MIRA INFORM REPORT

Report Date :

11.09.2014

IDENTIFICATION DETAILS

Name :	DOOSAN ENGINE CO., LTD.

Registered Office :	18, Gongdan-ro 21beon-gil, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea

Country :	South Korea

Financials (as on) :	30.06.2014

Date of Incorporation :	30.12.1999

Com. Reg. No.:	609-81-40128

Legal Form :	Listed Company

Line of Business :	Manufacture of Internal Combustion Piston Engines

No of Employees :	1,006

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 – June 01, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

South Korea

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	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	DOOSAN ENGINE CO., LTD.
Registered Address	18, Gongdan-ro 21beon-gil, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea
Building
Zip Code	641-370
Tel	+82-55-260-6000
Fax	+82-55-282-0588
E-mail	wookyu.kim@doosan.com;humjin.baek@doosan.com
Website	www.doosanengine.com
Trading Address	18, Gongdan-ro 21beon-gil, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Korea (Old Address System : 69-3, Sinchon-dong, Changwon-si, Gyeongsangnam-do, Korea)
Tel	+82-55-260-6000
Fax	+82-55-282-0588
Other Address-Geoje Office	1, Aju-dong ,Geoje-si, Gyeongsangnam-do, Korea
Tel	+82-55-682-2261
Fax	+82-55-681-7427
Other Address-Busan Office	29, Bongnae-dong 5-ga ,Yeongdo-gu, Busan, Korea
Tel	+82-51-417-1388
Fax	+82-51-410-8621
Type	Export
Industry	Manufacture of Internal Combustion Piston Engines
Main Business	Diesel Engine

Established (mm/dd/yyyy)	12/30/1999

The Subject owns the premises of Registered Address/Factory.

Detailed Products

Activity	Detailed Products (UNSPSC)
Sell	Engines(26101500)
Sell	Diesel power plants(26131501)
Sell	Crankshaft
Sell	Turbocharger

CEO’s

Name	Kim Dong-Cheol
Date of Birth	06/27/1952
Title	President & CEO
Sex	Male
Nationality	Korean

Profiles

Capital (KRW)

69,500,000,000

Employees

1,006

Formation

Listed Company (Korea Stock Exchange : 082740) as of 01/05/2011

A Company of DOOSAN GROUP

Bank Details

Korea Exchange Bank-Changwon Branch

Corporate Registered No.

194211-0038423

Business Registered No.

609-81-40128

Permit & Licenses

Int’l Trade No.: 24023803

Shareholder Position

Name	Shares	%
DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO.,LTD(194211-0000943)	29,650,000	42.66
SAMSUNG HEAVY INDUSTRIES CO.,LTD(110111-0168595)	9,815,000	14.12
DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD.(110111-2095837)	5,600,000	8.06
EMPLOYEE STOCK OWNERSHIP ASSOCIATION	1,644,379	2.37
OTHERS	22,790,621	32.79
TOTAL	69,500,000	100.00

Company History

The engine business of Doosan Heavy Industries & Construction (former Hanjung), launched in 1983 and that of Samsung Heavy Industries, launched in 1994 were merged. In the merging process, Daewoo Shipbuilding & Marine Engineering joined this new company as a major shareholder. On January 1, 2000, Doosan Engine was officially set up under the banner of Doosan with the first initial letters of these three companies(HSD ENGINE CO., LTD.)

12/30/1999 Incorporated as HSD ENGINE CO., LTD.

03/2005 Changed company name to the present name

11/2005 Awarded US$500 Million Export Top Prize

11/2007 Awarded 1Billion Export Top Prize

12/29/2009 Increased capital to 62,500,000,000 KRW from 30,000,000,000 KRW

Management

Job Description	Title	Name	Nationality	Date of Birth	Education
President & CEO	Mr.	Kim Dong-Cheol	Korean	1952.06.27	Seoul National University, Korea
Vice President & CEO	Mr.	Cho Nam-Seok	Korean	1959.10.05	Korea University, Korea
Executive Director	Mr.	Kim Jeong-Kwon	Korean	1955.06.30	Youngnam University, Korea
Executive Director	Mr.	Sunwoo Myung-Hwan	Korean	1955.11.	Hanyang University, Korea
Vice President & CFO	Mr.	Jang Myung-Ho	Korean	1964.02.07	Gyungbuk National Uiniversity, Korea
Outside Director / Auditor	Mr.	Oh Se-Jong	Korean	1943.06.08	UC Berkley, USA
Outside Director	Mr.	Jung Koo-Young	Korean	1938.11.12	Yonsei University, Korea
Outside Director / Auditor	Mr.	Yoon Yong-Seok	Korean	1954.10.	George Washington University, USA
Outside Director	Mr.	Lee Jae-Young	Korean	1965.12.	Washington University, USA
Outside Director / Auditor	Mr.	Park Bum-Hoon	Korean	1948.04.	Dongkuk University, Korea
Outside Director	Mr.	Song Ho-Geun	Korean	1956.01.	Harvard University, USA

Financials

Year / Unit : KRW	Sales	Assets	Net Income
(*)06/2014	408,913,791,927	1,606,504,977,499	-23,789,323,154
(*)2013	743,104,362,158	1,538,917,384,654	-6,151,839,103
(*)2012	1,377,618,958,445	1,672,968,308,719	54,366,505,061
(*)2011	2,005,949,262,462	2,051,480,611,768	209,636,479,757
(*)2010	1,831,615,390,618	2,229,611,103,972	266,059,737,115
2009	1,772,597,107,485	2,464,900,272,093	-249,695,256,019
2008	1,734,836,578,853	3,138,764,982,205	-512,779,968,953
2007	1,221,957,444,340	1,857,689,988,086	103,001,092,083
2006	1,016,816,117,889	934,211,090,107	52,418,002,030
2005	756,782,214,023	737,005,633,136	21,111,237,395
2004	588,395,875,988	637,788,986,998	3,111,534,708
2003	468,249,817,815	336,826,737,075	11,783,531,830

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

Financial Description

Authorized Capital(KRW)	120,000,000,000
Paid-Up Capital(KRW)	69,500,000,000
Total Issues Shares	69,500,000

Balance Sheet
Unit : Korean Won	01/01/2014~06/30/2014	As of 12/31/2013	As of 12/31/2012
Total Assets	1,606,504,977,499	1,538,917,384,654	1,672,968,308,719
Current Assets	558,492,387,923	486,070,488,542	633,297,122,185
Cash & Cash Equivalents	56,295,067,169	41,258,747,154	94,678,541,896
Current Financial Instruments	77,810,000,000	145,000,000,000	170,016,124,100
Marketable Financial Instruments	7,000,000,000
Short-Term Receivables	1,138,050,000	9,155,850,000	1,128,650,000
Trade Receivables & Other Receivables	86,578,985,346	25,511,680,236	85,273,333,022
Other Receivables-Construction	16,267,131,205	10,720,649,184	5,930,477
Deferred Income Tax Assets	668,408,889	1,136,878,000
Derivatives	44,075,814,364	40,237,290,875	38,090,761,839
Confirmed Agreement Appraisal Assets	23,350,911,026	20,346,022,821	20,627,029,543
Inventories	226,992,443,489	176,548,148,458	205,200,840,990
Other Current Assets	18,315,576,435	16,155,221,814	18,275,910,318
Non-Current Assets	1,048,012,589,576	1,052,846,896,112	1,039,671,186,534
Non-Current Financial Instruments	1,820,931,987	1,803,167,918	1,765,725,601
Marketable Financial Instruments	72,048,000	7,072,048,000	7,922,117,114
Investment_Related Companies	363,994,102,690	363,994,102,690	363,994,102,690
Long-Term Receivables	4,525,221,838	4,753,397,044	5,155,220,988
Other Long-Term Receivables	10,945,913,418	9,693,320,091	14,958,733,970
Tangibles	596,538,190,785	606,336,556,559	576,429,596,197
Intangibles	34,164,212,489	24,908,539,891	18,614,288,888
Derivatives	10,456,118,138	6,095,491,976	12,352,565,282
Confirmed Agreement Appraisal Assets	23,616,943,590	26,435,478,337	36,354,513,147
Other Non-Current Assets	1,878,906,641	1,754,793,606	2,124,322,657
Total Liabilities	950,263,332,921	858,981,797,869	1,028,488,896,541
Current Liabilities	642,268,699,335	527,886,844,781	710,931,856,014
Trade Payables & Other Payables	162,740,334,879	85,188,695,183	164,983,624,600
Other Payables-Construction	6,087,205,423	3,773,450,411	19,416,602,363
Short-Term Borrowings	9,934,272,800		29,828,495,145
Advance Receipts	320,775,239,807	321,968,490,284	374,193,000,937
Current Portion of Long-Term Debts	80,432,000,000	63,318,000,000	64,266,000,000
Deferred Income Tax Credit		3,822,392,136	18,195,115,048
Derivatives	5,674,270,672	2,615,663,130	3,330,156,254
Confirmed Agreement Appraisal Debts	44,184,221,765	34,731,375,957	26,500,340,834
Finance Guarantee Debts	33,110,739	34,344,231
Other Current Liabilities	12,408,043,250	12,434,433,449	10,218,520,833
Non-Current Liabilities	307,994,633,586	331,094,953,088	317,557,040,527
Long-Term Borrowings	20,000,000,000	50,000,000,000	114,266,000,000
Debentures	189,151,812,608	189,044,616,891	99,461,490,305
Other Long-Term Borrowings	2,374,729,853	1,112,640,295	1,057,450,866
Confirmed Salaries	12,614,616,094	10,608,946,661	19,815,842,555
Derivatives	999,090,874	279,647,734	2,112,892,517
Confirmed Agreement Appraisal Debts	31,699,801,625	21,394,738,642	21,881,552,439
Finance Guarantee	5,109,663,780	2,942,780,895	4,121,160,256
Provisions	8,509,348,314	10,097,900,058	19,568,071,955
Deferred Income Tax Credit	37,535,570,438	45,613,681,912	35,272,579,634
Capital Stock	69,500,000,000	69,500,000,000	69,500,000,000
Capital Surplus	367,214,701,425	367,214,701,425	367,214,701,425
Others	450,770,905	355,389,958	397,167,523
Other General Accumulated Amounts	36,207,539,902	36,207,539,902	-136,854,571
Profit Surplus	182,868,632,346	206,657,955,500	207,504,397,801
Total Equity	656,241,644,578	679,935,586,785	644,479,412,178
Liab. & Shareholder’s Equity	1,606,504,977,499	1,538,917,384,654	1,672,968,308,719

Income Statement
Unit : Korean Won	01/01/2014~06/30/2014	As of 12/31/2013	As of 12/31/2012
Sales	408,913,791,927	743,104,362,158	1,377,618,958,445
Cost of Sold Goods	419,977,807,209	691,062,379,511	1,224,471,146,479
Gross Profit	-11,064,015,282	52,041,982,647	153,147,811,966
Selling & Admin. Expenses	20,450,407,275	50,103,470,238	83,848,547,463
Operating Income	-31,514,422,557	1,938,512,409	69,299,264,503
Finance Income	67,830,346,885	100,716,557,461	120,952,187,860
Finance Expenses	68,954,485,640	104,139,106,746	119,418,727,442
Other Non-Operating Income	1,007,596,209	4,932,998,497	13,234,832,799
Other Non-Operating Expenses	226,701,271	8,682,574,295	11,812,205,822
Income Before Taxes	-31,857,666,374	-5,233,612,674	72,255,351,898
Income Taxes Expenses	-8,068,343,220	918,226,429	17,888,846,837
Net Income	-23,789,323,154	-6,151,839,103	54,366,505,061

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	-47,248,050,505	-55,321,566,926	-187,503,960,033
Cash Flows from Operating	-40,970,524,070	-32,633,243,128	-178,882,630,155
Net Income	-23,789,323,154	-6,151,839,103	54,366,505,061
Adjustment	18,151,400,224	3,596,792,680	47,315,630,720
Changes in Asset/ & Liability	-35,332,601,140	-30,078,196,705	-280,564,765,936
Interests Received	2,911,925,811	6,814,938,658	14,153,701,528
Interests Paid	-5,825,760,967	-10,120,201,101	-9,195,894,449
Dividends Received	-	826,620	-
Income Taxes	-3,363,691,279	-19,383,887,975	-13,579,136,957
Cash Flows from Investing	64,016,225,403	6,565,877,613	-45,042,011,326
Cash Inflow from Investing	76,377,527,126	30,369,738,965	6,426,011,253
Cash Outflows for Investing	-12,361,301,723	-23,803,861,352	-51,468,022,579
Cash Flows from Financing	-1,724,727,200	-4,672,895,145	6,785,287,127
Cash Inflows from Financing	29,934,272,800	89,421,600,000	155,983,287,127
Cash Outflows from Financing	-31,659,000,000	-94,094,495,145	-149,198,000,000
Increase/Decrease in Cash	15,036,320,015	-53,419,794,742	-225,791,034,755
Cash at the Beginning of Year	41,258,747,154	94,678,541,896	320,469,576,651
Cash at the End of Year	56,295,067,169	41,258,747,154	94,678,541,896

Products, Technologies, Services Description

Main Products & Services

The Subject Company, an integrated engine manufacturer, is a business enterprise specializing in producing diesel engine for large vessels, called the heart of the sea and power generation.

Diesel Engine for Large Vessels

Marine Diesel Engine

Diesel Power Plant

Annual Production Capacity

(Unit: Thousand H/P)

Item	2010	2009	2008
Diesel Engine	14,000	14,000	14,000

Technologies Acquired

Trade Partners & Competitors

Suppliers

DOOSAN MARINE INDUSTRY (DALIAN) CO., LTD.

Customers

SAMSUNG HEAVY INDUSTRIES CO.,LTD(110111-0168595)

HANJIN HEAVY INDUSTRIES & CONSTRUCTION CO.,LTD (180111-0602507)

DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD. (110111-2095837)

HUDONG-ZHONGHUA

ZHEJIANG OUHUA

DSIC

Competitors

HYUNDAI HEAVY INDUSTRIES CO.,LTD(181211-0000386)

STX ENGINE CO,.LTD(194211-0066763)

Related Parties (Subsidiaries, Joint-Venture & Affiliates)

Affiliates-Domestic	DOOSAN CORPORATION(110111-0013774) DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO.,LTD(194211-0000943) DOOSAN INFRACORE CO., LTD.(120111-0234469) (6.03% held by the subject company) DOOSAN ENGINE CO., LTD(194211-0038423) DOOSAN MECATEC CO., LTD.(110111-0126022) N.SHAPER CO., LTD .(110111-1943574) ORICOM INC(110111-0176986) DOOSAN DONG-A CO., LTD.(110111-3977117) DOOSAN CO., LTD.(110111-0013774) SRS KOREA CO., LTD.(110111-3139733) DOOSAN FEED & LIVESTOCK CO., LTD.(110111-3809138) DOOSAN WINE SALES CO., LTD.(110111-3942582) SAMHWA CROWN & CLOSURE CO., LTD.(134111-0003462) DOOSAN MOTTROL CO., LTD.(194211-0000274) DOOSAN CONSTRUCTION & ENGINEERING CO., LTD.(110111-0194277) NEO TRANS CO., LTD.(131111-0141801) DOOSAN TOWER CO., LTD.(110111-1722499) DOOSAN MOTORS CORP.(110111-3008293) DONG HYUN ENGINEERING CO., LTD.(110111-0508329) NEOPLUX CO., LTD.(110111-1927841) DOOSAN CAPITAL CO., LTD.(110111-1220336) 19.99% BIG & GOOD SECURITIES BROKERAGE.CO., LTD.(110111-1965560) REXCON CO., LTD.(110111-3586273) DOOSAN CUVEX CO., LTD(140111-00325709) DOOSAN BEARS INC(110111-0346919) DOOSAN MOTTROL HOLDINGS CO., LTD.(110111-3892505) DIP HOLDINGS CO., LTD.(110111-4103076) CASCO CO., LTD.(210111-0047938) (16.21% held by the subject company)
Affiliates-Overseas	DOOSAN MARINE INDUSTRY (DALIAN) CO., LTD. DAGUSHAN NANGANG INDUSTRY PARK, DEVELOPMENT ZONE, DALIAN, P.R. CHINA TEL :+86 411 8751 7957 FAX :+86 411 8751 7956 DALIAN SAMYOUNG DOOSAN METAL PRODUCT CO., LTD. (20.66% held by the subject company) DOOSAN HOLDINGS EUROPE LTD. (21.73% held by the subject company) DOOSAN INFRACORE INTERNATIONAL, INC. (20.93% held by the subject company)
Overseas Office	EUROPE BRANCH HEIDENKAMPSWEG, 100, 8. OG 20097 HAMBURG, GERMANY TEL:+49-40-2533-5656 FAX:+49-40-2533-5661 SINGAPORE BRANCH 78, SHENTON WAY, #16-04, SINGAPORE 079120 TEL:+65-6222-5515 FAX:+65-6222-5525 SHANGHAI BRANCH 828, HUA DU MANSION 14F 1200M E, ZHANG YANG ROAD, PUDONG, SHANGHAI, CHINA TEL: 22-6875-0876 FAX: 22-6875-0864 DALIAN HANJUNG-DMD INDUSTRY CO., LTD. (CHINA)

Joint Venture
Subsidiary	DOOSAN MARINE INDUSTRY (DALIAN) CO., LTD. (100.0% held by the subject company)

Cooperative Enterprise	-Technical Support from MAN DIESEL A/S WARTSILA MAN DIESEL SE SEMT PIELSTICK MITSUBISHI HEAVY INDUSTRIES ABB TURBO SYSTEM MAN DIESEL & TURBO FRANCE SAS DAIHATSU DIESEL MFG. -Insured Company DONGBU INSURANCE CO., LTD.(110111-0095285) MERITZ FIRE & MARINE INSURANCE CO., LTD.(110111-0013328)

Sales by Region (Activity & Markets)

Sales/ Unit : KRW	2010	2009	2008
Export	1,662,011,000,000	1,662,960,876,756	1,668,434,187,027
Domestic	68,057,000,000	109,636,230,729	66,402,391,826
Total	1,730,068,000,000	1,772,597,107,485	1,734,836,578,853

The Subject exports to China and Europe.

Court Action

Case No.	Court	Plaintiff(s)/ Creditor(s)/ Applicant(s)	Defendant(s)/ Debtor(s)/ Respondent(s)	Cause	Amount (KRW)	Status
	Ulsan District Court	Steamar Transportes Maritimos LDA & Others(1)	The Subject Company & Others(1)	Claim for Compensation form Damages	USD 125,163 EUR 266,865	1^st round is proceeding
	Court in Greece	GAEI(GUAM ADVANCE ENTERPRISES, INC.)	The Subject Company	Related to Chios Diesel Power Plant	Euro3,059,635	1^st round is proceeding
	Changwon District Court, Korea	Kim Kyung-Ho & Others(59)	The Subject Company	Related to Salaries	6,000,000	Proceeding
	Changwon District Court, Korea	Lee Sang-Woo & Others(461)	The Subject Company	Related to Salaries	2,310,000,000	Proceeding

News Clipping

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FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.83
UK Pound	1	Rs.98.15
Euro	1	Rs.78.66

INFORMATION DETAILS

Analysis Done by :	DIV

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%)

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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.