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MIRA INFORM REPORT
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Report No. : |
494586 |
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Report Date : |
05.03.2018 |
IDENTIFICATION DETAILS
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Name : |
SAACH
INTERNATIONAL TRADING WLL |
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Registered Office : |
Building 4, Block
328, Shop 1, 28 Suqayyah Avenue, Al Suqayyah, P O Box: 1713, Manama |
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Country : |
Bahrain |
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Financials (as on) : |
31.12.2017 |
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Date of Incorporation : |
01.04.2001 |
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Com. Reg. No.: |
10487-4 |
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Legal Form : |
With Limited
Liability - WLL |
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Line of Business : |
Import and
Distribution of Building Materials. |
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No. of Employees : |
25 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Bahrain |
A2 |
A2 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
BAHRAIN - ECONOMIC OVERVIEW
Low oil prices have generated a budget deficit of at least a $4 billion deficit in 2016, nearly 14% of GDP. Bahrain has few options for covering this deficit, with meager 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 inability to more effectively cut spending. Nevertheless, Bahrain in 2017 was able to raise about $3 billion by issuing international debt.
Oil comprises 86% of Bahraini budget revenues, despite past efforts to diversify its economy and to build communication and transport facilities for multinational firms with business in the Gulf. 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.
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 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 announced new higher prices for electricity and water, although it plans to roll these increases out more gradually than previous subsidy cuts.
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Source
: CIA |
SUMMARY
Company Name : SAACH
INTERNATIONAL TRADING WLL
Country of Origin : Bahrain
Legal Form :
With Limited Liability - WLL
Registration Date : 1st
April 2001
Commercial
Registration Number : 10487-4
Issued Capital : BD
1,000,000
Paid up Capital : BD
1,000,000
Total Workforce :
25
Activities :
Distributors of building materials
Financial Condition : Fair
Payments :
No Complaints
Operating Trend : Steady
COMPANY
NAME
SAACH INTERNATIONAL
TRADING WLL
ADDRESS
Registered & Physical
Address
Building : Building 4, Block 328, Shop 1
Street : 28 Suqayyah Avenue
Area : Al Suqayyah
PO Box : 1713
Town : Manama
Country : Bahrain
Telephone : (973-17) 251444
Facsimile : (973-17) 230305 / 242332
Mobile : (973-39) 965587
Email : hrbh@al-namal.com
Premises
Subject operates
from a small suite of offices and a showroom that are rented and located in the
Central Business Area of Manama.
KEY
PRINCIPALS
Name Nationality Position
·
Kurian
Vargese Mohamed Juma Indian Managing
Director
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Abdulwahed
Ramadhan Emirati Director
LEGAL
FORM & OWNERS
Date of Establishment : 1st
April 2001
Legal Form :
With Limited Liability -
WLL
Commercial Reg. No. : 10487-4
Issued Capital : BD 1,000,000
Paid up Capital : BD 1,000,000
Name of Shareholder (s) Nationality Percentage Holding
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Abdulwahed
Ramadhan Emirati 51%
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Kurian
Vargese Mohamed Juma Indian 49%
Notes
to the legal Form
Under
the Bahraini Commercial Companies Law a WLL may be formed by a minimum of 2 and
a maximum of 50 natural or legal
persons, whose liability is limited to their shares in the company’s capital. The
WLL is the most common form of
company where 100 percent foreign ownership is permitted. The minimum amount of
paid-up capital required is BD 20,000.
With Limited Liability (WLL) companies cannot issue public
shares, negotiable warrants, or debentures.
Banking and insurance activities are also not allowed.
AFFILIATED
COMPANIES
·
Al
Namal Contracting & trading Co WLL
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Al
Namal Estate Agency
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Al
Namal Mechanical Contracting Co WLL
OPERATIONS
Activities: Engaged in the import and distribution of
building materials.
Import
Countries: Europe and the
Far East
Operating Trend: Steady
Subject has a
workforce of 25 employees.
FINANCIAL
DATA
Financial
highlights provided by local sources are given below:
Currency: Bahraini
Dinar (BD)
Year Sales
Year Ending
31/12/15: BD
1,700,000
Year Ending 31/12/16: BD 1,800,000
Year Ending
31/12/17: BD
2,150,000
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
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Bahrain
Islamic Bank
PO Box: 5240
Manama
Tel: (973-17) 231402
Fax: (973-17) 275734
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
company 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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.23 |
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1 |
INR 89.71 |
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Euro |
1 |
INR 79.50 |
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BHD |
1 |
INR 172.65 |
Note:
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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NIS |
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Report Prepared
by : |
NIT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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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
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Promoters
/ Management background
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Payment
record
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Litigation
against the subject
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Industry
scenario / competitor analysis
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Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.