MIRA INFORM REPORT

Report Date :

09.11.2012

IDENTIFICATION DETAILS

Name :	KANGRIM HEAVY INDUSTRIES CO., LTD.

Registered Office :	40, Ungnam-dong, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea, Zip Code 642-290

Country :	South korea

Financials (as on) :	31.12.2011

Date of Incorporation :	10.07.2003

Com. Reg. No.:	609-81-59777

Legal Form :	Co., Ltd by shares

Line of Business :	Manufacturer of Distilling Machinery, Heat exchange unit and Gas Generators

No. of Employees :	286 employees

RATING & COMMENTS

MIRA’s Rating :

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 :	Exists

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 – June 30^th, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

South korea

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

South Korea - ECONOMIC OVERVIEW

South Korea over the past four decades has demonstrated incredible growth and global integration to become a high-tech industrialized economy. In the 1960s, GDP per capita was comparable with levels in the poorer countries of Africa and Asia. In 2004, South Korea joined the trillion dollar club of world economies, and currently is among the world's 20 largest economies. Initially, a system of close government and business ties, including directed credit and import restrictions, made this success possible. The government promoted the import of raw materials and technology at the expense of consumer goods, and encouraged savings and investment over consumption. The Asian financial crisis of 1997-98 exposed longstanding weaknesses in South Korea''s development model including high debt/equity ratios and massive short-term foreign borrowing. GDP plunged by 6.9% in 1998, and then recovered by 9% in 1999-2000. Korea adopted numerous economic reforms following the crisis, including greater openness to foreign investment and imports. Growth moderated to about 4% annually between 2003 and 2007. With the global economic downturn in late 2008, South Korean GDP growth slowed to 0.3% in 2009. In the third quarter of 2009, the economy began to recover, in large part due to export growth, low interest rates, and an expansionary fiscal policy, and growth was 3.6% in 2011. In 2011, the US-South Korea Free Trade Agreement was ratified by both governments and is projected to go into effect in early 2012. The South Korean economy''s long term challenges include a rapidly aging population, inflexible labor market, and heavy reliance on exports - which comprise half of GDP.

Source : CIA

Basic

Company Name	KANGRIM HEAVY INDUSTRIES CO., LTD. (Korean Company Name : “강림중공업(주)”)
Registered Address	40, Ungnam-dong, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea
Zip Code	642-290
Tel	+82-55-269-7700
Fax	+82-55-269-7795~6
E-mail	mssi@kangrim.com
Website	www.kangrim.com
Trading Address	40, Ungnam-dong, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea
Tel	+82-55-269-7700
Fax	+82-55-269-7795~6
Other Address-Pohang Factory	811-30, Yonghan-ri, Heunghae-eup, Buk-gu, Pohang-si, Gyeongsangbuk-do, Korea
Tel	+82-54-230-7000
Fax	+82-54-230-7221
Type	Export
Industry	Manufacture of Sections for Ships
Main Business	Marine Boiler, Industrial Boiler, Inert Gas System, Inert Gas Generator, N2 Generator, Incinerator, Air Reservoir Calofiers, Economizer, Heat Recover Steam Generator
Sub Business	Manufacture of Distilling Machinery, Heat exchange unit and Gas Generators
Established (mm/dd/yyyy)	07/10/2003

The Subject owns the premises of registered HQ address and Pohang Factory.

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Boilers(40102000)
Sell	Incinerators(47101529)

CEO’s

Name	Si Myung-Sun
Address	Suite 105-802, 1, Yeonji-dong, Busanjin-gu, Busan, Korea
Date of Birth	06/07/1937
Title	Chairman & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

3,000,000,000

Employees

286

Formation

Co., Ltd by shares

Bank Details

Busan Bank

Citibank, Korea

Industrial Bank of Korea

Korea Exchange Bank

Corporate Registered No.

194211-0062787

Business Registered No.

609-81-59777

Permit & Licenses

04/24/1997 ISO 9001

Int’l Trade No.: 24113461

Shareholder Position

Name	Shares	%
SI JONG-MIN	6,000,000	100.00
TOTAL	6,000,000	100.00

Company History

05/10/1981 Established as KANGRIM HEAVY INDUSTRIES CO.(Sole Proprietorship)

07/10/2003 Incorporated as the present name

11/2002 Awarded US$30 Million Export Top Prize

09/03/2007 Acquired kangrim industries co., ltd.(180111-0052885)

11/14/2007 Increased the authorized shares to 800,000 shares from 120,000 shares

11/15/2007 Increased capital to 3,000,000,000 KRW from 300,000,000 KRW

08/26/2009 Increased the authorized shares to 16,000,000 shares from 800,000 shares

09/27/2009 Spin off the par value to 500 KRW from 10,000 KRW

11/30/2009 Awarded US$ 100 Million Export Top Prize

Management

Job Description	Title	Name	Sex	Nationality	Inauguration Date
Chairman & CEO	Mr.	Si Myung-Sun	Male	Korean	07/10/2006
Director	Mr.	Si Jong-Min	Male	Korean	03/24/2009
Director	Mr.	Lee Hae-Jung	Male	Korean	08/07/2009
Auditor	M/S.	Kwon Young-Hee	Female	Korean	08/07/2009

Financials

Year / Unit : KRW	Sales	Assets	Net Income
2011	120,139,357,808	154,789,310,079	12,723,662,823
2010	151,093,976,394	147,610,705,588	17,047,271,294
2009	157,523,810,291	142,956,167,534	10,618,452,021
2008	154,890,142,229	116,237,569,738	7,679,235,071
2007	50,593,924,408	73,375,867,156	2,249,781,443
2006	23,752,576,493	36,349,525,144	16,529,110,753
2005	4,621,407,732	13,985,120,031	333,063,347

Financial Description

Authorized Capital(KRW)	8,000,000,000
Paid-Up Capital(KRW)	3,000,000,000
Total Issued Shares	6,000,000

Balance Sheet
Unit : Korean Won	As of 12/31/2011	As of 12/31/2010	As of 12/31/2009
Total Assets	154,789,310,079	147,610,705,588	142,956,167,534
Current Assets	75,790,675,665	56,719,123,491	48,880,220,543
-Quick Assets	64,411,805,495	48,412,825,996	36,592,625,781
-Inventories	11,378,870,170	8,306,297,495	12,287,594,762
Fixed Assets	78,998,634,414	90,891,582,097	94,075,946,991
-Investment	9,050,926,489	6,665,862,752	7,394,457,585
-Tangibles	68,308,772,949	82,920,735,154	85,865,387,559
-Intangibles	33,115,915	81,546,661	129,977,407
-Others	1,605,819,061	1,223,437,530	686,124,440
Total Liabilities	84,960,155,814	90,477,808,857	102,936,075,714
Current Liabilities	54,252,156,612	42,111,738,653	41,029,989,603
Fixed Liabilities	30,707,999,202	48,366,070,204	61,906,086,111
Capital Stock	3,000,000,000	3,000,000,000	3,000,000,000
Capital Surplus
Profit Surplus	66,158,826,578	53,435,163,755	36,387,892,461
Capital Adjustment	670,327,687	697,732,976	632,199,359
Total Equity	69,829,154,265	57,132,896,731	40,020,091,820
Liab. & Shareholder’s Equity	154,789,310,079	147,610,705,588	142,956,167,534

Current Liabilities	54,252,156,612	42,111,738,653	41,029,989,603
Trade Payables	15,239,672,286	12,048,967,228	19,426,134,930
Short-Term Borrowings	18,400,000,000	10,000,000,000	10,000,000,000
Account Payables	1,645,855,348	949,288,889	1,219,274,112
Accrued Expenses	2,453,019,898	1,891,998,412	1,015,614,938
Withholdings	45,864,842	61,096,200	72,399,882
Advance Receipts	4,391,848,571	4,029,828,990	3,333,468,776
Accrued Income Tax	2,223,016,912	3,500,000,000	1,300,000,000
Provision for Repairing	353,078,755	430,758,934	463,096,965
Current Portion of Long-Term Account Payables	9,499,800,000	9,199,800,000	4,200,000,000
Fixed Liabilities	30,707,999,202	48,366,070,204	61,906,086,111
Long-Term Borrowings	27,399,400,000	45,299,200,000	58,699,000,000
Provision for Severance & Retirement	3,342,251,709	3,128,555,922	2,819,955,988
Withholdings	286,658,554	359,670,766	203,001,959
Guarantee Deposit Withhold	60,000,000	50,000,000	60,000,000
Long-Term Borrowings to Shareholders/ Executives/ Employees	435,519,777	435,519,777	1,135,519,777

Income Statement
Unit : Korean Won	As of 12/31/2011	As of 12/31/2010	As of 12/31/2009
Sales	120,139,357,808	151,093,976,394	157,523,810,291
Cost of Sold Goods	101,637,684,634	115,631,216,982	127,700,583,709
Gross Profit	18,501,673,174	35,462,759,412	29,823,226,582
Selling & Admin. Expenses	13,280,256,042	12,225,669,376	12,777,097,857
Operating Income	5,221,417,132	23,237,090,036	17,046,128,725
Non-Operating Income	14,394,380,723	3,133,255,847	2,693,243,279
Non-Operating Expenses	3,243,598,986	4,616,828,375	6,580,910,288
Income Before Taxes	16,372,198,869	21,753,517,508	13,158,461,716
Income Taxes Expenses	3,648,536,046	4,706,246,214	2,540,009,695
Net Income	12,723,662,823	17,047,271,294	10,618,452,021

Cash Flows
Unit : Korean Won	As of 12/31/2011	As of 12/31/2010	As of 12/31/2009
Cash Flows from Operating	21,004,888,054	23,775,722,552	25,952,340,116
-Net Income	12,723,662,823	17,047,271,294	10,618,452,021
-Exp. without Cash Outflow	7,495,219,422	8,635,090,155	7,636,272,571
-Revenue without Cash Inflows	-11,887,839,465	-265,686,538	-124,905,796
-Changes in Asset/ & Liability	12,673,845,274	-1,640,952,359	7,822,521,320
Cash Flows from Investing	-14,522,143,147	-13,055,437,727	-41,619,945,892
-Cash Inflow from Investing	79,879,855,581	53,239,361,602	2,066,722,786
-Cash Outflows for Investing	-94,401,998,728	-66,294,799,329	-43,686,668,678
Cash Flows from Financing	-9,199,800,000	-9,100,000,000	20,902,420,000
-Cash Inflows from Financing	18,400,000,000	1,460,000,000	82,072,618,800
-Cash Outflows from Financing	-27,599,800,000	-10,560,000,000	-61,170,198,800
Increase/Decrease in Cash	-2,717,055,093	1,620,284,825	5,234,814,224
Cash at the Beginning of Year	9,213,463,096	7,593,178,271	2,358,364,047
Cash at the End of Year	6,496,408,003	9,213,463,096	7,593,178,271

Products, Technologies, Services Description

Main Products & Services

-Marine Products

Boilers, Marine

Economizers, Exhaust Gas

Incinerators, Waste Oil

IGS ( Inert Gas System )

IGG ( Inert Gas Generator )

N2 Generator

Air Reservoirs

Calorifiers

Package Unit

-Industrial Products

HRSG (Heat Recovery Steam Generator )

WHRS (Waste Heat Recovery System )

Heat Exchangers, Deaerator, Re-Boilers

Pressure Vessels & Column

Chemical Plants

Industrial Boilers

On Shore Plants

Trade Partners & Competitors

Customers

HYUNDAI HEAVY INDUSTRIES CO., LTD. (181211-0000386)

Competitors

DAEKYUNG MACHINERY & ENGINEERING CO., LTD.

125-2, BUGOK-DONG, NAM-GU, ULSAN, KOREA

TEL:+82-52-278-9000 FAX:+82-52-273-9898

ILSUNG CORPORATION

917, WONSAN-RI, ONSAN-EUP, ULJU-GUN, ULSAN, KOREA

TEL:+82-52-231-7514~5 FAX:+82-52-239-0333

DKT CO., LTD.

916-1, WONSAN-RI, ONSAN-EUP, ULJU-GUN, ULSAN, KOREA

TEL:+82-52-231-7300 FAX:+82-52-238-7291

Related Parties

(Subsidiaries, Joint-Venture & Affiliates)

Affiliates

KANGRIM INSULATON CO., LTD.(180111-0089474)

Subsidiary

KANGRIM HEAVY INDUSTRIES(CHANGZHOU) MACHINERY CO., LTD.(CHINA)

(100.0% held by the subject company)

Cooperative Enterprise

-Insured Company

MERITZ FIRE & MARINE INSURANCE CO., LTD(110111-0013328)

Sales by Region

(Activity & Markets)

Sales/ Unit :Mil KRW	2011	2010	2009
Export	102,375,435,261	132,042,676,115	129,315,967,442
Domestic	15,317,483,090	11,543,635,420	25,049,687,600
Others	2,446,439,457	7,507,664,859	3,158,155,249
Total	120,139,357,808	151,093,976,394	157,523,810,291

Not Available.

Court Action

Case No.	Court	Plaintiff(s)/ Creditor(s)/ Applicant(s)	Defendant(s)/ Debtor(s)/ Respondent(s)	Cause	Amount (KRW)	Status
	Changwon District Court	Choi You8ng-Cheol	The Subject Company	Receivables	1,197,000	Proceeding
	Ulsan District Court	Jingyang T&P CO., LTD.(Korea)	The Subject Company	Collection	160,000,000	Proceeding
	Changwon District Court	Korea Specialty Pipe Co., Ltd.(Korea)	The Subject Company	Receivables	35,707,000	Proceeding
	Busan District Court	Alborg Industry AS	The Subject Company	Infringement of Patent Right	100,000,000	Proceeding
	Changwon District Court	Lee Chang-Jae	The Subject Company	Receivables	411,775,000	Proceeding

News Clipping

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.44
UK Pound	1	Rs.87.00
Euro	1	Rs.69.43

INFORMATION DETAILS

Report Prepared by :

MNL

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%)

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.