MIRA INFORM REPORT

Report Date :

19.07.2013

IDENTIFICATION DETAILS

Name :	CROMSTEEL INDUSTRIES SA
Registered Office :	Dambovita county/ 130089 Targoviste, 16 Laminorului Street
Country :	Romania
Financials (as on) :	30.06.2012
Date of Incorporation :	27.12.2000
Legal Form :	Limited Liability Company, Entire Italian Capital
Line of Business :	manufacturer of high precision round steel bars and tubes for linear motion systems and hydraulic / pneumatic industry
No. of Employees :	379

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 – March 31^st 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
Romania	B2	B2

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

romania ECONOMIC OVERVIEW

Romania, which joined the European Union on 1 January 2007, began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Domestic consumption and investment fueled strong GDP growth, but led to large current account imbalances. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania''s widespread poverty. Corruption and red tape continue to permeate the business environment. Inflation rose in 2007-08, driven by strong consumer demand, high wage growth, rising energy costs, a nation-wide drought, and a relaxation of fiscal discipline. As a result of the increase in fiscal and current account deficits and the global financial crisis, Romania signed on to a $26 billion emergency assistance package from the IMF, the EU, and other international lenders. Worsening international financial markets, as well as a series of drastic austerity measures implemented to meet Romania''s obligations under the IMF-led bail-out agreement contributed to a GDP contraction of 6.6% in 2009, followed by a 1.1% GDP contraction in 2010. The economy returned to positive growth in 2011 due to strong exports, a better than expected harvest, and weak domestic demand. In 2012, however, growth slowed to less than 1%, partially due to slackening export demand and an extended drought that resulted in an exceptionally poor harvest. In March 2011, Romania and the IMF/EU/World Bank signed a 24-month precautionary stand-by agreement, worth $6.6 billion, to promote fiscal discipline, encourage progress on structural reforms, and strengthen financial sector stability. The Romanian authorities announced that they do not intend to draw funds under the agreement.

Source : CIA

Company name & address

NAME OF THE COMPANY	CROMSTEEL INDUSTRIES SA
Address	Dambovita county/ 130089 Targoviste, 16 Laminorului Street
Phone no. Cell phone no.	0040-245-213261/ 213925 0040- 724 589649/ 724 356069/ 726 109373	Fax no.	0040-245-213360
Web-site	www.cromsteel.ro	E-mail address	office@cromsteel.ro

HISTORIC/OFFICIAL DATA

Date of foundation	27.12.2000
Present legal form	limited liability company, entire Italian capital
Registered with the Trade Registry	J15/227/2000
VAT no.	11843301
Registered capital	55,973,942.3 RON
Shareholders	Individuals
	1. Mr.Mordini Roberto, Italian citizen, born on: 03.09.1948
	Participation:		0.3728075805%
	2. Mr.Mennini Paolo, Italian citizen, born on: 15.01.1946
	Participation		92.800901215%
	Legal persons
	3. MOFIN DI FRANCO E ROBERTO MORDINI & C SNC
	Address: Italy/ Prato-Montemurio, 109 Via Longa Street
	Participation:	6.8262912045%
Obligation to publish	According to the Romanian Financial Legislation, subject company is obliged to lodge with the Ministry of Public Finance its half-yearly accounts

EMPLOYEES

2007

2008

2009

2010

2011

June 2012

2012

total

452

417

275

264

331

390

379

BUSINESS ACTIVITY

CROMSTEEL Industries S.A. is part from the Italian group “Fait”. The main activity is production of round bars and pipes of a high precision, from steel and chrome plated.

90% from production goes to export, like: USA, Canada, UK, Spain, France, Germany, Netherlands, Poland, Czech Republic, Hungary, Slovak Republic, Slovenia, Italy, Bulgaria, Turkey, Russia, Ukraine, Taiwan, China and Chorea.

CROMSTEEL Industries S.A. is a manufacture of high precision round steel bars and tubes for linear motion systems and hydraulic / pneumatic industry.

CROMSTEEL Industries S.A. establishes long-term customer partnerships by delivering the most comprehensive manufacturing services. The production process involves a mechanical processing sequence of plastic working, thermal, and electro-chemical treatment.

The work processes are controlled by CNC and laser diameter systems. The company has developed and adapted his management to the standard ISO 9001/2000, SR EN ISO 14001 (for the System of Medium Management) and OHSAS 18001:1999 (for the System of Health and Work Security).

All products are ecologically designed or recyclable to satisfy all European standards.

Work-shops:

- Dambovita county/ Targoviste, 20 Laminorului Street

- Dambovita county/ Targoviste, 2 Locotenent Banu Ion Street

- Olt county/ Strejesti, Strejesti commune

OTHER PARTICIPATION

1. Company’s participation

subject is not involved as shareholder in any other Romanian company

2. Shareholders other participation

Mordini Roberto

AGROSERV COLIBASI SRL, J28/646/2009
VAT 24063340

GROUP SOFA RO SRL, J3/1325/2005
VAT 17781895

IMOBILIARE FIORENTINA SRL, J15/1299/2005,

VAT 18223820

GROUP SOFA RO SRL

J03/1325/2005
VAT 17781895

Mennini Paolo

AGROSERV COLIBASI SRL, J28/646/2009
24063340

G.M.B VIVAI GRUP SRL , J15/127/2001, VAT 13992180

METAL PLATING SRL, J15/924/2004, VAT
16847568

REAL ESTATE (RON)

- lands & buildings

2008

2009

2010

30,293,706

30,082,426

29,171,030

-equipment

36,954,569

35,937,052

30,604,830

TANGIBLES*

74,672,649 RON, at 30.06.2012

*According to the accounting standards, for the middle of the year the company is no more obliged to detail its tangible assets, anymore. Therefore, the real estates are included in “Tangibles” position among the other assets

BANKS

Piraeus Bank

MANAGEMENT

· as officially registered with the National Trade Registry

Board of administration

GALEOTTI MARCO Italian citizen, born on 21.03.1971

App date: 02.07.2007

Exp date: 02.07.2015

MORDINI ROBERTO Italian citizen, born on 03.09.1948

App date: 02.07.2007

Exp date: 02.07.2015

President

MENNINI PAOLO Italian citizen , born on 15.01.1946

App date: 02.07.2007

Exp date: 02.07.2015

CURRENCY

Exchange rate of EURO

1 EURO = 3.6102 RON on 31.12.2007

1 EURO = 3.9852 RON on 31.12.2008

1 EURO = 4.2282 RON on 31.12.2009

1 EURO = 4.2848 RON on 31.12.2010

1 EURO = 4.2341 RON on 30.06.2011

1 EURO = 4.3197 RON on 31.12.2011

1 EURO = 4.4494 RON on 30.06.2012

1 EURO = 4.4287 RON on 31.12.2012

FINANCIAL DATA: RON

BALANCE SHEET	31.12.2011	30.06.2012
INTANGIBLES - TOTAL	1,030,337	941,970
TANGIBLES - TOTAL	73,766,342	74,672,649
FINANCIALS - TOTAL	135,315	135,325
FIXED ASSETS - TOTAL	74,931,994	75,749,944
STOCKS - TOTAL	43,543,830	42,309,520
CLAIMS - TOTAL	50,719,316	62,187,228
CURRENT ASSETS	102,019,004	109,693,593
PREPAID EXPENSES	776,008	2,175,678
DEBTS WITHIN 1 YEAR	75,269,814	77,488,436
DEBTS OVER 1 YEAR	24,531,080	24,162,702
PROVISIONS	0	0
ADVANCED INCOMES	7,737,207	7,301,616
REGISTERED CAPITAL	11,630,939	11,630,939
RESERVES FROM ASETS REASSESSMENT	11,482,474	11,012,006
RESERVES	25,514,693	43,095,960
UNPAID PROFIT FROM PREVIOUS YEARS	0	4,481,421
NET RESULT - PROFIT	21,560,799	8,446,135
NET RESULT - LOSS	0	0
NET WORTH	70,188,905	78,666,461
PROFIT & LOSS ACCOUNT	30.06.2011	30.06.2012
Turnover	124,092,289	134,053,958
Own production & services	121,532,918	131,476,662
Sales	2,580,362	2,771,235
INCOMES FROM ORDINARY OPERATING ACTIVITY	126,231,417	136,487,376
Raw materials	80,840,703	87,774,822
Costs of goods sold	2,095,933	2,314,671
Wages	5,105,344	6,372,539
Depreciations & provisions	3,827,026	4,673,130
COSTS OF ORDINARY OPERATING ACTIVITY	109,822,917	123,903,126
ORDINARY OPERATING RESULT - PROFIT	16,408,500	12,584,250
ORDINARY OPERATING RESULT - LOSS	0	0
FINANCIAL INCOMES	5,819,082	1,861,798
FINANCIAL COSTS	7,523,129	4,107,960
FINANCIAL RESULT - PROFIT	0	0
FINANCIAL RESULT - LOSS	1,704,047	2,246,162
CURRENT RESULT - PROFIT	14,704,453	10,338,088
CURRENT RESULT - LOSS	0	0
Extraordinary incomes	0	0
Extraordinary costs	0	0
EXTRAORDINARY RESULT - PROFIT	0	0
EXTRAORDINARY RESULT - LOSS	0	0
TOTAL INCOMES	132,050,499	138,349,174
TOTAL COSTS	117,346,046	128,011,086
PRETAX RESULT - PROFIT	14,704,453	10,338,088
PRETAX RESULT - LOSS	0	0
TAX ON PROFIT	580,230	1,891,953
NET RESULT - PROFIT	14,124,223	8,446,135
NET RESULT - LOSS	0	0

N.B.: any difference occurred between former reports and the present one regarding some positions of the “Balance Sheet” or P/L Account for previous periods does not belong to us.

The financial data from this report are the ones officially declared by the subject with the Ministry of Public Finance data basis for 30.06.2012. As consequence, the responsibility for their accuracy belongs exclusively to the company.

OUR OPINION

based upon financial figures reported in the latest balance-sheet – 30.06.2012

- all figures are reported in RON if otherwise not specified.

Size

large, considering the number of employees

Position & trend

High volume of activity, with a strongly fluctuating turnover, registering a serious regress in 2009, but recovering again afterwards and always within large limits. Anyway, in the same manner like turnover, the results appear intensively varying year by year, registering an important leap at 2011 vs. 2010, but not continuing the rhythm for 2012 ( as the preliminary figures prove).

However, it can be noticed the constant good trend of the results for the last several periods, in spite of the important losses from financials ( company has contracted important bank credits ).

Payment behaviour – regular

Financial standing got improved at the current period.

Yet, business evolution should be kept monitored.

PRELIMINARY FOR 2012 ( RON )

TOTAL DEBTS= 96,084,077

CURRENT ASETS =111,251,098

FIXED ASETS= 74,632,653

STOCKS = 45,586,351

CLAIMS= 61,643,074

NET WORTH= 83,349,489

REGISTERED CAPITAL= 45,973,942

	2008	2009	2010	2011	Jun-11	Jun-12	2012
TURNOVER
RON	163,636,639	45,013,161	144,285,293	251,843,625	124,092,289	134,053,958	261,673,483
EURO	41,061,086	10,645,939	33,673,752	58,301,184	28,727,061	30,128,547	59,085,845
GROSS PROFIT
RON	10,618,969	-20,054,400	7,862,510	24,181,456	14,704,453	10,338,088	16,304,936
EURO	2,664,601	-4,743,011	1,834,977	5,597,948	3,472,864	2,323,479	3,681,653
NET PROFIT
RON	9,075,287	-20,083,067	7,846,010	21,560,799	14,124,223	8,446,135	13,129,163
EURO	2,277,248	-4,749,791	1,831,126	4,991,272	3,335,827	1,898,264	2,964,564

30.06.2012

CREDITS & LOANS (ACTIVE BALANCE)

Bank credits, on short term (within 1year)

17,713,463

Bank credits, on medium term (over 1 year)

34,974,380

Other financial loan and afferent intersets

104,720

BALANCE CLAIMS-DEBTS

Negative

Total claims

62,187,228

clients & trade debtors

47,368,824

Total debts

101,651,138

- Short term

77,488,436

Suppliers & trade creditors

46,203,365

bank credits

17,713,463

Other financial loan and afferent intersets

104,720

- Medium term

24,162,702

bank credits*

*higher than the total medium and long term debts reported in the B/S

34,974,380

2007

2008

2009

2010

2011

June 2012

Increased up to rather good

Liquidity analysis

- current ratio

0.96

1.04

0.75

1.40

1.36

1.42

- quick ratio

0.46

0.38

0.25

0.88

0.78

0.87

Solvability analysis

Constant satisfactory, even improved at June 2012

- the borrowing ratio (total debts/net worth)

2.04

1.66

2.36

1.88

1.42

1.29

Profitability analysis (%):

Recovered from losses; good for the last periods

- return on capital

17.01

16.73

0

15.81

30.72

10.74

- return on assets

5.58

6.27

0

5.19

12.13

4.50

- gross profit margin

5.74

6.49

0

5.45

9.60

7.71

Activity analysis

Debtors rotation got improved

- debtor’s days

80

59

113

120

74

84

- creditor’s days:

n/a

30

52

75

N/A

N/A

Stocks turnover, times/year

4

3

1

5

6

3

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.71
UK Pound	1	Rs.90.59
Euro	1	Rs.78.22

INFORMATION DETAILS

Report Prepared by :

MNL

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.