MIRA INFORM REPORT

 

 

Report Date :           

17.03.2011

 

IDENTIFICATION DETAILS

 

Name :

PARANAPANEMA SA

 

 

Registered Office :

Rua Felipe Camarão, 500 - Prédio Administrativo I - Utinga , Zip Code 09220-580 - Santo André/Sp

 

 

Country :

Brazil

 

 

Financials (as on) :

30.09.2010

 

 

Date of Incorporation :

30.06.1961

 

 

Legal Form :

Publicly Held Corporation

 

 

Line of Business :

Metallurgy of non-ferrous metals.

 

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 :

US$ 5.000.000,00

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Usually 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 – December 31, 2010

 

Country Name

Previous Rating

                   (30.09.2010)                  

Current Rating

(31.12.2010)

Brazil

a2

a2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

COMPANY NAME

 

PARANAPANEMA S/A

 

 

company ADDRESSES

 

MAIN ADDRESS:

RUA FELIPE CAMARÃO, 500 - PRÉDIO ADMINISTRATIVO I - UTINGA

ZIP CODE/CITY:

09220-580 - SANTO ANDRÉ/SP

 

 

PHONE:

11 2199-7623

FAX:

11 2199-7623

WEB SITE:

www.paranapanema.com.br

 

BRANCHES:

 

 

 

ADDRESS:

VIA DO COBRE, 3700 - AIO - COPEC

ZIP CODE/CITY:

42850-000 DIAS D’AVILA/BA

PHONE:

71 2203-1694

FAX:

71 2203-1618

CNPJ:

60.398.369/0004-79

STATE REGISTER:

84.614.926

 

THE COMPANY ALSO HAS OTHER BRANCHES LOCATED IN: SANTO ANDRE, RIO DE JANEIRO, SERRA, SAO GRABRIEL DA PALHA, SÃO TIAGO, NOVA ERA, JUIZ DE FORA, ENTRE RIOS DE MINAS, CANDEIA AND CAMAÇARI.

 

 

LEGAL DATA

 

MAIN ACTIVITIES:

 

METALLURGY OF NON-FERROUS METALS.

 

LEGAL FORM:

PUBLICLY HELD CORPORATION

 

 

INCORPORATION DATE:

30/06/1961

REGISTER DATE:

30/06/1961

BALANCE SHEET FILING DATE:

31/12

TAX CONTRIBUTOR NUMBER (CNPJ):

60.398.369/0001-26

STATE REGISTER:

626.791.775.117

 

 

SHARE CAPITAL:

R$ 1.382.990.468,48

LAST REGISTER OF CAPITAL:

30/04/2010

 

BOARD OF DIRECTORS:

 

 

 

LUIZ ANTONIO SOUZA QUEIROZ FERRAZ JÚNIOR

PRESIDENT DIRECTOR

DÓRIS BEATRIZ FRANÇA WILHELM

INVESTORS RELATIONS DIRECTOR

MARCOS HENRIQUE CARLOS DE SOUZA

INDUSTRIAL DIRECTOR

WILSON ANTONIO NUNES

DIRECTOR

 

 

AUTHORIZED USE OF SIGNATURE

 

THE DIRECTORS ARE AUTHORIZED TO SIGN ON BEHALF OF THE COMPANY.

 

SHAREHOLDERS / PARTNERS:

 

 

 

CAIXA PREV. DOS FUNC.BCO DOBRASIL-PREVI

23,96%

BNDES - PARTICIPAÇÕES SA - BNDESPAR

17,23%

FUND. PETROBRÁS SEG. SOCIAL - PETROS

11,81%

EWZ INVESTMENTS LLC - SOCOPA SOC.CORRET.

8,320%

OTHERS

38,67%

SHARES IN TREASURY

00,01%

 

AFFILIATES / SUBSIDIARIES:

 

 

 

ELUMA S.A. INDÚSTRIA E COMÉRCIO

98,81%

CIBRAFÉRTIL - CIA BRASILEIRA DE FERTILIZANTES

99,84%

CARAÍBA METAIS S.A.

98,14%

CINC CARAÍBA INCORPORED LTD.

100,0%

PINC PARANAPANEMA INC. (USA)

100,0%

CDPC CENTRO DE DISTRIBUIÇÃO DE PRODUTOS DE COBRE LTDA

99,99%

TABOCA INVESTIMENTOS E COMÉRCIO LTDA

 

PMA NORDESTE PARTICIPAÇÕES LTDA

 

MINERAÇÃO BURITIRAMA S/A

 

RESTAURANTE TRÊS VINTENS LTDA ME

 

BONSUCEX HOLDING LTDA

 

COLÉGIO PINACULO DE ARAÇATUBA S/C LTDA

 

 

 

COMPANY'S BACKGROUND

 

PARANAPANEMA WAS FOUNDED IN 1961 TO ACT IN THE HEAVY CIVIL CONSTRUCTION INDUSTRY. OUR ACTIVITIES DIVERSIFIED IN 1965, WHEN WE ENTERED THE MINING SECTOR.

 

THE COMPANY WAS PUBLICLY LISTED IN 1971 AND IN THE SAME PERIOD WE STARTED INVESTING IN RESEARCH AND DEVELOPMENT FOR PRODUCTION OF TIN, RESULTING IN THE ORGANIZATION OF TABOCA, WHICH ENGAGES IN TIN EXTRACTION, AND OF MAMORÉ, ENGAGED IN TIN METALLURGY AND IN MANUFACTURING OF ALLOYS.

 

FROM 1978 TO 1979, OUR OPERATIONS WERE VERTICALIZED AND COVERED EVERYTHING FROM EXTRACTION OF CASSITERITE TO THE INDUSTRIAL PROCESS AND MARKETING OF THE FINAL PRODUCT - TIN METAL, SO MINING CASSITERITE BECAME OUR CORE BUSINESS. ALONG WITH THE LATTER, THE CONSTRUCTION DIVISION WAS DIVERSIFIED AND EXPANDED ITS RANGE OF ACTIVITY TO SANITATION SERVICES AND SIMILAR BUSINESS.

 

IN THE EARLY THE 80'S, WE WERE ALREADY MAJOR TIN PRODUCERS OPERATING DEPOSITS IN THE STATE OF RONDÔNIA AND ACTIVE IN TIN METALLURGY. WE ACQUIRED THE PITINGA MINE IN THE STATE OF AMAZONAS IN 1982, AND WHEN ITS RESERVES WERE CONFIRMED WE BEGAN TO ACT MORE INTENSIVELY IN THE TIN MINING SECTOR.

 

IN 1994, WE FOUNDED CIBRAFÉRTIL IN ORDER TO MAKE USE OF THE SULFURIC ACID, A BY-PRODUCT FROM THE OPERATIONS OF CARAÍBA METAIS. AFTER INVESTING IN SINGLE SUPERPHOSPHATE PLANTS (ACQUISITION OF AN OLD SINGLE SUPERPHOSPHATE PLANT FROM FOSFANIL / STATE OF SÃO PAULO), CIBRAFÉRTIL STARTED OPERATING IN FEBRUARY 1995.

 

IN DECEMBER 1995, A POOL OF PENSION FUNDS LED BY PREVI ACQUIRED CONTROL OF PARANAPANEMA, CARAÍBA METAIS, ELUMA AND COMPANHIA PARAIBUNA DE METAIS UPON PAYMENT OF 50.0% OF THE PURCHASE PRICE FOR EACH OF THESE COMPANIES.

 

IN FEBRUARY 1996, THE POOL OF PENSION FUNDS LED BY PREV PAID THE REMAINDER OF THE PURCHASE PRICE. IN THE SAME YEAR, FUNDING FROM AN ISSUE OF DEBENTURES CONVERTIBLE TO COMMON SHARES WAS USED TO ACQUIRE, FROM THE SAME POOL OF PENSION FUNDS, THE CONTROL OF CARAÍBA METAIS, ELUMA AND COMPANHIA PARAIBUNA DE METAIS ("PARAIBUNA").

 

AFTER THE ACQUISITION OF OUR SHAREHOLDING CONTROL BY THE PENSION FUNDS AND PROFESSIONALIZING OUR MANAGEMENT, WE STARTED TO CONCENTRATE INVESTMENTS ON THE NON-FERROUS METAL SEGMENT, WHICH HAS BECOME OUR CORE BUSINESS, AND DECIDED TO END OUR CONSTRUCTION BUSINESS IN 1996.

 

THE TIN INDUSTRY ASSETS IN MINING AND METALLURGY WERE ADDED TO OUR COPPER AND ZINC METALLURGY OPERATIONS, PLUS MANUFACTURING OF COPPER END-PRODUCTS, OUR ACTIVITIES BEING THEN CONCENTRATED ON 5 OPERATIONAL DIVISIONS BY BUSINESS SEGMENT: CARAÍBA METAIS (COPPER AND BY-PRODUCTS), ELUMA (COPPER SHEET, BARS, TUBES, FITTINGS AND OTHER COPPER ALLOYS), MAMORÉ (TIN AND INDUSTRIAL MINERALS), CIBRAFÉRTIL (FERTILIZERS) AND PARAIBUNA (ZINC AND BY-PRODUCTS). WITH THIS NEW CONFIGURATION, WE TOOK ON THE ROLE OF HOLDING COMPANY WITH NO OPERATIONAL ACTIVITY.

 

IN SUBSEQUENT YEARS, WE MADE AN EFFORT TO RESTRUCTURE OUR DEBT, WHICH HAD INCREASED WITH THE NEW CONFIGURATION OF THE CONGLOMERATE AMID THE ASIAN CRISIS (1997), TURBULENCE IN EASTERN EUROPE (MID-1998), AND BRAZIL'S CURRENCY DEVALUATION (1999). IN EARLY 2002, OUR HOLDING IN COMPANHIA PARAIBUNA DE METAIS WAS ENTIRELY SOLD OFF AND THE PROCEEDS USED TO REINFORCE THE CAPITAL STRUCTURE OF OUR GROUP.

 

FROM LATE 2003 ONWARDS, OUR NEW MANAGEMENT WAS RESPONSIBLE FOR FINANCIAL AND OPERATIONAL RESTRUCTURING, THE HIGHLIGHT BEING THE FOUNDING OF THE NEW TABOCA SUBSIDIARY IN THE STATE OF SAO PAULO.

 

IN ADDITION, IN DECEMBER 2003, WE PARALYZED ACTIVITIES AT MAMORÉ'S TANTALUM AND NIOBIUM OXIDE PLANT DUE TO THE LOW LEVEL OF THESE PRODUCTS' PRICES AS WELL AS PRODUCTION COSTS AND CONCENTRATED OUR EFFORTS ON SELLING ITS EQUIPMENT.

 

ON DECEMBER 29, 2004, PARANAPANEMA AND COMPANHIA VALE DO RIO DOCE ("CVRD") SIGNED A MEMORANDUM OF UNDERSTANDING ON CVRD USE OF MINING RIGHTS FOR PARANAPANEMA'S BAUXITE RESERVES AND OTHER MINERAL ASSETS IN THE PITINGA (AM) REGION. THE FINAL AGREEMENT FOR THE SALE OF THESE RIGHTS WAS SIGNED IN JANUARY 2005.

 

IN SEPTEMBER 2005, TABOCA, PREVIOUSLY ENGAGED ONLY IN THE EXTRACTION OF CASSITERITE, LEASED FACILITIES FROM MAMORÉ, WHICH PRODUCED THE METAL AND ALLOYS, AND THE FORMER COMPANY TOOK OVER THE ENTIRE PROCESS OF PRODUCTION AND SALES THUS CONCENTRATING OUR CASSITERITE OPERATIONS ON ONE SINGLE COMPANY.

 

ON NOVEMBER 13, 2008 PARANAPANEMA S.A. CONCLUDED ITS SALE OF 100% OF ITS SHARES IN MINERAÇÃO TABOCA S.A. AND MAMORÉ MINERAÇÃO E METALURGIA LTDA., A TABOCA SUBSIDIARY, TO THE COMPANY SERRA DA MADEIRA PARTICIPAÇÕES LTDA. WHICH WAS INDIRECTLY CONTROLLED BY THE MINING COMPANY MINSUR SA, MAIN PERU'S TIN PRODUCER.

 

THROUGH THIS SALE, IN COMPLIANCE WITH THE PROVISIONS IN THE ARTICLES OF THE 6TH CONVERTIBLE DEBENTURE ISSUE, PARANAPANEMA REDEEMED IN ADVANCE AT LEAST 50% OF THE DEBENTURES OF THE 2ND SERIES OF THE 6TH ISSUE OF DEBENTURES CONVERTIBLE INTO SHARES THAT WERE STILL OUTSTANDING AND AS A RESULT PROCEEDED TO THE MANDATORY CONVERSION OF THE REMAINING DEBENTURES INTO PARANAPANEMA COMMON STOCK. THEREFORE PARANAPANEMA SETTLED ITS NON-OPERATING DEBT TO THE DEBENTURE HOLDERS, AND SIGNIFICANTLY REDUCED ITS CONSOLIDATED OPERATING DEBT, THUS CONCLUDING YET ANOTHER STEP IN ITS FINANCIAL AND OPERATIONAL RESTRUCTURING PROCESS, WHICH INCLUDED SALE OF ASSETS TO REDUCE ITS NON-OPERATING DEBT.

 

ACCORDING TO THE SHAREHOLDERS' MEETING HELD ON NOVEMBER 13, 2009 SUBJECT TOOK OVER THE COMPANY CARAÍBA METAIS S/A.

 

AT THE EXTRAORDINARY SHAREHOLDERS' MEETING HELD ON NOVEMBER 13, 2009 WAS APPROVED THE TRANSFERENCE OF THE HEADQUARTERS LOCATED AT SANTO ANDRÉ/SP, TO DIAS D'ÁVILA/BA, VIA DO COBRE, Nº 3.700, ÁREA INDUSTRIAL OESTE, PRÉDIO ADMINISTRATIVO I, COMPLEXO PETROQUÍMICO DE CAMAÇARI - COPEC.

 

ON MARCH 31, 2010 SUBJECT TOOK OVER THE COMPANY ELUMA S.A. INDÚSTRIA E COMÉRCIO (ELUMA).

 

CURRENTLY THE COMPANY IS LISTED AT BOVESPA (SÃO PAULO STOCK EXCHANGE) NOVO MERCADO (NM) NIVEL 1 (BOVESPA'S NEW MARKET CORPORATE GOVERNANCE LEVEL 1), UNDER THE NAME AND STOCK CODE, RESPECTIVELY, "PARANAPANEMA ON N1 (PMAM3)"

 

IN THE YEAR OF 2000, IN THE SÃO PAULO STOCK EXCHANGE (BOVESPA), WHAT HAS BEEN CALLED AS THE NEW MARKET WAS ESTABLISHED, AS WELL AS THE LEVELS OF GOVERNANCE PRACTICE WERE SET FORTH.

 

THE NEW MARKET IS A LISTING SEGMENT FOR SHARES ISSUED BY COMPANIES THAT VOLUNTARILY ADOPT GOVERNANCE RULES THAT ARE TIGHTER THAN THE ONES FORESEEN IN APPLICABLE ORDINARY LEGISLATION. ACCORDING TO BOVESPA, THE VALUE AND LIQUIDITY OF LISTED SHARES ARE POSITIVELY INFLUENCED BY THE LEVEL OF SECURITY INVOLVING THE RIGHTS GRANTED TO THE SHAREHOLDERS AND BY THE QUALITY OF THE INFORMATION DISCLOSED BY THE COMPANIES.

 

COMPANIES QUALIFIED AS LEVEL 1 ARE MOSTLY COMMITTED WITH INFORMATION DISCLOSURE IMPROVEMENTS AND CAPITAL PULVERIZATION.

 

FURTHER DETAILS ARE SO FAR NOT KNOWN.

 

PUBLIC INFORMATION:

 

NO DETRIMENTAL FILES WERE FOUND.

 

 

FINANCIAL INFORMATION

 

GENERAL BALANCE SHEETS AS OF 30/09/2010, 31/12/2009 AND 31/12/2008.

(FIGURES ARE IN THOUSANDS OF REAIS).

 

ASSETS

 

 

 

CURRENT:

30/09/2010

31/12/2009

31/12/2008

 

 

 

 

CASH AND BANKS

174.075

85.766

141.123

INVESTMENTS

321.615

567.689

521.026

CLIENTS

353.923

376.501

359.220

RECOVERABLE TAXES

100.935

68.006

145.801

DEFERRED TAXES

32.500

 

36.495

DERIVATIVES OPERATIONS

27.052

16.547

33.243

ACCOUNTS RECEIVABLE

26.533

14.178

408.404

INVENTORY

932.882

849.999

716.219

PRE PAID EXPENSES

8.683

3.429

2.116

INTERCOMPANY CREDITS

169.445

 

 

 

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

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

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

TOTAL CURRENT ASSETS

2.147.643

1.982.115

2.363.647

 

LONG-TERM RECEIVABLES:

 

 

 

 

 

 

 

JUDICIAL DEPOSITS

31.192

48.553

17.880

RECOVERABLE TAXES

35.758

41.955

37.640

DISPOSAL OF REAL ESTATE

11.862

11.790

11.657

DEFERRED TAXES

32.170

80.640

175.082

ACCOUNTS RECEIVABLES

6.946

6.006

13.911

CLIENTS

5.963

4.774

5.349

 

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

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

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

TOTAL LONG-TERM RECEIVABLES

123.891

193.718

261.519

 

FIXED ASSETS:

 

 

 

 

 

 

 

INVESTMENTS

10.466

952

952

FIXED ASSETS

602.328

656.789

678.134

INTANGIBLE

7.907

11.489

16.143

 

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

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

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

TOTAL FIXED ASSETS

620.701

669.230

695.229

 

================

================

================

TOTAL ASSETS

2.892.235

2.845.063

3.320.395

 

LIABILITIES:

 

 

 

CURRENT:

30/09/2010

31/12/2009

31/12/2008

 

 

 

 

LOANS AND FINANCING

481.607

402.439

528.692

SUPPLIERS

627.711

576.269

451.407

TAXES & CONTRIBUTIONS

74.686

227.420

156.696

INTERCOMPANY DEBTS

59.203

 

 

OTHER DEBTS

124.734

59.369

37.186

 

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

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

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

TOTAL CURRENT LIABILITIES

1.367.941

1.265.497

1.173.981

 

LONG TERM LIABILITIES:

 

 

 

 

 

 

 

LOANS AND FINANCING

28.455

83.851

225.702

PROVISIONS

9.031

83.129

706.808

DEFERRED TAXES

24.165

 

 

ACCOUNTS PAYABLE

4.191

 

 

 

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

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

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

TOTAL LONG TERM LIABILITIES

65.842

166.980

932.510

 

DEFERRED INCOME

 

4.887

20.673

 

NET EQUITY:

 

 

 

 

 

 

 

SHARE CAPITAL

1.382.990

2.089.348

2.067.969

CAPITAL RESERVES

33

33

33

REVALUATION RESERVES

29.551

33.909

17.275

PROFIT RESERVES

-741

-741

-741

ACCRUED PROFIT (LOSS)

47.644

-713.770

-891.305

OTHER COMPREHENSIVE INCOME

-1.025

-1.080

 

 

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

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

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

TOTAL NET EQUITY

1.458.452

1.407.699

1.193.231

 

================

================

================

TOTAL LIABILITIES

2.892.235

2.845.063

3.320.395

 

PROFIT AND LOSS ACCOUNTS AS OF 30/09/2010, 31/12/2009 AND 31/12/2008.

(FIGURES ARE IN THOUSANDS OF REAIS).

 

 

30/09/2010

31/12/2009

31/12/2008

 

 

 

 

GROSS SALES

2.893.026

2.993.556

4.284.931

(-) TAXES ON SALES

442.360

481.643

803.577

 

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

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

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

NET SALES

2.450.666

2.511.913

3.481.354

(-) COST OF SOLD GOODS

2.374.380

2.525.986

3.301.815

 

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

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

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

GROSS PROFIT

76.286

-14.073

179.539

OPERATING REVENUE (EXPENSE)

-65.165

31.205

329.817

FINANCIAL REVENUE (EXPENSE)

35.095

-106.492

-335.843

 

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

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

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

OPERATIONAL PROFIT (LOSS)

46.216

-89.360

173.513

CONTRIBUTION/INCOME TAX

-2.930

283.044

-40.261

PROFIT SHARING

 

345

-238

 

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

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

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

NET PROFIT (LOSS)

43.286

194.029

133.014

 

RATIOS:

30/09/2010

31/12/2009

31/12/2008

 

QUICK RATIO

,89

 

,89

 

1,40

 

CURRENT RATIO

1,57

 

1,57

 

2,01

 

ACCOUNTS RECEIVABLE TURNOVER

6,92

TIMES

6,67

TIMES

9,69

TIMES

DAYS' SALES IN RECEIVABLES

38,99

DAYS

53,96

DAYS

37,15

DAYS

INVENTORY TURNOVER

2,55

TIMES

2,97

TIMES

4,61

TIMES

ACCOUNTS PAYABLE PERIOD

71,38

DAYS

82,13

DAYS

49,22

DAYS

RETURN ON ASSETS

,85

TIMES

,88

TIMES

1,05

TIMES

SALES TURNOVER ON NET EQUITY

1,68

TIMES

1,78

TIMES

2,92

TIMES

NET WORTH TIE-UP

,41

 

,47

 

,57

 

INDEBTEDNESS

,98

 

1,02

 

1,77

 

EQUITY RATIO

50,43

%

49,48

%

35,94

%

WORKING CAPITAL RATIO

57,00

%

56,63

%

101,34

%

GENERAL SOLVENCY

2,02

 

1,99

 

1,58

 

RETURN ON NET EQUITY

2,97

%

13,78

%

11,15

%

RETURN ON SALES (PROFIT MARGIN)

1,77

%

7,72

%

3,82

%

GROSS PROFIT MARGIN

3,11

%

-,56

%

5,16

%

OPERATIONAL RESULT

1,89

%

-3,56

%

4,98

%

SALES TURNOVER ON LIABILITIES

1,79

TIMES

1,98

TIMES

2,97

TIMES

FOREIGN CURRENCY ON ASSETS

 

 

 

 

 

 

FOREIGN CURRENCY ON LIABILITIES

 

 

 

 

 

 

 

EXCHANGE RATE:

 

 

US$ 1,00 = R$ 1,66

 - OFFICIAL RATE ON 14/03/2011

US$ 1,00 = R$ 1,69

 - OFFICIAL RATE ON 30/09/2010

US$ 1,00 = R$ 1,74

 - OFFICIAL RATE ON 31/12/2009

US$ 1,00 = R$ 2,33

 - OFFICIAL RATE ON 31/12/2008

 

COMMENTS ON THE FINANCIAL INFORMATION:

 

FOLLOWS ATTACHED WORKSHEET WITH MAIN FINANCIAL RATIOS.

 

THE FIGURES AVAILABLE IN 2009 SHOW A SATISFACTORY FINANCIAL STANDING. IT SHOWS ACCEPTABLE LEVEL OF INDEBTEDNESS, WHICH IS MAINLY COMPRISED BY TRADE AND FINANCIAL DEBTS. ON THE OTHER HAND IT SHOWS GOOD CURRENT RATIO AND POSITIVE WORKING CAPITAL AMOUNT. IT ALSO SHOWS DROP IN SALES AND THE COMPANY MADE OPERATIONAL PROFIT. HOWEVER, IT REVERSED THE LOSS DUE TO THE HIGH TRIBUTARY CREDITS.

 

THE QUARTERLY FIGURES FOR THE SUBJECT ITSELF AS OF SEPTEMBER 2010 SHOW SLIGHT IMPROVEMENT IN THE FINANCIALS. THE INDEBTEDNESS DECREASED AND THE LIQUIDITY IS GOOD. IN ADDITION IT IS NOTED GROWING SALES TREND AND THE OPERATIONS ARE PROFITABLE.

 

REMARKS:

 

THE TRIBUTARY CREDITS ARE DUE TO THE FACT THAT THE COMPANY'S SUBSIDIARIES MADE LOSSES IN THE PAST, THUS THE COMPANY HAS THE RIGHT TO RECOVER TAXES PAID PRIOR TO THE CLOSING OF THE BALANCE SHEET.

 

REAL ESTATE:

OWNED PREMISES ARE VALUED AT R$ 100.852.000,00

 

VEHICLES:

OWNED VEHICLES ARE VALUED AT R$ 65.000,00

 

MACHINES:

OWNED MACHINES AND EQUIPMENTS ARE VALUED AT R$ 445.299.000,00

 

 

INSURANCE

 

THE COMPANY'S SUBSIDIARIES MAINTAIN INSURANCE COVERAGE AT AMOUNTS CONSIDERED SUFFICIENT TO COVER ANY DAMAGES, CONSIDERING THE NATURE OF THEIR ACTIVITIES, RISKS INVOLVED IN OPERATIONS AND INSURANCE CONSULTANTS' GUIDANCE.

 

COVERAGE:

FIRE, RAY, EXPLOSION, ELECTRICAL DAMAGES, SMALL WORKS, EXTRAORDINARY EXPENSES, THEFT

VALUE:

R$ 1.291.522.150,00

 

 

COVERAGE:

GENERAL CIVIL LIABILITY

VALUE:

R$ 4.000.000,00

 

 

COVERAGE:

CIVIL LIABILITY - DIRECTORS AND MANAGERS

VALUE:

R$ 18.803.000,00

 

 

COVERAGE:

VEHICLES

VALUE:

MARKET VALUE

 

 

COVERAGE:

VEHICLES - CIVIL LIABILITY

VALUE:

R$ 150.000,00

 

 

COVERAGE:

LAWSUITS

VALUE:

VALOR ESTIPULADO PARA CADA CAUSA DEFENDIDA

 

 

COVERAGE:

GROUP LIFE

VALUE:

30X SALARY

 

 

COVERAGE:

TRANSPORT

VALUE:

INVOICE AMOUNT

 

BANKING REFERENCES

 

NOT AVAILABLE.

 

REMARKS: IN BRAZIL THE BANKS ARE PROHIBITED BY LAW TO PROVIDE INFORMATION OR ANY KIND OF COMMENTS ABOUT THEIR CLIENTS. DUE TO THIS LAW PROHIBITION WE ARE UNABLE TO PROVIDE ANY BANKING DETAILS.

 

ACCORDING TO THE CENTRAL BANK OF BRAZIL OFFICIAL REPORT, THE COMPANY HAS NO RETURNED CHECKS UP TO DATE. (IN THE TERMS OF "CIRCULAR 1682 BRAZILIAN CENTRAL BANK").

 

 

ACTIVITIES COMMENTS

 

THE COMPANY'S BUSINESS PURPOSE IS TO CARRY OUT INDUSTRIAL STEEL MILL ACTIVITIES, PARTICULARLY RELATED TO NON-FERROUS MINERALS; PROSPECTION AND MINING OF MINERAL ORES IN GENERAL, INCLUDING OIL AND NATURAL GAS RELATED DRILLING, DEVELOPMENT AND PRODUCTION ACTIVITIES; SALE AND PROCESSING OF MINERAL ORES AND ALL OTHER MINING RELATED ACTIVITIES; INDUSTRIAL ACTIVITIES RELATED TO USE OF MINERAL MATERIALS, OR FINISHED METAL PRODUCTS; CIVIL CONSTRUCTION ACTIVITIES IN GENERAL, INCLUDING PUBLIC SERVICES; PURCHASE, SALE, MANUFACTURE, IMPORT AND EXPORT OF FINISHED PRODUCTS, MACHINERY AND EQUIPMENT AND OTHER CONSUMER AND PRODUCTION GOODS RELATED TO THE AFOREMENTIONED ACTIVITIES; RENDERING OF ADVISORY SERVICES AND OTHER SERVICES RELATED TO THE ABOVE ACTIVITIES, AS WELL AS ACTIVITIES OF MANAGEMENT HOLDING COMPANIES.

 

IMPORT AND EXPORT:

 

IMPORTS FROM:

NOT AVAILABLE.

 

EXPORTS TO:

NOT AVAILABLE.

 

MAIN CLIENTS:

 

NOT AVAILABLE.

 

STAFF:

 

THE COMPANY HAS: 2.500 EMPLOYEES

 

 

CONCEPT AND FULFILMENT

 

THE SUBJECT IS A TRADITIONAL AND WELL-ESTABLISHED COMPANY, OPERATING SINCE 1961. SO FAR IT HAS A CLEAR TRADE HISTORY AND GOOD PAYMENT BEHAVIOUR.

 

THE COMPANY HAS TRADE RELATIONS WITH SEVERAL SUPPLIERS IN BRAZIL. THE SUPPLIERS EXTEND CREDIT FACILITIES TO THE SUBJECT IN TERMS AND AMOUNTS ACCORDING TO THE COMPANY'S NEEDS AND SO FAR NO PAYMENT PROBLEMS ARE NOTED.

 

MAIN SUPPLIERS:

 

DOMESTIC SUPPLIERS:

ANGLO AMERICAN SUR LTDA

MINERA ESCONDIDA LIMITADA

 

FOREIGN SUPPLIERS:

CORPORATION NACIONAL DEL COBRE DE CHILE

GLENCORE INTERNATIONAL AG

GLENCORE LIMITED

MINERA ALUMBRERA LIMITED

MINERA LOS PELAMBRES

STANDARD BANK PLC

TRAFIGURA AG

 

PAYMENT HISTORY:

 

85 SUPPLIERS REPORTED PAYMENTS:

   AMOUNT OF INVOICES PAID: 2001

TOTAL OF PROMPT PAYMENTS: 93%

TOTAL OF DELAYED PAYMENTS: 7%

 

HIGHEST INVOICE: R$ 859.481,00

HIGHEST CREDIT: R$ 3.810.554,00

 

 

FINAL OPINION

 

THE SUBJECT IS A LARGE SIZED AND WELL-ESTABLISHED COMPANY IN BUSINESS FOR SEVERAL YEARS. UP TO DATE IT HAS A SATISFACTORY FINANCIAL STANDING AND CLEAR TRADE HISTORY.

 

BASED ON THE GENERAL INFORMATION AVAILABLE IT IS BELIEVED THAT GOOD TRADE RELATIONS MAY BE ESTABLISHED. CREDIT FACILITIES MAY BE EXTENDED WITHIN TERMS AND AMOUNTS ADEQUATE TO THE COMPANY'S FINANCIAL STRENGTH.

 

THE COMPANY STILL HAS VERY HIGH FINANCIAL POWER AND IS CONSIDERED CREDITWORTHY AN INITIAL CREDIT LIMIT OF US$ 5.000.000,00.

 



FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.45.18

UK Pound

1

Rs.72.59

Euro

1

Rs.63.13

 

 

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.