System Day Ltd Company Formations & Company Documents tel: fax: systemday.

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1 SystemD ay System Day Ltd Company Formations & Company Documents tel: fax: systemday.com

2 Comprehensive Credit Analysis Report C o m p a n y : BLUE WATER ENG CO.,LTD. C E O : Moon,Soo Hak Tax Ragistration : R Ne p o r t i n og D a t e. :

3 Subject Summary Industry Analysis Profitability Analysis Stability Analysis Growth & Activity Analysis Analyst Opinion Company Profile Financial Statement Negative Credit Information Litigations Rating Definitions

4 01. Subject Summary Subject Identification Subject Name BLUE WATER ENG CO.,LTD. KIS Credit Rating Type Registered corporation Stock Code - Tax Identification Established President(CEO) Moon,Soo Hak Industry No. of Employees Address E37011 Sewage Treatment Services 6 Teheran-ro 10-gil Gangnam-gu Seoul8 Tel Website Risk High B is the average credit capability for commercial transactions and highly exposed on possible credit risk in changes of macro and micro economic condition. Watch Rating Fiscal Year : Date of Risk Low Real-time(daily-based) Credit Monitoring Reservation Date of Risk High Risk Low Warning: The indication of credit status changes has been observed, but expect no or minimum effect on credit status. KIScode is an unique ID code which NICE Information Service assigns to each company. The code can be unavailable for small companies. Credit Rating History B+ Notes: Although there can be more than one rating made each year, only the last credit rating of each year is shown above. Notes: The credit rating is estimated by the analysis based on the recent data of NICE Information Service Co., Ltd. The credit rating is for the purpose of indicating level of credit within valid period of credit reports and can be used as reference to open or maintain business accounts. The credit rating is valid from the date of the rating to the date of the expiration and doesn't reflect the changes of the corporations' status after the date of the rating. NICE Information Service Co., Ltd. is not responsible for your decisions made based on the credit reports. Company's Financial Standing within the Industry Cash Flow Rating Excellent (Cash Flow Rating:CF1) Activity Profitability Stability Growth Scale The ability of generating cash flow is in excellent condition. * Liquidity of the corporations and level of solvency indicator.

5 01. Subject Summary Financial Highlights Fiscal Yr. Total Asset Total Liability Total Stockholder s Sales(Net) Operating Income Net Income Equity , , , , ,049 1, , Audit Opinion - Fiscal Year End - (Unit : million KRW) Financial Ratio Highlights Financial Ratio Subject B.O.K. Avg. Subject B.O.K. Avg. Subject B.O.K. Avg. Net Sales Growth % Growth Total Assets Growth % Operating Income Growth % Profitability Income to Total Asset Ratio Net Income to Shareholder's Equtiy % % Net Income to Net Sales % Equity to Total Assets % Stability Activity Total Liabilities to Shareholder's Equity Total Borrowings to Total Assets % % Total Assets Turnover Times Account Receivables Turnover Times Inventory Turnover Times B.O.K. Avg. shows an average value calculated by Bank of Korea every year. Time Series Analysis of Financial Ratio Growth Unit : % Profitability Unit : Million Won, % Stability Unit : Million Won,% Activity Unit : times

6 01. Subject Summary Financial Highlights (Quarterly) (Unit : million KRW) Fiscal Yr. Total Asset Total Liability Total Stockholder s Sales Operating Income Net Income Equity , , , , ,049 1, , Financial Ratio Highlights (Quarterly) Financial Ratio Net Sales Growth % Growth Profitability Total Assets Growth % Operating Income Growth Income to Total Asset Ratio Net Income to Shareholder's Equtiy % % % Net Income to Net Sales % Equity to Total Assets % Stability Activity Total Liabilities to Shareholder's Equity Total Borrowings to Total Assets % % Total Assets Turnover Times Account Receivables Turnover Times Inventory Turnover Times Time Series Analysis of Financial Ratio (Quarterly) Growth Unit : % Profitability Unit : Million Won, % Stability Unit : Million Won,% Activity Unit : times

7 02. Industry Analysis Industry Profile Industry Name Industry Code (KSIC) Sewage Treatment Services E37011 # of Companies in the industry 35 companies Financial Analysis of (Sewage Treatment Services) Industry (Unit : million KRW, %) Industry Average (Financial) Total Asset 4,330,311 4,367,240 4,308,567 Total Stockholder s Equity 635, , ,226 Financial Sales(NET) 811, ,238 1,096,171 Operating Income 124, , ,732 Net Income 14,430-8,075 12,668 Operating Income to Net Sales Ratio Net Income to Total Assets Ratio Financial Ratio Debt Ratio Current Ratio Net Sales Growth Bankruptcy Rate Analysis (Unit : %) Delinquency Rate Analysis (Unit : %)

8 03. Profitability Analysis Key Financial Ratio Ratio Unit B.O.K. Avg. Operating Income to Net Sales Ratio Net Income to Total Assets Ratio (2014) NICE Industry Avg. (2015) % % Interest Coverage Ratio Times EBITDA/Sales(Net) % Reference Ratio Formula Description Operating Income to Net Sales Ratio Net Income to Total Assets Ratio Interest Coverage Ratio Operating Income / Sales(Net)) x 100 (Net Income / Avg Total Assets) x 100 Operating Income / Financial Charges EBITDA/Sales(Net) (EBITDA / Sales(Net)) x 100 It is an index that compares the sales and operating profit of the company s operation performance; the higher the index the high efficiency of operating business since the profit earned is high with the same sales. It is an index that compares the assets held by company and gained profit by company, and it shows how efficiently the asset held by the company is being operating. The higher the better. It is an index that compares operating profit from outcome of the company s operating activities and financial expenses of the cost of outsourced funds, the higher the high ability to repay the debt principal and interest through the sales activities of the company. EBITDA, sum amount of depreciation cost and intangible assets that does not require cash from operating profit, is used as the substitution index of cash flow from operating activities. The higher the better because compared to the sales, earned cash is larger when the ratio is high. Time Series Analysis of Financial Ratio Operating Income to Net Sales Ratio Unit : % Net Income to Total Assets Ratio Unit : % Interest Coverage Ratio Unit : % EBITDA/Sales(Net) Unit : %

9 04. Stability Analysis Key Financial Ratio Ratio Unit B.O.K. Avg. (2014) NICE Industry Avg. (2015) Debt Ratio % Current Ratio % Total Borrowings to Total Assets Fixed Assets to Long-term Capital % % Reference Ratio Formula Description Debt Ratio Current Ratio Total Borrowings to Total Assets Fixed Assets to Long-term Capital (Total Liabilities / Total Stockholders Equity) x 100 (Total Current Assets / Total Current Liabilities) x 100 (Total Borrowings /Total Assets) x 100 {(Total Non-Current Assets Total Deferred Assets) / (Total Stockholders Equity It is an index that compares the borrowed capital (debt), the source of corporate assets, and equity share capital. The financial structure is poor when the debt ratio goes high because it means high burden of repayment of debt. Less than 200% of debt ratio is normal. It is an index that compares the size of current assets that can be cashed within 1 year and current liabilities to be repaid within one year of the assets that are held by the company. As it evaluates the company s ability to pay short-term borrowings, the higher It is an index that compares the size of the total assets that are held by the company and the debt repayment by the company. The higher ratio means the high burden of repayment of debt. Because the non-current assets take long time to liquidate through operating activities, it has to be obtained with less short-term financing obligations when purchasing such as non-current liabilities and shareholders equity. Time Series Analysis of Financial Ratio Debt Ratio Unit : % Current Ratio Unit : % Total Borrowings to Total Assets Unit : % Fixed Assets to Long-term Capital Unit : %

10 05. Growth & Activity Analysis Key Financial Ratio Ratio Unit B.O.K. Avg. (2014) NICE Industry Avg. (2015) Net Sales Growth Rate % Net Income Growth Rate % Total Asset Turnover Ratio Times Receivable Turnover Ratio Times Reference Ratio Formula Description Net Sales Growth Rate Net Income Growth Rate Total Asset Turnover Ratio Receivable Turnover Ratio (Net Sales of Current Period / Net Sales of Previous Period-1) x 100 (Net Income of Current Period / Net Income of Previous Period-1)x100 Net Sales / Average Total Assets Net Sales / Average Account It is an index showing the degree of increased in sales year-on-year, and is desirable to have the positive (+) value. It is an index showing the degree of increased in net profit year-on-year, and is desirable to have the positive (+) value. If the net income for the year or the previous year s value is less than 0, the value cannot be displayed. With the value of sales of the company divided by the total assets, this index shows how efficiently the total capital invested in the company is being used. With the value of sales of the company divided by the annual average amount of accounts receivable, high level means quick liquidation of the trade receivables that are held by the company. If the turnover of receivables is excessively lower than the industry average, there are possibilities of liquidity problems due to elongation of trade receivables collection period. Time Series Analysis of Financial Ratio Net Sales Growth Rate Unit : % Net Income Growth Rate Unit : % Total Asset Turnover Ratio Unit : % Receivable Turnover Ratio Unit : %

11 Analyst Company Opinion Profile BLUE WATER ENG CO.,LTD Registration Company Name BLUE WATER ENG CO.,LTD. Established Date Tax Identification # Incorporation # President(CEO) Moon,Soo Hak Homepage No. of Employees 6 ( ) Type/Size Registered corporation / Small & Medium enterprises Listed Date - Address (06234) Teheran-ro 10-gil Gangnam-gu Seoul8 TEL : FAX : Industry (KSIC) E37011 Sewage Treatment Services Major Products - Group Affiliated - Reference Bank Kookmin Bank Fiscal Year End 12

12 07. Company Profile (Cont d) Major Shareholders ( as of ) Name of Shareholder No. of Shares Percentage Mun Su Hak 12, Sin Yeon Ok 6, Mun Seon Yeong 2, Displays up to 5 shareholders Employee Details ( as of ) Executive Officers General Admin. Technical Workers Production Workers Others Total Managements ( as of ) Position name Date of Birth Recent Career CEO Moon, SuHak Displays up to 10

13 07. Company Profile (Cont d) Revenue Details ( as of ) BLUE WATER ENG CO.,LTD (Unit: million : million KRW, KRW) %) Category/Product Amount Amount Amount Water and Sewage equipment 2,436 2,600 1,857 Total 2,436 2,600 1,857 Major Customers (Selling Information) ( as ) (Unit: million KRW, %) Customer Name Tax ID # Sales Amount Ratio Younggwang water and sewage ,445, Samchuk water and sewage ,680, Baeknyum technology Co.,Ltd , Major Suppliers (Purchasing Information) ( as ) (Unit: million KRW, %) Supplier Name Tax ID # Sales Amount Ratio Zailum water solution Korea ,868, Nokmyung building ,713, Sejong Tech ,600, Hansol Chem Bio Tec ,210, Sindorico , Dream Depot , Dahyun accounting firm , Costco Korea , KT , SK Telecom Co.,Ltd ,

14 08. Financial Statement Statement of Financial Position (GAAP) (Unit : million KRW, %) TOTAL CURRENT ASSETS 1, , Total Quick Assets 1, , (Cash & Cash Equivalents) 1, (A/R-construction, other receivables-operations) Total Inventory TOTAL NON-CURRENT ASSETS Total Tangible Assets (Land) (Construction in-progress) Total Intangible Assets Total Investments Assets TOTAL ASSETS 2, , , Total Current Liabilities 1, (Trade account payable) (Short-term borrowings) Total Non-current liabilities (Total bonds) (Long-term borrowings) TOTAL LIABILITIES 1, (Capital stocks) (Capital surplus) (Retained earnings) (Capital adjustments) TOTAL STOCKHOLDERS' EQUITY Ratio represents the component ratio to total assets. Debt Structure (GAAP) (Unit : million KRW, %) SHORT-TERM BORROWINGS Short-term Borrowings Current Portion of Long-term Borrowings Total short-term Bond LONG-TERM BORROWINGS Total Bonds Long-term Borrowings TOTAL BORROWINGS Financing Lease Liabilities TOTAL BORROWINGS (Including Financing Lease Liabilities) Ratio of Total Borrowings represents the component ratio to Total Assets where as other ratio represents the component ratio to Total Borrowings (including financing lease liabilities)

15 08. Financial Statement Income Statement (GAAP) (Unit : million KRW, %) SALES (NET) 2, , , Cost of Sales 2, , , GROSS PROFIT Selling & General Admin. Expenses (Depreciation) (Bad Debt Expenses) (Personnel Expenses) OPERATING INCOME Non-operating Income (Interest Income) Non-operating Expenses (Interest Expenses) Ongoing Business Income(Loss) Before Income Tax Expenses Income Taxes Expenses for Ongoing Business Income(Loss) NET INCOME Ratio represents the component ratio to Sales amount Cash Flow Analysis (GAAP) (Unit : million KRW, %) NET INCOME ADJUSTED NET INCOME (Net Inc. in A/R) (Net Inc. in Inventories) (Net Inc. in Trade Account Payable) Net Cash from Operations 1, , , Net Cash from Non-operation Capital Short & Over 1, Net Cash from Financing (Capital Increase with Consideration) (Net Inc. in LT Borrowings) (Net Inc. in Bonds) (Net Inc. in ST Borrowings) Net Inc. In Cash & Cash Equivalents Cash at the Beginning of the Period , Cash at the End of the Period 1, Ratio represents the component ratio to Sales amount

16 08. Financial Statement Statement of Financial Position (Quarterly) (Unit : million KRW, %) TOTAL CURRENT ASSETS 1, , Total Quick Assets 1, , (Cash & Cash Equivalents) 1, (A/R-construction, other receivables-operations) Total Inventory TOTAL NON-CURRENT ASSETS Total Tangible Assets (Land) (Construction in-progress) Total Intangible Assets Total Investments Assets TOTAL ASSETS 2, , , Total Current Liabilities 1, (Trade account payable) (Short-term borrowings) Total Non-current liabilities (Total bonds) (Long-term borrowings) TOTAL LIABILITIES 1, (Capital stocks) (Capital surplus) (Retained earnings) (Capital adjustments) TOTAL STOCKHOLDERS' EQUITY Ratio represents the component ratio to total assets. Income Statement (Quarterly) (Unit : million KRW, %) SALES (NET) 2, , , Cost of Sales 2, , , GROSS PROFIT Selling & General Admin. Expenses (Depreciation) (Bad Debt Expenses) (Personnel Expenses) OPERATING INCOME(Loss) Non-operating Income (Interest Income) Non-operating Expenses (Interest Expenses) Ongoing Business Income(Loss) Before Income Tax Expenses Income Taxes Expenses for Ongoing Business Income(Loss) NET INCOME Ratio represents the component ratio to Sales amount

17 08. Financial Statement Statement of Financial Position (IFRS, Non-consolidated) (Unit : million KRW, %) TOTAL NON-CURRENT ASSETS Total Tangible Assets Total Intangible Assets Investment Assets Noncurrent Trade and other Receivables Other Non-financial Asset TOTAL CURRENT ASSETS 1, , Total Inventory Trade and other Receivables Investment Assets Current Other Non-financial Asset Cash & Cash Equivalents 1, TOTAL ASSETS 2, , , Issued Capital (Capital Stocks) Retained Earnings Elements of Other Stockholder s Equity TOTAL STOCKHOLDERS EQUITY Total Non-current Liabilities (Total Borrowings) Total Current Liabilities 1, (Trade and other Payables) (Total Borrowings) TOTAL LIABILITES 1, Ratio represents the component ratio to total assets. Debt Structure (IFRS) (Unit : million KRW, %) TOTAL BORROWINGS CURRENT Short-term borrowings Current portion of long-term liabilities Total Short-term Bond TOTAL BORROWINGS NON-CURRENT (Total Bonds) (Long-term Borrowings) TOTAL BORROWINGS Financing Lease Liabilities TOTAL BORROWINGS (Including Financing Lease Liabilities) Ratio of Total Borrowings represents the component ratio to Total Assets where as other ratio represents the component ratio to Total Borrowings (including financing lease liabilities)

18 08. Financial Statement Income Statement (IFRS, Non-Consolidated) (Unit : million KRW, %) REVENUE (NET) 2, , , Cost of Sales 2, , , GROSS PROFIT Selling & General Admin. Expenses (Depreciation) (Bad Debt Expenses) (Personnel Expenses) OPERATING INCOME(Loss) Non-operating Income (Finance Income) Non-operating Expenses (Finance Expenses) Ongoing Business Income(Loss) Before Income Tax Expenses Income Taxes Expenses for Ongoing Business Income(Loss) NET INCOME Ratio represents the component ratio to Sales amount Cash Flow Analysis (IFRS, Non-Consolidated) (Unit : million KRW, %) NET INCOME ADJUSTED NET INCOME (Net Inc. in A/R) (Net Inc. in Inventories) (Net Inc. in Trade Account Payable) Net Cash from Operations 1, , , Net Cash from Non-operation Capital Short & Over 1, Net Cash from Financing (Capital Increase with Consideration) (Net Inc. in LT Borrowings) (Net Inc. in Bonds) (Net Inc. in ST Borrowings) Net Inc. In Cash & Cash Equivalents Cash at the Beginning of the Period , Cash at the End of the Period 1, Ratio represents the component ratio to Sales amount

19 08. Financial Statement Statement of Financial Position (Quarterly) (IFRS, Non-Consolidated) (Unit : million KRW, %) TOTAL NON-CURRENT ASSETS Total Tangible Assets Total Intangible Assets Investment Assets Noncurrent Trade and other Receivables Other Non-financial Asset TOTAL CURRENT ASSETS 1, , Total Inventory Trade and other Receivables Investment Assets Current Other Non-financial Asset Cash & Cash Equivalents 1, TOTAL ASSETS 2, , , Issued Capital (Capital Stocks) Retained Earnings Elements of Other Stockholder s Equity TOTAL STOCKHOLDERS EQUITY Total Non-current Liabilities (Total Borrowings) Total Current Liabilities 1, (Trade and other Payables) (Total Borrowings) TOTAL LIABILITES 1, Ratio represents the component ratio to Sales amount Income Statement (Quarterly) (IFRS, Non-Consolidated) (Unit : million KRW, %) REVENUE (NET) 2, , , Cost of Sales 2, , , GROSS PROFIT Selling & General Admin. Expenses (Depreciation) (Bad Debt Expenses) (Personnel Expenses) OPERATING INCOME(Loss) Non-operating Income (Finance Income) Non-operating Expenses (Finance Expenses) Ongoing Business Income(Loss) Before Income Tax Expenses Income Taxes Expenses for Ongoing Business Income(Loss) NET INCOME Ratio represents the component ratio to Sales amount

20 09. Negative Credit Information Negative Credit Information Summary (Unit : thousand KRW) 10+ days overdue payments Negative Credit Records Negative Credit Records (Financial Institutions) (Non-Financial Institutions) Counts Amounts days Overdue Payments (Unit : thousand KRW) Date Type Default Amount Name of Bank The records will be displayed when overdue payments occur over 10 days from Financial Institutions. Displays up to 5 cases. Negative Credit Records (Financial Institutions) Regulation Type Reporting Date Released Date Total Debt Amount Default Amount Name of Institution (Unit : thousand KRW) This indicates delinquency records of when liabilities for financial institution got overdue for more than 3 months, subrogation/extreme urgency records of when debt payment of a company was made by guarantor such as insurance company, and the records of bankruptcy filed. Displays up to 5 cases. Negative Credit Records (Non-Financial Institutions) Regulation Type Reporting Date Default Amount Name of Institution This indicates the records, provided from Credit Agencies, including default arising from business-to-business transaction (non-payment of trade payables, overdue rental fees and etc.). Displays up to 5 cases. (Unit : thousand KRW)

21 10. Litigations Litigation Summary (Unit : thousand KRW) No. of Records Amount of Litigation Amount of Litigation Amount of Litigation to Total Assets (%) to Net Sales (%) Ongoing Case Lost Defendant Closed Partially Lost Won Others Total Ongoing Case Lost Plaintiff Closed Partially Lost Won Others Total

22 11. Rating Definitions Definition of Credit Rating The corporate credit rating is an index that indicates the level of risk focused on the ability of debt repayment and financial stability. It also provides reliable data that will help you evaluate the company s credit by considering not only major financial information but also non-financial information such as company overview and business s risk status. Credit Status Credit Rating AAA Definition AAA is the extreme credit capability for commercial transactions and retains an excellent dealing ability with the changes of macro and micro economic condition. Excellent AA A AA is the excellent credit capability for commercial transactions and retains and appropriate dealing ability with the changes of macro and micro economic condition. A is good credit capability for commercial transactions and retains a limited dealing ability with the changes of macro and micro economic condition. Good BBB BBB is good credit capability for commercial transactions but lowly exposed on possible credit risk in changes of macro and micro economic condition. Average Unsatisfactory BB B CCC CC C BB is the average credit capability for commercial transactions and normally exposed on possible credit risk in changes of macro and micro economic condition. B is the average credit capability for commercial transactions and highly exposed on possible credit risk in changes of macro and micro economic condition. CCC is under the average credit capability for commercial transactions and needs caution for the deterioration of the transaction stability. CC is poor credit capability for commercial transactions and the stability of the transactions is low. C is the worst credit capability for commercial transactions and needs and extreme caution for the deterioration of the transaction stability. Poor D Capacity of payment is in arrears or bankruptcy. Except R Reservation for credit rating from financial statements with less than one year or a sudden change of management (M&A, change of category of business.etc) Definition of Watch Rating Watch is a tool that indicates credit changes of a corporation in a timely manner and has the strength in monitoring the credit changes perpetually instead of periodically. Watch Rating Definition Normal No indication of credit status changes has been observed. Credit Status is "normal". Reservation The indication of credit status changes has been observed, but expect no or minimum effect on credit status. Monitoring The indication of credit status changes has been observed. Additional analysis on its effects to company's profitability and other impacts is recommended. Caution Warning The indication of poor credit has been observed, and/or expect uncertainties to adverse business, financial and economic condition. Caution recommended. Record of payment delinquency and/or other credit problems has been observed. Susceptible to adverse business, financial and economic conditions. Caution required. Danger High Default Risk Over 3 months payment delinquency records and/or major credit problems has been observed. Highly susceptible to adverse business, financial and economic conditions. Extreme caution required. On-going default accounts, over 3 months payment delinquency records and/or major credit problems has already been filed. Out of business Out of business, merged and liquidation. Bankruptcy Bankruptcy has been filed or similar action also has taken. Definition of Cash Flow Rating The cash flow is the direct way to evaluate liquidation of the corporations and indicates the level of solvency as cash flow sound. Cash Flow Rating CF1 (Excellent) CF2(Good) CF3 (Normal) Definition The ability of generating cash flow is in excellent condition. The operating cash flow is in good condition and capable for further finance demands. The operating cash flow is in good condition but it needs external finance for further investment Cash Flow Definition Rating CF4 The annual cash flow is inferior to the average and not (Unsatisfactory) enough to cover working capital. CF5(Risk) CF6 (Fail) The cash flow profitability is negative and poor. The cash flow has been shown as negative over recent 2 years and its profitability is extremely poor