MIRA INFORM REPORT

Report Date :

04.10.2013

IDENTIFICATION DETAILS

Name :	DAEHWA INDUSTRIAL MACHINERY CO., LTD.

Registered Office :	8B, Waegwan, 2nd Indl. Complex 676-1, Naksan-ri, Waegwan-eup, Chilgok-gun, Gyeongsangbuk-do, Korea 718-801

Country :	South Korea

Financials (as on) :	31.12.2012

Date of Incorporation :	18.10.1991

Com. Reg. No.:	503-81-18105

Legal Form :	Co., Ltd by shares

Line of Business :	Manufacture of Metal Cutting and Compressing Machines for Metal

No. of Employees :	63

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 :	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	DAEHWA INDUSTRIAL MACHINERY CO., LTD. (Korean Company Name : “(주)대화산기”)
Registered Address	676-1, Naksan-ri, Waegwan-eup, Chilgok-gun, Gyeongsangbuk-do, Korea
Building	8B, Waegwan, 2nd Indl. Complex
Zip Code	718-801
Tel	+82-54-979-3000
Fax	+82-54-979-3030
E-mail	dhim@dhim.co.kr
Website	www.dhim.co.kr
Trading Address	8B, Waegwan, 2nd Indl. Complex, 676-1, Naksan-ri, Waegwan-eup, Chilgok-gun, Gyeongsangbuk-do, Korea
Tel	+82-54-979-3000
Fax	+82-54-979-3030
Type	Export/Import
Industry	Manufacture of Metal Cutting and Compressing Machines for Metal
Main Business	Coil Loading System, Roller Leveler, Strip Tension Systems, Cold Roll Forming Line, Rotary Shearing Line, Continuous Galvanizing Line
Established (mm/dd/yyyy)	10/18/1991

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Metal bending and forming machinery(23171700)
Sell	Metal bending and forming machinery(23171700)
Sell	Conveyors and accessories(24101700)
Sell	Workshop machinery and equipment and supplies(23170000)
Buy	Channels(30101800)
Buy	Bearings(31171500)
Buy	Pneumatic cylinders(27131701)
Buy	Seals(31181600)
Buy	Gearmotors(26111526)
Buy	Cable trays(39121201)
Buy	Train braking systems(25171703)
Buy	Spur gears(31171707)
Buy	Hydraulic cylinders(27121602)

CEO’s

Name	Kim Won-Yeon
Address	Suite 104-4003, 2435, Dalgubeol-daero, Jung-gu, Daegu, Korea
Date of Birth	12/14/1954
Title	President & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

600,000,000

Employees

Formation

Co., Ltd by shares

Bank Details

Shinhan Bank-Bisan Dong Branch

Corporate Registered No.

170111-0054544

Business Registered No.

503-81-18105

Permit & Licenses

12/23/2000 ISO 9001

Int’l Trade No.: 161327

Shareholder Position

Name	Shares	%
KIM WON-YEON & HIS FAMILY(3)	120,000	100.00
TOTAL	120,000	100.00

Company History

05/18/1985 Established as DAEHWA INDUSTRIAL MACHINERY CO.(Sole Proprietorship)

10/18/1991 Incorporated as the present name

11/26/2001 Designated as an INNO-BIZ Company

11/25/2004 Designated as a Venture Business

09/07/2005 Moved to the present6 HQ address from 358-18, Galsan-dong, Dalseo-gu, Daegu, Korea

12/02/2008 Awarded US$ 30 Million Export Top Prize

Management

Job Description	Title	Name	Sex	Nationality	Inauguration Date
President & CEO	Mr.	Kim Won-Yeon	Male	Korean	04/03/2003
Director	Mr.	Lee Sang-Chul	Male	Korean	04/25/2006
Director	Mr.	Kim Sung-Yon	Male	Korean	04/25/2006
Auditor	Mr.	Kim Chang-Ki	Male	Korean	04/25/2006

Financials

Year / Unit : KRW	Sales	Assets	Net Income
2012	43,906,101,604	34,742,800,588	508,519,827
2011	38,434,364,154	39,424,818,549	1,348,064,461
2010	47,643,714,317	34,465,556,853	2,416,391,635

Financial Description

Authorized Capital(KRW)	2,400,000,000
Paid-Up Capital(KRW)	600,000,000
Total Issued Shares	120,000

Balance Sheet
Unit : Korean Won	As of 12/31/2012	As of 12/31/2011	As of 12/31/2010
Total Assets	34,742,800,588	39,424,818,549	34,465,556,853
Current Assets	28,748,600,011	33,624,029,456	28,493,321,853
-Quick Assets	11,558,417,959	19,132,565,742	17,022,334,147
-Inventories	17,190,182,052	14,491,463,714	11,470,987,706
Fixed Assets	5,994,200,577	5,800,789,093	5,972,235,000
-Investment	298,588,940	677,406,430	703,253,660
-Tangibles	5,395,901,637	4,823,672,663	4,980,281,340
-Intangibles	299,710,000	299,710,000	288,700,000
Total Liabilities	21,059,012,522	26,249,550,310	22,038,353,075
Current Liabilities	20,370,982,644	25,223,799,792	20,507,606,835
Fixed Liabilities	688,029,878	1,025,750,518	1,530,746,240
Capital Stock	600,000,000	600,000,000	600,000,000
Capital Surplus	172,466	172,466	172,466
Profit Surplus	13,083,615,600	12,575,095,773	11,827,031,312
Capital Adjustment
Total Equity	13,683,788,066	13,175,268,239	12,427,203,778
Liab. & Shareholder’s Equity	34,742,800,588	39,424,818,549	34,465,556,853

Current Liabilities	20,370,982,644	25,223,799,792	20,507,606,835
Trade Payables	6,934,433,983	7,939,141,112	8,746,753,514
Short-Term Borrowings	1,000,000,000	4,000,000,000	3,500,000,000
Advance Receipts	11,847,318,870	11,699,123,690	7,056,814,678
Withholdings	74,276,697	67,665,377	53,211,612
Account Payables	53,142,048	78,050,184	163,847,156
Accrued Expenses	190,571,046	184,131,221	159,297,765
Accrued Income Tax	-	14,132,658	349,522,110
Current Portion of Long-Term Debts	271,240,000	485,160,000	478,160,000
Derivatives	-	756,395,550	-
Fixed Liabilities	688,029,878	1,025,750,518	1,530,746,240
Long-Term Borrowings	117,360,000	388,600,000	873,760,000
Provision for Severance & Retirement	1,704,930,224	1,435,881,498	1,302,813,115

Income Statement
Unit : Korean Won	As of 12/31/2012	As of 12/31/2011	As of 12/31/2010
Sales	43,906,101,604	38,434,364,154	47,643,714,317
Cost of Sold Goods	36,382,455,008	30,504,909,066	39,310,103,351
Gross Profit	7,523,646,596	7,929,455,088	8,333,610,966
Selling & Admin. Expenses	5,738,468,288	5,224,740,664	5,183,890,023
Operating Income	1,785,178,308	2,704,714,424	3,149,720,943
Non-Operating Income	828,141,696	751,850,920	1,331,292,845
Non-Operating Expenses	2,096,150,955	1,985,496,183	1,621,341,978
Income Before Taxes	517,169,049	1,471,069,161	2,859,671,810
Income Taxes Expenses	8,649,222	123,004,700	443,280,175
Net Income	508,519,827	1,348,064,461	2,416,391,635

Cash Flows
Unit : Korean Won	As of 12/31/2012	As of 12/31/2011	As of 12/31/2010
Cash Flows from Operating	1,720,890,842	-582,149,884	978,474,405
-Net Income	508,519,827	1,348,064,461	2,416,391,635
-Exp. without Cash Outflow	1,558,658,864	2,066,181,066	2,059,092,554
-Revenue without Cash Inflows	-302,580,899	-143,677,151	-412,976,731
-Changes in Asset/ & Liability	-43,706,950	-3,852,718,260	-3,084,033,053
Cash Flows from Investing	-47,661,710	-183,016,613	523,144,358
-Cash Inflow from Investing	1,194,434,448	330,346,157	685,454,678
-Cash Outflows for Investing	-1,242,096,158	-513,362,770	-162,310,320
Cash Flows from Financing	-3,485,160,000	-578,160,000	-2,212,760,000
-Cash Inflows from Financing	-	500,000,000	-
-Cash Outflows from Financing	-3,485,160,000	-1,078,160,000	-2,212,760,000
Increase/Decrease in Cash	1,811,930,868	1,343,326,497	711,141,237
Cash at the Beginning of Year	4,236,342,411	5,579,668,908	6,290,810,145
Cash at the End of Year	2,424,411,543	4,236,342,411	5,579,668,908

Products, Technologies, Services Description

Main Products & Services

Coil Loading System, Roller Leveler, Strip Tension Systems, Cold Roll Forming Line, Rotary Shearing Line, Continuous Galvanizing Line

Trade Partners & Competitors

Competitors

DONG YANG INDUSTRIAL MACHINERY CO., LTD.

863, SESAN-RI, DONGI-MYEON, OKCHEON-GUN, CHUNGCHEONGBUK-DO, KOREA

TEL:+82-43-732-3477 FAX:+82-43-733-8443

MYUNG JIN MACHINERY CO., LTD.

3DA-623, SIHWA INDUSTRIAL COMPLEX, 1283-10, JEONGWANG 1-DONG, SIHEUNG-SI, GYEONGGI-DO, KOREA

TEL:+82-31-498-4530 FAX:+82-31-499-4538

SAMSHIN MACHINERY CO., LTD.

1007-2, HWABONG-RI, EUNHA-MYEON, HONGSEONG-GUN, CHUNGCHEONGNAM-DO, KOREA

TEL:+82-41-641-9413 FAX:+82-41-642-0550

Sales by Region

(Activity & Markets)

The Subject deals with the companies in Russia, India, Japan and China.

Court Action

Not Available.

News Clipping

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.93
UK Pound	1	Rs.100.44
Euro	1	Rs.84.24

INFORMATION DETAILS

Report Prepared by :

NIS

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.