MIRA INFORM REPORT

 

 

 

 

Report Date :

05.08.2014

 

IDENTIFICATION DETAILS

 

Name :

ANTECO LTD.

 

 

Formerly Known As :

ANTECO COMMUNICATION & ENGINEERING INDUSTRIES LTD

 

 

Registered Office :

6 Moshe Aviv Street Industrial Zone B Or Yehuda 6037128           

 

 

Country :

Israel

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

1967

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Importers and marketers of close circuit communication systems, including CCTV systems, video-phones, intercoms, alarm systems, smoke detectors

 

 

No. of Employees

30

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

US$ 200,000

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 – June 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Israel

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 


 

ISRAEL ECONOMIC OVERVIEW

 

Israel has a technologically advanced market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among the leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are covered by tourism and other service exports, as well as significant foreign investment inflows. Between 2004 and 2011, growth averaged nearly 5% per year, led by exports. 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. 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. The economy has recovered better than most advanced, comparably sized economies, but slowing demand domestically and internationally, and a strong shekel, have reduced forecasts for the next decade to the 3% level. Natural gas fields discovered off Israel's coast since 2009 have brightened Israel's energy security outlook. The Tamar and Leviathan fields were some of the world's largest offshore natural gas finds this past decade. The massive Leviathan field is not due to come online until 2018, but production from Tamar provided a one percentage point boost to Israel's GDP in 2013 and is expected to contribute 0.5% growth in 2014. In mid-2011, public protests arose around income inequality and rising housing and commodity prices. Israel's income inequality and poverty rates are among the highest of OECD countries and there is a broad perception among the public that a small number of "tycoons" have a cartel-like grip over the major parts of the economy. 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. In May 2013 the Israeli government, in a politically difficult process, passed an austerity budget to reign in the deficit and restore confidence in the government's fiscal position. Over the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only 9% of the workforce, with the rest employed in manufacturing and services - sectors which face downward wage pressures from global competition

 

Source : CIA

 

 

 


Company name and address

 

ANTECO LTD.

 

Telephone         972 3 735 40 00

Fax                   972 3 634 63 66

 

Email:               info@anteco.co.il

 

6 Moshe Aviv Street

Industrial Zone B

OR YEHUDA     6037128            ISRAEL

 

 

HISTORY & LEGAL FORMATION

 

Originally established in 1967 as a non-registered business called ANTECO.

 

Converted into a private limited company and registered as such as per file
No. 51-097010-6 on the 10.03.1983, under the name ANTECO COMMUNICATION & ENGINEERING INDUSTRIES LTD., which changed to the present name on 21.07.2005.

 

 

SHARE CAPITAL

 

Authorized share capital NIS 60.00, divided into -

60,000 ordinary shares of NIS 0.001 each,

of which 25,000 shares amounting to NIS 25.00 were issued.

 

 

SHAREHOLDERS

 

1.         SYNEL M.L.L. PAYWAY LTD. (formerly SYNEL INDUSTRIES LTD.), 85%, a public limited company whose shares are trade on the Tel Aviv Stock Exchange, controlled (63.3%) by Gavriel (Gabi) Boganem,

2.         Avi Bareket, 15%.

 

In October 2009 SYNEL acquired subject from the Heirs of the Late Morris Ben-David. As part of the transaction, SYNEL transferred 15% of subject's shares to Avi Bareket (at face value).

 

 

DIRECTORS

 

Gavriel (Gabi) Boganem, General Manager of SYNEL M.L.L. PAYWAY,

Sharon Motai – Weiss, CFO of SYNEL M.L.L. PAYWAY.

 

GENERAL MANAGER

 

Avi Bareket.

 

 

BUSINESS

 

Importers and marketers of close circuit communication systems, including CCTV systems, video-phones, intercoms, alarm systems, smoke detectors, etc.

In the past also dealt in installation, which they no longer perform. Installation is carried out via sub-contractors and integrators.

 

Note: as of 31.12.2012 subject assumed all activities of sister company LOGIPHONE PHONE COMMUNICATION (importers and marketers of telephones and other electronic equipment) as part of an intended merger (not as yet registered in the Registrar of Companies). Subject is the "Low Voltage" Sector activity of SYNEL (following assuming all activities of LOGIPHONE).

 

Having over 600 customers, including government organs, banks and public institutions. Amongst clients: Ministry of Defense (and Israel Defense Force), AFCON GROUP, HI SECURITY SYSTEMS, EVRON SYSTEMS, PROTECH, G4S Group, MEGASON ELECTRONICS & CONTROL, BEZEQ THE ISRAELI TELECOMMUNICATIONS CO., A.A.P., MATKINET, etc.

 

All suppliers are foreign, having no local purchasing.

Among local services providers: TALI KEREN (public relations).

Sole local representatives of (among others, in line of activity):

A.V. TECH, DYNACOLOR, ACTI, HUNT, all of Taiwan,

VISION ARECONT, BRICKCOM, both of USA,

SIEMENS ENTERPRISE, of Germany,

FERMAX, of Spain,

DEDICATED MICROS, of the U.K,

BELTAL, of Italy,

TIBET SYSTEMS, CNB, SAMSUNG (CCTV field), all of South Korea.

 

Operating from rented premises, on an area of 1,000 sq. meters, in 6 Moshe Aviv Street, Industrial Zone B, Or Yehuda.

 

Having 30 employees.

Having 221 employees in SYNEL Group.

 

 

MEANS

 

Current inventory is valued at NIS 7,000,000.

 

According to SYNEL M.L.L. PAYWAY LTD. 2013 annual statements, assets attributed to the "Low Voltage" Segment as of 31.12.2013 – practically attributed to subject in 2013 (in brackets 31.12.2012): NIS 22,888,000 (NIS 25,039,000). Liabilities: NIS 15,757,000 (NIS 23,790,000)

 

In its 2013 annual statements, SYNEL M.L.L. reported that subject meets all its financial covenants.

 

Financial data is included in the consolidated B/S of parent company, SYNEL M.L.L. PAYWAY LTD., which shows:

 

NIS (thousands)

31.12.2013        31.03.2014

ASSETS

Current assets

Cash and cash equivalents                     6,775                2,918

Financial assets in fair value                   15,793              15,270

Customers                                            34,421              36,965

Other debtors                                        1,163                1,408

Other current assets                              2,990                2,767

Stock                                                    16,222              15,931

77,364              75,259

 

Non-current assets

Fixed assets (net)                                  10,751              10,662

Real estate for investment                       239,610 260,001

Goodwill and other intangible assets        31,681              31,745

Other non-current assets                          10,802                9,108

292,844 311,516

370,208 386,775

=======          =======

 

LIABILITIES

Current liabilities                                    61,307              65,376

Non-current liabilities                              161,302 170,312

Equity                                                   147,599 151,087

                                                            370,208 386,775

                                                            =======          =======

 

SYNEL M.L.L. PAYWAY LTD. current market value US$ 28.3 million.

 

Subject's B/S data which was published as part of the acquisition by M.L.L. PAYWAY LTD. showed:

           

31.12.2008        30.06.2009

Total assets      14,794,000        15,688,000

Total liabilities    18,851,000        18,876,000

 

There are 8 charges for unlimited amounts registered on the company's assets (financial and fixed assets), in favor of The First International Bank of Israel Ltd., Bank Hapoalim Ltd., Bank Leumi Le'Israel Ltd. and a leasing company (last charge placed March 2008).

 

 

REVENUES

 

2008 sales were NIS 25,960,000, making an operating profit of NIS 2,480,000, and a net profit of NIS 1,234,000.

2009 sales claimed to be 30,000,000, ending with a net loss of NIS 34,000.

2010 sales claimed to be 30,000,000, making a net profit of NIS 678,000.

Subject ended 2011 with a net profit of NIS 366,000.

2012 sales were NIS 30,000,000. Subject ended with a net profit of NIS 881,000.

2013 sales were NIS 30,000,000. Subject ended with a net profit of NIS 81,000.

Sales for the first 6 months of 2014 were NIS 15,000,000.

 

Revenues of the "Low Voltage" Segment in SYNEL financial statements:

2011 revenues were NIS 32,876,000, making an operating profit of

NIS 1,775,000.

2012 revenues were NIS 36,211,000, making an operating profit of

NIS 2,595,000.

2013 revenues were NIS 26,992,000, making an operating profit of

NIS 926,000.

 

SYNEL M.L.L. PAYWAY LTD.

Consolidated Statement of Income

NIS (thousands)

Year ended 31.12

2011                 2012                 2013

Revenues (sales, services and leasing)    133,284 142,594 132,130

 

Gross profit                                           60,839              65,628              62,444

 

Operating income                                   22,247              27,432              27,774

 

Pre-tax income                                      12,757              21,896              22,187

 

Net income                                            5,717                17,646              12,529

                                                            ======                        ======                        ======

 

SYNEL M.L.L. PAYWAY LTD. consolidated revenues for the first 3 months of 2014 were NIS 31,450,000 (similar to the parallel period in 2013), making a gross profit of NIS 15,266,000, an operating income of NIS 6,420,000, and a net income of NIS 3,488,000.

 

 

OTHER COMPANIES

 

SYNEL M.L.L. PAYWAY LTD., parent company, established in 1989 and publicly traded since 2000. Directly and through its subsidiaries, operates in the following lines of activities:

1.         Developers, manufacturers, exporters and marketers of data collection systems and solutions for workforce management, time and attendance, access control and job costing applications, as well as providers of service and solutions in the Human Resources management field.

2.         Owners and leasers of real estate assets.

3.         Low voltage operations (subject)

Holds:

DORSEL (B.A.Z.) LTD., 80%, a public limited company whose shares are traded on the Tel Aviv Stock Exchange, a yielding properties real estate company, current market value US$ 33.1 million, owns DORSEL RAANANA LTD. 100% and HAMADA 5 YOKNEAM LTD., 50%.

TIME AMERICA, 100%, U.S.A.,

SYNEL INDUSTRIES (UK) LTD., 80%, U.K., holds 90% in SYNEL FRANCE (SYSIO), France,

FEROX KONSULT AB, 50%, Sweden.

 

 

BANKERS

 

The First International Bank of Israel Ltd., Kiryat Hamelacha Branch (No. 055), Tel Aviv.

 

 

CHARACTER AND REPUTATION

 

Nothing unfavorable learned on subject.

 

Subject is a veteran business, well-known in its field and considered to be one of the largest local companies in the field of CCTV import and marketing with an estimated market share of 50%.

 

Subject is ISO 9001:2000 certified.

 

The acquisition of subject by SYNEL Group was synergetic to the Group’s activities of Access Control Division and LOGIPHONE (switchboard area).

 

 

In May 2007, subject signed several agreements worth NIS 5.5 million for the export of CCTV systems to European and African countries. According to the reports, among the companies subject signed contracts with are SECURITY WORLD in Kenya and EMI in Nigeria.

 

In August 2007, it was reported that subject signed an agreement with SANYO of Japan for exclusive representation in Israel for the CCTV systems.

 

Also in August 2007, it was reported that subject opened a center in Bulgaria.

 

In July 2010 it was reported that subject will represent ACTI of Taiwan.

 

In July 2012 it was reported that subject received the representation of BRICKCOM, VISION ARECONT and HUNT.

 

In the end of December 2012 SYNEL reported on merging LOGIPHONE PHONE COMMUNICATION, incorporated in 1992,  into subject to achieve greater efficiency in the "Low Voltage" Sector. In November 2013 the Tax Authorities approved the merger which will be affective from 31.12.2012. Final merger is awaiting legal registration.

 

According to the Israel Association of Electronics & Software, Hi-Tech industries sales in 2013 summed up to US$ 27.3 billion, over 6% rise from 2012 (then sales were US$ 25.6 billion, up from US$ 24.8 billion in 2011 and US$ 23.5 billion in 2010). 2013 sales divided into export of US$ 22.86 billion (US$ 21.48 billion, US$ 20.99 billion & US$ 19.87 billion in 2012, 2011 & 2010, respectively) and US$ 4.4 billion of sales to the local market (US$ 4.1 billion, US$ 3.9 billion & US$ 3.6 billion in 2012, 2011 & 2010, respectively).

 

Investments (capital formation) in imported machinery and other equipment (M&E) by the hi-tech industries in the branches of computers, electronic and optical production in 2013 fell by 55.4% from 2012, reaching NIS 2,552.5 million, continuing the negative trend in 2012, when investment fell by 30.5% from 2011.

 

 

SUMMARY

 

Good for trade engagements.

Maximum unsecured credit recommended US$ 200,000.

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.02

UK Pound

1

Rs.102.69

Euro

1

Rs.81.91

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

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%)

 

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.