MIRA INFORM REPORT

Report Date :

16.07.2013

IDENTIFICATION DETAILS

Name :	DAEDONG STEEL INC.

Registered Office :	Rm. 531, Daeyeong Bldg. 44-1, Yeouido-dong, Yeongdeungpo-gu, Seoul, Korea 150-714

Country :	South Korea

Financials (as on) :	31.03.2013

Date of Incorporation :	14.08.1973

Com. Reg. No.:	116-81-35991

Legal Form :	Listed Company

Line of Business :	Manufacture of Other Basic Iron and Steel

No. of Employees :	53

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
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 – March 31^st, 2013

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

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 is currently the world's 12th largest economy. 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. Korea''s export focused economy was hit hard by the 2008 global economic downturn, but quickly rebounded in subsequent years, reaching 6.3% growth in 2010. The US-South Korea Free Trade Agreement was ratified by both governments in 2011 and went into effect in March 2012. Throughout 2012 the economy experienced sluggish growth because of market slowdowns in the United States, China, and the Eurozone. The incoming administration in 2013, following the December 2012 presidential election, is likely to face the challenges of balancing heavy reliance on exports with developing domestic-oriented sectors, such as services. 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 Information

Company Name	DAEDONG STEEL INC. (Korean Company Name : “(주)대동스틸”)
Registered Address	44-1, Yeouido-dong, Yeongdeungpo-gu, Seoul, Korea
Building	Rm. 531, Daeyeong Bldg.
Zip Code	150-714
Tel	+82-2-780-4448
Fax	+82-2-786-6218
E-mail	daedong@daedongsteel.co.kr
Website	www.daedongsteel.co.kr
Trading Address	Rm. 531, Daeyeong Bldg., 44-1, Yeouido-dong, Yeongdeungpo-gu, Seoul, Korea
Tel	+82-2-780-4448
Fax	+82-2-786-6218
Other Address-Incheon Factory	165B-1L, Namdong Industrial Complex, 741, Gojan-dong, Namdong-gu, Incheon, Korea
Tel	+82-32-817-4448
Fax	+82-31-817-4449
Other Address-Pohang Factory	1837, Jangheung-dong, Nam-gu, Pohang-si, Gyeongsangbuk-do, Korea
Tel	+82-54-278-4664
Fax	+82-54-278-2896
Type	Export
Industry	Manufacture of Other Basic Iron and Steel n. e. c.
Main Business	Steel plate, Steel Products
Established (mm/dd/yyyy)	08/14/1973

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Steel plate(30102204)
Sell	Steel(11101704)
Sell	Steel coil(30101904)

CEO’s

Name	Lim Hyung-Gi
Address
Date of Birth	10/22/1948
Title	President & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

5,000,000,000

Employees

Formation

Listed Company (KOSDAQ : 048470) as of 01/10/2002

Bank Details

Woori Bank-Euljiro Branch

Corporate Registered No.

110111-0150691

Business Registered No.

116-81-35991

Permit & Licenses

08/14/2008 ISO 9001

08/14/2008 ISO 14001

Int’l Trade No.: 11187565

Shareholder Position

Name	Shares	%
LIM HYUNG-GI	2,009,247	20.09
OH SOO-BOK	1,186,766	11.87
POSCO(174611-0000741)	941,379	9.41
OTHERS	5,862,608	58.63
TOTAL	10,000,000	100.00

Company History

08/14/1973 Incorporated as SHINDUCK HEUNGUP INC.

03/19/1975 Changed company name to DAEDONG KANGUP INC.

08/09/2000 Changed company name to the present name

Management

Job Description	Title	Name	Nationality	Date of Birth	Education
President & CEO	Mr.	Lim Hyung-Gi	Korean	1948.10.22	Hanyang University, Korea
Director	Mr.	Lim Ju-Hee	Korean	1980.01.01	Purdue University, USA
Director	Mr.	Kim Chang-Kyum	Korean	1960.06.	Samchunpo Technical High, Korea
Outside Director	Mr.	Chang Woo-Jin	Korean	1956.05.	Seoul National University, Korea
Auditor	Mr.	Joo Yo-Shik	Korean	1948.02.23	Chungang University, Korea

Financials

Year / Unit : KRW	Sales	Assets	Net Income
(*)03/2013	39,414,778,012	92,515,531,180	157,624,965
(*)2012	188,596,627,837	96,396,361,791	-392,062,120
(*)2011	155,434,160,956	107,230,302,511	3,126,228,575

(*) Figures are based on the K-IFRS Accounting System.

Financial Description

Authorized Capital(KRW)	25,000,000,000
Paid-Up Capital(KRW)	5,000,000,000
Total Issued Shares	10,000,000

Balance Sheet
Unit : Korean Won	01/02/2013~03/31/2013	As of 12/31/2012	As of 12/31/2011
Total Assets	92,515,531,180	96,396,361,791	107,230,302,511
Current Assets	66,096,335,387	68,821,009,362	77,605,653,646
Cash & Cash Equivalents	2,354,738,813	2,924,811,384	2,319,233,605
Trade Receivables	40,952,887,216	45,889,456,728	40,486,741,972
Other Financial Assets	91,280,357	53,678,669	106,163,412
Inventories	22,555,823,631	19,809,257,541	34,686,431,838
Deferred Income Tax Assets	111,467,899	129,224,136	-
Other Current Assets	30,137,471	14,580,904	7,082,819
Non-Current Assets	26,419,195,793	27,575,352,429	29,624,648,865
Other Financial Assets	14,312,834,370	15,304,134,370	16,640,337,070
Tangibles	10,924,905,517	11,089,762,153	12,005,929,439
Intangibles	1,181,455,906	1,181,455,906	978,382,356
Total Liabilities	37,276,493,160	40,269,976,106	48,873,092,084
Current Liabilities	32,840,638,905	35,665,962,237	45,780,335,873
Trade Payables	5,139,250,973	14,146,786,906	13,809,380,033
Short-Term Borrowings	27,057,705,250	19,788,957,448	30,011,043,861
Other Current Financial Debts	549,953,972	355,791,501	730,900,271
Deferred Income Tax Credit	-	-	1,086,384,193
Other Current Liabilities	93,728,710	1,374,426,382	142,627,515
Non-Current Liabilities	4,435,854,255	4,604,013,869	3,092,756,211
Long-Term Borrowings	3,016,000,000	3,016,000,000	752,933,660
Other Non-Current Financial Debts	45,000,000	45,000,000	45,000,000
Confirmed Salaries	568,328,024	518,401,638	239,220,139
Deferred Income Tax Credit	806,526,231	1,024,612,231	2,055,602,412
Capital Stock	5,000,000,000	5,000,000,000	5,000,000,000
Capital Surplus	2,734,550,966	2,734,550,966	2,734,550,966
Installments	1,752,668,109	2,525,882,109	3,568,040,109
Treasury Stock	-1,585,692,842	-1,585,692,842	-1,585,692,842
Profit Surplus	47,337,511,787	47,451,645,452	48,640,312,194
Total Equity	55,239,038,020	56,126,385,685	58,357,210,427
Liab. & Shareholder’s Equity	92,515,531,180	96,396,361,791	107,230,302,511

Income Statement
Unit : Korean Won	01/02/2013~03/31/2013	As of 12/31/2012	As of 12/31/2011
Sales	39,414,778,012	188,596,627,837	155,434,160,956
Cost of Sold Goods	37,835,792,875	185,574,595,298	146,967,480,225
Gross Profit	1,578,985,137	3,022,032,539	8,466,680,731
Admin. Expenses	412,899,576	3,034,644,945	1,850,609,010
Logistics	328,759,686	1,795,905,915	2,019,826,138
Operating Income	837,325,875	-1,808,518,321	4,596,245,583
Finance Income	51,687,663	2,152,618,226	2,418,362,855
Finance Expenses	796,440,218	1,527,077,655	2,875,200,524
Other Income	87,143,467	728,875,357	317,212,124
Other Expenses	2,610,085	138,259,905	8,952,750
Income Before Taxes	177,106,702	-592,362,298	4,447,667,288
Income Taxes Expenses	19,481,737	-200,300,178	1,321,438,713
Net Income	157,624,965	-392,062,120	3,126,228,575

Cash Flows
Unit : Korean Won	01/02/2013~03/31/2013	As of 12/31/2012	As of 12/31/2011
Operating Activities Cash Flows	-5,424,175,073	9,780,132,650	-2,036,532,185
Net Income	157,624,965	-392,062,120	3,126,228,575
Adjustment	954,092,949	2,470,674,862	4,183,403,288
Changes in Asset/ & Liability	-6,366,041,619	9,796,129,320	-8,161,346,078
Interests Received	13,191,341	133,117,463	153,926,240
Interests Paid	-181,317,209	-1,271,759,087	-1,573,974,675
Dividends Received	0	409,450,000	431,000,000
Income Taxes	-1,725,500	-1,365,417,788	-195,769,535
Cash Flows from Investing	-75,307,245	-321,820,130	131,646,054
Cash Flows from Financing	4,929,409,747	-8,852,734,741	2,980,713,029
Increase/Decrease in Cash	-570,072,571	605,577,779	1,075,826,898
Cash at the Beginning of Year	2,924,811,384	2,319,233,605	1,243,406,707
Cash at the End of Year	2,354,738,813	2,924,811,384	2,319,233,605

Products, Technologies, Services Description

Main Products & Services

Steel plate, Steel Products

Trade Partners & Competitors

Suppliers

POSCO(174611-0000741)

Competitors

HAN YANG STEEL IND. CO., LTD.

472-2, JAKJEON 2-DONG, GYEYANG-GU, INCHEON, KOREA

TEL:+82-32-547-5540 FAX:+82-32-549-7914

KUNYOUNG STEEL CO., LTD.

381-13, JEONGJA 1-DONG, JANGAN-GU, SUWON-SI, GYEONGGI-DO, KOREA

TEL:+82-31-244-9998 FAX:+82-31-244-9968

P & S KOREA CO., LTD.

3RD FL., HI-SENSE BLDG., 1688-17, SEOCHO 1-DONG, SEOCHO-GU, SEOUL, KOREA

TEL:+82-2-3474-3933 FAX:+82-2-3474-3936

Sales by Region

(Activity & Markets)

Not Available.

Court Action

No.

News Clipping

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.05
UK Pound	1	Rs.90.71
Euro	1	Rs.78.47

INFORMATION DETAILS

Report Prepared by :

PRL

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%)

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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.