MIRA INFORM REPORT

 

 

Report No. :

505814

Report Date :

28.04.2018

 

 

 

IDENTIFICATION DETAILS

 

Name :

HOUSE OF UNIFORMS (HOU)

 

 

Registered Office :

Tala Plaza, Shop No. 41, 1st Floor, Building No. 142, Block 328 Road No. 28, Avenue No. 29 Segaya PO Box 10174 Manama 318

 

 

Country :

Bahrain

 

 

Financials (as on) :

31.12.2017

 

 

Date of Incorporation :

1985

 

 

Com. Reg. No.:

31403-1

 

 

Legal Form :

Sole Proprietorship

 

 

Line of Business :

Subject is engaged in the manufacture of school uniforms and work wear.

 

 

No. of Employees :

60

 

 

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January 2017)

 

MIRA’s Rating :

A

 

Credit Rating

Explanation

Rating Comments

A

Acceptable Risk

Business dealings permissible with moderate risk of default

 

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

 

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Bahrain

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately High Risk

 

C1

High Risk

 

C2

Very High Risk

 

D

 

 

BAHRAIN - ECONOMIC OVERVIEW

 

Low oil prices have generated a budget deficit of at least a $3.5 billion deficit in 2017, nearly 10% of GDP. Bahrain has few options for covering this deficit, with low foreign assets and fewer oil resources compared to its GCC neighbors. In 2016 the three major US credit agencies downgraded Bahrain’s sovereign debt rating to “junk” status, citing persistently low oil prices and the government’s high debt levels. Nevertheless, Bahrain in 2017 was able to raise about $4 billion by issuing international debt.

Oil comprises 85% of Bahraini budget revenues, despite past efforts to diversify its economy, build communication and transport facilities for multinational firms with business in the Gulf, and expand infrastructure development. As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf state. It plans to introduce a Value Added Tax (VAT) by the end of 2018.

Other major economic activities are production of aluminum - Bahrain's second biggest export after oil - finance, and construction. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries. In April 2018 Bahrain announced it had found a significant oil field off the country’s west coast, but is still assessing how much of the oil can be extracted profitably.

In 2011, Bahrain experienced economic setbacks as a result of domestic unrest driven by the majority Shia population; however, the economy recovered in 2012-15, partly as a result of improved tourism. In addition to addressing its current fiscal woes, Bahraini authorities face the long-term challenge of boosting Bahrain’s regional competitiveness — especially regarding industry, finance, and tourism — and reconciling revenue constraints with popular pressure to maintain generous state subsidies and a large public sector. Since 2015, the government lifted subsidies on meat, diesel, kerosene, and gasoline and has begun to phase in higher prices for electricity and water.

 

Source : CIA

 

SUMMARY

 

Company Name                         : HOUSE OF UNIFORMS (HOU)

Country of Origin                                    : Bahrain

Legal Form                                            : Sole Proprietorship

Start Date                                             : 1985

Registration Date                                   : 28th February 1994

Commercial Registration Number            : 31403-1, Manama

Chamber Membership Number                : 4107

Invested Capital                                     : BD 50,000

Total Workforce                                     : 60

Activities                                               : Manufacture of school uniforms and work wear

Financial Condition                                 : Fair

Payments                                             : Nothing detrimental uncovered

Operating Trend                         : Steady

 

 

 

COMPANY NAME

 

HOUSE OF UNIFORMS (HOU)

 

 

ADDRESS

 

Registered & Physical Address

 

Location            : Tala Plaza, Shop No. 41, 1st Floor, Building No. 142, Block 328

Street               : Road No. 28, Avenue No. 29

Area                 : Segaya

 

PO Box             : 10174

 

Town                 : Manama 318

Country             : Bahrain

 

Telephone         : (973-17) 245177 / 532311 / 532148

Facsimile          : (973-17) 231910 / 530945

Mobile               : (973-39) 464885 / 973-36 660577

Email                : uniforms@batelco.com.bh / uniforms@uniforms.com.bh

 

Please note that subject’s previous address was, Building No. 178, Flat No. 202, Block No. 309, Road No. 907, Manama.

 

Premises

 

Subject operates from a medium sized suite of offices and a workshop that are rented and located in the Central Business Area of Manama.

 

Branch Office (s)

 

     Location                                                                                                       Description

 

·       Al Ali Complex, Shop No. 1114                                                                      Rented showroom premises

Manama

     Tel: (973-17) 581510

 

·       Old Palace Road                                                                                           Rented factory premises

Godiybia Area

Manama

Tel: (973-17) 225983 / 532148

 

 

KEY PRINCIPALS

 

     Name                                                                       Nationality                     Position

 

·       Mrs Natividad Canaveras Martinez Lozano                   Bahraini                        Proprietor & General Manager

 

·       Yacoub Jawad                                                                -                             Assistant General Manager

 

·       Nanon Gonomoni                                                            -                             Finance Manager

 

·       Shaju Mathew                                                                 -                             Sales Supervisor

 

·       Prashant Murli                                                                -                             Purchasing Officer

 

 

LEGAL FORM & OWNERS

 

Date of Establishment  : Subject’s operations date back to 1985, however it was registered on 28th February 1994

 

Legal Form                  : Sole Proprietorship

 

Commercial Reg. No.  : 31403-1, Manama

 

Chamber Member No. : 4107

 

Invested Capital           : BD 50,000

 

Mrs Natividad Canaveras Martinez Lozano is the sole proprietor of the business.

 

Note to the Legal Form   Commonly referred to as an Individual establishment, only Bahraini citizens and citizens of the Gulf Cooperation       Council (GCC) countries (must be resident in Bahrain) may register an Individual Establishment in the Kingdom of Bahrain. An Individual Establishment is a non-incorporated entity and is owned by one individual only. The owner is liable for all debts and liabilities of the business to the extent of his/her personal assets. There are no legal requirements concerning the amount of capital of a sole proprietor.

 

 

OPERATIONS

 

Activities: Engaged in the manufacture of school uniforms and work wear.

 

     Subject is currently the sole supplier of personalised Polo and T-shirts to more than 45 schools.

 

Import Countries: India and China

 

International Suppliers:

 

·       Prime Overseas                    India

·       MTV Export                          India

·       Profitnet Export                     India

·       West Branchly                      India

·       Westra International              India

 

Operating Trend: Steady

 

Subject has a workforce of 60 employees.

 

 

FINANCIAL DATA

 

Financial highlights provided by local sources are given below:

 

Currency: Bahraini Dinar (BD)

 

Year                                                     Sales                          

 

Year Ending 31/12/15:                            BD 2,395,000                           

 

Year Ending 31/12/16:                            BD 2,750,000                           

 

Year Ending 31/12/17:                            BD 3,180,000                           

 

Local sources consider subject’s financial condition to be Fair.

 

Note:    According to Bahraini Commercial Law, only Bahraini Shareholding Companies BSC (Listed on the Bahraini Stock Market) are required to publish their financial information. Financial information on other legal forms can only be obtained from the companies / businesses directly

 

 

BANKERS

 

·       Bank of Bahrain & Kuwait

43 Government Avenue

PO Box: 597

Manama

Tel: (973-17) 253388

Fax: (973-17) 275785

 

 

PAYMENT HISTORY

 

No complaints regarding subject’s payments have been reported.

 

 

SANCTION LIST CHECKS

 

The subject and its shareholders have been checked in the following sanctions list databases:

 

Sanctions list                                                                                                   Results

 

United Nations Sanctions                                                                                   No matches

 

Australian Sanctions                                                                                          No matches

 

Bureau of Industry and Security (US)                                                                   No matches

 

EU Financial Sanctions                                                                                      No matches

 

Office of the Superintendent of Financial Institutions (Canada)                                No matches

 

OFAC - Specially Designated Nationals (SDN)                                                     No matches

 

UK Financial Sanctions (HMT)                                                                            No matches

 

US Consolidated Sanctions                                                                                No matches

 

 

GENERAL COMMENTS

 

During the course of this investigation the following sources were consulted:

 

-  Internal database

-  Journals, directories, media & web searches

-  Local Registry office

 

During the course of this investigation nothing detrimental was uncovered regarding subject’s operating history or the manner in which payments are fulfilled. As such the business is considered to be a fair trade risk.

 

 

COUNTRY OUTLOOK

 

Recent Developments

Cheap oil continues to test Bahrain’s economic resilience. Bahrain maintained an expansionary fiscal stance since 2009 resulting in general government deficits. The situation worsened in 2015 with a decline in oil revenues by about 10 percent of GDP and a general fiscal deficit estimated at 12.8 percent of GDP (from 3.4 percent in 2014). The deficit spending helped maintain economic growth at 2.9 percent, but brought reserves down to a low level at 2.6 months of imports and increased public debt to 62 percent of GDP. Bahrain has introduced some initiatives for fiscal consolidation. Revenue enhancing measures such as higher tobacco and alcohol taxes and government services

fees were introduced over the past year. A cost-cutting program entailed the raising of petrol prices by up to 60 percent in January 2016(likely to create savings worth US$148.4 million), the gradual phasing-in of price increases for electricity, water, diesel, and kerosene by 2019, an increase and unification of natural gas prices for industrial users, and the removal of meat subsidies. Inflation has gradually picked up in 2016 mainly as a result of the subsidy reform: the headline CPI rose by 3 percent, but it will remain subdued in 2017 as one-off measures affect the current year

only. 2016 outcomes demonstrate, however, that the authorities’ emphasis on growth comes at the expense of fiscal deterioration.

 

The Bahraini economy grew by an estimated 3.4 percent in 2016. While the hydrocarbon sector grew by an estimated 2 percent, the non-hydrocarbon sectors grew by an average estimated rate of 3.7 percent, a figure that reflects the continued emphasis on public investments, some of which were funded by the GCC. The downside of this approach, however, has been manifested in persistently high fiscal deficits, estimated at 12.6 percent of GDP in 2016. A large portion of the 2016 deficit was covered by debt issuances, despite the sovereign downgrade reflecting increasing pressures on government finances. Bahrain issued a US$600 million bond just before the downgrade and the authorities raised the public debt ceiling to BD 10 billion (around 80 percent of GDP) to enable additional borrowing. Bahrain’s external position faces growing vulnerabilities. The current account surplus of the past 12 years turned into a deficit in 2015, following the drop in oil prices and further deteriorated in 2016 to 4.6 percent of GDP. Reserve adjustments reflect the growing external imbalances. The exchange rate peg has come under significant pressure: external imbalances were reflected in a decline in reserves to 2.6 months of imports in the same time

frame. The real effective exchange rate has also appreciated by 17 percent since mid-2014, complicating adjustments to the adverse terms of trade shock that Bahrain is facing.

 

Little comprehensive welfare analysis is available due to restricted access to household survey data, limited capacity, and the sensitivities involved. Among Bahraini nationals’, labour force participation is low, and people work predominantly in the public sector, where wages are high and productivity low. Immigrant workers constitute about a half of the resident population and command much lower incomes. Key elements of the social contract - public employment and subsidies - are becoming less affordable in the context of subdued oil prices. Bahrain aims to gain from upgrading its capacity for welfare measurement that would support the design of policies aimed at mitigating the impact of the necessary adjustment. Results from a new household survey in 2015 have not yet been published.

 

Outlook

Economic growth is expected to decline in the forecast period. Real GDP growth projections have been revised downwards to 1.9 percent in 2017 and 2018, as continuing low oil prices depress private and government consumption. Some infrastructure investments are also likely to be put on hold. In the absence of significant upfront

fiscal adjustments, Bahrain will remain vulnerable to fiscal risks. Average inflation is expected to decrease to 2.1 percent in 2017 reflecting the cooling off in economic activity and phasing out of temporary price-boosting effects of subsidy reforms. The current account deficit will partially narrow to 3.8 percent of GDP in 2017 and remain about there for the years to come, with the exception of small adjustments. International reserves are expected to follow a declining trend, and reach 1.5 months of imports in 2018. Public debt is projected to exceed 90 percent of GDP in 2017, and reach about 100 percent in 2018.

 

Risks and Challenges

Ensuring fiscal sustainability while preserving a healthy growth rate has become an important challenge in Bahrain. Real GDP growth is expected to slow and fiscal and external balances are expected to remain under pressure in 2017 due to oil prices remaining well below fiscal break-even levels. Despite efforts to diversify and boost non-oil fiscal revenues, hydrocarbons account for about 80 percent of government revenues in Bahrain. In addition, subsidies still absorb more than 20 percent of the fiscal budget. The fiscal break-even price for Bahrain was estimated at US$110 per barrel in 2016, the highest amongst the GCC. Thus, Bahrain is expected to continue to run significant general fiscal deficits in the forecast period - 9.8 percent of GDP in 2017. Delays in implementing fiscal consolidation or a

further decline in oil prices could trigger additional sovereign rating downgrades making access to external financing harder, and intensifying pressure on reserves and the peg. Fiscal solvency and liquidity risks are high, and outcomes remain vulnerable to shocks to growth, commodity prices, and interest rates.

 

 

Key Economic Indicators                                    2014     2015     2016*    2017*    2018*    2019*

 

Real GDP Growth (%)                                        4.4          2.9        3.4     1.9       1.9       2.3

Inflation Rate (%)                                               2.7          1.8        3.0     2.1       2.0       2.0

Current Account Balance (% of GDP)                  4.6         -2.4       -4.6     -3.8       -3.5       3.5

Fiscal Balance (% of GDP)                                 -3.4       -12.8     -12.6     -9.8       -8.9       -7.6

 

* forecast

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

INR 66.78

UK Pound

1

INR 92.89

Euro

1

INR 80.74

BHD

1

INR 176.68

                                                                  

Note : Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

TRU

                                                


 

RATING EXPLANATIONS

 

Credit Rating

Explanation

Rating Comments

A++

Minimum Risk

Business dealings permissible with minimum risk of default

A+

Low Risk

Business dealings permissible with low risk of default

A

Acceptable Risk

Business dealings permissible with moderate risk of default

B

Medium Risk

Business dealings permissible on a regular monitoring basis

C

Medium High Risk

Business dealings permissible preferably on secured basis

D

High Risk

Business dealing not recommended or on secured terms only

NB

New Business

No recommendation can be done due to business in infancy stage

NT

No Trace

No recommendation can be done as the business is not traceable

 

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

 

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 are as follows:

 

·         Financial condition covering various ratios

·         Company background and operations size

·         Promoters / Management background

·         Payment record

·         Litigation against the subject

·         Industry scenario / competitor analysis

·         Supplier / Customer / Banker review (wherever available)

 

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.