China Credit Information Service, Ltd

CHINA CREDIT INFORMATION SERVICE, LTD.

IN-DEPTH REPORT

BASIC INFORMATION

CREDIT GRADE

FACTORY OR BRANCH OFFICE:

Actual Operating Office & Hsichih Factory

Address: No. 5000, Chung Hua Rd., Hsichih City, Taipei Hsien

Reg. No: 99-000000-00

Tel: 02-12345678

Fax: 02-87654321

Tatung Factory

Address: No. 352, 354, Sec. 1, Ta Tung Rd., Hsichih City, Taipei Hsien

Reg. No: 99-000000-01

Tel: 02-12345679

MAJOR AFFILIATE(S):

Name: Cybersys Technology Inc.

Person-in-charge: Chang San

Major business activities: Investment holding

Name: Formosa Holding Limited

Person-in-charge: Chang San

Major business activities: Investment holding

Name: Lian Ting Investment Co., Ltd.

Reg. No: 0001111

Person-in-charge: Wang Wu

Major business activities: Investment and re-investment

HISTORY:

Originally established as Chinese Technology Ltd., in Aug. 1986, Subject came to assume its present name and form in Dec. 1999.

SIGNIFICANT HISTROICAL AFFAIRS:

BUSINESS ACTIVITIES AT PRESENT (RANKING BY SALES REVENUE OF PRODUCT):

1.  Manufacture & sale of LCD

2.  Other electronic information products

3.  Manufacture & sale of VGA Card

VARIATION OF CAPITAL: (NT$1,000)

Established with an initial registered capital of NT$5,000, paid up fully to NT$5,000.

In Mar. 1999 changed to NT$10,000, paid up fully to NT$10,000.

In Jul. 1999 changed to NT$30,000, paid up fully to NT$30,000.

In Jun. 2000 changed to NT$60,000, paid up fully to NT$60,000.

In Dec. 2000 changed to NT$300,000, paid up partly to NT$149,194.

In Jul. 2001 changed to NT$300,000, paid up partly to NT$212,356.

In Mar. 2002 changed to NT$300,000, paid up partly to NT$270,356.

In Sep. 2002 changed to NT$600,000, paid up partly to NT$356,900.

In Nov. 2002 changed to NT$600,000, paid up partly to NT$400,000.

SHAREHOLDERS STRUCTURE:

Subject is

OTC Enterprise (No. 12345)

MAJOR SHAREHOLDERS

Total Number of Shareholders is 11.

Board of Directors

MANAGEMENT:

Founder –

Chang San

Chairman-cum-General Manager -

Name: Mr. Chang San (a.k.a. Chang Three)

Birthday: Nov. 1, 1961

Birth Place: Hualian Hsien, Taiwan

ID Number: U111111100

Address: No. 1000, Chung Hua Rd., Hsichih City, Taipei Hsien

Academic Qualifications: A university graduate

Working Experience(s):

Relationship with founder:

Himself

Participates in operation: Yes

Note: the above information on management is provided by subject’s spokesman.

PREMISES:

Office & Hsichih Factory – Company-owned land space of 251.86 square meters. Mortgaged: Yes

Company-owned floor space of 1,546.22 square meters. Mortgaged: Yes

Tatung Factory – Company-owned land space of 237.86 square meters. Mortgaged: Yes

Company-owned floor space of 1,464.24 square meters. Mortgaged: Yes

Note: Information provided from public data. Ownership status of the premises has not been verified and should conform to the official record(s) registered at local land administration authority.

MAJOR PRODUCTION FACILITIES:

MORTGAGE OF TANGIBLE ASSETS RECORDS

Subject has been reported no mortgage record on any of its tangible assets.

Note: The above record is based on the public announcements by concerned authorities of Taiwan Province and Taipei City. They are for reference only.

OPERATING INCOMES 2000 - 2002: (In NT$1,000)

OPERATING INCOMES OF 2002 BY PRODUCT: (In NT$1,000)

SALES PERFORMANCE JANUARY~APRIL, 2003: (NT$1,000)

789,058 100%

TRADE REFERENCES:

BANKERS:

-  Land Bank of Taiwan, Hsichih Branch - A/C No.0000, opened in Oct. 1999; current balance NT$1,000,000~3,000,000; relation normal. Tel : 02-22222227.

PAYMENT RECORD:

Subject has been reported no dishonored banking record.

Subject’s chairman-cum-general manager has been reported no dishonored banking record.

Note: The above banking record is based on the data obtained from the Clearing House as of 2003

BOUNCED CHECK RECORD:

Subject has been reported no bounced check record since Jun. 30, 2001.

Subject’s chairman-cum-general manager has been reported no bounced check record since Jun. 30, 2001.

Note: The above record is based on the data obtained from the Clearing House as of 2003. The record does not include those that had been closed nor that are over one year, even not yet closed.

BIDDING FORBIDDEN RECORD:

Subject has been reported no forbidden record bidding for government projects since Jan. 1, 2002.

The above record is based on the announcement of concerned government institutes. It is for reference only.

PUBLIC LITIGIOUS RECORD:

REGISTRATION OF PATENTS

Subject has been reported no registration of patent being awarded.

Note: The above record is based on the data obtained from the concerned authority.

IMPORTANT CERTIFICATIONS OR HONORS

BUSINESS STATUS:

Subject is belonging to member of the Chinese Technology Group.

Name of core company: Chinese Technology Co., Ltd.

Ranking on total assets of the Group: 150

Total No. of affiliates of the Group: 15

The above record is based on Business Groups in Taiwan by CCIS.

BUSINESS RANKING:

Source: Top 5000: Largest Corporations in Taiwan, and Business Groups in Taiwan. China Credit Information Service; Directory of Outstanding Importers and Exporters in Taiwan, Ministry of Economic Affairs

FINANCIAL PROFILE FOR YEARS 2000~2002: (in NT$1,000)

BUSINESS PERFORMANCE 2000~2002: (NT$1,000)

Please be noted that the above financial figures are:

þ based on subject’s2000~2002 financial statements (CPA audited)

n  SIGNIFICANT NEWS FROM PUBLIC MEDIA

GENERAL INFORMATION:

Industrial Trend

After the peak of panel price in the TFT-LCD market in June of 2002, demand was not as good as expected. The panel price dropped due to the down-stream manufacturers faced the pressure to reduce their stocks on one hand; and the launch of the fifth generation of panel from South Korean brought about a predicted oversupply of the product on the other. Even though the first quarter of 2003 saw a slight rise of monitor panel price in Taiwan, South Korea and Japan, the likelihood reducing demand because of such price increase did not materialize owing to the concerned monitor manufacturers are cautious in increasing their product prices. This suits the panel manufacturers. As the 17’’ display being the mainstream in the market, industry dealers all rush to readjust their production lines to produce the 17’’ display, in addition, industry dealers in Taiwan and South Korea actively plan to put next generation panel into production, which will enlarge the market supply in the future. Consequently, 17’’ panel is estimated to reduce in the second quarter of 2003. As far as 15’’ panel is concerned, its price is expected to increase, due to decreasing supply caused by 17’’ panel. Another reason is that part of the manufacturers of 15” panels are still suffering losses, they intend to make up the deficit by price increase.

Fortunately, quite a number of the western large-sized companies, as a result of their original OEM manufacturers in South Korea are developing their own branded products, start to switch their orders to Taiwan, this will definitely help local manufacturers here in the second quarter of the year. When it comes to the influences of SARS epidemic, domestic TFT-LCD panel manufacturers suffer slightly, because most of production bases are located in Taiwan. But if the situation is not brought under control quickly, it will have negative effects for sure.

Organizational Background & Management

Subject is collectively founded by Mr. Chang San with his friends. Later, two corporate shareholders joined in, namely Taiwan Insurance Co., Ltd. and Yih Ting Investment Development Co., Ltd. Its stock became public issued on Jul. 30, 2001 and was approved OTC in Oct. 2002. Thus, subject ‘s organizational background is considered fair.

Chairman-cum-General Manager Mr. Chang San set up subject after retiring from army. Subject becomes its present size after nearly 20 years of operations. Its operation capability is considered solid.

Facilities & Business Performance

1.  Important assets introduction:

Subject’s operating office shares the same address at No. 5000, Chung Hua Rd., Hsichih City, Taipei Hsien with its factory in Hsichih. Subject bought this land in Oct. 1999 with a land area of 237.86 sq. meters and workshop area of 1,464.24 sq. meters. The present total staff enrollment is 110. In addition, subject’s factory in Ta Tung is located at No. 1000-1001, Sec. 1, Ta Tung Rd., Hsichih City, Taipei Hsien and subject bought this land in Apr. 2001 with a land area of 251.86 sq. meter. There are 35 staff working there.

2.  Operating income analysis

Subject showed an operating income of NT$3,090,014,000 in 2002, a large growth of 107.82% compared with that of 2001. Apart from that the demand for LCD is increasing, subject also has the niche of possessing small-size products which serve special purposes is also one of the reasons for its tremendous growth. This unique product alone generated a total sales of NT$541,360,000 in 2002, growing about 31.50% compared with that in 2001. Furthermore, subject has signed sales contracts with leading POS system manufacturers in Europe through IPO in Taiwan. It also secure orders from overseas on defense and industrial LCD displays. These all contribute to the remarkable growth of the subject in recent years.