MIRA INFORM REPORT

Report Date :

31.07.2014

IDENTIFICATION DETAILS

Name :	KASHTAN ENERGY SAVING TECHNOLOGIES LTD.

Formerly Known as :	H-2 LIVING LTD

Registered Office :	2 Oded Street, Be'er Ya'akov

Country :	Israel

Date of Incorporation :	26.08.2009

Com. Reg. No.:	51-431567-0

Legal Form :	Private Limited Company

Line of Business :	Importers and marketers of Energy Saving Electrical Products and equipment, e.g. Led Lighting, Control and Supervision Systems, Detectors & self-Operating Emergency Lighting.

No of Employees :	125 employees (I. KASHTAN Group as of beginning of 2013)

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	US$ 50,000.

Status :	Moderate

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 01, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Israel

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	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 & address

KASHTAN ENERGY SAVING TECHNOLOGIES LTD.

Telephone 972 8 918 35 00

Fax 972 8 918 35 11

E-mail: info@kashtan.co.il

Physical address:

2 Oded Street

BE'ER YA'AKOV

Mailing address:

P.O. Box 802

TEL AVIV 6100702 ISRAEL

HISTORY & LEGAL FORMATION

A private limited company, incorporated as per file No. 51-431567-0 on the 26.08.2009.

Originally registered under the name H-2 LIVING LTD., which changed to the present name on the 06.11.2013.

SHARE CAPITAL

Authorized share capital NIS 1,000,000.00, divided into -

1,000,000 ordinary shares of NIS 1.00 each,

of which 605,000 shares amounting to NIS 605,000.00 were issued.

SHAREHOLDERS

Subject is fully owned by I. KASHTAN ELECTRICAL SUPPLIES LTD., fully owned by URANIA ELECTRIC PRODUCTS LTD., fully owned by Boaz Kashtan.

DIRECTORS & JOINT GENERAL MANAGERS

1. Boaz Kashtan, Chairman of I. KASHTAN Group,

2. Itay Kashtan,

3. Ofer Kashtan, latter 2 are the sons of Boaz Kashtan.

BUSINESS

Importers and marketers of energy saving electrical products and equipment, e.g. led lighting, control and supervision systems, detectors & self-operating emergency lighting.

Sales are to electricians, constructors.

Subject is part of I. KASHTAN Group, which exclusively represents locally over 40 foreign firms from all over the world. Among them (in subject's line of activity):

BTICINO, of Italy,

ESYLUX, of Germany.

Operating from main large premises, in 2 Oded Street, adjacent the Wholesale Market, Be'er Ya'akov, in Be'er Ya'akov Regional Council. Premises serve the Group.

Number of employees in subject not forthcoming.

Had 125 employees in I. KASHTAN Group as of beginning of 2013.

MEANS

Financial data not forthcoming.

There are 2 charges for unlimited amounts registered on the company's assets (all assets), in favor of Bank Leumi Le'Israel Ltd. and Bank Hapoalim Ltd. (charges placed May 2012 and February 2010).

REVENUES

Sales figures not forthcoming.

OTHER COMPANIES

I. KASHTAN ELECTRICAL SUPPLIES LTD., parent company, established 1932, incorporated 1959. Dealers, importers and marketers of electrical equipment and supplies for the construction, industrial and domestic sectors.

Also part of I. KASHTAN Group:

URANIA ELECTRIC PRODUCTS LTD., I. KASHTAN's parent company, a holding company.

KASHTAN TECHNOLOGIS LTD. (known as "KASHTAN TECH"), offering combined solutions for all domestic electrical systems (“smart home”), including alarm systems, electrical appliances, lighting, telecommunications, intercom, videos, etc. Local representatives of BTICINO of Italy.

KASHTAN REAL ESTATE LTD., a real estate company,

NES LED LIGHTING LTD., 80%, importers, exporters and marketers of Led lighting for projects.

ASTRAGAL LTD., Boaz Kashtan holds 20% of ordinary shares and 25% of management shares, plus 10% held by I. KASHTAN, importers and marketers of electronic, electro mechanics and industrial components for the industrial field. 2011 slaes NIS 30 million.

BANKERS

Bank data not forthcoming.

CHARACTER AND REPUTATION

Nothing unfavorable learned.

So far subject's officials refused to disclose data. They asked us to send them an email with our request – which we did – and they will consider our request.

In case they return to us with further data, we will update you accordingly.

I. KASHTAN is a most veteran family business, well-known in the local electricity branch and one of the leading in their field.

According to data by of the Metal, Electrical and Infrastructure Industries Association, representing the local Metal and Electricity Industries, which includes large scale export-oriented industries on one hand and family-owned plants which sell to the local market: 2010 sales (local and export) by the said industries amounted to NIS 70 billion, comprising 25% of Israel's industrial output. Sales for export reached US$ 10 billion in 2010.

Some 90,000 employees serve the said industries (26% of Israel's industrial workforce).

Central Bureau of Statistics (CBS) data reveals that investments by the local manufacturing industries in machinery & equipment (M&E) in 2013 fell by 12% from 2012, after a decrease by 3% in 2012. Investments whose source was from import, which comprised 62% of total investment by the industries in M&E, fell by 21.5%, while investments whose source was from local manufacturing rose by 11.5% in 2013.

Gross Domestic Capital Formation (investment) in machinery & other equipment in 2012 reached (in current prices) NIS 47,540 million, of which NIS 33,336 million was from imports and NIS 14,204 miilion from domestic production.

SUMMARY

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

Maximum unsecured credit recommended US$ 50,000.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.15
UK Pound	1	Rs.101.92
Euro	1	Rs.80.64

INFORMATION DETAILS

Analysis Done by :	DIV

Report Prepared by :	MNL

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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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.