MIRA INFORM REPORT

Report No. :	342363
Report Date :	26.09.2015

IDENTIFICATION DETAILS

Name :	GALFINBAND SA
Registered Office :	Galati county / 800701 Galati – Smardan Street No. 2A
Country :	Romania
Financials (as on) :	30.06.2015
Date of Incorporation :	1984
Legal Form :	Joint stock company, entire Romanian private capital
Line of Business :	Production of cold rolled steel strips, bare or metallic coated with tin, lead-tin alloy, or zinc Production of corrosive protected packing steel strips and catching pieces, for binding Production of SiCa, graphite, sulphur and titanium-iron cored wire steel tubes for the steel treatment in the casting ladle Production of galvanized steel profiles for construction works Design and research, development, execution and putting into operation of technologic installations, industrial automation and communication systems
No. of Employee :	57

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Slow
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

Company name and address

NAME OF THE COMPANY	GALFINBAND SA
Address	Galati county / 800701 Galati – Smardan Street No. 2A
Phone no. Cell phone no.	0040-236-833101 0040-236-833102 0040-236-833104 0040-236-833121 0040-722-277655 0040-758-111558	Fax no.	0040-236-449777 0040-236-833121
Web-site	www.galfinband.ro	E-mail address	office@galfinband.ro

HISTORIC/OFFICIAL DATA

Date of foundation	1984, as part of the Research and Design Institute for Flat Products and Metal Coatings in Galati, a State research & design institute. On 26.02.1991, according to a Governmental Decision, subject became a joint stock company, entirely State capital. Later on, it was totally privatized.
Present legal form	Joint stock company, entire Romanian private capital
Registered with the Trade Registry	J17/49/1991
VAT no.	1633663
Registered capital	90,377.5 RON
Shareholders	Individuals
	1. Mr. Andrasescu Teofil – Romanian citizen, born on 1.10.1982
	Participation			15.3578%
	2. List of individuals, not detailed with the National Trade Registry
	Participation			50.2227%
	Legal persons
	3. VULTURUL SA – Romanian legal person (J29/88/1991, VAT 1327303)
	Address: Prahova county / Comarnic – Republicii Street No. 4
	Participation			12.0495%
	4. List of other legal persons, not detailed with the National Trade Registry
	Participation			22.3701%
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	88	85	79	73	70	57
BUSINESS ACTIVITY - cold rolled narrow strip, according to the National Trade Registry updated files (NACE: 2432) According to www.galfinbad.ro Activities - Production of cold rolled steel strips, bare or metallic coated with tin, lead-tin alloy, or zinc - Production of corrosive protected packing steel strips and catching pieces, for binding - Production of SiCa, graphite, sulphur and titanium-iron cored wire steel tubes for the steel treatment in the casting ladle - Production of galvanized steel profiles for construction works - Design and research, development, execution and putting into operation of technologic installations, industrial automation and communication systems Main products - Cold rolled steel strips, bare or metallic coated with tin, lead-tin alloy, or zinc - Corrosive protected packing steel strips and catching pieces, for binding - SiCa, graphite, sulphur and titanium-iron cored wire steel tubes, for the steel treatment in the casting ladle - Technologic installations, industrial automation and communication systems GALFINBAND SA is working in a system of quality assurance. The Quality System implemented according to ISO 9001 - 2000 is certified by Germanischer Lloyd for the following domains: cold rolled steel strips, coated or not-coated, packing steel strips, powder cored wires for injection in the steel casting ladle, light steel profiles, technological installations, industrial automations and communication systems. TRADING INFO The company’s shares are quoted with the Bucharest Stock Exchange since June, 1997 (symbol: GALF) Share capital: 90,377.5 RON Nominal value: 0.1000 RON/share No. of shares: 903,775 Market capitalization: 822,435.25 RON

OTHER PARTICIPATION

1. Company’s participation

not applicable

2. Shareholders other participation

1. Mr. Andrasescu Teofil

ANDRĂŞESCU TEOFIL ÎNTREPRINDERE INDIVIDUALĂ – F17/451/2013, VAT 31593358

2. List of individuals

not applicable

3. VULTURUL SA

not applicable

4. List of other legal persons

not applicable

REAL ESTATE (RON)

- lands & buildings

2010

2011

2012

2013

2014

9,206,137

9,116,153

9,008,865

9,214,210

9,082,441

TANGIBLES*

23,843,544 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

Transilvania Bank SA

MANAGEMENT

as officially registered with the National Trade Registry

according to the company’s web-site

President of the Board

Mr. Bunu Antonel CRisti – Romanian citizen, born on 26.03.1968

Appointed on 23.04.2014; Expiration date of mandate: 23.04.2018

Member of the Board

Mr. Burca Sergiu – Romanian citizen, born on 30.12.1976

Appointed on 23.04.2014; Expiration date of mandate: 23.04.2018

Member of the Board

Mrs. Tiru Luminita – Romanian citizen, born on 30.08.1967

Appointed on 23.04.2014; Expiration date of mandate: 23.04.2018

General Manager

Mr. Branza Mihai – Romanian citizen, born on 8.11.1961

E-mail: mihai.brinza@galfinband.ro

Appointed on 14.03.210 for unspecified period

Financial Manager Mr. Dan Platon; danplaton@galfinband.ro

Commercial Manager Mr. Sorin Statescu; sorin@galfinbad.ro

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 = 4.3888 RON on 30.06.2014

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	26,147	278,177	278,177	3,251
TANGIBLES - TOTAL	27,242,472	25,483,565	24,390,751	23,843,544
FINANCIALS - TOTAL	120,000	120,000	120,000	120,000
FIXED ASSETS - TOTAL	27,388,619	25,881,742	24,788,928	23,966,795
STOCKS - TOTAL	4,843,673	3,569,887	2,778,446	2,478,976
CLAIMS - TOTAL	4,465,405	2,919,869	2,307,274	2,269,373
CURRENT ASSETS	9,923,256	6,634,075	5,405,612	5,084,200
PREPAID EXPENSES	40,230	6,088	4,265	71,044
DEBTS WITHIN 1 YEAR	11,910,529	8,714,571	8,739,559	8,133,511
DEBTS OVER 1 YEAR	6,117,944	7,080,494	7,700,196	7,758,976
PROVISIONS	0	0	0	0
ADVANCED INCOMES	1,912,478	1,738,986	1,566,282	1,484,258
REGISTERED CAPITAL	90,378	90,378	90,378	90,378
RESERVES from reassessment of the fixed assets	13,654,255	13,027,378	13,027,378	13,027,378
RESERVES	3,646,411	3,669,759	3,669,759	3,669,758
PROFITS CARRIED FORWARD	-3,237	-487,863	-2,069,928	-4,869,673
NET RESULT - PROFIT	23,347	0	0	0
NET RESULT - LOSS	0	1,311,798	2,524,819	172,547
NET WORTH	17,411,154	14,987,854	12,192,768	11,745,294
PROFIT & LOSS ACCOUNT	31.12.2012	31.12.2013	31.12.2014	30.06.2015
Turnover	23,604,267	19,500,840	12,320,359	6,493,154
Own production & services	23,281,425	18,920,761	12,164,895	6,456,747
Sales	282,498	550,941	127,983	25,516
INCOMES FROM ORDINARY OPERATING ACTIVITY	26,792,336	20,345,282	12,309,228	6,972,611
Raw materials	18,584,828	14,185,698	9,327,763	4,698,594
Costs of goods sold	273,029	532,708	116,104	4,685
Wages	3,144,824	2,695,473	2,097,587	973,452
Depreciations & provisions	1,052,615	1,030,140	1,092,812	547,208
Other operating costs	2,140,653	1,946,059	1,184,652	498,506
COSTS OF ORDINARY OPERATING ACTIVITY	25,868,550	20,907,078	14,191,053	6,943,296
ORDINARY OPERATING RESULT - PROFIT	923,786	0	0	29,315
ORDINARY OPERATING RESULT - LOSS	0	561,796	1,881,825	0
FINANCIAL INCOMES	50,130	9,783	17,713	60,610
FINANCIAL COSTS	934,761	759,785	660,707	262,472
FINANCIAL RESULT - PROFIT	0	0	0	0
FINANCIAL RESULT - LOSS	884,631	750,002	642,994	201,862
CURRENT RESULT - PROFIT	39,155	0	0	0
CURRENT RESULT - LOSS	0	1,311,798	2,524,819	172,547
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	26,842,466	20,355,065	12,326,941	7,033,221
TOTAL COSTS	26,803,311	21,666,863	14,851,760	7,205,768
PRETAX RESULT - PROFIT	39,155	0	0	0
PRETAX RESULT - LOSS	0	1,311,798	2,524,819	172,547
TAX ON PROFIT	15,808	0	0	0
NET RESULT - PROFIT	23,347	0	0	0
NET RESULT - LOSS	0	1,311,798	2,524,819	172,547

N.B.: any difference occurred between former report 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 submitted by the subject with the Bucharest Stock Exchange for 30.06.2015. Given the fact they are not coming from the Ministry of Public Finance data basis, but from the Bucharest Stock Exchange, which is a reliable source which takes into consideration only validated figures, they are still considered officially.

Anyway, the responsibility for the figures’ 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

the financials available reveal a serious business decline since 2013, both in terms of turnover and returns, more pronounced since 2014, especially regarding the turnover.

Yet, in the first half of 2015 the turnover seemed to stop the decline and the losses decreased. The operating result returned to a positive value, the losses coming exclusively from financials, due to the high interests paid for the engaged credits.

The equity is still solid, but based on the reserves from the reassessment of the fixed assets.

The liquidity is low, as the management of both debtors and creditors got depreciated. Besides, the company register delays in payments of ~57% of turnover! Also, the specific ratios reveal serious funding problems since 2014.

Overall, the financial standing looks weak and for the time being we appreciate the business relationships are feasible, but the credit based transactions should be fully secured.

The business trend has to be monitored.

31.12.2010

31.12.2011

31.12.2012

31.12.2013

30.06.2014

31.12.2014

30.06.2015

Turnover

RON

24,695,282

25,346,699

23,604,267

19,500,840

6,118,891

12,320,359

6,493,154

EURO

5,763,462

5,867,699

5,329,841

4,348,304

1,394,206

2,748,792

1,451,471

Gross profit

RON

654,060

154,688

39,155

-1,311,798

-1,533,680

-2,524,819

-172,547

EURO

152,647

35,810

8,841

-292,505

-349,453

-563,312

-38,571

Net profit

RON

527,927

99,004

23,347

-1,311,798

-1,553,680

- 2,524,819

-172,547

EURO

123,209

22,919

5,272

-292,505

-354,010

- 563,312

-38,571

30.06.2015

CREDITS & LOANS (ACTIVE BALANCE)

8,321,480

Bank credits, on short term (within 1year)

562,504

Bank credits, on medium term (over 1year)

6,560,026

Other financial loans & afferent interests, on medium term (over1year)

1,198,950

BALANCE CLAIMS-DEBTS

negative

Total claims

2,269,373

clients & trade debtors

2,035,198

Total debts

15,892,487

- Short term

8,133,511

suppliers & trade creditors

7,101,486

bank credits

562,504

to the Social Insurance

65,552

to the State Budget

130,307

other debt

109,351

- Medium term

7,758,976

bank credits

6,560,026

other financial loans & afferent interests

1,198,950

PAYMENTS BEHAVIOR

with delays

Total overdue of 57% of turnover (45.90% of total short term debt)

3,732,978

To suppliers, 52.35% delayed

3,717,978

over 30 days

1,191,046

over 90 days

685,352

over 1 year

1,841,580

To the Social Insurance

15,000

PAYMENTS INCIDENTS, as

officially recorded with the Payment Incident Bureau

Between 15.06.2012-29.05.2013 were registered incidents with 36 promissory notes

FINANCIAL STRENGTH

1,944 tsd EURO

BUSINESS RELATIONS

Only under fully secured terms

2010

2011

2012

2013

2014

30.06.2015

Unsatisfactory – very low

Liquidity analysis

- current ratio

0.82

0.94

0.83

0.76

0.62

0.63

- quick ratio

0.49

0.48

0.43

0.35

0.30

0.32

Solvability analysis

Still good

- the borrowing ratio (total debts/net worth)

0.78

0.87

1.04

1.05

1.35

1.35

Profitability analysis (%)

Unsatisfactory – consecutive losses since 2013

- return on capital

3.04

0.57

0.13

loss

loss

loss

- return on assets

1.59

0.29

0.06

loss

loss

loss

- gross profit margin

2.64

0.61

0.17

loss

loss

loss

Activity analysis

Business with funding problems since 2014!

- debtor’s days

56

52

69

55

68

63

- creditor’s days

48

73

60

54

198

197

Stocks turnover, times/period

9

7

5

5

4

3

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.66.10
UK Pound	1	Rs.100.89
Euro	1	Rs.73.96

INFORMATION DETAILS

Analysis Done by :	TRI
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%)

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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.