MIRA INFORM REPORT

Report Date :

22.02.2013

IDENTIFICATION DETAILS

Name :	SANDVIK CHOMUTOV PRECISION TUBES SPOL. S R.O.
Registered Office :	Vitezslava Nezvala 5502 430 01 Chomutov
Country :	Czech Republic
Financials (as on) :	31.12.2011
Date of Incorporation :	07/03/1994
Com. Reg. No.:	C 6548
Legal Form :	Private Limited Company
Line of Business :	Manufacture of tubes, pipes, hollow profiles and related fittings, of steel.
No. of Employees :	585

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

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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2011)	Current Rating (30.06.2012)
Czech Republic	A2	A2

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

CZECH REPUBLIC - ECONOMIC OVERVIEW

The Czech Republic is a stable and prosperous market economy, which harmonized its laws and regulations with those of the EU prior to its EU accession in 2004. While the conservative, inward-looking Czech financial system has remained relatively healthy, the small, open, export-driven Czech economy remains sensitive to changes in the economic performance of its main export markets, especially Germany. When Western Europe and Germany fell into recession in late 2008, demand for Czech goods plunged, leading to double digit drops in industrial production and exports. As a result, real GDP fell 4.7% in 2009, with most of the decline occurring during the first quarter. Real GDP, however, has slowly recovered with positive quarter-on-quarter growth starting in the second half of 2009 and continuing throughout 2011. The auto industry remains the largest single industry, and, together with its upstream suppliers, accounts for nearly 24% of Czech manufacturing. The Czech Republic produced more than a million cars for the first time in 2010, over 80% of which were exported. Foreign and domestic businesses alike voice concerns about corruption especially in public procurement. Other long term challenges include dealing with a rapidly aging population, funding an unsustainable pension and health care system, and diversifying away from manufacturing and toward a more high-tech, services-based, knowledge economy.

Source : CIA

Company name and address

SANDVIK CHOMUTOV PRECISION TUBES spol. s r.o.

Vitezslava Nezvala 5502 430 01 Chomutov Czech Republic

Telephone 00420/ 474 401 111

Telefax 00420/ 474 652 653

e-mail ludmila.hronova@sandvik.com

Web www.smt.sandvik.com/cz

Registration data

Registration: Krajsky soud ´Usti nad Labem

Statistical Nr. 60278773

Registration Nr. C 6548

Tax Nr. CZ60278773 Status active

Economic Situation

Business connection	Business connections appear permissible
Terms of payment	mostly within agreed terms, but partly also delayed

Basic information

Legal form

Private limited company

Founded

07/03/1994 as Private limited company

Registration

07/03/1994, Krajsky soud Usti nad Labem, C 6548 Statistical Nr.: 60278773 Tax Nr.: CZ60278773

Registered names

Valid from	Trade name(s)	Valid until
	SANDVIK CHOMUTOV PRECISION TUBES spol. s r.o.
07/03/1994	SANDVIK CHOMUTOV PRECISION TUBES spol. s r.o.

Owners and Capital

	Name / Address / Status	From	Share
Shareholders
	Sandvik PT Aktiebolag Gavleborgs lan 21, 811 81 Sandviken Sweden	22/11/2006	850,000,000 CZK
Total capital			850,000,000 CZK

Registered capital

Date Currency Value

07/03/1994 CZK 100,000

26/10/1994 CZK 300,000,000

29/01/1996 CZK 400,000,000

24/06/1998 CZK 800,000,000

22/11/2006 CZK 850,000,000

Management

	Name / Address / Status	Since	Power of attorney
Management
	Executive Manager Ing. Ludmila Hronova(birth date 08/06/1959) Jiraskova 4207, 430 01 Chomutov Czech Republic	26/08/1999	sole power of attorney

	Executive Manager RNDr. Jiff Polman, CSc.(birth date 09/01/1963) Staffc 166, 739 43 Staffc Czech Republic	22/03/2011	joint power of attorney
Supervisory Board
	Anna-Karin Andr<§n(birth date 05/10/1968) Vaxthusgatan 14, Gavle Sweden	10/08/2012
	Cecilia Hagglof(birth date 25/03/1973) Hedgrindsgatan 11, Sandviken Sweden	10/08/2012
	chairman of supervisory board Petra Einarsson(birth date 29/06/1967) Astjarnsvagen 9, Torsaker Sweden	10/08/2012

Company addresses

Valid from	Address	Valid until
10/04/2003	Vftezslava Nezvala 5502, 430 01 Chomutov, Czech Republic
07/03/1994	Libusina 4778, 430 23 Chomutov, Czech Republic	10/04/2003
Valid from	Billing address	Valid until
	Vftezslava Nezvala 5502, 430 01 Chomutov, Czech Republic

Business Activities

Main activity	Nace
Manufacture of tubes, pipes, hollow profiles and related fittings, of steel	24.20
Additional activities	Nace

Manufacture and sale of seamless tubes rolled under cold from both \ standard and special stainless sorts of steel.

Economic data

Turnover and Employees

Date	Turnover	Employee
2005	3,370,225,000 CZK
2006	3,986,592,000 CZK
2007	5,114,081,000 CZK
2008	3,444,629,000 CZK
2009	3,254,077,000 CZK
2010	3,953,978,000 CZK	564
2011	4,192,454,000 CZK	583
2012		585

Import / Export

	Import	Export
Percentage	Unknown	90%

Properties

Name	Detail	Currency	Value
Business premises	Property of the company Vftezslava Nezvala 5502, Chomutov 430 01, verified in the real estate registry		Unknown

Supplementary data

Remarks

All the sources of negative data accessible to public (insolvency registers, databases of debtors of health insurance institutions, commercial bulletin, collection database of Creditreform and others) are currently monitored. The company is a holder of certificates: ISO 9001 - Quality Management system Certificate, ISO 14001 - environment protection management system and OHSAS 18001 - security and health protection management system. Business management:

RNDr. Jirf Polman, CSc. - general director, phone: 00420/474 401 100 Ing. Ludmila Hronova - financial director, phone. 00420/ 474 401 220

Banks

Code	Bank name / Address
2600	Citibank Europe plc, organizacnf slozka
0100	Komercnf banka, a.s.

Main indices

Payment experience and credit opinion

Terms of payment	mostly within agreed terms, but partly also delayed
Business connection	Business connections appear permissible

Business development

Company development	Positive company development
Order situation	Good course of business

Events

No negative events registered.

Balances

Name	Ref.	31/12/2011 1000 CZK balance	31/12/2010 1000 CZK balance	31/12/2009 1000 CZK balance	31/12/2008 1000 CZK balance
TOTAL ASSETS	r1	4,855,355	3,993,944	2,974,953	4,652,265
Receivables for subscriptions	r2	0	0	0	0
Fixed assets	r3	1,373,459	1,107,806	847,552	892,584
Intangible fixed assets	r4	0	0	120	712
Incorporation expenses	r5				0
Research and development	r6				0
Software	r7			120	712
Valuable rights	r8				0
Goodwill	r9				0
Other intangible fixed assets	r10				0
Intangible fixed assets under construction	r11				0
Advance payments for intangible fixed assets	r12				0
Tangible fixed assets	r13	1,373,459	1,107,806	847,432	891,872
Lands	r14	24,532	24,532	24,532	24,532
Constructions	r15	374,384	301,940	282,054	278,699
Equipment	r16	577,942	521,734	533,267	515,713
Perennial corps	r17				0
Breeding and draught animals	r18				0
Other tangible fixed assets	r19	202	202	202	202
Tangible fixed assets under construction	r20	394,439	234,503	7,281	72,726
Advance payments for tangible fixed assets	r21	1,960	24,895	96	0
Adjustment to acquired assets	r22				0

Long-term financial assets	r23	0	0	0	0
Shares in controlled and managed organizations	r24				0
Shares in accounting units with substantial influence	r25				0
Other securities and shares	r26				0
Loans to controlled and managed organizations and to accounting unit with substantial influence	r27				0
Other financial investments	r28				0
Financial investments acquired	r29				0
Advance payments for long-term financial assets	r30				0
Current assets	r31	3,474,092	2,865,045	2,124,775	3,755,641
Inventory	r32	586,984	455,535	257,332	465,972
Materials	r33	300,236	328,419	143,437	342,602
Work in progress and semi-products	r34	261,694	107,668	94,187	107,663
Finished products	r35	25,033	18,902	18,683	12,807
Animals	r36				0
Merchandise	r37	21	546	1,025	2,900
Advance payments for inventory	r38				0
Trade receivables
Long-term receivables	r39	3,647	0	0	0
Trade receivables	r40				0
Receivables from controlled and managed organizations	r41				0
Receivables from accounting units with substantial influence	r42				0
Receivables from partners, cooperative members and association members	r43				0
Long-term deposits given	r44				0
Estimated receivable	r45				0
Other receivables	r46				0
Deferred tax receivable	r47	3,647			0
Short-term receivables	r48	1,704,804	2,169,079	1,814,822	3,150,592
Trade receivables	r49	487,225	460,170	659,453	674,798
Receivables from controlled and managed organizations	r50	1,186,658	1,629,580	1,129,138	2,442,137
Receivables from accounting units with substantial influence	r51				0
Receivables from partners, cooperative members and association members	r52				0
Receivables from social security and health insurance	r53				0
Due from state - tax receivable	r54	22,269	51,940	13,020	23,325
Short-term deposits given	r55	7,145	2,439	3,917	645
Estimated receivable	r56	1,339	2,482	7,916	8,622

Other receivables	r57	168	22,468	1,378	1,065
Short-term financial assets	r58	1,178,657	240,431	52,621	139,077
Cash	r59	114	179	71	379
Bank accounts	r60	1,178,543	240,252	52,550	138,698
Short-term securities and ownership interests	r61				0
Short-term financial assets acquired	r62				0
Accruals	r63	7,804	21,093	2,626	4,040
Deferred expenses	r64	5,428	17,924	2,443	1,264
Complex deferred costs	r65				0
Deferred income	r66	2,376	3,169	183	2,776
TOTAL LIABILITIES	r67	4,855,355	3,993,944	2,974,953	4,652,265
Equity	r68	3,987,274	3,043,617	2,119,881	4,114,476
Registered capital	r69	850,000	850,000	850,000	850,000
Registered capital	r70	850,000	850,000	850,000	850,000
Company's own shares and ownership interests (-)	r71				0
Changes of registered capital ( +/-)	r72				0
Capital funds	r73	-27,336	-63,888	-1,778	0
Share premium	r74				0
Other capital funds	r75				0
Differences from revaluation of assets and liabilities ( +/- )	r76	-27,336	-63,888	-1,778	0
Differences from revaluation in transformation (+/- )	r77				0
Diferences from tranformation of companies ( +/- )
Reserve funds, statutory reserve account for cooperatives, and other retained earnings	r78	85,000	85,000	85,000	85,000
Legal reserve fund / indivisible fund	r79	85,000	85,000	85,000	85,000
Statutory and other funds	r80				0
Profit / loss - previous years	r81	2,172,505	1,186,659	412,027	2,767,449
Retained earnings from previous years	r82	2,172,505	1,186,659	412,027	2,767,449
Accumulated losses from previous years	r83				0
Profit / loss - current year (+/-)	r84	907,105	985,846	774,632	412,027
Liabilities	r85	816,988	914,850	835,198	526,006
Reserves	r86	121,894	92,356	80,766	11,790
Reserves under special statutory regulations	r87				0
Reserves for pension and similar payables	r88				0
Income tax reserves	r89	82,854	84,736	65,180	7,503
Other reserves	r90	39,040	7,620	15,586	4,287
Long-term payables	r91	0	53,648	51,901	44,006
Trade Payables	r92				0

Payables to controlled and managed organizations	r93				0
Payables to accounting units with substantial influence	r94				0
Payables from partners, cooperative members and association members	r95				0
Long-term advances received	r96				0
Issues bonds	r97				0
Long-term notes payables	r98				0
Estimated payables	r99				0
Other payables	r100				0
Deferred tax liability	r101		53,648	51,901	44,006
Short-term payables	r102	695,049	768,846	702,531	470,210
Trade payables	r103	603,084	636,290	664,105	428,682
Payables to controlled and managed organizations	r104				0
Payables to accounting units with substantial influence	r105				0
Payables from partners, cooperative members and association members	r106				0
Payroll	r107	14,288	13,301	10,656	10,851
Payables to social securities and health insurance	r108	8,574	7,957	5,853	5,825
Due from state - tax liabilities and subsidies	r109	2,683	2,264	1,777	1,762
Short-term deposits received	r110	4,849	15	59	0
Issues bonds	r111				0
Estimated payables	r112	13,479	6,941	4,060	11,899
Other payables	r113	48,092	102,078	16,021	11,191
Bank loans and financial accommodations	r114	45	0	0	0
Long-term bank loans	r115	45	0	0	0
Short-term bank loans	r116	0	0	0	0
Short-term accommodations	r117	0	0	0	0
Accruals	r118	51,093	35,477	19,874	11,783
Accrued expenses	r119	27,040	23,690	19,874	11,783
Deferred revenues	r120	24,053	11,787		0

Profit and loss accounts

Name	Ref.	31/12/2011 1000 CZK profit/loss account	31/12/2010 1000 CZK profit/loss account	31/12/2009 1000 CZK profit/loss account	31/12/2008 1000 CZK profit/loss account
Turnover	a1	4,192,454	3,953,978	3,254,077	3,444,629
Revenues from sold goods	a2	8,039	251,785	102,636	209,404
Expenses on sold goods	a3	7,153	232,764	88,647	190,065
Sale margin	a4	886	19,021	13,989	19,339
Production	a5	4,352,719	3,719,528	3,136,880	3,218,964
Revenues from own products and services	a6	4,184,415	3,702,193	3,151,441	3,235,225
Change in inventory of own products	a7	167,074	17,325	-14,561	-16,261
Capitalization	a8	1,230	10		0
Production consumption	a9	2,472,269	2,214,140	1,897,522	2,303,906
Consumption of material and energy	a10	2,112,067	1,851,705	1,568,926	1,953,528
Services	a11	360,202	362,435	328,596	350,378
Added value	a12	1,881,336	1,524,409	1,253,347	934,397
Personnel expenses	a13	356,750	298,037	265,200	277,830
Wages and salaries	a14	255,714	213,393	191,044	200,861
Renumeration of board members	a15				0
Social security expenses and health insurance	a16	85,961	71,667	61,928	65,259
Other social expenses	a17	15,075	12,977	12,228	11,710
Taxes and fees	a18	980	872	960	457
Depreciations of intangible and tangible assets	a19	69,856	68,459	83,067	147,608
Revenues from disposals of fixed assets and materials	a20	101,039	85,450	60,417	125,684
Revenues from disposals of fixed assets	a21	2,550	394		102
Revenues from disposals of materials	a22	98,489	85,056	60,417	125,582
Net book value of disposed fixed assets and materials	a23	38,901	32,141	39,693	72,099
Net book value of sold fixed assets	a24	3,456	351		314
Net book value of sold material	a25	35,445	31,790	39,693	71,785
Change in operating reserves and adjustments and complex deferred costs ( + / -)	a26	360,222	-11,968	12,494	-24,324
Other operating revenues	a27	8,165	15,055	40,740	-3,541
Other operating expenses	a28	1,729	962	1,714	18,888
Transfer of operating revenues	a29				0
Transfer of operating expenses	a30				0
Operating profit / loss	a31	1,162,102	1,236,411	951,376	563,982
Revenues from sales of securities and ownership interests	a32				0
Sold securities and ownership interests	a33				0
Revenues from long-term financial assets	a34				0
Revenues from shares in controlled and managed organizations and in accounting units with substantial influence	a35				0
Revenues from others securities and ownership interests	a36				0

Revenues from other long-term financial assets	a37				0
Revenues from short-term financial assets	a38				0
Expenses associated with financial assets	a39				0
Revenues from revaluation of securities and derivatives	a40		3,869		13,857
Cost of revaluation of securities and derivatives	a41	13,013	5,323	12,256	23,902
Change in financial reserves and adjustments ( + /-)	a42				0
Interest revenues	a43	7,041	7,619	30,281	80,518
Interest expenses	a44	55	107	0	147
Other financial revenues	a45	177,445	274,123	165,335	227,916
Other financial expenses	a46	220,094	295,449	187,574	346,198
Transfer of financial revenues	a47				0
Transfer of financial expenses	a48				0
Profit / loss from financial operations (transactions )	a49	-48,676	-15,268	-4,214	-47,956
Income tax on ordinary income	a50	206,321	235,297	172,530	103,999
Due tax	a51	272,190	218,981	164,218	98,277
Tax deferred	a52	-65,869	16,316	8,312	5,722
Operating profit / loss ordinary activity	a53	907,105	985,846	774,632	412,027
Extraordinary revenues	a54				0
Extraordinary expenses	a55				0
Income tax on extraordinary income	a56				0
Due tax	a57				0
Tax deferred	a58				0
Operating profit / loss extraordinary activity	a59	0	0	0	0
Transfer profit (loss ) to partners (+/-)	a60				0
Profit / loss of current accounting period (+/-)	a61	907,105	985,846	774,632	412,027
Profit / loss before tax (+/-)	a62	1,113,426	1,221,143	947,162	516,026
Operating cash flow		1,592,336	516,514	2,723,370	145,927
Investment cash flow		-654,155	-328,704	-42,377	-111,086
Financial cash flow		45	0	-2,767,449
Receivables after due date total		7,788	17,228	42,349	44,427
Receivables more than 360 days after due date
Receivables more than 180 days after due date
Receivables more than 90 days after due date
Receivables more than 60 days after due date
Receivables more than 30 days after due date
Receivables less than 30 days after due date
Liabilities after due date total		65,665	35,799	990	32,532
Liabilities more than 360 days after due date
Liabilities more than 180 days after due date

		31/12/2011	31/12/2010	31/12/2009	31/12/2008
		1000	1000	1000	1000
Name	Ref.	CZK	CZK	CZK	CZK
		profit/loss	profit/loss	profit/loss	profit/loss
		account	account	account	account
Liabilities more than 90 days after due date
Liabilities more than 60 days after due date
Liabilities more than 30 days after due date
Liabilities less than 30 days after due date

Financial Ratios

Name	Ref.	31/12/2011	31/12/2010	31/12/2009	31/12/2008
Return on total assets ROA (in %)	1	22.93	30.57	31.84	11.09
Return on equity ROE (in %)	2	27.92	40.12	44.68	12.54
Return on sales ROS (in %)	3	26.56	30.88	29.11	14.98
Turnover of receivables (in days)	4	42.42	42.48	73.97	71.50
Turnover of liabilities (in days)	5	52.51	58.74	74.49	45.42
Turnover of inventories (days)	6	51.10	42.05	28.86	49.38
Net working capital (in ths. CZK)	7	2779043.00	2096199.00	1422244.00	3285431.00
Ratio of accounts payable to accounts receivable (in %)	8	245.80	263.72	240.55	612.70
Ratio of profit/loss to tangible assets (in%)	9	32.76	28.02	26.05	25.91
Current ratio	10	5.00	3.73	3.02	7.99
Quick ratio	11	4.15	3.13	2.66	7.00
Cash ratio	12	1.70	0.31	0.07	0.30
Debt ratio I (in %)	13	17.88	23.79	28.74	11.56
Debt ratio II (in %)	14	16.83	22.91	28.07	11.31

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.48
UK Pound	1	Rs.82.71
Euro	1	Rs.72.23

INFORMATION DETAILS

Report Prepared by :

PRL

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.