MIRA INFORM REPORT

Report Date :

18.10.2013

IDENTIFICATION DETAILS

Name :	KENNAMETAL SINTEC KERAMIK ASIA LTD.

Registered Office :	Room 1811, 18/F., Beverly Commercial Centre, 87-105 Chatham Road South, Tsimshatsui, Kowloon

Country :	Hong Kong

Date of Incorporation :	09.02.1995

Com. Reg. No.:	18811140

Legal Form :	Private Limited Company

Line of Business :	Importer, Exporter and Wholesaler of All kinds of non-oxide ceramics

No. of Employees :	4

RATING & COMMENTS

MIRA’s Rating :

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)

Hong Kong

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

hong kong - ECONOMIC OVERVIEW

Hong Kong has a free market economy, highly dependent on international trade and finance - the value of goods and services trade, including the sizable share of re-exports, is about four times GDP. Hong Kong levies excise duties on only four commodities, namely: hard alcohol, tobacco, hydrocarbon oil, and methyl alcohol. There are no quotas or dumping laws. Hong Kong's open economy left it exposed to the global economic slowdown that began in 2008. Although increasing integration with China, through trade, tourism, and financial links, helped it to make an initial recovery more quickly than many observers anticipated, it again faces a possible slowdown as exports to the Euro zone and US slump. The Hong Kong government is promoting the Special Administrative Region (SAR) as the site for Chinese renminbi (RMB) internationalization. Hong Kong residents are allowed to establish RMB-denominated savings accounts; RMB-denominated corporate and Chinese government bonds have been issued in Hong Kong; and RMB trade settlement is allowed. The territory far exceeded the RMB conversion quota set by Beijing for trade settlements in 2010 due to the growth of earnings from exports to the mainland. RMB deposits grew to roughly 9.1% of total system deposits in Hong Kong by the end of 2012, an increase of 59% from the previous year. The government is pursuing efforts to introduce additional use of RMB in Hong Kong financial markets and is seeking to expand the RMB quota. The mainland has long been Hong Kong's largest trading partner, accounting for about half of Hong Kong's exports by value. Hong Kong's natural resources are limited, and food and raw materials must be imported. As a result of China's easing of travel restrictions, the number of mainland tourists to the territory has surged from 4.5 million in 2001 to 34.9 million in 2012, outnumbering visitors from all other countries combined. Hong Kong has also established itself as the premier stock market for Chinese firms seeking to list abroad. In 2012 mainland Chinese companies constituted about 46.6% of the firms listed on the Hong Kong Stock Exchange and accounted for about 57.4% of the Exchange's market capitalization. During the past decade, as Hong Kong's manufacturing industry moved to the mainland, its service industry has grown rapidly. Growth slowed to 5% in 2011, and less than 2% in 2012. Credit expansion and tight housing supply conditions caused Hong Kong property prices to rise rapidly and inflation to rise 4.1% in 2012. Lower and middle income segments of the population are increasingly unable to afford adequate housing. Hong Kong continues to link its currency closely to the US dollar, maintaining an arrangement established in 1983.

Source : CIA

Company name

KENNAMETAL SINTEC KERAMIK ASIA LTD.

ADDRESS

Room 1811, 18/F., Beverly Commercial Centre, 87-105 Chatham Road South, Tsimshatsui, Kowloon, Hong Kong.

PHONE: 852-2572 8976, 2572 8979, 2833 5164, 2372 8991

FAX: 852-2572 3315

MANAGEMENT

Managing Director: Mr. Kevin Gerard Nowe

SUMMARY

Incorporated on: 9th February, 1995.

Organization: Private Limited Company.

Capital: Nominal: HK$100,000.00

Issued: HK$100,000.00

Business Category: Importer, Exporter and Wholesaler.

Group Turnover: US$2,589.4 million (Year ended 30-06-2013)

Employees: 4.

Main Dealing Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Banking Relation: Good.

Company name

KENNAMETAL SINTEC KERAMIK ASIA LTD.

ADDRESS

Registered Office:-

c/o B.& McK. Nominees Ltd.

Room 1401, 14/F., Hutchison House, 10 Harcourt Road, Hong Kong.

Operating Office:-

Room 1811, 18/F., Beverly Commercial Centre, 87-105 Chatham Road South, Tsimshatsui, Kowloon, Hong Kong.

Holding Company:-

Kennametal Sintec Holdings GmbH, Germany.

Ultimate Holding Company:

Deloro Holdings (Lux) S.à.r.l., Luxembourg.

Deloro Stellite Group Ltd., UK.

Deloro Stellite Holdings 1 Ltd., UK.

Deloro Stellite Holdings 2 Ltd., UK.

Deloro Stellite Holdings 3 Ltd., UK.

Deloro Stellite Holdings Corporation, US.

DSGP LLC, US.

Extrude Hone do Brasil Sistemas De Acabamentos De Peca Ltda., Brazil.

Extrude Hone KK, Japan.

Extrude Hone Participacoes Ltda., Brazil.

Extrude Hone Shanghai Co. Ltd., China.

Hanita Cutting Tools Inc., US.

Hanita Metal Works Ltd., Israel.

Hungary Logistics GmbH, Germany.

Hungary Shared Services GmbH, Germany.

Hungary Sintec Keramik GmbH, Germany.

ISIS GHH Ltd., UK.

Kenci S.L., Spain.

Kennametal (Baotou) Co. Ltd., China.

Kennametal (China) Co. Ltd., China.

Kennametal (Deutschland) Real Estate GmbH & Co. KG, Germany.

Kennametal (Malaysia) Sdn. Bhd., Malaysia.

Kennametal (Singapore) Pte. Ltd., Singapore.

Kennametal (Thailand) Co. Ltd., Thailand.

Kennametal AMSG GmbH, Germany.

Kennametal Argentina S.A., Argentina.

Kennametal Asia (HK) Ltd., Hong Kong.

Kennametal Australia Pty. Ltd., Australia.

Kennametal Belgium S.p.r.l., Belgium.

Kennametal Chile Ltda., Chile.

Kennametal de Mexico S.A. de C.V., Mexico.

Kennametal Deutschland GmbH, Germany.

Kennametal Distribution Services Asia Pte. Ltd., Singapore.

Kennametal do Brasil Ltda., Brazil.

Kennametal Europe GmbH, Switzerland.

Kennametal Europe Holding GmbH, Germany.

Kennametal Extrude Hone Corporation, US.

Kennametal Extrude Hone GmbH, Germany.

Kennametal Extrude Hone Holding GmbH, Germany.

Kennametal Extrude Hone Ltd., Ireland.

Kennametal Extrude Hone Ltd., UK.

Kennametal France S.A.S., France.

Kennametal GmbH, Germany.

Kennametal Hardpoint (Shanghai) Co. Ltd., China.

Kennametal Hardpoint (Taiwan) Inc., Taiwan.

Kennametal Holding GmbH, Germany.

Kennametal Holdings Europe Inc., US.

Kennametal Holdings LLC Luxembourg S.C.S., Luxembourg.

Kennametal Hungaria Kft., Hungary.

Kennametal Hungary Finance Services Kft., Hungary.

Kennametal Hungary Holdings Inc., US.

Kennametal Inc., US.

Kennametal India Ltd., India.

Kennametal International S.A., Panama.

Kennametal Italia Produzione S.R.L., Italy.

Kennametal Italia S.p.A., Italy.

Kennametal Japan Ltd., Japan.

Kennametal Kesici Takimlar Sanayi Ve Ticaret Anonim Sirketi, Turkey.

Kennametal Korea Ltd., Korea.

Kennametal Logistics UK Ltd., UK.

Kennametal Ltd., Canada.

Kennametal Luxembourg Holding S.à.r.l., Luxembourg.

Kennametal Luxembourg S.à.r.l, Luxembourg.

Kennametal Manufacturing Barcelona S.L., Spain.

Kennametal Manufacturing UK Ltd., UK.

Kennametal Nederland B.V., Netherlands.

Kennametal Polska Sp. Z.o.o., Poland.

Kennametal Produkcja Sp. z.o.o, Poland.

Kennametal Produktions GmbH & Co. KG., Switzerland.

Kennametal Real Estate GmbH & Co. KG, Germany.

Kennametal Shared Services Private Ltd., India.

Kennametal Sintec Keramik UK Ltd., UK.

Kennametal Sintec USA Inc., US.

Kennametal South Africa (Pty.) Ltd., South Africa.

Kennametal Stellite Coatings S.r.l., Italy.

Kennametal Stellite GmbH, Germany.

Kennametal Stellite Hettiger GmbH, Germany.

Kennametal Stellite Holding GmbH & Co. KG, Germany.

Kennametal Stellite Inc., Canada.

Kennametal Stellite India Private Ltd., India.

Kennametal Stellite L.P., US.

Kennametal Stellite S.p.A., Italy.

Kennametal Stellite UK Ltd., UK.

Kennametal Stellite, UK.

Kennametal Tricon Metals & Services Inc., US.

Kennametal UK Ltd., UK.

Kennametal Widia Beteiligungs GmbH, Germany.

Kennametal Widia Produktions GmbH & Co. KG, Germany.

Kennametal Widia Real Estate GmbH & Co. KG, Germany.

Kennametalc Sp. Z.o.o., Poland.

Materiales y Accesorios Kenem S.L., Spain.

Meturit AG, Switzerland.

OOO Kennametal, Russia.

Ruebig Real Estate GmbH & Co. KG., Switzerland.

Shanghai Stellite Co. Ltd., China.

Sintec Keramik Shanghai Co. Ltd., China.

Widia GmbH, Germany.

etc.

BUSINESS REGISTRATION NUMBER

18811140

COMPANY FILE NUMBER

0504921

MANAGEMENT

Managing Director: Mr. Kevin Gerard Nowe

Contact Person: Ms. Michelle Ho

CAPITAL

Nominal Share Capital: HK$100,000.00 (Divided into 100 shares of HK$1,000.00 each)

Issued Share Capital: HK$100,000.00

SHAREHOLDER

(As per registry dated 09-02-2013)

Name

No. of shares

Kennametal Sintec Holdings GmbH

Ingenrieder Strasse 2a 86956 Schogau, Germany.

100

===

DIRECTORS

(As per registry dated 09-02-2013)

Name (Nationality)	Address
Kevin Gerard NOWE	1044 Valleyview Drive, Latrobe PA 15650, US.
John CHANG	57 Namly Drive Shamrock Park 267465, Singapore.
Robinson E LATTIMER	28 Grumman Avenue, Wiliton CT 06897, US.
Shivaraman Narayanan VETTAKKORUMAKANKAN [formerly knows as: Shivaraman Narayanan VETTAKKOKURUMAKANKAN]	No. 18, Lane 399 Zao Zhuang Road, Pudong, New District, Shanghai 200136, China.

SECRETARY

(As per registry dated 09-02-2013)

Name	Address	Co. No.
B. & McK Nominees Ltd.	Room 1401, 14/F., Hutchison House, 10 Harcourt Road, Hong Kong.	0054552

HISTORY

The subject was incorporated on 9th February, 1995 as a private limited liability company under the Hong Kong Companies Ordinance.

Originally the subject was registered under the name of Sintec Keramik Asia Ltd., name changed to the present style on 27th March, 2008.

Apart from these, neither material change nor amendment has been ever traced and noted.

OPERATIONS

Activities: Importer, Exporter and Wholesaler.

Lines: All kinds of non-oxide ceramics.

Employees: 4.

Commodities Imported: China, Europe, other Asian countries, etc.

Markets: Asian countries, Europe, North America, etc.

Group Turnover: US$1,999.8 million (Year ended 30-06-2009)

US$1,884.1 million (Year ended 30-06-2010)

US$2,403.5 million (Year ended 30-06-2011)

US$2,736.2 million (Year ended 30-06-2012)

US$2,589.4 million (Year ended 30-06-2013)

Terms/Sales: L/C or as per contracted.

Terms/Buying: L/C, T/T, D/P, etc.

FINANCIAL INFORMATION

Nominal Share Capital: HK$100,000.00 (Divided into 100 shares of HK$1,000.00 each)

Issued Share Capital: HK$100,000.00

Group Profit/(Loss): (US$102.4 million) (Year ended 30-06-2009)

US$ 47.8 million (Year ended 30-06-2010)

US$229.7 million (Year ended 30-06-2011)

US$307.2 million (Year ended 30-06-2012)

US$203.2 million (Year ended 30-06-2009)

Profit or Loss: Making a small profit every year.

Condition: Keeping in a satisfactory manner.

Facilities: Making rather active use of general banking facilities.

Payment: Met trade commitments as required.

Commercial Morality: Satisfactory.

Banker: The Hongkong & Shanghai Banking Corp. Ltd., Hong Kong.

Standing: Normal.

GENERAL

Having issued 100 ordinary shares of HK$1,000.00 each, Kennametal Sintec Keramik Asia Ltd. is wholly owned by Kennametal Sintec Holdings GmbH which is a Germany-based company. The ultimate holding company of the subject Kennametal Inc. [Kennametal] is a US-based firm.

Kennametal is engaged in manufacturing and marketing non-oxide ceramics, so does the subject.

The subject is representing Kennametal Sintec Holdings GmbH in Hong Kong.

Kennametal now has become one of the world’s leading manufacturers of non-oxide ceramics. Main products are used as evaporators in the metallizing industry, high-pure CVD products for electronic applications, high‑temperature resistant nitrides for furnace industries, and new carbons for use as pistons in the automotive industry. Kennametal Sintec Group was founded in 1980 and now has about 250 employees worldwide, with six production plants in Europe and the United States. Due to the high involvement in innovative materials for new applications, over 10% of the group’s turnover is devoted to its development budget.

Kennametal serves customers in more than 60 countries worldwide – with more than 50 percent of these revenues coming from outside North America.

During 2013, Kennametal generated 59 percent of its sales in markets outside of the United States of America (U.S.), with principal international operations in Western Europe, Asia Pacific, India, Latin America and Canada. In addition, it operates manufacturing and distribution facilities in Israel and South Africa, while serving customers through sales offices, agents and distributors in Eastern Europe and other parts of the world. While geographic diversification helps to minimize the sales and earnings impact of respective demand changes in any one particular region, its international operations are subject to normal risks of doing business globally, including fluctuations in currency exchange rates and changes in social, political and economic environments.

To market its products, it maintains two premium brands: Kennametal® and WIDIA®. These master brands also include sub-categories combining the Kennametal master brand with various trademarks such as: Kennametal Conforma Clad™; Kennametal Tricon™; Kennametal Extrude Hone™; Kennametal Sintec™; Kennametal International Specialty Alloys™; and Kennametal Stellite™. Similarly, it combines the WIDIA master brand with other trademarks, such as: WIDIA GTD™; WIDIA Ruebig™; WIDIA Circle™; WIDIA Manchester™; WIDIA Hanita™; WIDIA Clappdico™; WIDIA Metal Removal™; and WIDIA Metcut™; as well as other trademarks such as ToolBoss™, Kyon™, Fix-Perfect™ and Mill1™. Kennametal owns these trademarks via Kennametal Inc. or Kennametal subsidiaries.

Kennametal employed approximately 12,600 persons at 30th June, 2013, of which approximately 4,500 were located in the United States and 8,100 in other parts of the world, principally Europe, Asia Pacific and India.

For the year ended 30th June, 2013, the sales of the Group amounted to US$2,589.4 million (year ended 30th June, 2012: US$2,736.2 million); net income amounted to US$203.2 million (year ended 30th June, 2012: US$307.2 million).

The subject is fully supported by Kennametal.

As the history of the subject is over 18 years in Hong Kong, on the whole, consider it good for normal business engagements.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.58
UK Pound	1	Rs.98.51
Euro	1	Rs.83.49

INFORMATION DETAILS

Report Prepared by :

SDA

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.