MIRA INFORM REPORT

Report Date :

23.04.2011

IDENTIFICATION DETAILS

Name :	VÍTKOVICE GEARWORKS A.S.
Formerly Known As :	VÍTKOVICE OCELOVÉ KONSTRUKCE, a.s.
Registered Office :	Ruská 83/24, 706 02 Ostrava - Vítkovice
Country :	Czech Republic
Financials (as on) :	31.12.2009
Date of Incorporation :	23.04.2001
Com. Reg. No.:	B/2485
Legal Form :	Public Limited Company
Line of Business :	Manufacturer of bearings, gears, gearing and driving elements

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	CZK 7 200 000 EUR 270 504
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 – December 31, 2010

Country Name	Previous Rating (30.09.2010)	Current Rating (31.12.2010)
Czech Republic	a2	a2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name & address

VÍTKOVICE GEARWORKS a.s.
Ruská 83/24
706 02 Ostrava - Vítkovice
Telephone : 00420/ 595 956 392
Telefax : 00420/ 595 956 045
E-Mail : miloslav.kunat@vitkovice.cz
Web : www.ozubarna.cz

Company development

Positive business development

Order situation	Good course of business
Terms of payment	As far as known, prompt

Business connection	Business connections appear permissible
Credit limit		CZK 7 200 000,- EUR 270 504,-

Legal form

Public limited company

Foundation	23/04/2001 - Public limited company
Comp. Register	23/04/2001, Krajský obchodní soud v Ostravě, RegNr.: B/2485 Statistical number: 25877933 Tax number: CZ25877933

Share Capital	23/04/2001	CZK	2 000 000,-
	01/02/2002	CZK	57 000 000,-

21/07/2009		CZK	100 000 000,-
	8 pc of common nominative shares

at nominal value of CZK 10.000.000,--

1 pc of common nominative shares

at nominal value of CZK 5.000.000,--

4 pc of common nominative shares

at nominal value of CZK 2.000.000,--

4 pc of common nominative shares

at nominal value of CZK 1.000.000,--

28 pc of common nominative shares

at nominal value of CZK 100.000,--

9 pc of common nominative shares

at nominal value of CZK 20.000,--

20 pc of common nominative shares

at nominal value of CZK 1.000,--

all the shares are in documentary form

Main Shareholder	VÍTKOVICE, a.s. (ICO:45193070) Ruská 2887/101, 706 02 Ostrava, Vítkovice		%	100
Board of Directors		Ing. Jan Světlík (17.08.1958) Veleslavínova 1766/13, 702 00 Ostrava, Moravská Ostrava chairman

Ing. Pavel Ondruch (02.05.1958)
J. Herolda 1559/10, 700 30 Ostrava - Bělský Les
vice-chairman

Ing. Pavel Pawlas (24.06.1957)
Na Potoku 409/23, 720 00 Ostrava - Hrabová

Supervisory Board	Ing. Vladan Polášek (08.09.1972) Mitrovická 1170/293, 724 00 Ostrava chairman
	Jan Škopek Horní Bludovice 450, 739 37 Horní Bludovice

	Jaroslav Lobodinský Marty Krásové 4450, 708 00 Ostrava - Poruba
General Data	Manufacture and sale of gears and of gear-boxes, of cog-

wheels, of worm gears and shafts, of toothplate

connectors, manufacture and assembling of welded

parts, of winding equipment, of technological

facilities, rolling plants, revisions and repairs of gears

	Engineering activity.
Main activity: Manufacture of bearings, gears, gearing and driving elements

Former name(s)
VÍTKOVICE OCELOVÉ KONSTRUKCE, a.s.
Beginning of validity: 23.04.2001
End of validity: 12.12.2001

VÍTKOVICE Ozubárna, a.s.
Beginning of validity: 12.12.2001
End of validity: 27.07.2005

	Trade name(s) VÍTKOVICE GEARWORKS a.s. Beginning of validity: 27.07.2005
Export: Austria Germany Norway Slovakia		20%

Import:
Norway

		Address: Ruská 83/24, 706 02 Ostrava - Vítkovice telephone: 00420/ 595 956 392 telefax: 00420/ 595 956 045 e-mail: miloslav.kunat@vitkovice.cz Web: www.ozubarna.cz
Staff	2007		178 employees

2008	197 employees
2010	196 employees

		2011		195 employees
Annual Sales	2005		actual sales		CZK	201 851 000,-

2006	actual sales	CZK	279 763 000,-
2007	actual sales	CZK	371 991 000,-

2008	actual sales	CZK	604 838 000,-
2009	actual sales	CZK	726 931 000,-

2010		actual sales	CZK	760 000 000,-
	The final accounts for the year 2010 are not available yet.

Property	Property of the shareholder: Business premises VÍTKOVICE, a.s. (IM-Online) CZ-706 02 Ostrava, Vítkovice, Ruská 83/24
Balance sheets	The enclosed balance of 2009 from business register, it is authenticated by the auditor. (31.12.2009 - 1 CZK) The enclosed balance of 2008. (31.12.2008 - 1 CZK) The enclosed balance of 2007. (31.12.2007 - 1 CZK) The enclosed balance of 2006. (31.12.2006 - 1 CZK)

	The enclosed profit/loss account of 2009 from business register, it is authenticated by the auditor. (31.12.2009 - 1 CZK) The enclosed profit/loss account of 2008. (31.12.2008 - 1 CZK) The enclosed profit/loss account of 2007. (31.12.2007 - 1 CZK) The enclosed profit/loss account of 2006. (31.12.2006 - 1 CZK)
Remarks	The company is a holder of ISO 9001 certificate. All the sources of negative data accessible to public (insolvency registers, databases of debtors of health insurance institutions, commercial bulletin, collection database and others) are currently monitored.

Business management:

Ing. Miloslav Kunát – company director

Ing. Pavel Brodský – business director, phone 00420/ 595 957 382

ing. Vladimír Oleják – financial director, phone: 00420/ 595 954 040

Antonín Kňura – production director, phone: 00420/ 595 957 026

Ing. Miroslav Matějek – investment and maintenance department chief,

Phone: 00420/ 595 956 583

Subsidiary company:

- VÍTKOVICE MKV s.r.o., IČ 26325985,

Lochotínská 407/13, 301 66 Plzeň, share 100%

By means of the sole shareholder, the inquired company is a part of

the group VÍTKOVICE HOLDING.

Bankers

Komerční banka, a.s.

Copyright:

This information is addressed exclusively to the addressee. Contractor obligates to provide updated information. Although it is always put maximum effort to collect actual and exact information, it is not confirmed as delinquency if there are particular inaccurateness contained within the information, which are not considered as essential in terms of the objective for which the information is provided to the addressee. Contractor and recipient conform to the rules of the Name and Description Security Act, Nub.101/2000. According to the Name and Description Security Act, recipient has the right to process or to use forwarding data only for the purpose for which information has been sent to the recipient. Usage for other purpose is acceptable only in case referring to valid regulations of the above mentioned act.

Financial

	balance	31.12.2006 (CZK)	31.12.2007 (CZK)	31.12.2008 (CZK)	31.12.2009 (CZK)
r1	TOTAL ASSETS	193 409 000	310 935 000	502 905 000	524 181 000
r2	Receivables for subscriptions	0		0	0
r3	Fixed assets	47 562 000	80 017 000	70 679 000	65 740 000
r4	Intangible fixed assets	378 000	359 000	1 371 000	1 143 000
r5	Incorporation expenses			0
r6	Research and development			0
r7	Software	378 000	359 000	691 000	1 143 000
r8	Valuable rights			0
r9	Goodwill			0
r10	Other intangible fixed assets			0
r11	Intangible fixed assets under construction			680 000
r12	Advance payments for intangible fixed assets			0
r13	Tangible fixed assets	42 559 000	74 765 000	61 850 000	56 973 000
r14	Lands	12 194 000	12 194 000	12 194 000	12 194 000
r15	Constructions	471 000	5 286 000	5 187 000	5 326 000
r16	Equipment	23 112 000	43 407 000	43 344 000	38 105 000
r17	Perennial corps			0
r18	Breeding and draught animals			0
r19	Other tangible fixed assets			0
r20	Tangible fixed assets under construction	579 000	266 000	63 000	167 000
r21	Advance payments for tangible fixed assets	7 402 000	14 692 000	2 023 000	2 023 000
r22	Adjustment to acquired assets	-1 199 000	-1 080 000	-961 000	-842 000
r23	Long-term financial assets	4 625 000	4 893 000	7 458 000	7 624 000
r24	Shares in controlled and managed organizations	4 625 000	4 893 000	7 458 000	7 624 000
r25	Shares in accounting units with substantial influence			0
r26	Other securities and shares			0
r27	Loans to controlled and managed organizations and to accounting unit with substantial influence			0
r28	Other financial investments			0
r29	Financial investments acquired			0
r30	Advance payments for long-term financial assets			0
r31	Current assets	143 426 000	228 169 000	420 304 000	449 306 000
r32	Inventory	41 120 000	102 353 000	162 173 000	175 914 000
r33	Materials	10 527 000	15 724 000	23 541 000	14 999 000
r34	Work in progress and semi-products	30 244 000	80 838 000	133 495 000	88 243 000
r35	Finished products		5 791 000	0
r36	Animals			0
r37	Merchandise			0
r38	Advance payments for inventory	349 000		5 137 000	72 672 000
r39	Long-term receivables	0	592 000	540 000	18 237 000
r40	Trade receivables		592 000	540 000	18 237 000
r41	Receivables from controlled and managed organizations			0
r42	Receivables from accounting units with substantial influence			0
r43	Receivables from partners, cooperative members and association members			0
r44	Long-term deposits given			0
r45	Estimated receivable			0
r46	Other receivables			0
r47	Deferred tax receivable			0
r48	Short-term receivables	56 238 000	66 330 000	154 782 000	116 410 000
r49	Trade receivables	56 115 000	57 641 000	127 359 000	85 425 000
r50	Receivables from controlled and managed organizations		4 185 000	0
r51	Receivables from accounting units with substantial influence			0
r52	Receivables from partners, cooperative members and association members			0
r53	Receivables from social security and health insurance			0
r54	Due from state - tax receivable	22 000	1 825 000	0	14 009 000
r55	Short-term deposits given	12 000	986 000	250 000	1 993 000
r56	Estimated receivable		0	0	136 000
r57	Other receivables	89 000	1 693 000	27 173 000	14 847 000
r58	Short-term financial assets	46 068 000	58 894 000	102 809 000	138 745 000
r59	Cash	11 000	34 000	35 000	34 000
r60	Bank accounts	1 057 000	1 811 000	1 600 000	103 418 000
r61	Short-term securities and ownership interests	45 000 000	57 049 000	101 174 000	35 293 000
r62	Short-term financial assets acquired			0
r63	Accruals	2 421 000	2 749 000	11 922 000	9 135 000
r64	Deferred expenses	2 289 000	1 678 000	11 695 000	9 128 000
r65	Complex deferred costs			0
r66	Deferred income	132 000	1 071 000	227 000	7 000
r67	TOTAL LIABILITIES	193 409 000	310 935 000	502 905 000	524 181 000
r68	Equity	68 633 000	81 586 000	96 822 000	171 474 000
r69	Registered capital	57 000 000	57 000 000	57 000 000	100 000 000
r70	Registered capital	57 000 000	57 000 000	57 000 000	100 000 000
r71	Company’s own shares and ownership interests (-)			0
r72	Changes of registered capital ( +/- )			0
r73	Capital funds	-10 399 000	-10 131 000	-8 254 000	-7 400 000
r74	Share premium			0
r75	Other capital funds			0
r76	Differences from revaluation of assets and liabilities ( +/- )	-10 399 000	-10 131 000	-8 254 000	-7 400 000
r77	Differences from revaluation in transformation ( +/- )			0
r78	Reserve funds, statutory reserve account for cooperatives, and other retained earnings	2 441 000	3 420 000	4 465 000	6 139 000
r79	Legal reserve fund / indivisible fund	2 141 000	3 120 000	4 165 000	5 839 000
r80	Statutory and other funds	300 000	300 000	300 000	300 000
r81	Profit / loss - previous years	1 000	10 399 000	10 131 000	8 255 000
r82	Retained earnings from previous years	1 000	10 399 000	10 131 000	8 255 000
r83	Accumulated losses from previous years		0	0
r84	Profit / loss - current year (+/-)	19 590 000	20 898 000	33 480 000	64 480 000
r85	Other sources	124 612 000	229 303 000	401 389 000	352 636 000
r86	Reserves	14 410 000	18 360 000	17 410 000	20 265 000
r87	Reserves under special statutory regulations	14 340 000	18 290 000	17 360 000	20 215 000
r88	Reserves for pension and similar payables			0
r89	Income tax reserves			0
r90	Other reserves	70 000	70 000	50 000	50 000
r91	Long-term payables	1 604 000	3 222 000	4 259 000	31 460 000
r92	Trade payables			0	26 695 000
r93	Payables to controlled and managed organizations			0
r94	Payables to accounting units with substantial influence			0
r95	Payables from partners, cooperative members and association members			0
r96	Long-term advances received			0
r97	Issues bonds			0
r98	Long-term notes payables			0
r99	Estimated payables			0
r100	Other payables			0
r101	Deferred tax liability	1 604 000	3 222 000	4 259 000	4 765 000
r102	Short-term payables	67 729 000	148 164 000	338 158 000	274 767 000
r103	Trade payables	32 917 000	91 794 000	124 917 000	150 082 000
r104	Payables to controlled and managed organizations			0
r105	Payables to accounting units with substantial influence			0
r106	Payables from partners, cooperative members and association members			0
r107	Payroll	2 815 000	3 616 000	3 823 000	3 936 000
r108	Payables to social securities and health insurance	1 636 000	2 423 000	2 551 000	2 460 000
r109	Due from state - tax liabilities and subsidies	4 715 000	2 838 000	24 924 000	8 855 000
r110	Short-term deposits received	15 080 000	40 627 000	176 692 000	92 986 000
r111	Issues bonds			0
r112	Estimated payables	1 838 000	5 541 000	3 563 000	4 436 000
r113	Other payables	8 728 000	1 325 000	1 688 000	12 012 000
r114	Bank loans and financial accommodations	40 869 000	59 557 000	41 562 000	26 144 000
r115	Long-term bank loans	23 769 000	50 407 000	41 562 000	26 144 000
r116	Short-term bank loans	17 100 000	9 150 000	0	0
r117	Short-term accommodations	0		0	0
r118	Accruals	164 000	46 000	4 694 000	71 000
r119	Accrued expenses	164 000	46 000	4 694 000	71 000
r120	Deferred revenues			0
	profit/loss account	31.12.2006 (CZK)	31.12.2007 (CZK)	31.12.2008 (CZK)	31.12.2009 (CZK)
a1	Turnover	279 763 000	371 991 000	604 838 000	726 931 000
a2	Revenues from sold goods	0		0	0
a3	Expenses on sold goods	0		0	0
a4	Sale margin	0		0	0
a5	Production	290 478 000	425 036 000	659 359 000	683 562 000
a6	Revenues from own products and services	279 763 000	371 991 000	604 838 000	726 931 000
a7	Change in inventory of own products	9 209 000	50 559 000	52 656 000	-45 251 000
a8	Capitalization	1 506 000	2 486 000	1 865 000	1 882 000
a9	Production consumption	205 414 000	323 930 000	530 389 000	516 229 000
a10	Consumption of material and energy	152 599 000	255 777 000	398 889 000	434 747 000
a11	Services	52 815 000	68 153 000	131 500 000	81 482 000
a12	Added value	85 064 000	101 106 000	128 970 000	167 333 000
a13	Personnel expenses	57 675 000	66 948 000	82 246 000	82 369 000
a14	Wages and salaries	41 703 000	48 507 000	59 627 000	60 379 000
a15	Renumeration of board members	727 000	720 000	705 000	540 000
a16	Social security expenses and health insurance	14 502 000	16 874 000	20 523 000	19 687 000
a17	Other social expenses	743 000	847 000	1 391 000	1 763 000
a18	Taxes and fees	99 000	410 000	138 000	162 000
a19	Depreciations of intangible and tangible assets	3 165 000	4 200 000	6 716 000	7 274 000
a20	Revenues from disposals of fixed assets and materials	1 707 000	3 917 000	4 120 000	1 902 000
a21	Revenues from disposals of fixed assets	19 000	1 431 000	2 255 000	20 000
a22	Revenues from disposals of materials	1 688 000	2 486 000	1 865 000	1 882 000
a23	Net book value of disposed fixed assets and materials	1 506 000	3 262 000	3 047 000	1 882 000
a24	Net book value of sold fixed assets		776 000	1 182 000
a25	Net book value of sold material	1 506 000	2 486 000	1 865 000	1 882 000
a26	Change in operating reserves and adjustments and complex deferred costs ( + / - )	3 184 000	3 941 000	-977 000	3 412 000
a27	Other operating revenues	5 345 000	2 875 000	2 741 000	955 000
a28	Other operating expenses	1 056 000	4 581 000	2 669 000	1 481 000
a29	Transfer of operating revenues	0		0
a30	Transfer of operating expenses	0		0
a31	Operating profit / loss	25 431 000	24 556 000	41 992 000	73 610 000
a32	Revenues from sales of securities and ownership interests	988 000		0
a33	Sold securities and ownership interests			0
a34	Revenues from long-term financial assets		4 185 000	4 452 000	7 017 000
a35	Revenues from shares in controlled and managed organizations and in accounting units with substantial influence		4 185 000	0	7 017 000
a36	Revenues from others securities and ownership interests			0
a37	Revenues from other long-term financial assets			4 452 000
a38	Revenues from short-term financial assets	529 000	1 200 000	655 000	616 000
a39	Expenses associated with financial assets			0
a40	Revenues from revaluation of securities and derivatives			0
a41	Cost of revaluation of securities and derivatives			0
a42	Change in financial reserves and adjustments ( + / - )			0
a43	Interest revenues	9 000	2 000	5 000	127 000
a44	Interest expenses	992 000	2 051 000	3 285 000	1 483 000
a45	Other financial revenues	1 568 000	4 719 000	11 791 000	5 669 000
a46	Other financial expenses	1 723 000	5 463 000	14 840 000	8 002 000
a47	Transfer of financial revenues			0
a48	Transfer of financial expenses			0
a49	Profit / loss from financial operations ( transactions )	379 000	2 592 000	-1 222 000	3 944 000
a50	Income tax on ordinary income	6 220 000	6 250 000	7 290 000	13 074 000
a51	Due tax	5 097 000	4 632 000	6 253 000	12 568 000
a52	Tax deferred	1 123 000	1 618 000	1 037 000	506 000
a53	Operating profit / loss ordinary activity	19 590 000	20 898 000	33 480 000	64 480 000
a54	Extraordinary revenues			0
a55	Extraordinary expenses			0
a56	Income tax on extraordinary income			0
a57	Due tax			0
a58	Tax deferred			0
a59	Operating profit / loss extraordinary activity	0		0	0
a60	Transfer profit ( loss ) to partners (+/-)	0		0
a61	Profit / loss of current accounting period (+/-)	19 590 000	20 898 000	33 480 000	64 480 000
a62	Profit / loss before tax (+/-)	25 810 000	27 148 000	40 770 000	77 554 000
	Receivables after due date total	10 566 000		4 372 000	5 663 000
	Receivables more than 180 days after due date	139 000	249 000	106 000	1 113 000
	Liabilities after due date total				0
	Liabilities more than 180 days after due date	0	0	0

Balance indices		31.12.2006	31.12.2007	31.12.2008	31.12.2009
Return on total assets ROA (in %)	a62/r1 * 100	13,34	8,73	8,11	14,80
Return on equity ROE (in %)	a62/r68 * 100	37,61	33,28	42,11	45,23
Return on sales ROS (in %)	a62/a1 * 100	9,23	7,30	6,74	10,67
Turnover of receivables (in days)	r49/a1 * 365	73,21	56,56	76,86	42,89
Turnover of liabilities (in days)	r103/a1 * 365	42,95	90,07	75,38	75,36
Turnover of inventories (days)	r32/a1 * 365	53,65	100,43	97,87	88,33
Net working capital (in ths. CZK)	r31 - r102 - r116 - r117	58 597,00	70 855,00	82 146,00	174 539,00
Ratio of accounts payable to accounts receivable (in %)	(r39+r48) / (r91+r102) * 100	81,11	44,21	45,36	43,97
Ratio of profit/loss to tangible assets (in%)	r3 / a1 * 100	17,00	21,51	11,69	9,04
Current ratio	r31 / (r102+r116+r117)	1,69	1,45	1,24	1,64
Quick ratio	(r58+r48) / (r102+r116+r117)	1,21	0,80	0,76	0,93
Cash ratio	r58 / (r102+r116+r117)	0,54	0,37	0,30	0,51
Debt ratio I (in %)	(1-r68/r67) * 100	64,51	73,76	80,75	67,29
Debt ratio II (in %)	r85/r67 * 100	64,43	73,75	79,81	67,27

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.30
UK Pound	1	Rs.72.92
Euro	1	Rs.64.69

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

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.