MIRA INFORM REPORT

Report Date :

21.06.2013

IDENTIFICATION DETAILS

Name :	SIGMA HOTELS SRL
Registered Office :	Cluj County, Cluj Napoca, 109 Republicii Str. , etj 1, app 3
Country :	Romania
Financials (as on) :	31.12.2011
Date of Incorporation :	20.02.2008
Legal Form :	Limited liability company, joint venture of Romanian and foreign capital
Line of Business :	Providing Services of hotels and other accommodation
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Poor
Payment Behaviour :	Unknown
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 information

NAME OF THE COMPANY	SIGMA HOTELS SRL
Address	Cluj County, Cluj Napoca, 109 Republicii Str. , etj 1, app 3
Phone no. Cell phone no.	+40264504008; 504007	Fax no.	+40264504008; 504007
Web-site	www.sigmatowers.ro	E-mail address	office@sigmatowers.ro

HISTORIC/OFFICIAL DATA

Date of foundation	20.02.2008
Present legal form	Limited liability company, joint venture of Romanian and foreign capital
Registered with the Trade Registry	J12/707/2008
VAT no.	23327193
Registered capital	10,000 RON
Shareholders	Individuals
	1. PASZKANY ARPAD, Romanian citizen, born on : 09.07.1948
	Participation							1%
	Legal persons
	2. WEBER INVESTMENTS LIMITED
	Address: Cyprus, NICOSIA, CRYSTAL OFF. KRAMBIS, BUILD,PC 1065 STR.STASIKRATOUS 20B
	Participation						99%
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
total		n/a		n/a		n/a				n/a		n/a
BUSINESS ACTIVITY : hotels and other accommodation services According to internet information http://www.wall-street.ro/articol/Turism/55987/Primul-hotel-Sheraton-din-Romania-se-va-construi-la-Cluj-Napoca.html through the signing on an partnership between the subject and Starwood Hotels & Resorts Worldwide Inc., In Romania were going to be opened the first SHERATON hotel. This being the first step in the extension of Starwood Hotels & Resorts Worldwide Inc. in Eastern Europe. The hotel were programed to be part of Tower I, one of the two towers of “Sigma Towers” complex - which will include two towers each with 27 floors, Tower I and Tower II. According to the internet the construction were planned to begun in 2009 and to be completed in 2012 SIGMA HOTELS in mass media http://phoenix.corporate-ir.net/phoenix.zhtml?c=78669&p=irol-newsArticle&ID=1237728&highlight= “Sheraton Cluj Hotel and The Residences at Sheraton Cluj Scheduled to Open in 2012 (White Plains, NY) December 18 – Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) announced today a long term agreement with S.C. Sigma Hotels S.r.l. to manage the first international hotel brand in Cluj, Romania – the Sheraton Cluj Hotel and The Residences at Sheraton Cluj. Scheduled to open in early 2012, the property will be part of a mixed-use development project, Sigma Towers, located in the city of Cluj, Transylvania, approximately 440 kilometers north-west of Bucharest. The hotel and the residences combined will make up a 26-story tower that will consist of 202 hotel guestrooms, 110 residential apartments and 12,000 sq. meters of class A offices. “The signing of this property marks an exciting moment for both Starwood Hotels & Resorts and Romania, allowing us to continue our expansion into key Eastern European cities”, said Roeland Vos, President at Starwood Hotels & Resorts, Europe, Africa and the Middle East. “Cluj is one of the country’s most important economic centers and is a perfect fit for our iconic Sheraton brand.” The hotel and residences will have views over the city of Cluj and will be located only five minutes by car from the city center. The property will also be conveniently situated nearby Cluj International Airport, which offers direct flights between Cluj and some of Europe's major cities. “We are delighted to be working with a world-class operator such as Starwood and to be bringing one of the world’s most recognized hotel brands, Sheraton Hotels & Resorts, into the country”, said Zsolt Nagy, CEO of Sigma Hotels S.r.l. “We believe that this is an important milestone for the city and we look forward to hosting both local and international business travelers alike, in a true five-star setting”. Once completed, the hotel it will boast 1,520 sq. meters of meetings and conference space as well as an all-day dining restaurant, two specialty restaurants and a lobby bar and café. A luxurious 850 sq. meter spa featuring an indoor swimming pool will also be available. The exclusive hotel amenities and concierge services will also be available to future apartment owners. About Starwood Hotels & Resorts, Worldwide Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with approximately 900 properties in more than 100 countries and 155,000 employees at its owned and managed properties. Starwood Hotels is a fully integrated owner, operator and franchisor of hotels, resorts and residences with the following internationally renowned brands: St. Regis®, The Luxury Collection®, W®, Westin®, Le Méridien®, Sheraton®, Four Points® by Sheraton, and the recently launched AloftSM, and ElementSM. Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwoodhotels.com.” Work-shops, as officially registered with the National Trade Registry : n/a
OTHER PARTICIPATION
1. Company’s participation		n/a
2. Shareholders other participation		n/a
REAL ESTATE (RON)
		2007	2008		2009				2010		2011
- lands		-	-		-				2,113,003		2,113,003
- buildings		-	-		-				0		0
- equipment		-	-		-				0		0
BANKS
MANAGEMENT · as officially registered with the National Trade Registry		Administrator NAGY ZSOLT, born on 21.06.1971 App date: 25.01.2008 fro unlimited period
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 = 4.3197 RON on 31.12.2011

FINANCIAL DATA: RON

BALANCE SHEET	31.12.2010	31.12.2011
INTANGIBLES - TOTAL	33	0
TANGIBLES - TOTAL	2,701,357	2,701,357
FINANCIALS - TOTAL	0	0
FIXED ASSETS - TOTAL	2,701,390	2,701,357
STOCKS - TOTAL	0	0
CLAIMS - TOTAL	28,880	32,219
CURRENT ASSETS	28,960	32,333
PREPAID EXPENSES	0	0
DEBTS WITHIN 1 YEAR	78,812	90,969
DEBTS OVER 1 YEAR	3,167,003	3,196,337
PROVISIONS	0	0
ADVANCED INCOMES	0	0
REGISTERED CAPITAL	10,000	10,000
RESERVES	0	0
NET RESULT - PROFIT	0	0
NET RESULT - LOSS	43,513	38,150
NET WORTH	-515,465	-553,616
PROFIT & LOSS ACCOUNT	31.12.2010	31.12.2011
Turnover	28,285	53,881
Own production & services	28,285	53,881
Sales	0	0
INCOMES FROM ORDINARY OPERATING ACTIVITY	28,285	53,881
Raw materials	78	0
Costs of goods sold	0	0
Wages	0	0
Depreciations & provisions	196	33
COSTS OF ORDINARY OPERATING ACTIVITY	59,994	85,840
ORDINARY OPERATING RESULT - PROFIT	0	0
ORDINARY OPERATING RESULT - LOSS	31,709	31,959
FINANCIAL INCOMES	36,084	39,692
FINANCIAL COSTS	46,238	45,883
FINANCIAL RESULT - PROFIT	0	0
FINANCIAL RESULT - LOSS	10,154	6,191
CURRENT RESULT - PROFIT	0	0
CURRENT RESULT - LOSS	41,863	38,150
Extraordinary incomes	0	0
Extraordinary costs	0	0
EXTRAORDINARY RESULT - PROFIT	0	0
EXTRAORDINARY RESULT - LOSS	0	0
TOTAL INCOMES	64,369	93,573
TOTAL COSTS	106,232	131,723
PRETAX RESULT - PROFIT	0	0
PRETAX RESULT - LOSS	41,863	38,150
TAX ON PROFIT	1,650	0
NET RESULT - PROFIT	0	0
NET RESULT - LOSS	43,513	38,150

N.B.: any difference occurred between former report and the present one regarding some positions of the “Balance Sheet” for the end of the previous years 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 31.12.2011. As consequence, the responsibility for their accuracy belongs exclusively to the company.

OUR OPINION

based upon financial figures reported in the latest balance-sheet – 31.12.2011

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

Size

undetermined due to the lack of employees

Position & trend

According to the internet information, subject under investigation is the official company which operates under this name; Sheraton hotel is coming in Romania. Company was established in 2008 as the result of an agreement with Starwood Hotels & Resorts Worldwide.

The figures available prove the financial and economic situation of a young company which just started the activity.

The figures available prove small figures of sales year by year and consecutively losses.

Specific ratios are in a weak condition, proving a high risk.

Taking into account the above presented elements we consider that the risk involved is high and we suggest that any amount should be secured for the time being.

	2008	2009	2010	2011
TURNOVER
RON	0	0	28,285	53,881
EURO	0	0	6,601	12,473
TOTAL INCOMES
RON	5,341	25,740	64,369	93,573
EURO	1,340	6,088	15,023	21,662
TOTAL COSTS
RON	409,384	102,182	106,232	131,723
EURO	102,726	24,167	24,793	30,494
GROSS PROFIT
RON	-404,043	-76,442	-41,863	-38,150
EURO	-101,386	-18,079	-9,770	-8,832
NET PROFIT
RON	404,043	-77,909	-43,513	-38,150
EURO	101,386	-18,426	-10,155	-8,832

31.12.2011

CREDITS & LOANS (ACTIVE BALANCE)

Bank credits, on short term (within 1year)

0

Bank credits, on medium term (over 1 year)

0

Other financial loans & afferent interests, on short term (within 1year)

0

Other financial loans & afferent interests, on medium term (over 1 year)

0

BALANCE CLAIMS-DEBTS

negative

Total claims

32,219

clients & trade debtors

0

Claims with the state budget

32,219

Total debts

3,287,306

- Short term

90,969

- Medium term

3,196,337

suppliers & trade creditors

2,224,645

To the entities of the group

454,810

PAYMENTS BEHAVIOR

with delays

Total overdue of exceeding the level of turnover

62,816

To suppliers

62,816

over 30 days

2,729

over 1 year

60,087

PAYMENTS INCIDENTS, as

officially recorded with the Payment Incident Bureau

No incidents between 19.06.2012-19.06.2013

2007

2008

2009

2010

2011

Constant poor

Liquidity analysis

- current ratio

-

0.54

0.05

0.37

0.36

- quick ratio

-

0.54

0.05

0.37

0.36

Solvability analysis

Constant unsatisfactory

- the borrowing ratio (total debts/net worth)

-

-7.54

-6.71

-6.30

-5.94

Profitability analysis (%)

Consecutively losses

- return on capital

-

0

0

0

0

- return on assets

-

0

0

0

0

- gross profit margin

-

0

0

0

0

Activity analysis

Heavy settlements with debtors

- debtor’s days

-

-

-

373

218

- creditor’s days:

-

-

-

n/a

n/a

Stocks turnover, times/year

-

-

-

-

117

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.59.70
UK Pound	1	Rs.92.22
Euro	1	Rs.79.18

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.