MIRA INFORM REPORT

Report No. :	354771
Report Date :	18.12.2015

IDENTIFICATION DETAILS

Name :	OTELINOX SA
Registered Office :	Dambovita county / 135200 Targoviste – Soseaua Gaesti No. 16
Country :	Romania
Financials (as on) :	30.06.2015
Date of Incorporation :	1974
Legal Form :	Joint Stock Company, Joint Venture Of Romanian And Foreign Capital
Line of Business :	Subject is the only cold laminated stainless steel sheets and strips producer.
No. of Employee :	698

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

Comapny name and address

NAME OF THE COMPANY

OTELINOX SA

Address

Dambovita county / 135200 Targoviste – Soseaua Gaesti No. 16

Phone no.

Cell phone no.

0040-245-209100, 209102, 209492, 209386, 209306, 209374, 209370, 209354, 209353, 209354, 209302

0040-740-102176

Fax no.

0040-245-611230, 212453

Web-site

www.otelinox.com

E-mail address

florin.sendroiu@otelinox.ro vera.sterica@otelinox.ro valentin.sorescu@otelinox.ro

HISTORIC/OFFICIAL DATA

Date of foundation

1974, as a State enterprise named “Intreprinderwa OTELINOX Targoviste”. Following a 1990 Governmental Decision, since February 1991 it became a joint stock company, named OTELINOX SA.

Short history (according to the company’s web-site)

OTELINOX was established on June 01 1974, following an international auction won by Japanese companies NISSHIN STEEL CO Ltd. for manufacturing of cold rolled stainless steel strips and sheets and DAIDO STEEL Co for manufacturing of hot rolled small profiles and wire rod.

In November 1979 the stainless steel sheets and strips production plant have been commissioned. Japanese companies HITACHI, MITSUBISHI and NISSHIN STEEL brought the know-how. Currently, Rolling Mill no.1 Plant has been modernized to satisfy the highest international standards.

OTELINOX is the only cold laminated stainless steel sheets and strips producer in Romania and Eastern Europe. Its products are exported especially in Europe, but also in Asia and North America, etc.

In February 1981, the Wire Rod and Bar Mill production plant was commissioned. Now, this plant doesn’t exist.

In October 1997, SAMSUNG DEUTSCHLAND GmbH – a branch of SAMSUNG CORPORATION Korea, has acquired the main package of shares (51%) of OTELINOX SA.

Starting 1998, SAMSUNG dedicates itself to rebuild and develop OTELINOX, so this will have, in the nearest future, an important role in the Romanian economy, as well as within SAMSUNG group. A large program of investments was implemented, aiming for the upgrade and automate of the equipment, but also new investments.

In July 2002, a large investment was finalized, by creating a new production unit – Rolling Mill no.2 Plant. The plant produces thin and ultra-thin stainless steel narrow strips with thickness between 0.05 and 0.8 mm and widths between 5 and 650 mm.

In April 2010, a new production unit was finalized – Rolling Mill no.3 Plant. The project for the new production unit started in September 2007 and the works were of large scale. Rolling Mill no.3 produces high precision stainless steel wide strips, with thickness between 0.1 and 1.5 mm and widths between 30 and 1250 mm.

The cold rolling mill is the third high performance Sendzimir rolling mill in OTELINOX, having a 50.000 tons production capacity. The products made in the new plant are 95% for the external market, same as all stainless steel product made in OTELINOX.

Present legal form

joint stock company, joint venture of Romanian and foreign capital

Registered with the Trade Registry

J15/288/1991

VAT no.

921641

Registered capital

82, 696,197.5 RON

Shareholders

Legal persons

1. SAMSUNG DEUTCHLAND GMBH – German legal person

Address: Germany / Am. Kronberger Hang 6 – 65824, Str. Schwalbach/TS

Participation

94.2578194118%

2. List of other legal persons, not detailed with the National Trade Registry

Participation

0.272778564%

3. “Oltenia” Financial Investment Company – Romanian legal person (J16/1210/1993,

VAT 4175676)

Address: Dolj county / Craiova – Tufanele Street No. 1

Participation

5.4694020242%

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

EMPLOYEES

2010

2011

2012

2013

2014

30.06.2015

total

866

847

843

840

723

698

BUSINESS ACTIVITY

- cold rolled narrow strip, according to the National Trade Registry updated files (NACE: 2432)

OTELINOX is the only cold laminated stainless steel sheets and strips producer in Romania and Eastern Europe.

Its products are exported especially in Europe, but also in Asia and North America, etc.

OTHER PARTICIPATION

1. Company’s participation

not applicable

2. Shareholders other participation

1. SAMSUNG DEUTCHLAND GMBH

not applicable

2. List of other legal persons

not applicable

3. OLTENIA Financial Investment Company

To other over 100 Romanian companies, suite of the early 1990’s mass privatization

REAL ESTATE (RON)

- lands & buildings

2010

2011

2012

2013

2014

83,532,179

44,827,199

38,197,634

33,234,174

55,325,016

TANGIBLES*

166,380,090 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

Romanain Commercial Bank SA, BRD-GSG SA

MANAGEMENT

· as officially registered with the National Trade Registry

· other executives, according to the company’s web-site

President of the Board & General Manager

Mr. Park Euichul – South-Korean citizen, born on 26.01.1962

Appointed on 8.04.2015; Expiration date of mandate: 8.04.2016

Vice-President of the Board

Mr. Park Seung Hyun – South-Korean citizen, born on 9.10.1977

Appointed on 8.04.2015; Expiration date of mandate: 8.04.2016

Member of the Board

Mr. Lee Sang Hun – South-Korean citizen, born on 13.04.1971

Appointed on 8.04.2015; Expiration date of mandate: 8.04.2016

Kwang Hoon Lee - Production Director

Valeri Hamza - Commercial Director

Bogdan Vissarion - Quality Director

Leonida Tatomirescu - Human Resources Director

Duk Hyun Kim - Finance Director

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	849,800	366,558	60,559	316,774
TANGIBLES - TOTAL	184,278,967	164,209,988	175,597,106	166,380,090
FINANCIALS - TOTAL	0	0	0	0
FIXED ASSETS - TOTAL	185,128,767	164,576,546	175,657,665	166,696,864
STOCKS - TOTAL	36,073,640	35,745,477	33,482,579	30,864,261
CLAIMS - TOTAL	17,681,706	14,710,132	10,235,483	13,370,870
CURRENT ASSETS	54,153,044	51,020,713	44,025,766	50,625,541
PREPAID EXPENSES	1,540,074	1,190,598	1,349,977	1,697,405
DEBTS WITHIN 1 YEAR	66,819,646	41,878,010	29,657,092	21,874,539
DEBTS OVER 1 YEAR	29,384	16,346	0	0
PROVISIONS	0	0	0	0
ADVANCED INCOMES	2,866,037	1,456,458	20,316	26,089
REGISTERED CAPITAL	82,696,197	82,696,197	82,696,197	82,696,197
RESERVES from reassessment of the fixed assets	14,795,819	10,491,521	34,872,394	32,917,205
RESERVES	98,274,197	102,729,189	107,020,938	63,000,464
PROFITS CARRIED FORWARD	-28,757,967	-28,977,893	-25,914,822	9,715,138
NET RESULT - PROFIT	1,127,976	3,621,727	0	5,763,183
NET RESULT - LOSS	0	0	10,345,702	0
NET WORTH	171,106,818	173,437,043	191,356,000	197,119,182
PROFIT & LOSS ACCOUNT	31.12.2012	31.12.2013	31.12.2014	30.06.2015
Turnover	161,127,745	163,207,391	150,521,617	80,122,889
Own production & services	N/A	N/A	N/A	N/A
Sales	N/A	N/A	N/A	N/A
INCOMES FROM ORDINARY OPERATING ACTIVITY	191,186,775	188,226,793	173,070,445	88,710,906
Raw materials	N/A	N/A	N/A	N/A
Costs of goods sold	N/A	N/A	N/A	N/A
Wages	N/A	N/A	N/A	N/A
Depreciations & provisions	N/A	N/A	N/A	N/A
Other operating costs	N/A	N/A	N/A	N/A
COSTS OF ORDINARY OPERATING ACTIVITY	185,293,306	182,315,378	182,420,031	82,732,216
ORDINARY OPERATING RESULT - PROFIT	5,893,469	5,911,415	0	5,978,690
ORDINARY OPERATING RESULT - LOSS	0	0	9,349,586	0
FINANCIAL INCOMES	5,055,727	1,859,239	762,139	170,042
FINANCIAL COSTS	9,821,220	4,148,927	1,758,255	385,549
FINANCIAL RESULT - PROFIT	0	0	0	0
FINANCIAL RESULT - LOSS	4,765,493	2,289,688	996,116	215,507
CURRENT RESULT - PROFIT	1,127,976	3,621,727	0	5,763,183
CURRENT RESULT - LOSS	0	0	10,345,702	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	196,242,502	190,086,032	173,832,584	88,880,948
TOTAL COSTS	195,114,526	186,464,305	184,178,286	83,117,765
PRETAX RESULT - PROFIT	1,127,976	3,621,727	0	5,763,183
PRETAX RESULT - LOSS	0	0	10,345,702	0
TAX ON PROFIT	0	0	0	0
NET RESULT - PROFIT	1,127,976	3,621,727	0	5,763,183
NET RESULT - LOSS	0	0	10,345,702	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

large, considering the total no. of employees.

Position & trend

large business volume, with variable returns during the investigated period.

Nonetheless, despite the losses registered, the equity stands solid, giving a constant very good solvability.

The financial standing is fluctauting, mostly within passable limits.

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

177,253,821

144,150,551

161,127,745

163,207,391

150,521,617

80,122,889

EURO

41,368,050

33,370,500

36,382,628

36,392,042

33,582,833

17,910,560

Gross profit

RON

-6,739,913

-17,178,546

1,127,976

3,621,727

-10,345,702

5,763,183

EURO

-1,572,982

-3,976,791

254,697

807,574

-2,308,227

1,288,294

Net profit

RON

-6,756,413

-17,178,546

1,127,976

3,621,727

-10,345,702

5,763,183

EURO

-1,576,833

-3,976,791

254,697

807,574

-2,308,227

1,288,294

30.06.2015

CREDITS & LOANS (ACTIVE BALANCE)

N/A

BALANCE CLAIMS-DEBTS

Negative

Total claims; no further details are available

13,370,870

Total debts, 100% on short term; no further details are available

21,874,539

PAYMENTS BEHAVIOR

No Complaints

PAYMENTS INCIDENTS, as

officially recorded with the Payment Incident Bureau

No incidents recorded in the period 16.12.2014 – 16.12.2015

BLACKLISTING (international sanctions)

Not applicable

FINANCIAL STRENGTH

50,491 tsd EURO

FIRM’S RATING

D

RISK CATEGORY

Above normal

BUSINESS RELATIONS

Permissible

Applies to short term credit facilities and should not be construed as a maximum credit limit, which can be only established by the supplier. The credit limit has been set using a formula which takes into consideration the credit rating, and the latest behavioral and financial performances. Other information may of course influence the size of the credit you may grant.

2010

2011

2012

2013

2014

30.06.2015

Improved up to a rather good level in H1 2015

Liquidity analysis

- current ratio

0.99

0.66

0.81

1.22

1.48

2.31

- quick ratio

0.36

0.23

0.27

0.36

0.36

0.90

Solvability analysis

Constant very good

- the borrowing ratio (total debts/net worth)

0.46

0.47

0.39

0.24

0.15

0.11

Profitability analysis (%)

Variable; improved, lately, up to moderate level

- return on capital

loss

loss

0.66

2.09

loss

2.92

- return on assets

loss

loss

0.47

1.67

loss

2.63

- gross profit margin

loss

loss

0.70

2.22

loss

7.19

Activity analysis

Quick settlements

- debtor’s days

38

40

40

33

25

30

- creditor’s days

12

14

15

18

18

n/a

Stocks turnover, times/period

5

5

4

5

5

3

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.66.65
UK Pound	1	Rs.99.61
Euro	1	Rs.72.33
EUR	1	Rs.71.82

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

INFORMATION DETAILS

Analysis Done by :	KIN
Report Prepared by :	ANK

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.