MIRA INFORM REPORT

Preliminary report

Report Date :

12.04.2012

IDENTIFICATION DETAILS

Name :	MAGNESITA REFRATARIOS SA
Registered Office :	Praça Louis Ensch,240 - Cidade Industrial 32210-050 - Contagem/MG
Country :	Brazil
Financials (as on) :	30.09.2010
Date of Incorporation :	26.12.2006
Legal Form :	Publicly Held Corporation
Line of Business :	Manufacture of refractory ceramic products
No. of Employees :	6736

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 :	US$ 1.000.000,00
Status :	Moderate
Payment Behaviour :	Slow
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 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
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

MAGNESITA REFRATARIOS S/A

ADDRESSES

MAIN ADDRESS:	PRAÇA LOUIS ENSCH,240 - CIDADE INDUSTRIAL
ZIP CODE/CITY:	32210-050 - CONTAGEM/MG
PHONE:	31 3368-1419
FAX:	31 3348-8566
E-MAIL:	magnesita@magnesita.com.br
WEB SITE:	www.magnesita.com.br

BRANCHES:
ADDRESS:	RUA BEGÔNIA,169 SETOR A - CAMPINA VERDE
ZIP CODE/CITY:	32150-350 CONTAGEM/MG
CNPJ:	086845470
ADDRESS:	AVENIDA ALTINO ARANTES, S/Nº. LADO ESQUERDO JUNDIAPEBA,0
ZIP CODE/CITY:	08750-500 MOGI DAS CRUZES/SP
ADDRESS:	RUA JORNALISTA ZOLTAN GLUECK,93
ZIP CODE/CITY:	32210-090 CONTAGEM/MG

FURTHER TO THE ABOVE THE COMPANY ALSO HAS OTHER BRANCHES LOCATED IN: BRUMADO/BA, CONCEIÇÃO DO PARÁ/MG, PONTA GROSSA/PR, BOM SUCESSO DE ITARARÉ/SP, MOGI DAS CRUZES/SP, ONÇA DO PITANGUI/MG, ITAMARANDIBA/MG, UBERABA/MG, CUBATÃO/SP, POÇOS DE CALDAS/MG AND JOÃO PINHEIRO/MG.

LEGAL DATA

MAIN ACTIVITIES:

MANUFACTURE OF REFRACTORY CERAMIC PRODUCTS.

LEGAL FORM:	PUBLICLY HELD CORPORATION
INCORPORATION DATE:	26/12/2006
REGISTER DATE:	26/12/2006
BALANCE SHEET FILING DATE:	31/12
TAX CONTRIBUTOR NUMBER(CNPJ):	08.684.547/0001-65
STATE REGISTER:	001.066066.0016
SHARE CAPITAL:	R$ 2.388.844.863,65
LAST REGISTER OF CAPITAL:	24/06/2010

BOARD OF DIRECTORS:
RONALDO IABRUDI DOS SANTOS PEREIRA	PRESIDENT DIRECTOR
FLAVIO REZENDE BARBOSA	INVESTORS RELATIONS DIRECTOR
AFONSO CELSO RESENDE	DIRECTOR
FABRICIO RODRIGUES AMARAL	DIRECTOR
WAGNER MARIANO SAMPAIO	DIRECTOR
LUIS RODOLFO MARIANI BITTENCOURT	DIRECTOR
EDUARDO FRANCISCO LÔBO	DIRECTOR
GUSTAVO LÚCIO GONÇALVES FRANCO	DIRECTOR
MILTON JOSE DE OLIVEIRA SACRAMENTO	DIRECTOR
OTTO ALEXANDRE LEVY RESI	DIRECTOR
YAN HOFFSTETTER	DIRECTOR
DAVID GREGORY	DIRECTOR

AUTHORIZED USE OF SIGNATURE

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

SHAREHOLDERS / PARTNERS:
ALUMINA HOLDINGS, LLC	34,33%
GIF II FUNDO DE INV. EM PARTICIPAÇÕES	3,56%
MAG FUNDO DE INV. EM PARTICIPAÇÕES	3,69%
GPCP4 - FUNDO DE INV. EM PARTICIPAÇÕES	0,45%
REARDEN L HOLDINGS S.À R.L.	8,14%
FAMA INVESTIMENTOS	8,74%
OTHERS	41,09%

AFFILIATES / SUBSIDIARIES:
CERÂMICA SÃO CAETANO LTDA	100%
M S A AGROPECUÁRIA LTDA	34,20%
RASA - REFRACTARIOS ARGENTINOS SAICYM	100%
ILIAMA PARTICIPAÇÕES SL E CONTROLADA	100%
REFRACTARIOS MAGNESITA URUGUAY S.A	100%
REFRACTARIOS MAGNESITA COLOMBIA S.A.	100%
MAG-SÉ PARTICIPAÇÕES LTDA.	100%
LWB ISLAND COMPANY LTD. E SUAS CONTROLADAS	100%
MAGNESITA GRUNDSTUCKS BETEILIGUNGS GMBH	100%
MAGNESITA REFRACTORIES CORPORATION	100%
MAG-TEC LTDA. (ANTERIORMENTE, MSA SERVICE LTDA.)	100%
MASSAMBABA MINERAÇÃO LTDA	100%
REFRACTARIOS MAGNESITA DEL PERU S.A.C.	100%

COMPANY'S BACKGROUND

RPAR HOLDING S/A WAS ESTABLISHED ON DECEMBER 26, 2006 TO BE A HOLDING COMPANY. ON AUGUST 06, 2007 THE SHAREHOLDERS' MEETING APPROVED THE ALTERATION OF THE SUBJECT'S CORPORATE NAME FROM SIBAÚMA PARTICIPAÇÕES S.A. TO RPAR HOLDING S.A. AND THEN TO MAGNESITA REFRATARIOS S/A.

FROM DECEMBER 11, 2006 TO SEPTEMBER 26, 2007 THE COMPANY DID NOT GENERATE ANY REVENUE.

ON SEPTEMBER 27, 2007 THE COMPANY COMPLETED THE ACQUISITION OF SHARES OF 70,7% OF THE VOTING SHARE CAPITAL OF MAGNESITA S.A. AND 3,1% OF PREFERRED SHARES, TOTALING 38,6% OF THE SHARE CAPITAL OF MAGNESITA S/A.

IN DECEMBER 2007 THE SUBJECT CARRIED OUT A PUBLIC OFFERING TO ACQUIRE COMMON SHARES OF DA MAGNESITA S.A., REPRESENTING 29,27% OF THE VOTING CAPITAL AND 15,39% OF THE SOCIAL CAPITAL.

ON FEBRUARY 20, 2008 THE COMPANY TOOK OVER ITS WHOLE-OWNED SUBSIDIARY PARTIMAG S.A.

ON FEBRUARY 21, 2008 THE COMPANY MAGNESITA REFRATARIOS S/A TOOK OVER THE COMPANY MAGNESITA S.A. (FOUNDED ON JULY 13, 1940) CNPJ 19.791.268/0001-17. AND ADOPTED THE CURRENT CORPORATE NAME.

ON APRIL 30, 2008 THE SUBJECT TOOK OVER THE FOLLOWING COMPANIES:

IKERA INDUSTRIA E COMERCIO LTDA - CNPJ 18.751.883/0001-37;

MAGNESITA SERVICE LTDA - CNPJ 20.466.512/0001-55;

RISA - REFRATÁRIOS E ISOLANTES LTDA - CNPJ 19.791.334/0001-59;

REFRATEC PRODUTOS ELETROFUNDIDOS LTDA - CNPJ 20.128.609/0001-58;

REFRATEC PARTICIPAÇÕES LTDA - CNPJ 06.165.397/0001-58;

SÃO JOSE ADMINISTRAÇÃO DE MATÉRIAS PRIMAS - CNPJ 60.681.160/0001-75;

RISA MATERIAIS CERÂMICOS LTDA - CNPJ 07.886.734/0001-69.

FURTHER DETAILS ABOUT THE SUBJECT'S HISTORY ARE SO FAR NOT KNOWN.

PUBLIC INFORMATION:

PROTESTS:

4 PROTESTS,TOTAL AMOUNT R$ 2.171,00

DETAILS OF PROTESTS:

NOTARY OFFICE:	DATE:	VALUE:
CARTÓRIO DE MG-OURO BRANCO	16/12/2010	R$ 80,00
1º CARTÓRIO DE MG-CONTAGEM	16/11/2010	R$ 840,00
1º CARTÓRIO DE MG-CONTAGEM	03/11/2010	R$ 281,00
1º CARTÓRIO DE MG-CONTAGEM	07/12/2010	R$ 969,00

LAWSUITS:
	DATE:	COURT OF LAW:

1

FEDERAL LAWSUIT

18/10/10

1ª VARA DE MG-MONTES CLAROS

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	352.411	188.495	238.760
CLIENTS	333.149	333.750	301.859
INVENTORY	305.930	267.241	269.810
OTHER CREDITS	1.133
PRE PAID EXPENSES	585		626
RECOVERABLE TAXES	43.080	50.250	45.194
BANKS-ESCROW ACCOUNT		24.485
CREDIT AND VALUES	65.189	65.189
DISPOSAL OF REAL ESTATE	19.572
	----------------	----------------	----------------
TOTAL CURRENT ASSETS	1.121.049	929.410	856.249

LONG-TERM RECEIVABLES:
RECOVERABLE TAXES	1.897	1.774	1.520
JUDICIAL DEPOSITS		9.445	10.877
OTHER CREDITS		321	2.652
DISPOSAL OF REAL ESTATE	59.018	59.886	26.890
TRIBUTARY CREDITS	207.926	157.558	77.758
PREMIUM TO AMORTIZE	73.322	88.874	88.874
INTERCOMPANY CREDITS	49.689
GUARANTEE DEPOSITS	10.663
	----------------	----------------	----------------
TOTAL LONG-TERM RECEIVABLES	402.515	317.858	208.571

FIXED ASSETS:
INVESTMENTS	678.954	914.241	852.925
FIXED ASSETS	336.904	386.426	428.362
INTANGIBLE	1.376.420	1.368.868	1.395.674
	----------------	----------------	----------------
TOTAL FIXED ASSETS	2.392.278	2.669.535	2.676.961
	================	================	================
TOTAL ASSETS	3.915.842	3.916.803	3.741.781

LIABILITIES:
CURRENT:	30/09/2010	31/12/2009	31/12/2008
LOANS AND FINANCING	91.985	346.704	361.757
SUPPLIERS	59.778	79.295	53.467
TAXES & CONTRIBUTIONS	18.855	25.303	15.330
DIVIDENDS	410	1.049	1.049
LABOR OBLIGATIONS	63.290	42.777	57.791
ADVANCE FROM CLIENTS	2.013
COMMISSIONS DUE	539
OBLIGATIONS/THIRD PARTIES	8.267
FREIGHTS PAYABLE	1.082
ACCOUNTS PAYABLE	3.174
OTHER DEBTS	2.984	22.960	37.350
	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	252.377	518.088	526.744

LONG TERM LIABILITIES:
LOANS AND FINANCING	1.110.193	901.167	950.843
PROVISIONS	91.388	106.246	86.760
OTHER	45.330	40.809	34.712
INTERCOMPANY DEBTS			5.679
DEFERRED TAXES	192.289	130.160	22.932
	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	1.439.200	1.178.382	1.100.926

NET EQUITY:
SHARE CAPITAL	2.388.845	2.386.032	2.036.032
CAPITAL RESERVES	103.214	99.126	97.908
PROFIT RESERVES	3.495	2.856	2.856
OTHER COMPREHENSIVE INCOME	-193.443	-118.507	96.505
ACCRUED PROFIT (LOSS)	-77.846	-149.174	-119.190
	----------------	----------------	----------------
TOTAL NET EQUITY	2.224.265	2.220.333	2.114.111
	================	================	================
TOTAL LIABILITIES	3.915.842	3.916.803	3.741.781

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	1.196.424	1.306.033	1.533.337
(-) TAXES ON SALES	274.615	286.380	339.475
	----------------	----------------	----------------
NET SALES	921.809	1.019.653	1.193.862
(-) COST OF SOLD GOODS	583.087	639.477	750.082
	----------------	----------------	----------------
GROSS PROFIT	338.722	380.176	443.780
OPERATING REVENUE (EXPENSE)	-157.192	-209.005	-458.345
FINANCIAL REVENUE(EXPENSE)	-81.935	-176.003	-65.734
	----------------	----------------	----------------
OPERATIONAL PROFIT (LOSS)	99.595	-4.832	-80.299
CONTRIBUTION/INCOME TAX	-28.267	-25.152	26.600
	----------------	----------------	----------------
NET PROFIT (LOSS)	71.328	-29.984	-53.699

RATIOS:

30/09/2010

31/12/2009

31/12/2008

QUICK RATIO	3,23		1,28		1,11
CURRENT RATIO	4,44		1,79		1,63
ACCOUNTS RECEIVABLE TURNOVER	2,77	TIMES	3,06	TIMES	3,96	TIMES
DAYS' SALES IN RECEIVABLES	97,58	DAYS	117,83	DAYS	91,02	DAYS
INVENTORY TURNOVER	1,91	TIMES	2,39	TIMES	2,78	TIMES
ACCOUNTS PAYABLE PERIOD	27,68	DAYS	44,64	DAYS	25,66	DAYS
RETURN ON ASSETS	,24	TIMES	,26	TIMES	,32	TIMES
SALES TURNOVER ON NET EQUITY	,41	TIMES	,46	TIMES	,56	TIMES
NET WORTH TIE-UP	,15		,17		,20
INDEBTEDNESS	,76		,76		,77
EQUITY RATIO	56,80	%	56,69	%	56,50	%
WORKING CAPITAL RATIO	344,20	%	79,39	%	62,56	%
GENERAL SOLVENCY	2,31		2,31		2,30
RETURN ON NET EQUITY	3,21	%	-1,35	%	-2,54	%
RETURN ON SALES (PROFIT MARGIN)	7,74	%	-2,94	%	-4,50	%
GROSS PROFIT MARGIN	36,75	%	37,28	%	37,17	%
OPERATIONAL RESULT	10,80	%	-,47	%	-6,73	%
SALES TURNOVER ON LIABILITIES	3,65	TIMES	1,97	TIMES	2,27	TIMES
FOREIGN CURRENCY ON ASSETS
FOREIGN CURRENCY ON LIABILITIES

EXCHANGE RATE:
US$ 1,00 = R$ 1,68	- OFFICIAL RATE ON 14/01/2011
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 ANNUAL FIGURES SHOWED A SATISFACTORY FINANCIAL STANDING. IT SHOWED GOOD LIQUIDITY RATIOS WITH GOOD WORKING CAPITAL AMOUNT AND LOW LEVEL OF INDEBTEDNESS. ON THE OTHER HAND IT SHOWS DROP IN SALES AND ITS HIGH FINANCIAL EXPENSES DROVE THE COMPANY TO MAKE NEGATIVE RESULTS.

THE QUARTERLY FIGURES FOR SEPTEMBER 2010 SHOW A GOOD FINANCIAL SITUATION. IT HAS HIGH LIQUIDITY RATIOS AND IMPORTANT WORKING CAPITAL, AS WELL AS LOW LEVEL OF INDEBTEDNESS. IT ALSO SHOWS GROWING SALES TREND AND POSITIVE RESULT.

REAL ESTATE:

OWNED PREMISES ARE VALUED AT R$ 70.739.000,00

VEHICLES:

NOT AVAILABLE

MACHINES:

OWNED MACHINES AND EQUIPMENTS ARE VALUED AT R$ 226.387.000,00

INSURANCE

THE COMPANY AND ITS SUBSIDIARIES HAVE INSURANCE POLICIES WHICH COVERS OPERATIONAL RISKS OVER ITS INDUSTRIAL PLANTS, MACHINERY AND INVENTORIES. IT ALSO COVERS CEASING PROFIT, FIRE, FLOODING AND OTHER EVENTS AS SHOWED IN SEPTEMBER 30, 2010:

COVERAGE:	INSURED AMOUNT
VALUE:	R$ 1.591.786.000,00
COVERAGE:	CEASING PROFIT
VALUE:	R$ 587.512.000,00
COVERAGE:	CIVIL LIABILITY
VALUE:	R$ 25.000.000,00

BANKING REFERENCES

	BRANCH/PHONE:	CITY:
BANCO BRADESCO S/A	31 3361-7588	CONTAGEM/MG
BANCO DO BRASIL S/A	31 3248-7900	BELO HORIZONTE/MG

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

MANUFACTURE OF REFRACTORY CERAMIC PRODUCTS.

IMPORT AND EXPORT:

IMPORTS FROM:

NOT AVAILABLE.

EXPORTS TO:

NOT AVAILABLE.

MAIN CLIENTS:

DOMESTIC CLIENTS:

ARCELOR BRASIL

CIA SIDERÚRGICA NACIONAL - CSN

CIA SIDERÚRGICA PAULISTA - COSIPA

GRUPO GERDAU

USINAS SID DE MINAS GERAIS S/A - USIMINAS

STAFF:

THE COMPANY HAS: 6736 EMPLOYEE(S)

CONCEPT AND FULFILMENT

THE SUBJECT IS A WELL ESTABLISHED COMPANY BUT TOOK OVER THE ACTIVITIES OF A COMPANY WHICH ACTIVITIES DATE BACK TO 1940. SO FAR IT HAS A CLEAR TRADE HISTORY AND FAIR PAYMENT BEHAVIOR.

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.

THE LAWSUIT REPORTED IS NOT RELATED WITH TRADE DEBT. IT IS RELATED TO TAX DEBT THAT FOR ANY REASON THE COMPANY HAS NOT YET PAID. NEVERTHELESS WE POINT OUT THAT THE SAID LAWSUIT DOES NOT AFFECT THE COMPANY'S TRADE REPUTATION.

THE PROTESTS FOUND ARE CONSIDERED IRRELEVANT.

MAIN SUPPLIERS:

DOMESTIC SUPPLIERS:

ALCOA ALUMINIO S/A

ELFUSA GERAL DE ELETROFUSÃO LTDA

FERROVIA CENTRO ATLÂNTICA S/A

NACIONAL DE GRAFITE LTDA

PERSTORP DO BRASIL IND E COM LTDA

SAINT GOBAIN MATS CERÂMICOS LTDA

PAYMENT HISTORY:

59 SUPPLIERS REPORTED PAYMENTS:

AMOUNT OF INVOICES PAID: 1186

TOTAL OF PROMPT PAYMENTS: 75%

TOTAL OF DELAYED PAYMENTS: 25%

HIGHEST INVOICE: R$ 207.498,00

HIGHEST CREDIT: R$ 302.823,00

FINAL OPINION

THE SUBJECT IS A WELL-ESTABLISHED COMPANY. IT SHOWS A CLEAR TRADE HISTORY AND FAIR PAYMENT BEHAVIOR.

DESPITE THE SLOW PAYMENTS SHOWED IT IS BELIEVED THAT GOOD TRADE RELATIONS MAY BE ESTABLISHED. CREDIT FACILITIES MAY BE EXTENDED WITHIN TERMS AND AMOUNTS ADEQUATE TO THE COMPANY'S SIZE AND FINANCIAL STRENGTH.

THE COMPANY HAS PAYMENT CAPACITY AND IS CONSIDERED CREDITWORTHY FOR AN INITIAL CREDIT LIMIT OF US$ 1.000.000,00.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.51.55
UK Pound	1	Rs.81.95
Euro	1	Rs.67.57

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.