MIRA INFORM REPORT

Report No. :	352520
Report Date :	05.12.2015

IDENTIFICATION DETAILS

Name :	MELINDA IMPEX STEEL SA
Registered Office :	Harghita county / 535600 Odorheiu Secuiesc – Beclean Street No. 314
Country :	Romania
Financials (as on) :	30.06.2015
Date of Incorporation :	November 2003
Legal Form :	Joint Stock Company, Entire Romanian Private Capital
Line of Business :	Wholesale of metals and metal ores, according to the National Trade Registry updated files (NACE: 4672)
No. of Employees :	148 [2015]

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, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
Romania	B1	B1

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 EU 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. 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. In the aftermath of the global financial crisis, Romania signed on to a $26 billion emergency assistance package from the IMF, the EU, and other international lenders, but GDP contracted until 2011. 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. In September 2013, Romanian authorities and the IMF/EU agreed to a follow-on precautionary two-year stand-by agreement, worth $5.4 billion, to continue with reforms, although Bucharest has announced that it does not intend to draw funds under the agreement. Economic growth rebounded in 2013, driven by strong industrial exports and an excellent agricultural harvest, and the current account deficit was reduced substantially. The economy closed out 2014 with 2.8% growth, down from the 3.5% posted in 2013. Industry outperformed other sectors of the economy. Exports remained the engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. In 2014, the Government of Romania succeeded in meeting its annual target for the budget deficit, the external deficit remained low, and inflation was the lowest since 1989, allowing a gradual loosening of the monetary policy throughout the year. However, progress on structural reforms has been uneven and the economy still is vulnerable to external shocks. An ageing population, weak domestic demand, tax evasion, and insufficient health-care represent the top vulnerabilities.

Source : CIA

COMMERCIAL INFORMATION REPORT

NAME OF THE COMPANY

MELINDA IMPEX STEEL SA

Address

Harghita county / 535600 Odorheiu Secuiesc – Beclean Street No. 314

Phone no.

Cell phone no.

0040-266-217280, 207400, 207407, 218096

0040-745-345746

0040-740-119624

Fax no.

0040-266-217280, 207401, 207402, 215459

Web-site

www.melindasteel.ro

E-mail address

steelhr@melinda.ro

HISTORIC/OFFICIAL DATA

Date of foundation

November, 2003

Present legal form

Joint stock company, entire Romanian private capital

Registered with the Trade Registry

J19/1065/2003

VAT no.

15936500

Registered capital

11,552,900 RON

Shareholders

Individuals

1. Mr. Pal Denes – Romanian citizen, born on 03.10.1964

Participation

53.64%

2. Mrs. Nyisztor Maria – Romanian citizen, born on 27.08.1975

Participation

1.572%

Legal person

3. MELINDA-IMPEX INSTAL SA – Romanian legal person (J19/1063/2003,

VAT 15936519)

Address: Harghita county/ 535600 Odorheiu Secuiesc – Beclean Street No. 314

Participation

44.788%

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

2010

2011

2012

2013

2014

30.06.2015

total

121

125

137

140

139

148

BUSINESS ACTIVITY

- Wholesale of metals and metal ores, according to the National Trade Registry updated files (NACE: 4672)

According to the company’s web-site

Present for 20 years on the profile market in Romania, appreciated by specialists as one of the leaders in this domain, MELINDA STEEL SA has its main activity in commercialization and distribution of steel products and newly reinforcing steel processing with automatic machines and production of gutter systems.

The portfolio includes a high number of metallurgic products, in a wide variety, produced by the most important domestic and foreign manufacturers from Austria, Bulgaria, Czech Republic, Greece, Hungary, Italy, Poland, Russia, Turkey, Ukraine.

Other premises

- 9 operating points (warehouses), opened in Bacau, Baia Mare, Brasov, Ilfov county (Dragomiresti), Craiova, Constanta, Oradea. Targu Mures, Timisoara

- 2 logistic centers (regional ware-houses), opened in Constanta and Timisoara

- over 15,500 sqm of covered depositing activity

- 100 vehicles and utilities fleet

- over 2,000 products & over 5,500 clients

- Automatic stirrup cutting and bending machines placed at 8 Melinda Steel operating points.

- Rank 3 according to the 2012 rankings of the top companies with the same domain

For more details, please visit www.melindasteel.ro

OTHER PARTICIPATION

1. Company’s participation

not applicable

2. Shareholders other participation

Mr. Pal Denes

MELINDA-IMPEX INSTAL SA –

J19/1063/2003, VAT 15936519

Mrs. Nyisztor Maria

BOROKA TRANSCOM 2000 SRL –

J19/437/2002, VAT 1506521

MELINDA-IMPEX INSTAL SA

not applicable

REAL ESTATE (RON)

- lands & buildings

2010

2011

2012

2013

2014

10,102,034

9,946,744

9,513,392

8,830,287

12,352,593

TANGIBLES*

17,997,226 RON, at 30.06.2015

*According to the accounting standards, for the middle of the year the company is not obliged to detail its tangible assets. Therefore, the real estates are included in “Tangibles” position among the other assets

BANKS

OTP Bank SA, UniCRedit Bank SA, Romanian Bank for Development - GSG

MANAGEMENT

as officially registered with the National Trade Registry

President of the Board

Mr. Pal Denes – appointed on 24.05.2007; Expiration date of mandate: 31.12.2015

Member of the Board

Mrs. Pal Melinda Maria – Romanian citizen, born on 28.08.1964

Appointed on 1.12.2013; Expiration date of mandate: 31.12.2015

Member of the Board

Mr. Andras Lehel – Romanian citizen, born on 14.03.1976

Appointed on 3.11.2006; Expiration date of mandate: 31.12.2015

General Manager

Mr. Albert Istvan – Romanian citizen, born on 15.07.1984

Appointed on 6.10.2014; Expiration date of mandate: 31.12.2015

Sales Manager

Mr. Buzogany Attila – Romanian citizen, born on 10.06.1973

Appointed on 31.03.2011; Expiration date of mandate: 31.12.2015

CURRENCY

Exchange rate of EURO

1 EURO = 4.2848 RON on 31.12.2010

1 EURO = 4.3197 RON on 31.12.2011

1 EURO = 4.4287 RON on 31.12.2012

1 EURO = 4.4847 RON on 31.12.2013

1 EURO = 4.4821 RON on 31.12.2014

1 EURO = 4.4735 RON on 30.06.2015

FINANCIAL DATA: RON

BALANCE SHEET	31.12.2012	31.12.2013	31.12.2014	30.06.2015
INTANGIBLES - TOTAL	61,908	105,679	63,284	40,245
TANGIBLES - TOTAL	15,940,850	14,775,332	18,697,372	17,997,226
FINANCIALS - TOTAL	17,500	17,500	17,500	17,500
FIXED ASSETS - TOTAL	16,020,258	14,898,511	18,778,156	18,054,971
STOCKS - TOTAL	44,039,448	27,550,041	27,717,612	27,393,338
CLAIMS - TOTAL	17,269,813	16,907,598	20,199,846	31,335,617
CURRENT ASSETS	61,704,913	50,402,955	50,531,916	59,623,295
PREPAID EXPENSES	76,852	114,840	179,238	238,259
DEBTS WITHIN 1 YEAR	42,687,992	31,832,357	36,469,959	44,696,635
DEBTS OVER 1 YEAR	2,330,894	1,770,276	1,179,505	882,933
PROVISIONS	0	0	0	0
ADVANCED INCOMES	0	0	0	0
REGISTERED CAPITAL	11,552,900	11,552,900	11,552,900	11,552,900
SHARE PREMIUM	177,976	177,976	177,976	177,976
RESERVES from reassessment of the fixed assets	1,967,337	1,967,337	2,372,607	2,372,607
RESERVES	1,947,536	1,995,030	1,995,030	1,995,030
PROFITS CARRIED FORWARD	14,215,438	15,426,395	15,932,916	15,290,103
NET RESULT - PROFIT	3,100,786	741,529	0	948,341
NET RESULT - LOSS	0	0	191,583	0
NET WORTH	32,783,137	31,813,673	31,839,846	32,336,957
PROFIT & LOSS ACCOUNT	31.12.2012	31.12.2013	31.12.2014	30.06.2015
Turnover	154,794,446	115,311,256	139,866,950	77,679,313
Own production & services	129,173	N/A	N/A
Sales	154,692,716	N/A	N/A
INCOMES FROM ORDINARY OPERATING ACTIVITY	155,086,452	116,024,821	140,134,129	77,724,286
Raw materials	2,218,132	N/A	N/A
Costs of goods sold	130,621,563	N/A	N/A
Wages	5,422,684	N/A	N/A
Depreciations & provisions	1,790,213	N/A	N/A
Other operating costs	9,043,255	N/A	N/A
COSTS OF ORDINARY OPERATING ACTIVITY	149,056,129	114,150,149	137,189,588	75,078,070
ORDINARY OPERATING RESULT - PROFIT	6,030,323	1,874,672	2,944,541	2,646,216
ORDINARY OPERATING RESULT - LOSS	0	0	0	0
FINANCIAL INCOMES	4,754,086	2,854,744	1,513,449	703,420
FINANCIAL COSTS	7,207,682	3,779,534	4,622,554	2,239,222
FINANCIAL RESULT - PROFIT	0	0	0	0
FINANCIAL RESULT - LOSS	2,453,596	924,790	3,109,105	1,535,802
CURRENT RESULT - PROFIT	3,576,727	949,882	0	2,646,220
CURRENT RESULT - LOSS	0	0	164,564	0
Extraordinary incomes	0	0	0	0
Extraordinary costs	0	0	0	0
EXTRAORDINARY RESULT - PROFIT	0	0	0	0
EXTRAORDINARY RESULT - LOSS	0	0	0	0
TOTAL INCOMES	159,840,538	118,879,565	141,647,578	78,427,706
TOTAL COSTS	156,263,811	117,929,683	141,812,142	77,317,292
PRETAX RESULT - PROFIT	3,576,727	949,882	0	1,110,414
PRETAX RESULT - LOSS	0	0	164,564	0
TAX ON PROFIT	475,941	208,353	27,019	162,073
NET RESULT - PROFIT	3,100,786	741,529	0	948,341
NET RESULT - LOSS	0	0	191,583	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 30.06.2015. As consequence, the responsibility for their accuracy belongs exclusively to the company.

OUR OPINION

based upon financial figures reported in the latest balance-sheet – 30.06.2015

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

Size

medium, considering the total no. of employees.

Position & trend

large volume of activity developed, with certain fluctuations of turnover in the investigated period and mostly descending profits. Certain recovery was registered in H1 2015, from losses to profits.

On the B/S side, both liquidity and solvability look well-enough.

Overall, the financial standing looks satisfactory.

Moreover, the payments behaviour stands correct, without delays.

The business relationships are feasible and the credit facilities are suitable.

31.12.2010

31.12.2011

31.12.2012

31.12.2013

31.12.2014

30.06.2015

Turnover

RON

133,443,666

157,017,358

154,794,446

115,311,256

139,866,950

77,679,313

EURO

31,143,499

36,349,135

34,952,570

25,712,145

31,205,674

17,364,326

Gross profit

RON

10,273,928

6,724,920

3,576,727

949,882

-164,564

1,110,414

EURO

2,397,761

1,556,803

807,625

211,805

-36,716

248,220

Net profit

RON

8,925,543

5,780,942

3,100,786

741,529

-191,583

948,341

EURO

2,083,071

1,338,274

700,157

165,346

-42,744

211,991

31.12.2014

CREDITS & LOANS (ACTIVE BALANCE)

N/A

BALANCE CLAIMS-DEBTS

Negative

Total claims; no further details are available

31,335,617

Total debts

45,579,568

- Short term; no further details are available

44,696,635

- Medium term; no further details are available

882,933

PAYMENTS BEHAVIOR

No Complaints

PAYMENTS INCIDENTS, as

officially recorded with the Payment Incident Bureau

In the period 2.12.2014 – 2.12.2015

BLACKLISTING (international sanctions)

Not applicable

2010

2011

2012

2013

2014

30.06.2015

Rather satisfactory

Liquidity analysis

- current ratio

2.22

1.45

1.45

1.58

1.39

1.33

- quick ratio

1.04

0.45

0.41

0.72

0.63

0.72

Solvability analysis

Constant acceptable

- the borrowing ratio (total debts/net worth)

1.32

1.49

1.37

1.06

1.18

1.41

Profitability analysis (%)

Variable, mostly moderate

- return on capital

29.14

17.44

9.46

2.33

loss

2.93

- return on assets

12.55

6.99

3.99

1.13

loss

1.22

- gross profit margin

7.70

4.28

2.31

0.82

loss

1.43

Activity analysis

Settlements within normal limits

- debtor’s days

58

46

41

54

53

73

- creditor’s days

55

57

42

38

56

n/a

Stocks turnover, times/period

4

3

4

4

5

3

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.66.84
UK Pound	1	Rs.101.04
Euro	1	Rs.73.05
RON	1	Rs.16.18

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	KAS
Report Prepared by :	TPT

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%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.