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Report Date : |
29.04.2013 |
IDENTIFICATION DETAILS
|
Name : |
BROMINE COMPOUNDS LTD. |
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Registered Office : |
P.O. Box 180, Beer Sheva (8410101) Maklef House 12 Kroitzer Menachem Street BEER SHEVA 8489425 |
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Country : |
Israel |
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Financials (as on) : |
31.12.2012 |
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Date of Incorporation : |
11.01.1961 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, exporters and marketers of bromine compounds and other industrial chemicals based on minerals extracted from the Dead Sea, the world’s largest bromine source (methyl bromide, sodium, potassium and ammonium bromides, etc.), |
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No. of Employees : |
5,495 |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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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 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
ISRAEL - ECONOMIC OVERVIEW
Israel has a technologically advanced market economy. Its major
imports include crude oil, grains, raw materials, and military equipment. Cut
diamonds, high-technology equipment, and pharmaceuticals are among the leading
exports. Israel usually posts sizable trade deficits, which are covered by
tourism and other service exports, as well as significant foreign investment
inflows. The global financial crisis of 2008-09 spurred a brief recession in
Israel, but the country entered the crisis with solid fundamentals - following
years of prudent fiscal policy and a resilient banking sector. The economy has
recovered better than most advanced, comparably sized economies. In 2010,
Israel formally acceded to the OECD. Israel's economy also has weathered the
Arab Spring because strong trade ties outside the Middle East have insulated
the economy from spillover effects. Natural gasfields discovered off Israel's
coast during the past two years have brightened Israel's energy security
outlook. The Leviathan field was one of the world's largest offshore natural
gas finds this past decade, and production from the Tama field is expected to
meet all of Israel's natural gas demand beginning mid-2013. In mid-2011, public
protests arose around income inequality and rising housing and commodity
prices. The government formed committees to address some of the grievances but
has maintained that it will not engage in deficit spending to satisfy populist
demands.
Source
: CIA
BROMINE COMPOUNDS
LTD.
Telephone 972 8 629 72
22
Fax 972 8 628
04 44; 629 78 48
P.O. Box 180, Beer
Sheva (8410101)
Maklef House
12 Kroitzer
Menachem Street
BEER SHEVA 8489425
ISRAEL
A private limited
company, incorporated as per file No. 51-027339-4 on the 11.01.1961. Since 1962
parent company (DSBG) has the State sole concession for extracting bromine and
its compounds (current license is till 2030).
Authorized share
capital NIS 289,999,999.80, divided into -
1,611,111,110
ordinary shares (1,595,659,395 issued) of NIS 0.18 each,
1 special share of NIS 0.0001
(issued),
of which shares
amounting to NIS 287,218,691.1001 were issued.
Company is fully
owned by DEAD SEA BROMINE COMPANY LTD.
(DSBG), a fully owned subsidiary of ISRAEL CHEMICALS LTD. (ICL), a public
limited company whose shares are traded on the Tel Aviv Stock Exchange (TASE).
ICL is controlled
(51.8%) by The ISRAEL CORPORATION LTD. (TIC), also publicly traded on TASE,
controlled (51.5%) by OFER Group, owned by Ofer family, and
controlled by Idan Ofer (some 90%) and
POTASH CORPORATION
OF SASKATCHEWAN (PCS) holds 13.71% of ICL (during March 2010 invested some NIS
1.5 billion in 2.5% of ICL shares).
The State of
Israel holds one single special share in subject, given the fact subject holds
rights on Israel national resource.
Up till November
2000 parent DSBG shares were traded on the Tel Aviv Stock Exchange. In November
2000 subject’s “grandparent” ICL reached full control over DSBG after it
acquired 10.8% of its shares from the public in consideration of NIS 270
million.
In October 2012
TIC announced on negotiations with PCS on a merger deal, where PCS will take
over full ownership of ICL in a shares swap deal (TIC will become a shareholder
in PCS). At this stage PCS announced it is backing from the transaction due to
the Israel government objection (see more CHARACTER).
1. Nir Gilad, Chairman of ICL,
2. Stefan Borgas, CEO of ICL,
3.
Yossi Rosen,
4.
Asher Greenbaum,
5.
Eli Amit,
6.
Victor Medina,
7.
Avisar Paz,
8.
Yair Orgler,
9.
Yossi Lastigzon,
10.
Avi Dueitchman, CFO of ICL,
11.
12.
Shlomo Maoz,
13.
Amir Makov,
14.
Avraham (Beiga) Sochat (former Minister of
Finance).
Nissim Hadar (also
of parent co. DSBG).
Subject
is part of ICL Industrial Products (ICL-IP), headed by
the DEAD SEA BROMINE GROUP (DSBG). ICL-IP
sales comprised 21.5% of ICL total 2012 sales.
Manufacturers,
exporters and marketers of bromine compounds and other industrial chemicals
based on minerals extracted from the Dead Sea, the world’s largest bromine
source (methyl bromide, sodium, potassium and ammonium bromides, etc.), for
agricultural and industrial purposes, mainly plastics industry and chemicals
for oil/gas drilling, etc. and are also used as flame retardants, mainly for
the electronics industries. Most of ICL-IP products are bromine-based (the rest
is chlorine-based, magnesia-based and others). Most of the bromine extracted is
for ICL own production (76%), the rest is sold to 3rd parties.
97% of sales are
to overseas markets.
Yearly production capacity of bromine compounds is 400K tons (202K tons produced in 2011) and 280K
tons of elementary bromine (254K tons produced).
Among local suppliers: SIG INDUSTRIES, PETRUS TECHNICAL SUPPLY, ATEKA, AMGAL
CHEMICALS, MODCHEM, LEAD CONTROL, A.D. SINUN, YAMATON, HAL DOR IMPORT, PURE
CHEMICALS, APPLIED CHEM, SEVEN SEAS SHIPPING (shipping services), E.S.T.
PROJECTS, etc.
Subject and DSBG
are operating from head offices in Maklef House, 12 Kroitzer Menachem Street,
Industrial Zone, Beer Sheva. Plants are situated in Sodom (at Dead Sea shores),
and in the Negev Desert, in Ramat Hovav, and DSP plant in Mishor Rotem (near
Dimaona).
ICL-IP
also operate from plants in the USA (2 plants), China (3 plants), Germany,
France, Ireland and in the Netherlands, as well as from a Logistic Center in
the Netherlands, and from marketing and service offices in several other
countries.
There are 12,280
employees in the ICL Group (of which 5,495 employees in Israel), of which 2,660
employees in ICL IP Division, to which subject belongs.
Financial data is
included in the consolidated statements of parent company, ISRAEL CHEMICALS
LTD., which shows:
US$ (thousands)
ASSETS 31.12.2011 31.12.2012
Current assets:
Cash and cash equivalents 330,121 288,509
Investments, deposits and
short term loans 144,126 172,440
Customers 1,327,513 1,074,207
Other receivables 181,531 231,347
Other assets 48,703 63,517
Stock 1,410,930 1,480,044
3,442,924 3,310,064
Non-current assets:
Investments and other
non-current assets 517,881 645,365
Fixed assets 2,575,988 3,049,973
Intangible assets 746,305 741,380
3,840,174 4,436,718
7,283,098 7,746,782
======== ========
LIABILITIES
Current Liabilities 1,753,523 1,926,135
Non-current liabilities 2,424,681 2,420,643
Equity 3,104,894 3,400,004
7,283,098 7,746,782
======== ========
ICL’s current
market value US$ 15,342.4 million.
Total
assets of ICL-IP as of 31.12.2012 summed up to US$ 1,750.2 million (was US$
1,643.3 million as of 31.12.2011).
On the 04.12.2011
ICL signed an agreement with 7 international banks to receive a line of credit
of US$ 650 million.
Subject is an
“Approved Enterprise” and as such enjoys tax benefits and State incentives,
including from The Chief Scientist Office. DSBG
received an approval from the Israel Investment Centre (IIC) for a US$ 50
millions expansion plan for the Bromine plant in Sodom. In 2000, IIC
approved investment plans for subject (jointly with sister DEAD SEA BROMINE
CO.) for the sum of US$ 140 million.
There is 1 charge
for an unlimited amount registered on the company’s assets, in favor of a
foreign company CRYSTAL PURCHASING LTD.
Subject pays
royalties to the State of Israel as part of the rights given for mineral
production from the Dead Sea.
ICL-IP Div. sales:
2009 sales were
US$ 1,015.1 million, making a gross profit of US$
236.5 million and an operating profit of
US$ 20.9 million.
2010 sales were
US$ 1,313.2 million, operating profit of
US$ 206.6 million.
2011 sales were
US$ 1,513 million, operating profit of
US$ 297.7 million.
2012 sales were
US$ 1,436.6 million, operating profit of
US$ 230.7 million.
DSBG
ended 2010 with a consolidated net profit of US$ 73,699,000.
DSBG
ended 2011 with a consolidated net profit of US$ 175,086,000.
DSBG
ended 2012 with a consolidated net profit of US$ 144,860,000.
ISRAEL
CHEMICALS LIMITED
Consolidated
Statement of Income
US$
(thousands)
Year
ended 31.12
2010 2011 2012
Sales 5,691,537 7,067,834 6,672,241
Gross profit 2,432,076 3,155,663 2,757,179
Operating income 1,346,127 1,925,965 1,576,515
Income before taxes on
income 1,295,423 1,871,708 1,526,159
Net income 1,028,617 1,523,016 1,305,133
======== ======== ========
Subject's
subsidiaries:
BROMINE COMPOUNDS
MARKETING (2002) LTD., 100%,
TETRABROM
TECHNOLOGIES LTD., 100%,
CHEMADA FINE
CHEMICALS LTD., 26%.
Also part of ICL Industrial Products and DSBG, headed by parent company DEAD
SEA BROMINE COMPANY LTD. (among others):
TAMI IMI INSTITUTE
FOR RESEARCH &DEVELOPMENT LTD.,
DEAD SEA PRICLASE
FUSED PROD
ICL-IP AMERICA
INC., USA, owns HY YIELD BROMINE, 80%, USA.
ICL-IP JAPAN LTD.,
Japan,
LANDCAM LIMITED,
South Africa,
BROMINE &
CHEMICALS LIMITED, UK,
EUROCLEARON B.V.,
the Netherlands, owns CLEARON CORP., USA,
ICL-IP EUROPE
B.V., the Netherlands, holds several subsidiaries, including BROMOCHEMIE
HOLDINGS B.V., ICL IP TERNEUZEN B.V., SINOBROM (75%, China), LIANYONGANG DEAD
SEA BROMINE COMPOUNDS LTD (60%, China), BROMISA INDUSTRIAL E COMERCIAL LTDA
(Brazil), and others.
ROTEM AMFERT NEGEV
B.V., Holland
Other companies
part of the ICL Group, among many others:
ICL Fertilizers Division:
ICL FERTILIZERS
LP,
ROTEM AMFERT NEGEV
LTD., producers, exporters and marketers of a
varitey of products based on phosphate rock mined in the Negev Desert,
including phosphate fertilizers, phosphoric acid and specialty fertilizers.
FERTILIZERS AND
CHEMICALS LTD., manufacturers, importers and marketers of fertilizers and
chemicals, mainly for the agriculture sector, nitrogen and phosphorus
fertilizers, industrial chemicals, feed additives, etc.
DEAD SEA WORKS
LTD., producers, manufacturers, exporters and marketers of potash and other
chemicals from the Dead Sea. Owns ICL IBERIA SCS, GRUPO EMPRESARIAL
AGROMEDITERRANO S.A and IBER POTASH S.A. of Spain, CLEAVLAND POTASH LIMITED of
the U.K., ASHLEY CHEMICALS (HOLLAND) B.V.
EUROCHIL HOLDING
B.V., Germany
AMSTERDAM
FERTILIZERS DEUTSCHLAND OHG (AMFERT GERMANY)
AMSTERDAM
FERTILIZERS B.V., the Netherlands
ROTEM HOLDING
GmbH, Germany
ZUARI ROTEM
SPECIALTY FERTILIZERS, 50%, India
P.M. CHEMICALS
SRL, Italy
ICL ASIA LTD.
ROTEM BKG LLC, USA
ROTEM DU BRAZIL LTD,
ICL BRAZIL LTDA, both of Brazil
ICL FERTILIZERS
(INDIA) PRIVATE LIMITED, India
ICL Performance
Products (ICL-PP):
ICL PERFORMANCE
PROD
B.K. GIULINI GmbH,
a subsidiary in Germany
BKG PURIPHOS B.V.
PEKAFERT B.V.,
holds EUROCIL LUXEMBOURG
ASTARIS INC. of
the U.S.A. and Brazil
ICL NORTH AMERICA
INC, USA.
ICL Metallurgy, headed by DEAD
SEA MAGNESIUM LTD., producers, manufacturers, exporters and marketers of
magnesium and related products, producing magnesium from the Dead Sea.
Others:
MIFALEI TOVALA
LTD., land transportation, bulk
transportation
I.D.E.
TECHNOLOGIES LTD., 50%, desalination facilities and water treatment,
ICL FINANCE B.V.,
The Netherlands, ICL FINANCE INC., The USA, ICL FINANCE & ISSUING LTD., ICL FINE CHEMICALS LTD.,
TWINCAP FOERSAEKRINGS AB (Sweden), and many others, including companies in the
ICL Group and ISRAEL CORP. concern.
Bank
Leumi Le’Israel Ltd., Beer Sheva Branch (No. 921), Beer Sheva.
Bank
Hapoalim Ltd., Beer Sheva Branch (No. 631), Beer Sheva.
In November
There are several
other claims, mainly due to environmental issues, none seem to be significant
at this stage. DSBG and ICL have been investing tens of NIS millions in recent
years in environmental protection ends.
Apart from that,
nothing unfavorable learned.
Subject meets ISO 9000, ISO 14000 quality
standards.
DSBG is considered
of the world’s leading company in the bromine market, with estimated production
capacity of 40% of the total bromine production in the world and lead in the
bromine-based flame retardant products market. Imports amount to US$ 100
million per annum. In addition, it is a world’s leading producer of specialty
phosphates based on purified phosphoric acid.
ICL is a multi-national concern, among the world's leading suppliers of
minerals and one of the largest industrial concerns in Israel. It is ranked as
the world's 6th largest potash manufacturer (has 9% market share), the world's largest producer of PK fertilizers (compound of potash and
phosphate fertilizers), and leading producer of specialty phosphates based on
purified phosphoric acid.
ISRAEL CORP.
(TIC), current market value US$ 5,083 million, part of OFER Group, is Israel’s
largest holding company, one the largest and most influential groups in the Israeli
market, operating worldwide also in the fields of energy, shipping, high tech
& electronics and real estate.
Canadian PCS,
which holds some 14% in ICL, is the world’s largest potash producer (20% market
share). As noted above, PCS started negotiating with TIC several months ago
with view of gaining full ownership of ICL (by merging it into PCS, allocating
PCS shares to TIC), in a strategic move facing the global Potash market which
forces mergers in order to face competition. PCS is publicly traded on NYSE and
Toronto (TSX: POT, NYSE: POT) with market value of US$ 35.25 billion. Under the
circumstances, TIC will become the major shareholder in PCS with some 20%
stake. Yet, such a transaction requires the State of Israel authorization (the
State holds a golden share in ICL since it controls the State's natural
resource), and lately the Israeli Minister of Treasury announced he will object
such deal. In the end of April 2013 PCS announced the time is not right for the
merger. Moreover, in case PCS sees that a merger is not practical it may turn
to acquire ICL's Jordanian rival and sell its holdings in ICL.
ICL Group,
including subject's ICL-IP Div., were
adversely hit by the global economic crisis (thus subject's markets, such as
the electronics, construction, automotive, oil drilling got hurt). ICL took massive
cost saving steps to face the depression. Yet, since 4thQ-2009
worlds markets recovered and financial results improved (ICL-IP 2011 sales
reached all-time record).
DSBG signed long
term cooperation agreement with the DOW CHEMICALS, including with subsidiary
DOW AGROSCIENCE (in value of US$ 100 million per annum). Also signed a joint
venture agreement with the Chinese leading chemical company SHANDONG HAIHUA
SHAREHOLDING COMPANY LTD., for a joint establishment of a manufacturing and
marketing plant in China for bromine compounds, with investment of US$ 30
million (equally split).
DSBG also signed
in 2001 an agreement with one of the largest Japanese companies, D.K.
(manufacturers and marketers of chemical products), for the formation of a
joint venture, for manufacturing and marketing of delaying combustion chemical
products for the Far East market.
In
September 2005, ICL acquired ASTARTIS, producers of phsphate-based products of
the USA and Brazil, for a sum of US$ 255 million.
In early 2007 ICL
acquired also the assets and activities of Canadian FIRETROL, which develops
phosphoric based products for fire extinguishing (in forests, etc.).
In August 2007 ICL
acquired American SUPRESTA, manufacturers of phosphorus products for fire
safety, in consideration of US$ 352 million (by ICL own finance). SUPRESTA is
the leading company in its field in the world. ICL's products for fire safety
were so far based on bromine, and the purchase expands this line of products to
the new area.
In November 2007,
ICL-PP Div. acquired BIOGEMA of France, producers of fire extinguishing
products, for several US$ million and in January 2008 acquired the water
treatment activities of the HENKEL, for US$ 89 million. Also as part of ICL
strategy to expand its Industrial Products and Performance Products market
share, during 2009 ICL acquired of 6 European companies in the fields of water
purification (MEDENTECH of Ireland) and hygiene (including PRIMALAB of France,
HYPROCLEAN of Germany and EKULINE’s cleaning products Div.), for estimated
total sum of US$ 40 million.
ICL Group's plants
started to benefit from the shift of Group's use in natural gas as energy
source (replacing the ISRAEL ELECTRICITY CORP. conventional electricity power)
from the end of 2008. ICL expected to save US$ 100 million per year due to the
shift of energy source. In March 2008 subject signed an agreement with TETHYS
SEA, to supply natural gas to subject in value of US$ 260-330 million. In
addition, in July 2012 ICL announced on investing US$ 320 million in the
erection of a new 250mW natural gas-based power station in Sodom site. The
project, expected to end by 2015 2nd half, is designed to meet the
forecasted growth in demand for ICL potash and bromine production capacity,
while saving electricity costs.
In May 2010 it was
reported that DSBG is benefiting from the decrease in bromine salt levels in
China's bromine production sites which led to lower Chinese production and
higher bromine prices. Hence, since the beginning of 2010 subject moved to
produce to 85%-90% of its production capacity, compared with some 46% in 2009.
In June 2010 it
was reported that ICL signed transportation contracts with ISRAEL RAILWAYS for
cargo from the Dead Sea and Negev Desert until
In December 2010
the Israeli Parliament voted to cancel ICL special tax benefits (hundreds NIS
millions), as part of a revision concerning royalties from State resources (ICL
has been enjoying both from low royalties rate and tax benefits) and the
assumption that ICL also paid less than it had to, thus it has to compensate
the State. This will have certain negative implications on ICL Group’s future
results. After long mediation process, royalties for certain minerals were
elevated and negotiations towards the fees update continue.
Latest ICL acquisitions in the specialty
fertilizers field: In February 2011 acquired EVERRIS (formerly SCOTTS GLOBAL),
for US$ 270 million. In April 2011 acquired Spain's largest specialty chemical
manufacturer FUENTES MENDEA, for US$ 122 million. In July 2011 acquired Mexican
COSMOCEL QUIMICA, food additives and specialty chemicals manufacturers, for US$
35 million. In October 2011 acquired the activities of American HALOX, a global
leader in phsphate-based products for the
colors and coatings industry in the building field, for several tens US$
million, and 50% (on top of 50% already held) of Belgian fertilizer components
maker NUTRISI HOLDINGS, which holds 50% in NU3, the world's largest
manufacturer of soluble NPK.
In December 2011
subject bought CHEMTURA’s 50% share in their TETRABROM TECHNOLOGIES bromine
compounds joint venture, the world's largest flame retardants manufacturer,
becoming the sole owner of the operation.
Subject developed a bromine compound, which
eliminates the mercury pollution of coal burning of power plants. Following the
expecting of a significant demand increase (due to strict environmental laws),
in November 2011 it was reported that subject intends to invest some US$ 100
million in the expansion of Ramat Hovav plant.
The local Chemical
industry is considered one of the strongest in the market, with impressive growth
trend in recent years. The industry employs 30,000 workers. Total turnover of
the local Chemical Industry in 2008 amounted to US$ 24 billion, comprising 30%
of Israel’s total industrial turnover.
Good for trade
engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.54.29 |
|
|
1 |
Rs.83.88 |
|
Euro |
1 |
Rs.70.67 |
INFORMATION DETAILS
|
Report
Prepared by : |
PRL |
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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.