MIRA INFORM REPORT

Report Date :

06.02.2012

IDENTIFICATION DETAILS

Correct Name :	KINNERET – ZBM – DVIR LTD.

Formerly Known As :	KINNERET BOOK PUBLISHING (1985) LTD.

Registered Office :	10 Hataasiya Street, Industrial Zone, Or Yehuda 60212

Country :	Israel

Date of Incorporation :	09.07.1985

Legal Form :	Private Limited Company

Line of Business :	Subject is a publishing house

No. of Employees :	40 -60

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$ 100,000.
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 – September 30^th, 2011

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

Israel

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

Company name & address

KINNERET – ZBM – DVIR LTD.

(Also trading as KINNERET ZMORA BITAN DVIR PUBLISHING HOUSE)

Telephone 972 3 634 49 77

Fax 972 3 634 09 53

10 Hataasiya Street

Industrial Zone

OR YEHUDA 60212-ISRAEL

HISTORY & LEGAL FORMATION

A private limited company, incorporated as per file No. 51-107712-5 on the 09.07.1985, by Ms. Talma Elyagon (Roz) and Yoram Roz.

Subject is also continuing activities of several very veteran book publishers, which merged, united, partnered, split and passed through various legal formations:

· ZMORA BITAN, established 1973, continuing activities which began in the 1930's (ZMORA) and early 1950's (BITAN).

· MODAN, established early 1970's, continuing activities which began in 1880.

· In 1973 ZMORA, BITAN and MODAN united, forming ZMORA BITAN MODAN (ZBM in caption), and in 1982

· MODAN left partnership (though later resumed cooperation in a subsidiary – see below).

· In 1996 ZB became fully owned by the Zmora family.

· In 1986 ZBM acquired DVIR Publishing, established 1901.

Originally established under the name KINNERET BOOK PUBLISHING MANAGEMENT (1985) LTD., which changed to KINNERET BOOK PUBLISHING (1985) LTD. on the 17.12.1987.

Name finally changed to the present name on the 27.12.2001 due the unification of the above publishing houses.

SHARE CAPITAL

Authorized share capital NIS 1,330.00, divided into -

1,330,000 ordinary shares of NIS 0.001 each,

of which 100 shares amounting to NIS 0.1 were issued.

SHAREHOLDERS

According to the Registrar of Companies, Subject is fully owned by POALIM TRUST SERVICES LTD. (holding shares in trust).

In practice, subject is owned by Eran Zmora, Ms. Talma Elyagon (Roz) and Yoram Roz (directly and via owned companies).

DIRECTORS

1. Yoram Roz, General Manager,

2. Eran Zmora,

3. Ms. Talma Elyagon (Roz), wife of Yoram.

BUSINESS

A publishing house, operating in many book fields, via the publishing houses names each ('Zmora', 'Bitan', 'Kinneret' & 'Dvir'), specializing in its sector with its own book and writer portfolio), fiction, religion, educational, etc., both original and translation.

Subject published some 320 different titles each year.

Main client: SHARF LIOR MARKETING & DISTRIBUTION (main client – most sales to book stores are via this firm).

Operating from rented premises, on an area of 300 sq. meters, in 10 Hataasiya Street, Industrial Zone, Or Yehuda.

Having between 40 -60 employees.

MEANS

Financial data not forthcoming.

There are 8 charges for unlimited amounts, as well as 4 charges for the total sum of NIS 27,250,000.000 registered on the company's assets (financial assets and vehicles), in favor of local banks and a leasing company (last charge placed December 2011).

SALES

Sales figures not forthcoming.

OTHER COMPANIES

TZOMET SFARIM 2002 LIMITED PARTNERSHIP, equally owned by subject, MODAN PUBLISHING HOUSE LTD. and Mr. Avi Shomer, a book store chain, with some 85 branches, having some 800 employees. 2010 sales reported to be NIS 330 million.

BANKERS

Bank Hapoalim Ltd., Itzhak Sade Branch (No. 780), Tel Aviv.

CHARACTER AND REPUTATION

Nothing unfavorable learned.

Subject is a leading books publishing house in Israel, and as a co-owner TZOMET SFARIM, which is one of 2 Israel's leading book store chain, is subject to scrutiny by the Antitrust Authority (thus creating a vertical ownership in the branch which may abuse its position).

Subject's officials refused to disclose financial data.

Subject is the larger publishing house in Israel.

TZOMET SFARIM, together with its rival STEIMATZKI, control some 80% of the book market in Israel.

According to surveys from 2009 in the branch, 6,000 new titles are printed in Israel each year, in over 10 million copies, of which two thirds are translated. This puts the Israeli reader at the top of the world ranking in purchasing books.

The local annual books market is valued at NIS 1.2 billion in 2011, some 30,000 titles (of which some half teaching and religious/ holy books). Most sales reach the books chains (such as subject). There are over 450 bookstores in Israel, over half of which belong to the large chains.

SUMMARY

Notwithstanding the refusal to disclose financial details, considered good for trade engagements.

Maximum unsecured credit recommended US$ 100,000.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.48.96
UK Pound	1	Rs.77.47
Euro	1	Rs.64.39

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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