MIRA INFORM REPORT

Report Date :

17.03.2011

IDENTIFICATION DETAILS

Name :	FRONTECH LTD.

Formerly Known As :	A. ZAH HALAFIM (1993) LTD

Registered Office :	P.O. Box 13203, 6 Granit Street, Industrial Zone, Zur Yigal 44862

Country :	Israel

Date of Incorporation :	01.01.1993

Legal Form :	Private Limited Company

Line of Business :	Importers and marketers of automobiles spare parts

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	US$ 160,000.

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 – December 31, 2010

Country Name

Previous Rating

(30.09.2010)

Current Rating

(31.12.2010)

Israel

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

Company name & address

FRONTECH LTD.

Telephone 972 9 793 17 77; 793 17 95

Fax 972 9 793 17 99

P.O. Box 13203

6 Granit Street

Industrial Zone

ZUR YIGAL-44862-ISRAEL

HISTORY & LEGAL FORMATION

A private limited company, incorporated as per file No. 51-175982-1 on the 01.01.1993.

Originally registered under the name A. ZAH HALAFIM (1993) LTD., which changed to the present name on the 30.10.2003.

SHARE CAPITAL

Authorized share capital NIS 19,800.00, divided into -

19,800 ordinary shares of NIS 1.00 each,

of which 10,000 shares amounting to NIS 10,000.00 were issued.

SHAREHOLDERS

Subject is fully owned by MESER SPARE PARTS TRADING CO. LTD, owned by Moshe Meser.

DIRECTORS

1. Zah Meser, General Manager,

2. Moshe Meser.

BUSINESS

Importers and marketers of automobiles spare parts.

All suppliers are foreign.

Sole local representatives of:

TMD, of Germany,

SBS, of Denmark,

CEFARD, C. A. R., both of Italy,

TVS, ALLIED, both of India,

DLZ, DAX, both of china,

AIRTEX, Q. H., ALKO, all of Spain,

ROTA, of Turkey.

Amongst clients are exlusive importers and dealers of vehicles, e.g. MAYER’S CARS & TRUCK COMPANY (agents of Honda, Volvo), CHAMPION MOTORS (local agents of Volkswagen, Audi), leasing companies, e.g. NEW KOPPEL SIXT, as well as other dealers in the local aoutomotive secter, e.g. DISKAL, many shops and licensed garages.

Operating from premises, owned by the shareholders, on an area of 2,500 sq. meters, in 6 Granit Street, Industrial Zone, Zur Yigal and from a rented service warehouse, on an area of 300 sq. meters, in 62 Hamasger Street, Tel Aviv.

Having 24 employees (had 23 employees in 2009).

MEANS

Current stock valued at NIS 9,000,000 (same as in 2009).

Property owned by shareholders in 6 Granit Street, Zur Yigal Industrial Zone (where subject is operating from) is valued at NIS 12,000,000.

There are 15 charges for an unlimited amounts and 3 charges for the total sum of NIS 1366,000.00 registered on the company’s assets, in favor of Bank Leumi Le'Israel Ltd., Bank of Jerusalem Ltd., Union Bank of Israel Ltd., Israel Discount Bank Ltd. and companies.

ANNUAL SALES

2007 sales claimed to be NIS 22,000,000.

2008 sales claimed to be NIS 26,000,000.

2009 sales claimed to be NIS 28,500,000.

2010 sales claimed to be NIS 31,000,000.

OTHER COMPANIES

DRUM 2000 (1998) LTD., 100%, importers and marketers of car brakes.

MESER SPARE PARTS TRADING CO. LTD.

FRONTECH INVESTMENTS AND HOLDINGS 2001 LTD., non-active.

BANKERS

· Bank Leumi Le'Israel Ltd., Petach Tikva Business Branch (No. 707), Petach Tikva, account No. 337300/78.

· Union Bank of Israel Ltd., Rosh Haayin Branch (No. 078), Rosh Haayin, account No. 443400/80.

· Israel Discount Bank Ltd., Kfar Saba Branch (No. 054), Kfar Saba, account No. 825557.

A check with the Central Banks’ database did not reveal anything detrimental on subject’s a/m accounts.

CHARACTER AND REPUTATION

Nnothing unfavourable learned.

Subject is a veteran family company.

Sales of new vehicles in Israel in 2010 marked a record high with 216,430 vehicles sold and representing 25.3% rise from 2009. This comes after in 2009 sales of new vehicles fell by 11% from 2008, as the local market experienced the slow-down in economy related to the global economic crisis. Until 2009, the number of owned private vehicles in Israel was in constant rise in high ratios all over last decade and more (for instance, from 123,000 in 2003 to over 194,000 in 2008). The major increase in recent years has been the volume of vehicles owned by leasing companies. In 2008, 62% of the new cars sold were to leasing companies.

The growth trend is expected to continue in 2011.

For the spare parts suppliers’ branch, which is considered a stable branch, the slow-down trend in 2009 was rather positive for the suppliers, as people preferred fixing and better maintain their vehicle instead of buying new ones. According to reports, the turnover of garages from fixing and vehicle maintenance grew by 8% in 2009 from 2008. Yet, customers preferred in general cheaper spare parts.

Supply of spare parts for new vehicles in their first years is done by the exclusive importing agents, as part of the warranty service.

There have been several new trends in the local market for automotive spare, which is highly competitive and characterized in surplus of supply and price sensitivity. One is the vehicle importers allowing supply of quality spare parts which are not in the car manufacturer packaging. Almost all spare parts are imported, and import from the Far East, especially from China, has been increasing significantly in recent years. Major clients for spare parts have been leasing companies, and in recent years also insurance companies, buying spare parts directly or indirectly.

SUMMARY

Good for trade engagements.

Maximum unsecured credit recommended US$ 160,000.

Note: The telephone numbers you provided are disconnected (appear to be old numbers).

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.18
UK Pound	1	Rs.72.59
Euro	1	Rs.63.13

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

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.