MIRA INFORM REPORT

Report Date :

15.12.2014

IDENTIFICATION DETAILS

Name :	SOVICO CORPORATION

Registered Office :	2271-5, Nambusunhwan-ro, Seocho-gu, Seoul, 3rd Fl., Sovico Bldg., 137-851

Country :	South Korea

Financials (as on) :	31.12.2013

Date of Incorporation :	07.02.1979

Com. Reg. No.:	114-81-33871

Legal Form :	Co., Ltd by shares

Line of Business :	Wholesale of Household Electric Appliances and Parts

No. of Employees :	73

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 – September 30, 2014

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

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. South 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. South 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-Korea Free Trade Agreement was ratified by both governments in 2011 and went into effect in March 2012. Throughout 2012 and 2013 the economy experienced sluggish growth because of market slowdowns in the United States, China, and the Eurozone. The administration in 2014 is likely to face the challenge 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, dominance of large conglomerates (chaebols), and heavy reliance on exports, which comprise about half of GDP.

Source : CIA

Basic Information

Company Name	SOVICO CORPORATION
Registered Address	2271-5, Nambusunhwan-ro, Seocho-gu, Seoul, Korea
Building	3rd Fl., Sovico Bldg.
Zip Code	137-851
Tel	+82-2-2106-2800
Fax	+82-2-587-7337
E-mail	webmaster@sovico.co.kr ;thsong@sovico.co.kr
Website	www.sovico.co.kr

Trading Address	3rd Fl., Sovico Bldg., 2271-5, Nambusunhwan-ro, Seocho-gu, Seoul, Korea (Old Address System : 3rd Fl., Sovico Bldg., 1027-5, Bangbae 3-dong, Seocho-gu, Seoul, Korea (P.O.BOX 398))
Tel	+82-2-2106-2800
Fax	+82-2-523-5504

Other Address-Branch	Rm.1305, 1210, Jaesong-dong, Haeundae-gu, Busan, Korea
Tel	+82-51-757-4112~4

Other Address-Branch	988-46, Maegok-ri, Hobeop-myeon, Icheon-si, Gyeonggi-do, Korea

Other Address-Branch	557, Jinsangmi-ro, Seolseong-myeon, Icheon-si, Gyeonggi-do, Korea

Type	Import
Industry	Wholesale of Household Electric Appliances and Parts
Main Business	Speaker, Amplifier, Deck

Established (mm/dd/yyyy)	02/07/1979

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Amplifiers(32101514)
Sell	Loudspeakers(52161512)
Sell	Audio and visual equipment(52161500)

CEO’s

Name	Kwon Dae-Hyun
Address	Suite 104-202, 2311-12, Nambusunhwan-ro, Seocho-gu, Seoul, Korea
Date of Birth	08/07/1968
Title	President & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

3,000,000,000

Employees

Formation

Co., Ltd by shares

Bank Details

Woori Bank-Sadang Branch

Shinhan Bank

Hana Bank

Kookmin Bank

Busan Bank

Corporate Registered No.

110111-0246432

Business Registered No.

114-81-33871

Permit & Licenses

03/2002 ISO 9001

Int’l Trade No.: 960360

Shareholder Position

Name	Shares	%
KWON KYUNG-SUB & HIS FAMILY(6)	300,000	100.00
TOTAL	300,000	100.00

Company History

04/22/1973 Established

02/07/1979 Incorporated as Tae Young Trading Co., Ltd.

0/01/1998 M&A with Bando Sound Co., Ltd.(110111-0386189)

06/15/1998 Moved to the present HQ address from 1009-1, Bangbae-dong, Seocho-gu, Seoul, Korea

02/27/2004 Changed company name to the present name

12/20/2007 Increased the authorized shares to 300,000 shares from 100,000 shares

12/21/2007 Increased capital to 1,800,000,000 KRW from 1,000,000,000 KRW

03/30/2013 Increased capital to 3,000,000,000 KRW from 1,800,000,000 KRW

Management

Job Description	Title	Name	Sex	Nationality	Inauguration Date
President & CEO	Mr.	Kwon Dae-Hyun	Male	Korean	01/03/2014
Director	Mr.	Kwon Kyung-Sub	Male	Korean	01/30/1994
Director	Mr.	Kwon Dae-Joon	Male	Korean	07/25/2012
Auditor	Mr.	Kwon Jong-Seob	Male	Canadian	03/12/2012

Financials

Year / Unit : KRW	Sales	Assets	Net Income
2013	31,749,805,597	29,435,986,573	722,119,519
2012	32,543,335,162	26,829,007,707	666,414,697
2011	34,278,781,762	28,061,145,584	847,899,048
2010	38,036,998,161	26,901,247,286	1,715,725,929
2009	34,921,977,138	31,158,173,904	1,689,197,688
2008	37,558,280,996	28,213,756,764	428,238,030
2007	36,546,889,178	26,660,668,252	2,872,469,527
2006	34,057,479,359	25,105,882,538	3,640,903,295
2005	32,276,648,084	22,733,076,619	3,162,366,155

Financial Description

Authorized Capital(KRW)	3,000,000,000
Paid-Up Capital(KRW)	3,000,000,000
Total Issued Shares	300,000

Balance Sheet
Unit : Korean Won	As of 12/31/2013	As of 12/31/2012	As of 12/31/2011
Total Assets	29,435,986,573	26,829,007,707	28,061,145,584
Current Assets	16,895,305,365	19,549,062,539	21,059,060,937
-Quick Assets	9,555,214,647	7,853,128,008	10,394,149,098
-Inventories	7,340,090,718	11,695,934,531	10,664,911,839
Fixed Assets	12,540,681,208	7,279,945,168	7,002,084,647
-Investment	2,259,429,029	805,444,763	389,820,540
-Tangibles	10,111,178,069	6,303,760,295	6,096,056,557
-Intangibles
-Others	170,074,110	170,740,110	516,207,550
Total Liabilities	9,791,507,160	11,289,404,971	12,179,609,977
Current Liabilities	8,537,313,796	9,199,942,892	11,148,591,225
Fixed Liabilities	1,254,193,364	2,089,462,079	1,031,018,752
Capital Stock	3,000,000,000	1,800,000,000	1,800,000,000
Capital Surplus	22,056,350	22,056,350	22,056,350
Profit Surplus	12,339,665,905	13,717,546,386	14,059,479,257
Capital Adjustment	4,282,757,158	-
Total Equity	19,644,479,413	15,539,602,736	15,881,535,607
Liab. & Shareholder’s Equity	29,435,986,573	26,829,007,707	28,061,145,584

Current Liabilities	8,537,313,796	9,199,942,892	11,148,591,225
Trade Payables	1,048,491,202	2,241,146,626	2,685,413,419
Short-Term Borrowings	5,250,000,000	5,250,000,000	6,288,996,640
Account Payables	445,912,169	691,136,262	722,809,353
Advance Receipts	33,623,058	516,586,860	14,339,560
Withholdings	31,128,650	37,755,930	46,553,262
VAT Withhold	383,554,397	155,489,689	297,576,200
Accrued Expenses	4,363,146	8,760,987	8,639,882
Accrued Income Tax	174,283,404	95,363,458	14,262,909
Guarantee Deposit Withhold	80,000,000	100,000,000	70,000,000
Current Portion of Long-Term Debts	1,000,000,000	-	1,000,000,000
Other Current Liabilities	85,957,770	103,703,080	-
Fixed Liabilities	1,254,193,364	2,089,462,079	1,031,018,752
Long-Term Borrowings	410,872,854	1,410,872,854	410,872,854
Leasehold Deposit Received	223,000,000	203,000,000	193,000,000
Provision for Severance & Retirement	1,876,457,090	1,762,710,850	1,625,618,870

Income Statement
Unit : Korean Won	As of 12/31/2013	As of 12/31/2012	As of 12/31/2011
Sales	31,749,805,597	32,543,335,162	34,278,781,762
Cost of Sold Goods	22,439,778,167	22,921,752,996	23,565,494,668
Gross Profit	9,310,027,430	9,621,582,166	10,713,287,094
Selling & Admin. Expenses	8,075,407,353	8,559,992,354	9,123,386,470
Operating Income	1,234,620,077	1,061,589,812	1,589,900,624
Non-Operating Income	341,721,006	493,720,147	375,976,740
Non-Operating Expenses	607,429,886	730,498,460	960,185,340
Income Before Taxes	968,911,197	824,811,499	1,005,692,024
Income Taxes Expenses	246,791,678	158,396,802	157,792,976
Net Income	722,119,519	666,414,697	847,899,048

Cash Flows
Unit : Korean Won	As of 12/31/2013	As of 12/31/2012	As of 12/31/2011
Cash Flows from Operating	4,928,151,155	958,756,961	-664,945,725
-Net Income	722,119,519	666,414,697	847,899,048
-Exp. without Cash Outflow	1,320,018,965	1,007,933,299	1,271,716,019
-Revenue without Cash Inflows	-88,002,740	-10,226,033	-3,681,526
-Changes in Asset/ & Liability	2,974,015,411	-705,365,002	-2,780,879,266
Cash Flows from Investing	-2,176,987,760	-487,072,538	-99,787,474
-Cash Inflow from Investing	256,458,148	402,227,813	736,263,415
-Cash Outflows for Investing	-2,433,445,908	-889,300,351	-836,050,889
Cash Flows from Financing	-900,000,000	-1,898,996,640	317,688,770
-Cash Inflows from Financing	20,000,000	1,540,000,000	3,248,018,770
-Cash Outflows from Financing	-920,000,000	-3,438,996,640	-2,930,330,000
Increase/Decrease in Cash	1,851,163,395	-1,427,312,217	-447,044,429
Cash at the Beginning of Year	862,936,313	2,290,248,530	2,737,292,959
Cash at the End of Year	2,714,099,708	862,936,313	2,290,248,530

Products, Technologies, Services Description

Main Products & Services

Speaker, Amplifier, Deck

Brand Name : JBL, AKG Acoustics, Soundcraft

Trade Partners & Competitors

Suppliers

JBL INTERNATIONAL

JBL PROFESSIONAL

AKG ACOUSTICS

SOUNDCRAFT

(*)KDB CAPITAL CORPORATION(110111-0137558) provides the vehicle leasing services to the subject company.

Customers

Competitors

CRESYN CO., LTD.

8-22, JAMWON-DONG, SEOCHO-GU, SEOUL, KOREA

TEL:+82-2-2041-2700 FAX:+82-2-2041-2788

I-SOUND CO., LTD.

2-601, ACE HIGHTECH CITY, 55-20, MULLAEDONG 3-GA, YEONGDEUNGPO-GU, SEOUL, KOREA

TEL:+82-2-2663-7100 FAX:+82-2-2663-7116

SAMBON PRECISION & ELECTRONICS CO., LTD.

204, SAMJEONG-DONG, OJEONG-GU, BUCHEON-SI, GYEONGGI-DO, KOREA

TEL:+82-32-683-7300 FAX:+82-32-678-5868

Related Parties (Subsidiaries, Joint-Venture & Affiliates)

Affiliates

SOVICO AV CORPORATION(110111-0990774)

SOUNDUS CO., LTD.(110111-1014896)

(48.00% held by the subject company)

INKEL PA CO., LTD.( 120111-0475675)

(75.71% held by the subject company)

AUDIO WORKS CO., LTD.(135711-0067308)

(22.50%held by the subject company)

SOVICO ENG CO., LTD.(205711-0011061)

(99.17%held by the subject company)

SOVICO SYSTEM CO., LTD.(110111-1083065)

Cooperative Enterprise

-Insured Company

LIG INSURANCE CO., LTD.(110111-0017859)

DONGBU INSURANCE CO., LTD.(110111-0095285)

Sales by Region (Activity & Markets)

The subject deals with the companies in Denmark, Germany, Japan and USA.

Court Action

No.

News Clipping

------------

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.44
UK Pound	1	Rs.98.15
Euro	1	Rs.77.38

INFORMATION DETAILS

Analysis Done by :	SUB

Report Prepared by :	NIT

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.