CREDIT REPORT SAMPLE SRL Date of preparation 9/17/2013 Creditworthiness: WEAK BASIC COMPANY INFORMATION Company name: SAMPLE SRL Registered address: Str. Mare nr. 1, Sector 1, 123456 Bucureşti, Romania Telephone: +40 21 1234567 Fax: +40 21 1234567 Electronic mail: office@sample.ro Web page: www.sample.ro Id no.: 1234567 Tax no.: RO 1234567 Legal form: Limited Liability Company Court register entry date: 15.3.2000 Registration no.: J40/123/2000 SHORT SUMMARY: (DECEMBER 2012) Total assets (in Equity capital (in Financial debt (in Net sales revenues (in EBITDA (in Net profit/loss for financial year (in 324.169.415 24.486.239 6.882.168 460.923.266 23.548.774 19.378.113 Trend - credit score (max. 100 points): Creditworthiness: Recommended credit limit: 12.243.120 EUR Page 1 of 10
GENERAL COMPANY DATA Equity capital (in 2010 2011 2012 Equity capital 29.286.717 25.372.765 24.486.239 Share capital 2.217.156 2.199.243 2.145.115 Share capital = 9.500.070 RON divided into 950.007 shares in the amount of 10 RON each Ownership: Registered activity: Premises: POPESCU VIRGIL - 60 % IONESCU ION - 40 % NACE 4752 - Retail sale of hardware, paints and glass in specialized stores. Showroom and warehouse in Str. Sapientei nr. 3A, Sector 3, Bucuresti Showroom and warehouse in Str. Principala nr 15, Brasov, Judetul Brasov Showroom and warehouse in Str. Dreapta nr. 101, Cluj-Napoca, Judetul Cluj Showroom and warehouse in Str. Inclinata nr. 30, Timisoara, Judetul Timis Business activity (in 2010 2011 2012 Net sales 362.814.314 429.780.941 460.923.266 revenues Import: Average number of employees: France, Italy, Germany, Poland, Slovenia 2010 2011 2012 615 623 672 91 employees on 31.12.2005 95 employees on 31.12.2006 83 employees on 31.12.2007 392 employees on 31.12.2008 526 employees on 31.12.2009 Management: Commercial banks: POPESCU VIRGIL - General Manager IONESCU ION - Sales Manager MARINESCU MARIN - Financial Manager BANCA COMERCIALA ROMANA BRD - GROUPE SOCIETE GENERALE BANCA TRANSILVANIA PIREUS BANK ROMANIA Page 2 of 10
BALANCE SHEET 12/31/2010 (in 12/31/2011 (in 12/31/2012 (in ASSETS 243.233.722 288.083.549 324.169.415 LONG-TERM ASSETS 14.305.848 15.481.904 20.269.371 Intangible long-term assets 72.458 135.782 108.165 Tangible long-term assets 14.233.159 15.346.122 20.161.206 Long-term financial investments 231 0 0 SHORT-TERM ASSETS 228.391.980 271.828.897 302.323.947 Inventories 30.922.603 43.765.855 54.190.503 Short-term financial investment 0 0 0 Short-term operating receivables 184.530.019 214.455.381 240.738.069 Short-term operating receivables due by customers 178.295.543 203.607.974 188.586.318 Cash 12.939.359 13.607.660 7.395.375 ST DEFERRED COSTS AND ACCRUED REVENUES 535.893 772.748 1.576.097 LIABILITIES 243.233.722 288.083.549 324.169.415 EQUITY CAPITAL 29.286.717 25.372.765 24.486.239 Share capital 2.217.156 2.199.243 2.145.115 PROVISIONS AND LONG-TERM ACCRUED COSTS AND DEFERRED REVENUES 1.628.737 1.762.719 1.619.273 Provisions 1.628.737 1.762.719 1.619.273 Long-term accrued costs and deferred revenues 0 0 0 LONG-TERM LIABILITIES 0 6.603 0 Long-term financial liabilities 0 0 0 Long-term operating liabilities 0 6.603 0 SHORT-TERM LIABILITIES 212.318.267 260.941.462 298.047.682 Short-term financial liabilities 4.337.220 8.558.232 6.882.168 Short-term operating liabilities 207.981.048 252.383.231 291.165.513 Short-term operating liabilities to suppliers 204.649.626 249.314.141 288.825.313 ST ACCRUED COSTS AND DEFERRED REVENUES AND OTHER ST LIABILITIES 0 0 16.221 Page 3 of 10
PROFIT & LOSS ACCOUNT 1/2010-12/2010 (in 1/2011-12/2011 (in 1/2012-12/2012 (in NET SALES REVENUES 362.814.314 429.780.941 460.923.266 OTHER OPERATING REVENUES 2.461.822 2.144.537 987.603 GROSS OPERATING PROFIT 365.276.136 431.925.478 461.910.870 OPERATING EXPENSES 350.823.609 412.025.366 439.392.344 Cost of goods, materials and services 315.625.125 379.655.519 410.739.280 Labour costs 4.708.692 5.704.089 6.232.987 Depreciation 6.902.903 1.732.570 1.030.248 Other operating expenses 23.586.890 24.933.189 21.389.828 OPERATING PROFIT 14.452.526 19.900.112 22.518.526 FINANCIAL REVENUES 4.574.312 7.733.658 4.005.846 FINANCIAL EXPENSES 3.015.588 3.960.949 4.051.006 Interest expenses 1.127.200 239.292 349.977 FINANCING PROFIT 1.558.724 3.772.709 0 FINANCING LOSS 0 0 45.160 TOTAL PROFIT 16.011.250 23.672.822 22.473.367 TAX ON PROFIT 3.287.721 3.292.547 3.095.254 NET PROFIT FOR FINANCIAL YEAR 12.723.529 20.380.275 19.378.113 AVERAGE NUMBER OF EMPLOYEES BASED ON WORKING HOURS WITHIN THE FINANCIAL PERIOD 615 623 672 NUMBER OF OPERATING MONTHS 12 12 12 Page 4 of 10
RATIOS 12/31/2010 12/31/2011 12/31/2012 Monthly sales revenues (in 30.234.526 35.815.078 38.410.272 Investment in intang., tangible long-term assets and inventories (in 45.228.220 59.247.759 74.459.874 Financial liabilities (in 4.337.220 8.558.232 6.882.168 Net worth (in 30.915.454 27.135.484 26.105.512 EBITDA (in 21.355.429 21.632.682 23.548.774 Free cash flow - estimation (in n.a. 20.607.535 15.871.862 Cash-flow estimation Cash-flow from operating activities (in n.a. 23.516.160 21.689.577 Cash-flow from investing activities (in n.a. -2.908.625-5.817.715 Cash-flow from financing activities (in n.a. -19.939.234-22.084.147 Balance at the beginning of the year (in 12.939.359 13.607.660 7.395.375 Changes in cash and cash equivalents (in n.a. 668.301-6.212.286 Balance at the end of the period (in n.a. 12.939.359 13.607.660 Financial intermediary position Net debt (in 14.312.766 32.112.276 48.354.362 Net short-term debt (in 14.312.997 32.105.672 48.354.362 Net long-term debt (in / 6.603 0 Net claim (in / / / Net short-term claim (in / / / Net long-term claim (in 231 / 0 Net working capital analysis Net working capital - NWC (in 16.609.606 11.660.183 5.836.142 Recommended net working capital (in 6.738.245 6.760.929 5.066.883 Surplus / deficit of NWC (in 9.871.361 4.899.254 769.259 Share of NWC in sales revenues (%) 4,58 2,71 1,27 Share of deficit of NWC in sales revenues (%) / / / Share of deficit of NWC which can be replaced with net profit in one year (%) Financial strength / / / Capital ratio (%) 12,04 8,81 7,55 Debt to net worth 6,87 9,62 11,42 Financing of tangible and intangible long-term assets by capital (%) Financing of long-term assets and inventories by capital (%) 204,72 163,89 120,80 64,75 42,82 32,89 Long-term sources to long-term assets (%) 216,10 175,31 128,79 Financial stability (%) 68,35 45,81 35,06 Net claim to net worth (%) / / / Net short-term claim to monthly sales income (in months) Financial balance / / / Current ratio 1,08 1,04 1,02 Quick acid ratio 0,93 0,88 0,84 Quick ratio 0,06 0,05 0,02 Quality of net working capital 0,00 0,00 0,00 Long-term financing of short-term assets (%) 7,26 4,28 1,92 Long-term financing of inventories (%) 53,71 26,64 10,77 Short-term financing of long-term assets (%) / / / Page 5 of 10
Profitability and efficiency Sales revenues increase/decrease (%) n.a. 18,46 7,25 Net profit margin on sales (%) 3,51 4,74 4,20 Operating margin (%) 3,98 4,63 4,89 EBITDA in sales revenues (%) 5,89 5,03 5,11 Cash flow from operating activities in sales revenues (%) n.a. 5,47 4,71 Free cash flow in sales revenues (%) n.a. 4,79 3,44 Return on equity - ROAE (%) 43,44 74,57 77,73 Return on assets - ROAA (%) 5,23 7,67 6,33 Rate of accumulation (%) 5,41 5,18 4,40 Sales revenues per employee (in 589.942 689.857 685.898 Labour costs in value added 0,18 0,21 0,21 Value added per employee (in 42.381 43.879 44.318 Net profit/loss per employee (in 20.689 32.713 28.836 Net profit to operating cash-flow (%) n.a. 86,66 89,34 Share of cash-flow from operating activities in total assets (%) n.a. 8,16 6,69 Share of loss in depreciation (%) / / / Share of loss in share capital (%) / / / Assets management Inventory days 32 33 40 Receivables collection period (days) 183 167 178 Payables deferral period (days) 218 202 223 Cash converting cycle (days) -3-2 -5 Assets turnover 1,49 1,62 1,51 Capital turnover 12,39 15,73 18,49 Indebtedness Level of indebtedness-fin. of material investments by foreign funds (%) 31,65 54,20 64,94 Financial debt to total capital 0,15 0,34 0,28 Net financial debt to EBITDA / / / Ratio of short-term debt to monthly sales revenues (in months) Ratio of net short-term debt to monthly sales income (in months) Factor of indebtedness (total debt compared to accumulation in years) 7,02 7,29 7,76 0,47 0,90 1,26 10,82 11,73 14,71 Share of free cash flow in fin. and oper. Liabilites (%) n.a. 7,90 5,32 Share of EBITDA in fin. and oper. Liabilites (%) 10,06 8,29 7,90 EBIT financial expenses cover ratio 12,82 83,16 64,34 EBITDA financial expenses cover ratio 18,95 90,40 67,29 Share of financial costs in sales revenues (%) 0,31 0,06 0,08 Trade receivables to trade payables 0,89 0,85 0,83 Share of intangible and tangible long-term assets in depreciation (%) n.a. 67,89 464,69 Page 6 of 10
CONCLUSION/EVALUATION Creditworthiness: Description of creditworthiness: B+ Moderate financial condition, a low level of financial strength. Unstable business trend. Highly vulnerable to adverse changes in financial and business conditions. A low level of capacity for payment of financial commitments. Significant / high credit risk. Recommended credit limit: ( 12.243.120 EUR History of assessments: ( Balance sheet period Date of preparation Creditworthiness 12/2010Z 9/17/2013 N Recommended credit limit Could not be defined 12/2011Z 9/17/2013 B+ 12.686.382 12/2012Z 9/17/2013 B+ 12.243.119 Additional comment Exchange rate (balance sheet): 1 EUR 2010 2011 2012 End of period 4,28480 RON 4,31970 RON 4,42870 RON Average 4,20990 RON 4,23790 RON 4,45600 RON Page 7 of 10
GRAPHS (COMPANY) Net sales revenues, EBITDA, net profit/loss (last three business periods) Revenue structure (latest period) Cost structure in sales revenues (last three business periods) Page 8 of 10
Accumulation in sales revenues (latest period) Return on equity - ROAE (last three business periods) Assets and liabilities structure (latest period) Page 9 of 10
Comparison of financial debt to equity capital Cash-flow estimation Page 10 of 10