MIRA INFORM REPORT

Report Date :

30.10.2013

IDENTIFICATION DETAILS

Name :	POSCO SPECIALTY STEEL CO., LTD.

Registered Office :	65, Sinchon-Dong, Chang-Won-Si, Gyeongsangnam-Do, Korea

Country :	South Korea

Financials (as on) :	30.06.2013

Date of Incorporation :	14.02.1997

Com. Reg. No.:	609-81-29083

Legal Form :	Co., Ltd by shares

Line of Business :	Manufacture of Steel Wire

No. of Employees :	1,242

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 :	---

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	POSCO SPECIALTY STEEL CO., LTD. (Korean Company Name : “포스코특수강(주)”)
Registered Address	65, Sinchon-dong, Chang-won-si, Gyeongsangnam-do, Korea (New Address System : 147, Jeokhyeon-ro, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea)
Zip Code	641-370
Tel	+82-55-269-6114
Fax	+82-55-269-6901
E-mail	cssinfo@changwonsteel.co.kr;cs116603@poscoss.co.kr;ikechang@poscoss.co.kr
Website	www.poscoss.co.kr;www.cssteel.co.kr
Trading Address	5th Fl., Daegong Bldg., 823-21, Yeoksam 1-dong, Gangnam-gu, Seoul, Korea
Tel	+82-55-269-6189
Fax	+82-2-3469-6888
Type	Export
Industry	Manufacture of Steel Wire
Main Business	Round Bars, Flat Bars, Square Bars, Wire Rods, Seamless Pipe
Sub Business
Established (mm/dd/yyyy)	02/14/1997

The Subject owns the premises of registered HQ address.

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Bar(30101600)
Sell	Billets(30103300)
Sell	Pipe(40142100)
Sell	Rod(30102400)
Sell	Steel bars(30101604)

CEO’s

Name	Cho Noi-Ha
Address	Suite 1402, 7, Achasan-ro 78-gil, Gwangjin-gu, Seoul, Korea
Date of Birth	01/1953
Title	President & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

180,321,750,000

Employees

1,242

Formation

Co., Ltd by shares

A Company of POSCO Group

Bank Details

Woori Bank-Changwon Branch

SC First Bank of Korea

Shinhan Bank

Corporate Registered No.

194211-0025248

Business Registered No.

609-81-29083

Permit & Licenses

04/09/1997 KS Mark

0/08/1997 JIS

12/12/1997 ISO 9002

05/11/1998 TUV

12/05/2000 ISO 14001

12/01/2002 ISO 9001

01/11/2005 ISO 9001 by KAQ

02/2/2006 ISO 14001 by KAQ

Int’l Trade No.: 24013136

Shareholder Position

Name	Shares	%
POSCO(174611-0000741)	26,000,000	72.09
OTHERS	10,064,350	27.91
TOTAL	36,064,350	100.00

Company History

02/14/1997 Incorporated as CHANGWON SPECIALTY STEEL CO., LTD.

03/16/2004 Agreement on taking over the operation of Changwon Specialty Steel’s Maintenance Business Div. from POSCO MACHINERY & ENGINEERING CO., LTD.

11/26/2004 Awarded US$300 Million Export Top Prize

11/30/2005 Awarded US$400 Million Export Top Prize

02/14/2007 Changed company name to the present name from CHANGWON SPECIALTY STEEL CO.,LTD.

08/30/2013 Increased capital to 180,321,750,000 KRW from 137,218,300,000 KRW

Detailed Information

Management

Job Description	Title	Name	Nationality	Date of Birth	Education
President & CEO	Mr.	Cho Noi-Ha	Korean	1953.01.	Korea University, Korea
Vice President	Mr.	Jang Young-Ik	Korean	1953.12.18	Dongah University, Korea
Executive Director	Mr.	Kang Deuk-Sang	Korean	1960.09.	Korea University, Korea
Director	Mr.	Nam Cheol-Soon	Korean	1960.08.	Seoul National University, Korea
Director	Mr.	Park Jong-Kook	Korean	1946.08.	Youngnam University, Korea
Outside Director	Mr.	Sung Si-Woong	Korean	1953.05.	Seoul National University, Korea
Outside Director	Mr.	Shin Pyung-Woo	Korean	1953.02.	Korea University, Korea
Executive Director	Mr.	Kang Deuk-Sang	Korean	1960.09.09	Korea University, Korea

Financials

Year / Unit : KRW	Sales	Assets	Net Income
(*)06/2013	676,315,176,808	1,653,056,576,753	23,899,752,817
(*)2012	1,405,667,101,152	1,496,633,202,983	69,091,484,483
(*)2011	1,662,895,933,177	1,582,729,146,335	127,573,387,534
(*)2010	1,543,122,293,143	1,307,488,976,178	101,900,846,147
2009	1,271,037,122,662	972,260,104,367	64,993,801,409
2008	1,679,748,221,937	1,007,588,365,957	77,316,309,453
2007	1,553,616,007,725	1,062,479,264,361	60,237,906,991
2006	1,147,746,490,710	969,823,927,036	47,436,432,695
2005	1,142,118,666,634	815,687,254,846	37,208,984,142
2004	1,006,406,592,810	741,325,076,882	33,469,997,152
2003	729,580,614,108	658,583,823,437	334,594,439

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

Financial Description

Authorized Capital(KRW)	500,000,000,000
Paid-Up Capital(KRW)	180,321,750,000
Total Issues Shares	36,064,350(Common : 27,443,660 / Preferable : 8,620,690)

Balance Sheet
Unit : Korean Won	01/01/2013~06/30/2013	As of 12/31/2012	As of 12/31/2011
Total Assets	1,653,056,576,753	1,496,633,202,983	1,582,729,146,335
Current Assets	481,529,771,422	420,046,536,036	660,590,745,733
Cash & Cash Equivalents	118,741,962,251	58,332,161,231	271,466,753,505
Trade Receivables	122,898,553,213	121,186,926,307	108,620,027,819
Other Finance Assets	15,505,427,214	14,934,338,835	48,299,275,584
Inventories	222,431,711,359	224,863,744,629	231,718,577,989
Other Current Assets	1,952,117,385	729,365,034	486,110,836
Non-Current Assets	1,171,526,805,331	1,076,586,666,947	922,138,400,602
Non-Current Financial Instruments	13,191,416,442	13,584,798,367	11,383,890,102
Investment_Related Companies	271,180,623,860	170,848,954,920	80,364,054,920
Investment_Real Estates	2,038,867,489	6,518,470,537	6,563,872,633
Tangibles	875,432,135,637	878,958,647,072	817,249,686,789
Intangibles	7,194,991,553	6,675,796,051	6,576,896,158
Other Non-Current Assets	2,488,770,350	-
Total Liabilities	624,397,227,238	484,278,338,145	691,477,473,151
Current Liabilities	385,216,498,670	389,450,910,700	442,989,353,210
Trade Payables	170,981,652,502	145,004,268,752	166,394,807,783
Short-Term Borrowings	161,538,152,802	162,125,287,847	2,678,620,000
Other Current Financial Debts	45,451,746,735	69,833,479,346	249,299,694,427
Accrued Income Tax	2,398,036,251	7,957,017,006	20,798,066,046
Other Current Liabilities	4,846,910,380	4,530,857,749	3,818,164,954
Non-Current Liabilities	239,180,728,568	94,827,427,445	248,488,119,941
Long-Term Borrowings	203,866,550,696	65,001,133,703	226,424,803,501
Other Non-Current Financial Debts	2,572,663,366	346,485,208	294,724,383
Confirmed Salaries	16,970,642,053	17,496,587,665	13,125,485,527
Deferred Income Tax Credit	15,770,872,453	11,983,220,869	8,643,106,530
Capital Stock	137,218,300,000	137,218,300,000	130,000,000,000
Capital Surplus	176,333,424,177	176,333,424,177	124,995,341,017
Profit Surplus	715,107,625,338	698,803,140,661	636,256,332,167
Total Equity	1,028,659,349,515	1,012,354,864,838	891,251,673,184
Liab. & Shareholder’s Equity	1,653,056,576,753	1,496,633,202,983	1,582,729,146,335

Income Statement
Unit : Korean Won	01/01/2013~06/30/2013	As of 12/31/2012	As of 12/31/2011
Sales	676,315,176,808	1,405,667,101,152	1,662,895,933,177
Cost of Sold Goods	-626,006,805,619	1,269,463,413,290	1,472,488,798,723
Gross Profit	50,308,371,189	136,203,687,862	190,407,134,454
Selling & Admin. Expenses	-20,517,055,431	53,683,391,889	32,711,643,045
Admin. Expenses	-14,877,976,533	44,359,377,129	23,671,546,831
Selling & Logistics Expenses	-5,639,078,898	9,324,014,760	9,040,096,214
Operating Income	29,791,315,758	82,520,295,973	157,695,491,409
Finance Profits	-3,383,535,065	3,210,922,604	2,055,319,862
Finance Income	4,919,845,380	8,885,089,746	17,016,708,064
Finance Expenses	-8,303,380,445	12,096,012,350	14,961,388,202
Other Non-Operating Profits	1,274,977,375	2,766,415,268	3,520,331,599
Other Non-Operating Income	1,352,768,021	7,031,527,647	5,487,834,343
Other Non-Operating Expenses	-77,790,646	4,265,112,379	1,967,502,744
Income Before Taxes	27,682,758,068	82,075,788,637	163,271,142,870
Income Taxes Expenses	-3,783,005,251	12,984,304,154	35,697,755,336
Net Income	23,899,752,817	69,091,484,483	127,573,387,534

Cash Flows
Unit : Korean Won	01/01/2013~06/30/2013	As of 12/31/2012	As of 12/31/2011
Operating Activities Cash Flows	58,265,504,163	137,138,820,350	154,407,926,966
Cash Flows from Operating	67,830,246,412	160,442,112,141	196,763,804,507
Net Income	23,899,752,817	69,091,484,483	127,573,387,534
Adjustment	42,992,882,391	96,462,201,847	99,060,814,313
Changes in Asset/ & Liability	937,611,204	-5,111,574,189	-29,870,397,340
Interests Received	1,845,469,551	7,229,397,862	10,212,071,111
Interests Paid	-5,834,749,370	-9,000,993,264	-9,398,385,130
Dividends Received	90,100,000	109,200,000	302,145,750
Income Taxes	-5,665,562,430	-21,640,896,389	-43,471,709,272
Cash Flows from Investing	-128,034,111,295	-385,543,959,742	-143,668,100,224
Cash Inflow from Investing	10,616,800,000	98,685,093,429	159,189,200,958
Cash Outflows for Investing	-138,650,911,295	-484,229,053,171	-302,857,301,182
Cash Flows from Financing	130,033,157,907	35,473,493,160	-3,038,039,064
Cash Inflows from Financing	199,310,500,000	42,052,113,160	63,789,080,936
Cash Outflows from Financing	-69,277,342,093	-6,578,620,000	-66,827,120,000
Increase/Decrease in Cash	60,264,550,775	-212,931,646,232	7,701,787,678
Cash at the Beginning of Year	58,638,349,421	271,569,995,653	263,868,207,975
Cash at the End of Year	118,902,900,196	58,638,349,421	271,569,995,653

Products, Technologies, Services Description

Main Products & Services

Structures and Building and Construction and Manufacturing Components and Supplies

Structural materials and basic shapes

Distribution and Conditioning Systems and Equipment and Components

Fluid and gas distribution

Tube and tubing

Wire Rods & Bars

- Available Grades & Applications

Stainless Steel

Heat Resisting Steel

Steel Machine Structural Use

Steel For Tool & Special Use

Super Alloy

- The Available Size & Tolerance

Round & Square Bars

Wire Rods

Wide Flat Bars

- Packing

Seamless Pipes & Tubes

- Available Grades & Applications

- The Available Size & Tolerance

Pipe for Ordinary Piping

Tubes for Boiler & Heat Exchanger

Tubes for Structural Purposes

- Packing

Product Shapes & Dimensions

- Product Shapes & Dimensions

Annual Production Capacity (Unit : Ton)

Bar & Wire rods:783,000

Seamless Tube & Pipe:17,000

Total 800,000

Technologies Acquired

Trade Partners & Competitors

Suppliers

ROTEM

VAI-POMNI

MORGAN

UTAB

NKMZ

Tae Chang Machinery

Dae Kyo ENG.

Customers

Sales Channel

- Domestic : End-User, Wholesalers

- Overseas : Through Int'l Trading Companies, Direct Exporting

Conditions

- Sales by customer's demands

- Credit within 75 days

- Granting Credit with collaterals

- Local L/C or L/C

Competitors

KISWIRE LTD.

475, MANGMI 2-DONG, SUYEONG-GU, BUSAN, KOREA

TEL:+82-51-760-1700 FAX:+82-51-757-7379

KOSTEEL CO., LTD.

4TH FL., HOUSTORY, 32-4, JEONNONG 2-DONG, DONGDAEMUN-GU, SEOUL, KOREA

TEL:+82-2-2106-0200 FAX:+82-2-581-8800

SEAH SPECIAL STEEL CO., LTD.

747, JANGHEUNG-DONG, NAM-GU, POHANG-SI, GYEONGSANGBUK-DO, KOREA

TEL:+82-54-285-4771 FAX:+82-54-285-4095

Related Parties (Subsidiaries, Joint-Venture & Affiliates)

Affiliates	POSCO(174611-0000741) POSCO COATED & COLOR STEEL CO., LTD.(174611-0006492) POSDATA CO., LTD.(110111-0658637) POSCO REFRACTORIES & ENVIRONMENT CO., LTD.(174611-0001947) SAMJUNG PACKING AND ALUMINUM CO., LTD.(174611-0000866) POS-A.C. CO., LTD.(174611-0003448) POSCO ENGINEERING & CONSTRUCTION CO., LTD.(174611-0002979) POSCO RESEARCH INSTITUTE(110111-1042350) POSCON(174611-0002242) POSTEEL(110111-0344591) POSCO SPECIALTY STEEL CO., LTD. (194211-0025248) POSCO MACHINERY CO., LTD.(206411-0010175) POSMEC(POSCO MACHINERY & ENGINEERING CO., LTD.)(174611-0012176) POSCO TERMINAL CO., LTD.(204611-0017575) POSTECH VENTURE CAPITAL COOPERATION (174611-0029080) POSMATE CO., LTD.(110111-0739841) POSCO POWER CORPORATION(110111-1829576) SNNC CO., LTD.(204611-0023415) PHP CO., LTD.(120111-0421545) POSBRO(110111-3528986) SUWON GREEN ENVIRONMENT CORPORATION(134811-0133794) POSCORE CO., LTD.(134811-0003343) RIZTECH BIZ CO., LTD. POSWITH CO., LTD.(171711-0075927) UITRANS CO., LTD.(110111-3792309) BASYS INDUSTRY CO. LTD.(110111-0954647) METAPOLIS CO., LTD.(134811-0094475) SEOUNG GWANG CO., LTD.(120111-0222844) CHEONGNA IBT CO., LTD.(120111-0454520) POHANG FEUL CELL CO., LTD.(171711-0076256) MEGA ASSET CO., LTD.(161511-0097480) DAEWOOENGINEERING COMPANY CO., LTD.(110111-0203268) ENTOB CORPORATION(110111-2059362) (0.625% held by the subject company)
Subsidiary	POSCOSS VINA CO., LTD.(VIETNAM) PHU MY II INDUSTRIAL ZONE, TAN THANH DISTRICT, BA RIA- VUNG TAU PROVINCE, VIETNAM
Corporate Ownership	POSCO(174611-0000741) 1, GOEDONG-DONG, NAM-GU, POHANG-SI, GYEONGSANGBUK-DO 790-704 KOREA TEL: +82-54-220-0114 FAX: +82-54-220-6000
Major Shareholders	POSCO(174611-0000741) 1, GOEDONG-DONG, NAM-GU, POHANG-SI, GYEONGSANGBUK-DO 790-704 KOREA TEL: +82-54-220-0114 FAX: +82-54-220-6000
Cooperative Enterprise	-Insured Company SAMSUNG LIFE INSURANCE CO., LTD.(110111-0005953)

Sales by Region (Activity & Markets)

Sales/ Unit :Mil KRW	03/2012	2011	2010
Export	72,595	321,113	311,095
Domestic	308,638	1,341,783	1,232,027
Total	381,233	1,662,896	1,543,122

The Subject imports from Australia and Canada.

Court Action

No.

News Clipping

----

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.78
UK Pound	1	Rs.99.65
Euro	1	Rs.84.48

INFORMATION DETAILS

Report Prepared by :

NLM

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.