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Report Date : |
11.11.2013 |
IDENTIFICATION DETAILS
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Name : |
DEAD
SEA BROMINE COMPANY LTD. |
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Registered Office : |
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Country : |
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Financials (as on) : |
30.06.2013 |
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Date of Incorporation : |
16.06.1955 |
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Legal Form : |
Public 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
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No. of Employees : |
5,500 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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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) |
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Israel |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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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
DEAD SEA BROMINE COMPANY
LTD.
(Known as DEAD SEA
BROMINE GROUP - DSBG)
Telephone 972 8 629 76 00
Fax 972 8 629 78 44
P.O. Box 180, Beer Sheva (8410101) 12 Menachem Kroitzer Street, Maklef House Beer Sheva 8489425 Israel
Originally incorporated as a
private limited company and registered as such as per file No. 51-013749-0 on
the 16.06.1955.
Converted into a public limited company and registered as per file
No. 52-003580-9 on the 30.07.1986.
At a later date subject published a prospectus offering shares to the public.
In November 2000 parent company, ISRAEL CHEMICALS LTD., following a successful tender offer for its shares, reached full ownership over subject after it acquired 10.8% of the shares from the public in consideration of NIS 270 million.
Consequently, subject was de-listed from trading on the Tel Aviv Stock Exchange and during 2001 re-converted into a private limited company (though latter registration number remains).
Authorized share capital NIS
100,000,000.00, divided into -
99,999,999 ordinary shares (88,600,077 shares
issued),
1 special share (issued), all of NIS 1.00
each,
of which shares amounting to
NIS 88,600,078.00 were issued.
Company is fully owned by 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.
1. Nir Gilad - Chairman of ICL,
2. Stefan Borgas - Chairman of subject and CEO of ICL,
3. Eli Amit,
4. Itzhak Lotan,
5. Victor Medina,
6. Avisar Paz,
7. Ehud Buch,
8. Yossi Lastigson,
9. Shlomo Maoz,
10. Amir Makov,
11. Yair Orgler,
12. Asher Greenbaum,
13. Avi Dueitchman,
14. Avraham (Beiga) Sochat (former Minister of Finance).
Charles Weidhas (heads the Industrial Products segment)
Subject is part of ICL Industrial
Products (ICL-IP), heading the DEAD SEA
BROMINE GROUP (known as “DSBG”). ICL-IP sales
comprised 21.5% of ICL total 2012 sales (similar to 2011).
Mainly via wholly-owned subsidiary BROMINE COMPOUNDS LTD., operating as 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.
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).
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.
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.
DSBG Group is operating from main offices in Maklef House, 12 Menachem Kroitzer Street, 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 12,020 employees in ICL Group (of which some 5,500 employees in Israel), of which 2,660 employees in ICL IP Division, to which subject belongs.
Financial data is included in the consolidated B/S of ("grand") parent company, ISRAEL CHEMICALS LTD., which shows:
US$ (thousands)
ASSETS 31.12.2012 30.06.2013
Current assets:
Cash and cash equivalents 206,067 238,998
Investments, deposits and short term loans 142,689 101,137
Customers 1,034,668 1,237,634
Other receivables and assets 273,490 283,783
Stock 1,430,151 1,369,415
3,087,065 3,230,967
Non-current assets:
Investments and other non-current assets 425,652 401,972
Fixed assets 3,097,385 3,353,936
Intangible assets 734,809 768,690
4,257,846 4,524,598
7,344,911 7,755,565
======== ========
LIABILITIES
Current liabilities 1,809,198 2,094,564
Non-current liabilities 2,147,449 2,001,065
Equity 3,388,264 3,659,936
7,344,911 7,755,565
======== ========
ICL current market value US$ 10,852 million.
Subject is an “Approved Enterprise”, and as such enjoys State benefits. Subject received approval from the Israeli Investment Centre (IIC) for a US$ 50 million expansion plan for the Bromine plant in Sodom. In November 2000, the IIC approved investment plans for subject (jointly with other members of ICL) for the sum of US$ 140 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.
There are 3 charges for unlimited
amount registered on the company's assets, in favour of the State of Israel and
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.
Sales for the first 6 months of 2013 were US$ 691 million (8% decrease from 1stH 2012), operating profit of US$ 98 million.
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
======== ======== ========
ICL consolidated sales for the first 6 months of 2013 were US$ 3,410.5 million (similar to the parallel period in 2012), making a gross profit of US$ 1,377 million, an operating profit of US$ 756 million and a net income of US$ 622.3 million.
Subject ended 2010 with a
consolidated net profit of US$ 73,699,000.
Subject ended 2011 with a
consolidated net profit of US$ 175,086,000.
Subject ended 2012 with a
consolidated net profit of US$ 144,860,000.
Subject’s subsidiaries (100% unless otherwise stated), part
of ICL Industrial Products (ICL-IP), among many others:
BROMINE COMPOUNDS LTD., 100%, main manufacturing subsidiary,
BROMINE COMPOUNDS MARKETING (2002) LTD., 100%, marketing arm,
TETRABROM TECHNOLOGIES LTD.,
CHEMADA FINE CHEMICALS LTD., 26%,
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:
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 Holds 100%, among others, in ICL IBERIA SCS, GRUPO EMPRESARIAL AGROMEDITERRANO S.A and IBER POTASH S.A., both of Spain, CLEAVLAND POTASH LIMITED of the U.K., ASHLEY CHEMICALS (HOLLAND) B.V.
MIFALEI TOVALA LTD., land transportation, bulk transportation,
EUROCHIL HOLDINGS B.V. (ICL FERTILIZERS EUROPE), Holland, marketing arm in Europe, holds ICL FI POTASH B.V. and many others subsidiaries.
AMSTERDAM FERTILIZERS B.V., Holland, owns ICL FERTILIZERS EUROPE CV, ROTEM TURKEY, AMSTERDAM FERTILIZERS DEUTSCHLAND OHG (AMFERT GERMANY), ICL FERTILIZERS DEUTSCHLAND,
EVERRIS INTERNATIONAL B.V., Holland,
P.M. CHEMICALS SRL, Italy,
ICL ASIA LTD.,
ZUARI ROTEM SPECIALTY FERTILIZERS, 50%, India.
ROTEM BKG LLC, USA,
ROTEM DU BRAZIL LTD, ICL BRAZIL LTDA, both of Brazil,
ICL FERTILIZERS (INDIA) PRIVATE LIMITED, India,
ICL Performance Products Div.:
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:
I.D.E. TECHNOLOGIES LTD., 50%, desalination facilities and water treatment,
ICL FINANCE B.V., The Netherlands, ICL FINANCE INC., USA, ICL FINANCE & ISSUING LTD., ICL FINE CHEMICALS LTD., TWINCAP FOERSAEKRINGS AB (Sweden), and many others, incl. companies in ICL and ISRAEL CORP.
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.
DSBG 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 (9% market share in 2011), 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$ 3,947 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). 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). PCS is publicly traded on NYSE and Toronto (TSX: POT, NYSE: POT) with market value of US$ 27.83 billion. Under the circumstances, TIC would have become the major shareholder in PCS with some 20% stake. Such a transaction requires the State of Israel authorization, which holds a golden share in ICL that acquires it veto rights, as ICL has concession to Israel's natural resources (potash, phosphates, bromine). After the Minister of Finance expressed his resistance to such transaction, in April PCS announced it withdraws its intention to pursuit with the merger at this time.
ICL Group, including BROMINE COMPOUNDS's ICL-IP Div., was adversely hit by the global
economic crisis (thus BROMINE COMPOUNDS'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), although a certain decrease is witnessed in the first half of 2013.
ICL has suffered a major blow in end of July 2013 with the announcement of URALKALI on its intention to cease selling potash via the marketing company BCP (means the dismantling of the Russian potash cartel which may lead to the drop of potash prices in world markets in the short term and loss of revenues). Consequently, ICL market value dropped significantly, though recovered to some extent recently following rumors on renewal of the Cartel.
In 1995 ICL acquired CLEARON CORP. of the USA, for US$ 50 million.
DSBG signed long term cooperation agreement with DOW CHEMICALS and its subsidiary DOW AGROSCIENCE. It also signed a joint venture agreement with the Chinese leading chemical company SHANDONG HAIHUA SHAREHOLDING CO. 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., 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-IP 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.
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, in the beginning of 2010 BROMINE COMPOUNDS moved to produce to 85%-90% of its production capacity, compared with some 46% in 2009.
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 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 December 2010 the Israeli Parliament voted to cancel ICL Group's special tax benefits (hundreds NIS millions), as part of a revision concerning royalties from State resources (has been enjoying both from low royalties rate and tax benefits), with view of elevating the fees collected by the State. The State claimed that ICL also paid less than it had to and has to compensate the State. That will have certain negative implications on Group’s future results. A long mediation process has been taking place, and royalties for certain minerals were already elevated.
Government officials claim the fee is still too low and consider much higher rate.
Among 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 for US$ 35 million Mexican COSMOCEL QUIMICA, food additives & specialty chemicals manufacturers.
In December 2011 BROMINE COMPOUNDS 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.
Group developed a bromine compound, which eliminates the mercury pollution of coal burning of power plants. With expectations for 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.
Good for trade engagements.
Maximum unsecured credit up to several US$ million.
Note: Since February 2013 Israel Post has started using a new area code method of 7 digits (the old method of 5 digits is no longer valid).
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.62.73 |
|
|
1 |
Rs.100.92 |
|
Euro |
1 |
Rs.84.06 |
INFORMATION DETAILS
|
Report
Prepared by : |
NIS |
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.