MIRA INFORM REPORT

Report Date :

04.10.2014

IDENTIFICATION DETAILS

Name :	KOREA ZINC COMPANY, LTD.

Registered Office :	542, Gangnam-daero, Gangnam-gu, Seoul, Korea (Old Address System : 142, Nonhyeon 1-dong, Gangnam-gu, Seoul, Korea)

Country :	South Korea

Financials (as on) :	30.06.2014

Date of Incorporation :	01.08.1974

Com. Reg. No.:	211-81-11260

Legal Form :	Listed Company

Line of Business :	Manufacture of Smelting, Refining and Alloys of Lead, Zinc and Tin

No of Employees :	1,282

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 – June 1, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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	KOREA ZINC COMPANY, LTD. (Korean Company Name : “고려아연(주)”)
Registered Address	542, Gangnam-daero, Gangnam-gu, Seoul, Korea (Old Address System : 142, Nonhyeon 1-dong, Gangnam-gu, Seoul, Korea)
Building	14th Fl., Youngpoong Bldg.
Zip Code	135-749
Tel	+82-2-519-3465
Fax	+82-2-549-8245
E-mail	hpyoo@koreazinc.co.kr;ronlee@koreazinc.co.kr
Website	www.koreazinc.co.kr
Trading Address	14th Fl., Youngpoong Bldg., 142, Nonhyeon 1-dong, Gangnam-gu, Seoul, Korea
Tel	+82-2-519-3465
Fax	+82-2-549-8245
Other Address-Onsan Factory	139, Ijin-ro, Onsan-eup, Ulju-gun, Ulsan, Korea (Old Address System : 505, Daejeong-ri, Onsan-eup, Ulju-gun, Ulsan, Korea)
Tel	+82-52-231-6021
Fax	+82-52-239-0131
Type	Export/Import
Industry	Manufacture of Smelting, Refining and Alloys of Lead, Zinc and Tin
Main Business	Zinc Ingots, Lead Ingots, Electronic Sulfuric Acid, Sodium Sulfate Anhydride
Sub Business
Established (mm/dd/yyyy)	08/01/1974

The Subject owns the premises of Onsan Factory.

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Bar(30101600)
Sell	Ingots(30103400)
Sell	Zinc Zn(12141750)
Sell	Lead(11101714)
Sell	Inorganic compounds(12352300)
Sell	Precious metal ingots(30103410)
Sell	Zinc ingots(30103404)
Sell	Inorganic acids(12352301)
Sell	Nonferrous alloy(11101711)
Sell	Copper ingots(30103408)
Sell	Magnesium hydroxide(51171503)

CEO’s

Name	Choi Chang-Keun
Address
Date of Birth	12/14/1947
Title	Chairman & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

94,350,000,000

Employees

1,282

Formation

Listed Company (Korea Stock Exchange : 010130) as of 07/28/1990

A Company of YOUNG POONG GROUP

Bank Details

Shinhan Bank-Sales 2 Team

Corporate Registered No.

110111-0168404

Business Registered No.

211-81-11260

Permit & Licenses

09/2000 KT Mark

06/29/2001 ISO 9001 by LRQA

10/2002 KS Mark

12/18/2004 ISO 14001 by LRQA

Int’l Trade No.: 807117

Shareholder Position

Name	Shares	%
YOUNG POONG CORPORATION(110111-0003824)	5,078,297	26.91
JANG HYUNG-JIN	850,829	4.51
YOUNG POONG PRECISION CORPORATION(110111-0342496)	295,110	1.56
JANG CHEOL-JIN	401,717	2.13
YOOMI DEVELOPMENT CO., LTD.(110111-0235542)	170,205	0.90
CHOI CHANG-KYU	332,093	1.76
TREASURY STOCK	1,195,760	6.34
OTHERS	10,545,989	55.89
TOTAL	18,870,000	100.00

Company History

08/01/1974 Incorporated as the present name

11/2000 Awarded US$ 700 Million Export Top Prize

11/2005 Awarded US$ 800 Million Export Top Prize

12/2006 Awarded US$ 1 Billion Export Top Prize

Detailed Information

Management

Job Description	Title	Name	Nationality	Date of Birth	Education
Chairman & CEO	Mr.	Choi Chang-Keun	Korean	1947.12.14	Seoul National University, Korea
President & CEO	Mr.	Lee Je-Joong	Korean	1958.01	Myungji University, Korea
Director	Mr.	Jang Hyung-Jin	Korean	1946.06	Yonsei University, Korea
Outside Director	Mr.	Lee Kyu-Yong	Korean	1955.12.23	Seoul National University, Korea
Outside Director / Auditor	Mr.	Kim Byung-Bae	Korean	1952.02.10	Yonsei University, Korea
Outside Director / Auditor	Mr.	Kim Jong-Soon	Korean	1951.09	Hongik University, Korea
Outside Director	Mr.	Choi Kyo-Il	Korean	1962.02	Korea University, Korea
Outside Director	Mr.	Joo Bong-Hyun	Korean	1951.01	Korea Army Academy, Korea

Financials

Year / Unit : KRW	Sales	Assets	Net Income
(*)06/2014	2,059,977,445,139	5,015,961,690,315	217,941,632,557
(*)2013	4,232,415,605,322	4,690,739,689,682	467,666,897,246
(*)2012	4,926,649,427,995	4,486,814,791,424	596,362,413,837
(*)2011	4,857,562,192,551	3,901,068,008,733	676,786,475,756
(*)2010	3,129,065,096,834	3,354,926,539,358	516,275,254,619
2009	2,575,311,864,940	2,671,653,719,015	413,690,953,859
2008	2,454,242,871,512	2,167,467,193,130	282,718,611,985
2007	2,570,809,730,725	2,479,845,028,282	421,705,786,790
2006	2,152,517,964,568	1,899,289,540,834	424,549,864,948
2005	1,375,888,685,686	1,429,069,049,801	70,965,816,805

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

Financial Description

Authorized Capital(KRW)	230,000,000,000
Paid-Up Capital(KRW)	94,350,000,000
Total Issues Shares	18,870,000

Balance Sheet
Unit : Korean Won	01/01/2014~06/30/2014	As of 12/31/2013	As of 12/31/2012
Total Assets	5,015,961,690,315	4,690,739,689,682	4,486,814,791,424
Current Assets	2,388,932,147,654	2,177,698,783,843	2,197,976,604,168
Cash & Cash Equivalents	278,074,052,120	317,171,394,474	358,405,998,064
Trade Receivables & Other Receivables	294,036,342,021	225,619,057,849	321,144,276,707
Current Financial Instruments	120,780,000,000	100,830,000,000	90,620,000,000
Short-Term Investment Assets	540,526,522,682	455,906,051,944	248,448,303,272
Current Portion of Investment_Subsidiaries	187,187,548,180	217,572,800,027	338,491,427,326
Derivatives	1,794,691,080	1,325,957,852	1,637,744,561
Other Current Assets	4,521,906,617	2,616,219,768	1,900,342,604
Inventories	962,011,084,954	856,657,301,929	837,328,511,634
Non-Current Assets	2,627,029,542,661	2,513,040,905,839	2,288,838,187,256
Long-Term Trade Receivables & Other Receivables	47,970,069,311	65,975,777,313	68,026,721,948
Non-Current Financial Instruments	414,000,000	414,000,000	414,000,000
Long-Term Investment Assets	327,513,833,039	290,278,638,012	230,258,999,151
Tangibles	1,591,181,636,075	1,473,311,917,340	1,301,488,922,318
Investment_Real Estates	10,541,935,766	10,757,645,256	11,189,064,230
Intangibles	20,338,464,974	12,223,294,274	10,485,679,261
Investment_Related Companies	45,876,906,676	45,982,211,821	45,763,475,808
Investment_Subsidiaries	583,192,696,820	614,097,421,823	621,211,324,540
Total Liabilities	691,038,765,291	513,650,241,359	651,962,156,441
Current Liabilities	535,058,642,218	364,156,299,182	485,986,259,404
Trade Payables & Other Payables	201,847,585,983	201,814,498,440	189,317,008,886
Short-Term Borrowings	106,999,765,587	87,180,550,416	112,770,548,110
Current Portion of Long-Term Borrowings	10,338,408,202	11,314,934,448	12,935,941,836
Current Portion of Debentures			106,966,379,284
Deferred Income Tax Credit	66,503,605,120	61,932,698,040	60,039,962,190
Derivatives	190,176,547	483,173,897	1,368,715,547
Other Current Liabilities	149,179,100,779	1,430,443,941	2,587,703,551
Non-Current Liabilities	155,980,123,073	149,493,942,177	165,975,897,037
Long-Term Borrowings	44,269,545,750	49,900,466,360	61,292,659,216
Confirmed Salaries	10,985,359,304	7,059,964,066	11,641,283,743
Deferred Income Tax Credit	100,725,218,019	92,533,511,751	93,041,954,078
Capital Stock	94,350,000,000	94,350,000,000	94,350,000,000
Capital Surplus	54,599,469,714	54,599,469,714	54,599,469,714
Capital Adjustment	-38,478,851,840	-38,478,851,840	-38,478,851,840
Others	13,448,697,743	-4,814,346,401	29,444,007,136
Profit Surplus	4,201,003,609,407	4,071,433,176,850	3,694,938,009,973
Total Equity	4,324,922,925,024	4,177,089,448,323	3,834,852,634,983
Liab. & Shareholder’s Equity	5,015,961,690,315	4,690,739,689,682	4,486,814,791,424

Income Statement
Unit : Korean Won	01/01/2014~06/30/2014	As of 12/31/2013	As of 12/31/2012
Sales	2,059,977,445,139	4,232,415,605,322	4,926,649,427,995
Cost of Sold Goods	1,721,726,723,446	3,546,332,827,802	4,089,247,131,267
Gross Profit	338,250,721,693	686,082,777,520	837,402,296,728
Selling & Admin. Expenses	40,241,090,660	72,917,719,546	72,304,359,520
Operating Income	298,009,631,033	613,165,057,974	765,097,937,208
Other Profits	16,248,717,240	25,909,964,383	2,393,242,350
Other Operating Income	14,225,191,568	37,595,729,778	38,393,204,873
Other Operating Expenses	30,473,908,808	63,505,694,161	35,999,962,523
Finance Profits	7,375,439,532	20,700,914,492	20,199,257,288
Finance Income	30,268,194,230	62,038,598,248	69,476,265,641
Finance Expenses	22,892,754,698	41,337,683,756	49,277,008,353
Income Before Taxes	289,136,353,325	607,956,008,083	787,690,436,846
Income Taxes Expenses	71,194,720,768	140,289,110,837	191,328,023,009
Net Income	217,941,632,557	467,666,897,246	596,362,413,837

Cash Flows
Unit : Korean Won	01/01/2014~06/30/2014	As of 12/31/2013	As of 12/31/2012
Operating Activities Cash Flows	290,906,833,299	699,198,509,389	500,919,467,493
Cash Flows from Operating	338,700,158,331	794,915,906,770	708,955,956,734
Net Income	217,941,632,557	467,666,897,246	596,362,413,837
Adjustment	148,534,231,661	263,391,623,593	269,410,881,016
Changes in Asset/ & Liability	-27,775,705,887	63,857,385,931	-156,817,338,119
Interests Received	15,129,676,479	34,992,281,550	38,850,602,352
Interests Paid	-849,167,451	-6,137,136,071	-5,380,881,492
Dividends Received	2,188,955,000	2,500,810,200	2,495,938,600
Income Taxes	-64,262,789,060	-127,073,353,060	-244,002,148,701
Cash Flows from Investing	-256,947,991,095	-508,801,903,794	-615,052,147,536
Cash Flows from Financing	-73,056,129,105	-231,630,645,377	-30,514,756,488
Increase/Decrease in Cash	-39,097,286,901	-41,234,039,782	-144,647,436,531
Cash at the Beginning of Year	317,171,394,474	358,405,998,064	503,068,054,788
Cash at the End of Year	278,074,052,120	317,171,394,474	358,405,998,064

Products, Technologies, Services Description

Main Products & Services

Zinc Ingots, Lead Ingots, Electronic Sulfuric Acid, Sodium Sulfate Anhydride

Performed Production (Unit : MT)

Item	09/2010	2009	2008
Zinc	355,353	441,565	445,232
Lead	156,510	221,953	198,407
Gold	2.23	2.75	1.72
Silver	976	1,293	1,003
Electronic Sulfuric Acid	827,049	1,012,002	988,682

Technologies Acquired

Trade Partners & Competitors

Suppliers

TRAFIGURA, GLENCORE, LOUIS DREYFUS

BHP BILLITON, GLENCORE SUMMIT

Customers

STANDARD BANK PLC(JAPAN)

SOJITZ CORPORATION(JAPAN)

MITSUBISHI CORPORATION(JAPAN)

SUMITOMO CORPORATION(JAPAN)

Competitors

POONG JEON NONFERROUS METAL CO., LTD.

8B-4L, 680-3, GYEONGSEO-DONG, SEO-GU, INCHEON, KOREA

TEL:+82-32-561-9111 FAX:+82-32-561-9118

SANGSHIN METALLIC CO., LTD.

4MA-402-2, SIHWA INDUSTRIAL COMPLEX, 701-3, SEONGGOK-DONG, DANWON-GU, ANSAN-SI, GYEONGGI-DO, KOREA

TEL:+82-31-499-4011 FAX:+82-31-499-4016

PJ ALTEK CO., LTD.

1B-4L, INCHEON WEST INDUSTRIAL COMPLEX, 682-3, GYEONGSEO-DONG, SEO-GU, INCHEON, KOREA

TEL:+82-32-561-0787 FAX:+82-32-561-0789

Related Parties (Subsidiaries, Joint-Venture & Affiliates)

Affiliates-Domestic	YOUNG POONG CORPORATION(110111-0003824) KOREA ZINC INC.(110111-0168404) KOREA CIRCUIT CO., LTD.(130111-0026749) INTERFLEX CO., LTD.(135011-0042924) YOUNG POONG ELECTRONICS CO., LTD.(135011-0032106) YOUNG POONG BOOK STORE CO., LTD.(110111-0855530) SIGNETICS CORP.(110111-0070815) KG INTERNATIONAL CORPORATION(110111-4252807) YOUNGPOONG CORPORATION(110111-0003824) YOUNG POONG PRECISION CORPORATION(110111-0342496) SEWON TEXTILE CO., LTD.(110111-0318760) TERRANIX CO., LTD.(135011-0042950) YOUNG POONG DEVELOPMENT CO., LTD.(110111-0612914) YOOMI DEVELOPMENT CO., LTD.(110111-0235542) SORIN INVESTMENT DEVELOPMENT CORPORATION(110111-0074544) XMETECH CO., LTD.(131111-0238400) STI CORP.(115611-0019652) KOREA NICKEL CORP.(110111-0529482) (19.00% held by the subject company) SORIN I & T CO., LTD.(110111-1260077) (33.34% held by the subject company) KG GREENTECH CO.,LTD.(230111-0164077) (60.00% held by the subject company) CLEAN KOREA CO., LTD.(134711-0004996) (100.0% held by the subject company) SORIN CORPORATION(110111-0365068) (49.97% held by the subject company) KORYO HEAVY EQUIPMENT CO., LTD.(181211-0020558) (100.0% held by the subject company) KG ENGINEERING CO., LTD.(110111-2102153) (90.00% held by the subject company) ALANTUM CORPORATION(131111-0215078) (35.98% held by the subject company)
Affiliates-Overseas	KZ - PRANDA CO., LTD.(THAILAND) (40.0% held by the subject company) KZ MINERALS BOLIVIA S.A.(BOLIVIA) (99.9% held by the subject company) KZ MINERALS HOLDINGS PTE.LTD.(SINGAPORE) (100.0% held by the subject company) MINOCQUA METALS CORP.(AUSTRALIA) (50.0% held by the subject company) PAN PACIFIC METAL MINING CORP.(CANADA) (100.0% held by the subject company) COLWELL KENNEDY AUSTRALIA PTY., LTD.(AUSTRALIA) (100.0% held by the subject company) SUN METALS HOLDING PTY., LTD.(AUSTRALIA) (100.0% held by the subject company) YP JAPAN CORP.(JAPAN) CHINA CIRCUIT(TIANJIN) CO., LTD.(CHINA) SUN METALS CORP., PTY., LTD.(AUSTRALIA) ALANTUM EUROPE GMBH(GERMANY) AATM(DALIAN) CO., LTD.(CHINA) AATM(SHENYANG) CO., LTD.(CHINA) KZI SINGAPORE PTE. LTD. PT. KZI INDONESIA YP JAPAN CORP.
Overseas Office
Liaison Office
Overseas Branch
Joint Venture
Subsidiary	SORIN CORPORATION(110111-0365068) (49.97% held by the subject company) CLEAN KOREA CO., LTD.(134711-0004996) (100.0% held by the subject company) KORYO HEAVY EQUIPMENT CO., LTD.(181211-0020558) (100.0% held by the subject company) SORIN I & T CO., LTD.(110111-1260077) (33.34% held by the subject company) KG ENGINEERING CO., LTD.(110111-2102153) (90.00% held by the subject company) ALANTUM CORPORATION(131111-0215078) (35.98% held by the subject company) PAN PACIFIC METAL MINING CORP.(CANADA) (100.0% held by the subject company) COLWELL KENNEDY AUSTRALIA PTY., LTD.(AUSTRALIA) (100.0% held by the subject company) SUN METALS HOLDING PTY., LTD.(AUSTRALIA) (100.0% held by the subject company) SUN METALS CORP., PTY., LTD.(AUSTRALIA) KZ MINERALS BOLIVIA S.A.(BOLIVIA) (99.9% held by the subject company) KZ MINERALS HOLDINGS PTE.LTD.(SINGAPORE) (100.0% held by the subject company) KG GREENTECH CO.,LTD.(230111-0164077) (60.00% held by the subject company)
Corporate Ownership
Major Shareholders
Cooperative Enterprise	-Insured Company LIG INSURANCE CO., LTD.(110111-0017859)

Sales by Region (Activity & Markets)

Sales/ Unit : Million KRW	09/2011	2010	2009
Export	2,963,274	2,305,665	1,928,080
Domestic	760,307	823,400	647,232
Total	3,723,581	3,129,065	2,575,312

The Subject deals with the companies in Australia.

Court Action

No.

News Clipping

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.75
UK Pound	1	Rs.100.07
Euro	1	Rs.77.95

INFORMATION DETAILS

Analysis Done by :	DIV

Report Prepared by :	TPT

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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