MIRA INFORM REPORT

Report Date :

19.05.2011

IDENTIFICATION DETAILS

Name :	PILSEN STEEL S.R.O.
Registered Office :	Tylova 1/57 316 00 Plzeň
Country :	Czech Republic
Financials (as on) :	31.12.2009
Date of Incorporation :	05.03.1993
Com. Reg. No.:	C/3406
Legal Form :	Private Limited Company
Line of Business :	Manufacture of tubes, pipes, hollow profiles and related fittings, of steel

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	EUR 1 626 405
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 – 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 identifications

PILSEN STEEL s.r.o.

Tylova 1/57
316 00 Plzeň

telephone: 00420/ 378 132 106
telefax: 00420/ 378 134 097
e-mail: info@pilsensteel.cz
Web: www.pilsensteel.cz

Terms of payment

Mostly within agreed terms, but partly also delayed

Business connection	Business connections appear permissible
Credit limit		CZK 43 290 000,- EUR 1 626 405,-

Basic Information

Legal form

Private limited company

Foundation	05/03/1993 - Private limited company
Comp. Register	05/03/1993, Krajský soud Plzeň, RegNr.: C/3406 Statistical number: 47718706 Tax number: CZ47718706

Share Capital	05/03/1993	CZK	448 335 000,-
	30/06/1995	CZK	460 283 000,-

08/10/1999	CZK	832 831 000,-
28/06/2005	CZK	1 303 571 000,-

	06/06/2007		CZK			100 000 000,-
Shareholders		United Pilsen S.A. rue Ermesinde 67, 1469 Luxembourg, Luxemburg		CZK	100 000 000,-

Management	Igor Vazhenin (08.04.1972) Alexeja Tolstogo 11, Sankt Peterburg, Russia Executive Manager joint power of attorney
	Denis Kazantsev (06.12.1970) Ramenki 25, 119 607 Moskva, Russia Executive Manager joint power of attorney

Igor Tribunskii (16.11.1961)
Krasnych Partizan 5, 196650 Sankt Peterburg, Russia
Executive Manager
joint power of attorney

Manfred Nowak (20.06.1954)
Bolevecká 1409/6, 301 01 Plzeň, Severní Předměstí
Executive Manager
joint power of attorney

Supervisory Board	Igor Shamis (19.10.1956) Prospekt Kosmonavtov 29, Sankt Peterburg, Russia chairman of supervisory board
	Yury Podmiglazov (14.02.1952) Maršala Polubojarova 4, 109156 Moskva, Russia

Vladislav Šíma (20.11.1964)
Jižní 667/35, 312 00 Plzeň, Újezd
Tel:00420/ 378 134 163
E-mail:vladislav.sima@pilsensteel.cz

Oleg Ershov (04.09.1969)
Osada Novenkij 3, Volgogradskaja oblast, Stredneachtubinskij rajon, Russia

General Data	Manufacture of semi-finished metallurgical products for various
	branches of industry. Production and sale of steel, of forming and

grey alloy, of ingots.

Mechanical processing of forgings for industrial firms occupying

themselves with manufacture of power stations, shipbuilding and

rolling plants.

Main activity: Manufacture of tubes, pipes, hollow profiles and related fittings, of steel		(24.20)
	Former name(s) ŠKODA, HUTĚ, Plzeň, s. r. o. Beginning of validity: 05.03.1993 End of validity: 25.05.2007

	Trade name(s) PILSEN STEEL s.r.o. Beginning of validity: 25.05.2007
Export: Denmark Germany India Italy Russia Spain		88%

Import:
Germany
Poland

		Address: Tylova 1/57, 316 00 Plzeň telephone: 00420/ 378 132 106 telefax: 00420/ 378 134 097 e-mail: info@pilsensteel.cz Web: www.pilsensteel.cz
Staff	2008		1136 employees

2009	1044 employees
2010	930 employees

Annual Sales	2005	actual sales	CZK	751 926 000,-
	2006	actual sales	CZK	1 095 027 000,-

2007	actual sales	CZK	5 422 712 000,-
2008	actual sales	CZK	5 959 993 000,-

2009	actual sales	CZK	4 330 736 000,-
2010	projected sales	CZK	3 500 000 000,-

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)

Auditor	KPMG Česká republika Audit, s.r.o. (ICO:49619187) Pobřežní 648/1a, 186 00 Praha 8
Remarks		The company is a holder of ISO 9001 certificate.

Business management:

Vladislav Šíma – entrusted with company management, business director

Ing. Radek Sýkora – economic director

Ing. Stanislav Brotánek CSc. – technical director

Ing. Roman Heide – chief of the production plant “Forgery”

Václav Vysušil – chief of the production plant “Machining”

Zdeněk Bokr - chief of the production plant “Steelwork”

To the company PILSEN STEEL s.r.o., IČ 47718706, - as to the

successor company - property of the disappearing company ŠKODA STEEL

IČ 27615090 as of disappearing company was transferred.

The record date of fusion is 1.1.2007.

The company PILSEN STEEL s.r.o. is indirectly controlled by the

Russian enterpriser

Igor Shamis

Bankers

Citibank Europe plc, organizační složka HSBC Bank plc - pobočka Praha

(2600) (8150)

		balance		31.12.2006 (CZK)		31.12.2007 (CZK)		31.12.2008 (CZK)		31.12.2009 (CZK)
r1		TOTAL ASSETS		518 930 000		3 700 346 000		4 021 855 000		3 553 806 000
r2		Receivables for subscriptions		0		0		0
r3		Fixed assets		126 443 000		1 228 514 000		1 579 346 000		1 734 092 000
r4		Intangible fixed assets		277 000		2 640 000		4 119 000		6 081 000
r5		Incorporation expenses				0
r6		Research and development		40 000		0		2 721 000		1 760 000
r7		Software		237 000		1 076 000		510 000		1 363 000
r8		Valuable rights				0		888 000		1 727 000
r9		Goodwill				0
r10		Other intangible fixed assets				1 351 000				1 231 000
r11		Intangible fixed assets under construction				213 000
r12		Advance payments for intangible fixed assets				0
r13		Tangible fixed assets		126 166 000		1 225 874 000		1 575 227 000		1 728 011 000
r14		Lands		0		8 190 000		8 190 000		8 190 000
r15		Constructions		65 437 000		193 730 000		255 239 000		282 019 000
r16		Equipment		58 560 000		671 438 000		734 145 000		943 235 000
r17		Perennial corps				0
r18		Breeding and draught animals				0
r19		Other tangible fixed assets		2 119 000		58 817 000		88 241 000		91 049 000
r20		Tangible fixed assets under construction		50 000		115 992 000		275 183 000		272 945 000
r21		Advance payments for tangible fixed assets				33 364 000		80 995 000		8 449 000
r22		Adjustment to acquired assets				144 343 000		133 234 000		122 124 000
r23		Long-term financial assets		0		0		0
r24		Shares in controlled and managed organizations				0
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		391 789 000		2 469 249 000		2 441 852 000		1 819 205 000
r32		Inventory		99 812 000		990 857 000		1 330 757 000		1 057 197 000
r33		Materials		9 436 000		214 460 000		281 472 000		328 111 000
r34		Work in progress and semi-products		76 126 000		721 425 000		992 165 000		686 913 000
r35		Finished products		14 250 000		53 194 000		57 120 000		42 173 000
r36		Animals				0
r37		Merchandise				0
r38		Advance payments for inventory				1 778 000
r39		Long-term receivables		116 153 000		0		26 318 000
r40		Trade receivables				0
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		116 153 000		0		26 318 000
r48		Short-term receivables		123 596 000		1 122 442 000		922 042 000		685 227 000
r49		Trade receivables		112 190 000		713 570 000		706 564 000		349 034 000
r50		Receivables from controlled and managed organizations				132 000 000
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				104 654 000		150 901 000		125 319 000
r55		Short-term deposits given		7 165 000		41 333 000		55 903 000		207 593 000
r56		Estimated receivable		1 959 000		9 207 000		6 792 000		2 320 000
r57		Other receivables		2 282 000		121 678 000		1 882 000		961 000
r58		Short-term financial assets		52 228 000		355 950 000		162 735 000		76 781 000
r59		Cash		20 000		67 000		16 000		17 000
r60		Bank accounts		52 208 000		355 883 000		162 719 000		76 764 000
r61		Short-term securities and ownership interests				0
r62		Short-term financial assets acquired				0
r63		Accruals		698 000		2 583 000		657 000		509 000
r64		Deferred expenses		428 000		2 393 000		657 000		509 000
r65		Complex deferred costs				0
r66		Deferred income		270 000		190 000
r67		TOTAL LIABILITIES		518 930 000		3 700 346 000		4 021 855 000		3 553 806 000
r68		Equity		295 805 000		1 564 196 000		1 426 432 000		1 752 548 000
r69		Registered capital		1 303 571 000		100 000 000		100 000 000		100 000 000
r70		Registered capital		1 303 571 000		100 000 000		100 000 000		100 000 000
r73		Capital funds		0		76 258 000		-251 289 000
r76		Differences from revaluation of assets and liabilities ( +/- )				76 258 000		-251 289 000
r78		Reserve funds, statutory reserve account for cooperatives, and other retained earnings		22 417 000		779 098 000		779 098 000		779 098 000
r79		Legal reserve fund / indivisible fund		22 417 000		40 641 000		40 641 000		40 641 000
r80		Statutory and other funds				738 457 000		738 457 000		738 457 000
r81		Profit / loss - previous years		-1 294 671 000				103 840 000		475 463 000
r82		Retained earnings from previous years						103 840 000		475 463 000
r83		Accumulated losses from previous years		-1 294 671 000
r84		Profit / loss - current year (+/-)		264 488 000		608 840 000		694 783 000		397 987 000
r85		Other sources		223 125 000		2 136 150 000		2 595 349 000		1 801 258 000
r86		Reserves		30 168 000		698 382 000		935 816 000		746 487 000
r87		Reserves under special statutory regulations		8 347 000		623 365 000		736 902 000		629 235 000
r89		Income tax reserves				47 340 000		144 568 000
r90		Other reserves		21 821 000		27 677 000		54 346 000		117 252 000
r91		Long-term payables		0		433 736 000		0		21 484 000
r92		Trade payables				379 468 000
r101		Deferred tax liability				54 268 000				21 484 000
r102		Short-term payables		192 957 000		1 004 032 000		1 390 233 000		795 102 000
r103		Trade payables		125 330 000		593 299 000		748 388 000		433 499 000
r104		Payables to controlled and managed organizations								144 220 000
r107		Payroll		7 664 000		25 007 000		28 612 000		23 577 000
r108		Payables to social securities and health insurance		4 079 000		14 057 000		15 412 000		11 823 000
r109		Due from state - tax liabilities and subsidies		5 272 000		4 565 000		4 518 000		4 041 000
r110		Short-term deposits received		14 545 000		97 463 000		54 325 000		59 572 000
r112		Estimated payables		34 142 000		192 061 000		155 785 000		85 805 000
r113		Other payables		1 925 000		77 580 000		383 193 000		32 565 000
r114		Bank loans and financial accommodations		0		0		269 300 000		238 185 000
r115		Long-term bank loans		0		0		0
r116		Short-term bank loans		0		0		269 300 000
r117		Short-term accommodations		0		0		0
r118		Accruals		0		0		74 000
r119		Accrued expenses				0		74 000
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		1 095 027 000		5 422 712 000		5 959 993 000		4 330 736 000
a2	Revenues from sold goods		0		0		0
a3	Expenses on sold goods		0		0		0
a4	Sale margin		0		0		0
a5	Production		997 455 000		5 809 672 000		6 594 270 000		4 393 605 000
a6	Revenues from own products and services		1 095 027 000		5 422 712 000		5 959 993 000		4 330 736 000
a7	Change in inventory of own products		-105 177 000		55 333 000		260 991 000		-206 928 000
a8	Capitalization		7 605 000		331 627 000		373 286 000		269 797 000
a9	Production consumption		748 804 000		4 153 203 000		4 745 347 000		2 843 596 000
a10	Consumption of material and energy		494 456 000		3 108 146 000		3 613 609 000		2 000 405 000
a11	Services		254 348 000		1 045 057 000		1 131 738 000		843 191 000
a12	Added value		248 651 000		1 656 469 000		1 848 923 000		1 550 009 000
a13	Personnel expenses		157 111 000		553 308 000		618 640 000		542 136 000
a14	Wages and salaries		113 026 000		406 773 000		454 577 000		405 117 000
a15	Renumeration of board members		360 000		477 000		5 460 000		246 000
a16	Social security expenses and health insurance		39 083 000		132 328 000		144 551 000		123 315 000
a17	Other social expenses		4 642 000		13 730 000		14 052 000		13 458 000
a18	Taxes and fees		657 000		521 000		1 264 000		1 343 000
a19	Depreciations of intangible and tangible assets		29 583 000		156 142 000		179 974 000		216 178 000
a20	Revenues from disposals of fixed assets and materials		0		5 030 000		1 692 000		4 776 000
a21	Revenues from disposals of fixed assets				3 057 000		1 211 000		2 466 000
a22	Revenues from disposals of materials				1 973 000		481 000		2 310 000
a23	Net book value of disposed fixed assets and materials		0		2 357 000		1 968 000		2 925 000
a24	Net book value of sold fixed assets				783 000		1 322 000		620 000
a25	Net book value of sold material				1 574 000		646 000		2 305 000
a26	Change in operating reserves and adjustments and complex deferred costs ( + / - )		-44 645 000		138 678 000		143 572 000		-98 069 000
a27	Other operating revenues		73 649 000		37 163 000		199 507 000		104 047 000
a28	Other operating expenses		39 738 000		76 610 000		214 217 000		294 951 000
a29	Transfer of operating revenues		0		0		0
a30	Transfer of operating expenses		0		0		0
a31	Operating profit / loss		139 856 000		771 046 000		890 487 000		699 368 000
a32	Revenues from sales of securities and ownership interests		0		0		0
a33	Sold securities and ownership interests		0		0		0
a34	Revenues from long-term financial assets		0		0		0
a35	Revenues from shares in controlled and managed organizations and in accounting units with substantial influence				0
a36	Revenues from others securities and ownership interests				0
a37	Revenues from other long-term financial assets				0
a38	Revenues from short-term financial assets		0		0		0
a39	Expenses associated with financial assets		0		0		0
a40	Revenues from revaluation of securities and derivatives		7 049 000		10 795 000		6 829 000		7 699 000
a41	Cost of revaluation of securities and derivatives		2 315 000		9 993 000		43 407 000		1 922 000
a42	Change in financial reserves and adjustments ( + / - )				0		0
a43	Interest revenues		428 000		18 393 000		12 731 000		1 208 000
a44	Interest expenses		0		52 436 000		170 047 000		5 943 000
a45	Other financial revenues		11 000 000		134 259 000		291 796 000		22 942 000
a46	Other financial expenses		7 683 000		103 667 000		72 334 000		256 927 000
a47	Transfer of financial revenues		0		0		0
a48	Transfer of financial expenses		0		0		0
a49	Profit / loss from financial operations ( transactions )		8 479 000		-2 649 000		25 568 000		-232 943 000
a50	Income tax on ordinary income		45 892 000		159 557 000		221 272 000		68 438 000
a51	Due tax				75 732 000		218 763 000		83 460 000
a52	Tax deferred				83 825 000		2 509 000		-15 022 000
a53	Operating profit / loss ordinary activity		102 443 000		608 840 000		694 783 000		397 987 000
a54	Extraordinary revenues		0		0		0
a55	Extraordinary expenses		0		0		0
a56	Income tax on extraordinary income		-162 045 000		0		0
a57	Due tax				0
a58	Tax deferred				0
a59	Operating profit / loss extraordinary activity		162 045 000		0		0
a60	Transfer profit ( loss ) to partners (+/-)		0		0		0
a61	Profit / loss of current accounting period (+/-)		264 488 000		608 840 000		694 783 000		397 987 000
a62	Profit / loss before tax (+/-)		148 335 000		768 397 000		916 055 000		466 425 000
	Operating cash flow		33 009 000		723 278 000		866 705 000		487 015 000
	Investment cash flow		-164 000		47 842 000		-390 484 000		-362 914 000
	Financial cash flow		-437 000		-546 461 000		-669 436 000		-210 055 000
	Receivables after due date total		181 538 000		231 207 000		328 178 000		80 483 000
	Liabilities after due date total		75 985 000		134 448 000		143 389 000		155 272 000

Balance indices		31.12.2006	31.12.2007	31.12.2008	31.12.2009
Return on total assets ROA (in %)	a62/r1 * 100	28,58	20,77	22,78	13,12
Return on equity ROE (in %)	a62/r68 * 100	50,15	49,12	64,22	26,61
Return on sales ROS (in %)	a62/a1 * 100	13,55	14,17	15,37	10,77
Turnover of receivables (in days)	r49/a1 * 365	37,40	48,03	43,27	29,42
Turnover of liabilities (in days)	r103/a1 * 365	41,78	39,93	45,83	36,54
Turnover of inventories (days)	r32/a1 * 365	33,27	66,69	81,50	89,10
Net working capital (in ths. CZK)	r31 - r102 - r116 - r117	198 832,00	1 465 217,00	782 319,00	1 024 103,00
Ratio of accounts payable to accounts receivable (in %)	(r39+r48) / (r91+r102) * 100	124,25	78,07	68,22	n/a
Ratio of profit/loss to tangible assets (in%)	r3 / a1 * 100	11,55	22,66	26,50	40,04
Current ratio	r31 / (r102+r116+r117)	2,03	2,46	1,47	n/a
Quick ratio	(r58+r48) / (r102+r116+r117)	0,91	1,47	0,65	0,96
Cash ratio	r58 / (r102+r116+r117)	0,27	0,35	0,10	n/a
Debt ratio I (in %)	(1-r68/r67) * 100	43,00	57,73	64,53	50,69
Debt ratio II (in %)	r85/r67 * 100	43,00	57,73	64,53	50,69

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.08
UK Pound	1	Rs.73.45
Euro	1	Rs.64.30

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%)

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.