	+86-752-6683768
3
Name	ADDA Electric Machinery Technology (Kun Shan) Co., Ltd.
Address:	No.88 Jiangfeng Road, Zhang-Pu Town, KunShan City, JiangSu Province, China
Tel:	+86-512-57451127
Fax:	+86-512-57451146
4
Name	ADDA USA, Inc.
Address:	1502 West Yale Ave, Orange, Ca 92867, USA
Tel:	+1-714-674-7920
Fax:	+1-714-257-7486
Email:	sales@addausa.com

Offices

1
Name	Group Administration & Fan International Sales Office
Address	35F, No.38, Singuang Road, Ling Ya District, Kaohsiung City, Taiwan(R.O.C)
Tel	+886-7-269-5166
Fax	+886-7-269-5366
2
Name	Taipei Fan Domestic Sales Office
Address	9FL-6, No.81,Sec.1, Hsin-Tai 5th Road , Sijhih District, New Taipei City, Taiwan (R.O.C)
Tel	+886-2-2698-0277
Fax	+886-2-2698-0295
3
Name	Taipei Thermal Department
Address	16F-3, No.77, Sec.1, Hsin-Tai 5th Road, Sijhih District, New Taipei City, Taiwan (R.O.C)
Tel	+886-2-8698-4160
Fax	+886-2-8698-4222

Shareholders

Major Shareholders

Name	Subscription Shares
Kang Xun Co., Ltd. (Literal Translation)
23,660,278
Jiatai Investment and Development Co., Ltd. (Literal Translation)	19,289,698
Shihong Liu	410,768
Yufang Zhan	318,756

Shareholders Information:

1
Registered Name:	Kang Xun Co., Ltd. (Literal Translation)
Registered Address:	1/F, No.20, Ln.21, Bade Rd., Douliu City, Yunlin County, Taiwan
Date of Foundation:	2008-2-27
Registration Number:	28933209
Registry:	MOEA Central Office
Registered Capital:	NTD 60,000,000
Paid-up Capital:	NTD 60,000,000
Legal Representatives:	Ruiyi Huang
Legal Form:	Joint Stock Company
Date of Last Annual Return:	2016-9-2
2
Registered Name:	Jiatai Investment and Development Co., Ltd. (Literal Translation)
Registered Address:	19/F-2, No.89, Sec.2, Changsha Str., Wanhua Dist., Taipei, Taiwan
Date of Foundation:	2016-6-14
Registration Number:	43902628
Registry:	Taipei City Government
Registered Capital:	NTD 29,600,000
Paid-up Capital:	NTD 29,600,000
Legal Representatives:	Caiyun Huang
Legal Form:	Joint Stock Company
Date of Last Annual Return:	--

Management Information

Core Management

Directors

1
Name		Ruiyi Huang
Position		Chairman of the Board
2
Name	Songtian Guan
Position		Director
3
Name	Zhenghong Cai
Position		Director
4
Name	Mingxiong Liu
Position		Director
5
Name	Zongwen Zhang
Position		Director
6
Name	Mingyang Lai
Position		Independent Director
7
Name	Jiaxin Xu
Position		Independent Director
8
Name	Shihong Liu
Position		Supervisor
9
Name	Yufang Zhan
Position		Supervisor
10
Name		Zhaoxiong Lin
Position		Manager
Date of Appointment		2014-1-1

Personnel Structure

Total Employees

About 200 Employees

Operation Information

Offices & Factories

	Headquarters
Add	No.6, East Section, Industry 6 Road, Pingtung City, Pingtung County 900, Taiwan, R.O.C.

Production Information

Subject is engaged in manufacturing of blower fans, etc.

Subject has a factory in Taiwan and related factories in the mainland of China for production.

Subject obtained the certifications of ISO 9001, ISO 9002, and ISO 14001:2004, ISO/TS 16949.

Purchase Information

The registered activities of subject:

Business Code	Details
C805030	Manufacturing of plastic daily necessities
C805050	Manufacturing of industrial plastic products
C805990	Manufacturing of other plastic products
CC01010	Manufacturing of power generation, transmission and distribution machinery
CC01030	Manufacturing of electrical equipment and audio-visual electronic products
CC01040	Manufacturing of lighting equipment
CC01060	Manufacturing of wire communication machinery
CC01110	Manufacturing of computer and office equipment
CC01990	Manufacturing of other electrical machine and electronic machinery
CE01030	Manufacturing of optical instrument
CQ01010	Manufacturing of mould
F113020	Wholesale of electrical equipment
F113070	Wholesale of telecommunications equipment
F213010	Retail of electrical equipment
F213060	Retail of telecommunications equipment
ZZ99999	Besides licensed business, all other business items those are not banned or restricted.

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

Sales Information

Subject is engaged in sale of blower fans, etc.

The major products include AC fan, DC fan, waterproof fan, blower, thermal module, etc.

The products are applied for electronic products, automobile, machinery equipment, etc.

Subject’s sales regions are domestic market, Southeast Asia, Northeast Asia, Middle East, America, Europe, Africa, etc.

It is introduced that subject’s customers include Qualtek Electronics Corporation, Schneider Electric IT Corporation, Jaro Thermal Inc., etc.

Import and export right:

Import right	Yes
Export right	Yes

Settlements

Purchase

Domestic Purchase

Products	Components and raw materials, etc.
Payment Terms	T/T, Cash, etc.

Import

Products	Components and raw materials, etc.
Payment Terms	L/C, T/T, etc.

Sales

Domestic Markets

Product	Blower fans, etc.
Selling Terms	T/T, Cash, etc.

Export

Product	Blower fans, 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	838,449	836,268
Notes receivable, net
Notes receivable, net	156,582	120,093
Accounts receivable, net
Accounts receivable, net	561,263	564,595
Other receivables
Other receivables, net	4,601	9,418
Current tax assets
Total current tax assets	8,482	10,276
Inventories
Total inventories	254,955	261,309
Prepayments
Total prepayments	67,294	68,360
Other current assets
Total other current assets	19,434	8,043
Total current assets	1,911,060	1,878,362
Non-current assets
Non-current financial assets at cost
Non-current financial assets at cost, net	3,058	3,058
Property, plant and equipment
Total property, plant and equipment	385,825	485,482
Investment property, net
Investment property, net	92,647	0
Intangible assets
Total intangible assets	11,553	17,123
Deferred tax assets	25,315	29,031
Other non-current assets
Total other non-current assets	43,517	40,492
Total non-current assets	561,915	575,186
Total assets	2,472,975	2,453,548
Liabilities and equity
Liabilities
Current liabilities
Short-term borrowings
Total short-term borrowings	242,659	282,926
Accounts payable
Total accounts payable	383,726	372,591
Accounts payable to related parties
Total accounts payable to related parties	0	8,308
Other payables
Total other payables	333,250	227,265
Other payables to related parties	1,382	132
Current tax liabilities	41,627	21,083
Other current liabilities
Other current liabilities, others	34,689	41,381
Total other current liabilities	34,689	41,381
Total current liabilities	1,037,333	953,686
Non-current liabilities
Deferred tax liabilities
Total deferred tax liabilities	4,742	5,139
Other non-current liabilities
Net defined benefit liability, non-current	6,144	3,857
Guarantee deposits received	2,815	1,742
Total other non-current liabilities	8,959	5,599
Total non-current liabilities	13,701	10,738
Total liabilities	1,051,034	964,424
Equity
Equity attributable to owners of parent
Share capital
Ordinary share	1,200,000	1,460,679
Total capital stock	1,200,000	1,460,679
Capital surplus
Total capital surplus	33,039	33,039
Retained earnings
Legal reserve	8,355	8,355
Special reserve	72,974	72,974
Unappropriated retained earnings (accumulated deficit)
Total unappropriated retained earnings (accumulated deficit)	159,843	-49,212
Total retained earnings	241,172	32,117
Other equity interest
Other equity, others
Total other equity, others	-52,270	-36,711
Total other equity interest	-52,270	-36,711
Total equity attributable to owners of parent	1,421,941	1,489,124
Non-controlling interests	0	0
Total equity	1,421,941	1,489,124
Total liabilities and equity	2,472,975	2,453,548
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	2017	2016
Operating revenue
Net sales revenue
Net sales revenue	2,267,832	2,240,802
Total operating revenue	2,267,832	2,240,802
Operating costs
Total operating costs	1,634,712	1,719,141
Gross profit (loss) from operations	633,120	521,661
Gross profit (loss) from operations	633,120	521,661
Operating expenses
Selling expenses
Total selling expenses	144,955	161,818
Administrative expenses
Total administrative expenses	200,189	189,206
Research and development expenses
Total research and development expenses	83,192	83,346
Total operating expenses	428,336	434,370
Net operating income (loss)	204,784	87,291
Non-operating income and expenses
Other income
Total other income	50,093	27,471
Other gains and losses
Other gains and losses, net	-55,736	-11,263
Finance costs
Finance costs, net	4,701	5,090
Total non-operating income and expenses	-10,344	11,118
Profit (loss) from continuing operations before tax	194,440	98,409
Tax expense (income)
Total tax expense (income)	31,904	11,642
Profit (loss) from continuing operations	162,536	86,767
Profit (loss) from discontinued operations
Total profit (loss) from discontinued operations	0	0
Profit (loss)	162,536	86,767
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	-2,693	-251
Components of other comprehensive income that will not be reclassified to profit or loss	-2,693	-251
Components of other comprehensive income that will be reclassified to profit or loss
Exchange differences on translation	-18,746	-102,534
Income tax related to components of other comprehensive income that will be reclassified to profit or loss	-3,187	-17,431
Components of other comprehensive income that will be reclassified to profit or loss	-15,559	-85,103
Other comprehensive income, net	-18,252	-85,354
Total comprehensive income	144,284	1,413
Profit (loss), attributable to:
Profit (loss), attributable to owners of parent	162,536	86,767
Profit (loss), attributable to non-controlling interests	0	0
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent	144,284	1,413
Comprehensive income, attributable to non-controlling interests	0	0
Basic earnings per share
Total basic earnings per share	1.20	0.59
Diluted earnings per share
Total diluted earnings per share	1.20	0.59

Cash Flows

Unit: NTD/000

Consolidated	2017	2016
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	194,440	98,409
Profit (loss) before tax	194,440	98,409
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	72,294	82,181
Amortization expense	8,260	10,431
Provision (reversal of provision) for bad debt expense	-293	-340
Interest expense	4,701	5,090
Interest income	-9,449	-7,645
Loss (gain) on disposal of property, plan and equipment	244	3,379
Total adjustments to reconcile profit (loss)	75,757	93,096
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in derivative financial assets for hedging	0	0
Decrease (increase) in notes receivable	-36,489	-70,981
Decrease (increase) in accounts receivable	3,666	98,395
Decrease (increase) in other receivable	4,833	575
Decrease (increase) in inventories	6,918	57,098
Decrease (increase) in prepayments	-2,520	-1,519
Decrease (increase) in other current assets	548	-5,877
Total changes in operating assets	-23,044	77,691
Changes in operating liabilities
Increase (decrease) in accounts payable	11,135	-64,060
Increase (decrease) in accounts payable to related parties	-8,308	-2,758
Increase (decrease) in other payable	106,151	58,173
Increase (decrease) in other payable to related parties	1,250	0
Increase (decrease) in other current liabilities	-6,692	18,108
Increase (decrease) in net defined benefit liability	-406	-426
Total changes in operating liabilities	103,130	9,037
Total changes in operating assets and liabilities	80,086	86,728
Total adjustments	155,843	179,824
Cash inflow (outflow) generated from operations	350,283	278,233
Interest received	9,433	7,914
Income taxes refund (paid)	-6,247	-24,537
Net cash flows from (used in) operating activities	353,469	261,610
Cash flows from (used in) investing activities
Acquisition of property, plant and equipment	-77,188	-82,695
Proceeds from disposal of property, plant and equipment	8,042	5,048
Acquisition of intangible assets	-1,945	-5,130
Increase in other financial assets	-11,939	0
Decrease in other financial assets	0	40,248
Increase in other non-current assets	-3,025	0
Decrease in other non-current assets	0	5,133
Net cash flows from (used in) investing activities	-86,055	-37,396
Cash flows from (used in) financing activities
Decrease in short-term loans	-40,267	-55,286
Increase in guarantee deposits received	1,073	1,422
Capital reduction payments to shareholders	-211,467	0
Interest paid	-4,867	-4,876
Net cash flows from (used in) financing activities	-255,528	-58,740
Effect of exchange rate changes on cash and cash equivalents	-9,705	-58,842
Net increase (decrease) in cash and cash equivalents	2,181	106,632
Cash and cash equivalents at beginning of period	836,268	729,636
Cash and cash equivalents at end of period	838,449	836,268
Cash and cash equivalents reported in the statement of financial position	838,449	836,268

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

Name	Bank of Taiwan

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

Department

Business Department

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 67.44
UK Pound	1	INR 89.89
Euro	1	INR 79.00
TWD	1	INR 2.26

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)

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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.