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MIRA INFORM REPORT
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Report No. : |
510377 |
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Report Date : |
23.05.2018 |
IDENTIFICATION DETAILS
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Name : |
EL FARDOUS FOR GARMENTS |
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Registered Office : |
Zone A, Industrial Area, 6th Of October City, 6th
of October City |
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Country : |
Egypt |
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Financials (as on) : |
2017 |
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Date of Incorporation : |
2016 |
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Com. Reg. No.: |
26687 |
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Legal Form : |
Sole Proprietorship |
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Line of Business : |
Subject is engaged in the import of textiles
and the manufacture of garments |
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No. of Employees : |
35 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
B |
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Credit Rating |
Explanation |
Rating Comments |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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Status : |
Moderate |
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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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Egypt |
C1 |
C1 |
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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 |
EGYPT - ECONOMIC OVERVIEW
Occupying the northeast corner of the African continent, Egypt is bisected by the highly fertile Nile valley where most economic activity takes place. Egypt's economy was highly centralized during the rule of former President Gamal Abdel NASSER but opened up considerably under former Presidents Anwar EL-SADAT and Mohamed Hosni MUBARAK. Agriculture, hydrocarbons, manufacturing, tourism, and other service sectors drove the country’s relatively diverse economic activity.
Despite Egypt’s mixed record for attracting foreign investment over the past two decades, poor living conditions and limited job opportunities have contributed to public discontent. These socioeconomic pressures were a major factor leading to the January 2011 revolution that ousted MUBARAK. The uncertain political, security, and policy environment since 2011 has restricted economic growth and failed to alleviate persistent unemployment, especially among the young.
In late 2016, persistent dollar shortages and waning aid from its Gulf allies led Cairo to turn to the IMF for a 3-year, $12 billion loan program. To secure the deal, Cairo floated its currency, introduced new taxes, and cut energy subsidies - all of which pushed inflation above 30% for most of 2017, a high that had not been seen in a generation. Since the currency float, foreign investment in Egypt’s high interest treasury bills has risen exponentially, boosting both dollar availability and central bank reserves. Cairo will need to make a sustained effort to implement a range of business reforms, however, to induce foreign and local investment in manufacturing and other labor-intensive sectors.
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Source
: CIA |
SUMMARY
Company Name :
EL FARDOUS FOR GARMENTS
Country of Origin :
Egypt
Legal Form :
Sole Proprietorship
Registration Date :
2016
Commercial Registration Number :
26687, 6th of October City
Tax Card Number :
312-241-625
Invested Capital :
EGP 20,000
Total Workforce :
35
Activities :
Import of textiles and the manufacture of garments
Financial Condition :
Fair
Payments :
No Complaints
Person Interviewed :
Ahmed Shatta, Administration Manager
COMPANY
NAME
EL FARDOUS FOR GARMENTS
ADDRESS
Registered & Physical Address
Location : Zone A, Industrial Area, 6th Of October City
Town : 6th of October
City
Country : Egypt
Telephone :
(20-66) 333838
Mobile :
(20-100) 6665240
Email :
noutu.066@yahoo.com
Premises
Subject operates from a medium sized suite of offices and a
factory that are rented and located in the Industrial Area of 6th of October
City.
KEY
PRINCIPALS
Name Position
Noura Mohamed Kamal Eddine Proprietor
& General Manager
Ahmed Saad Factory
Manager
Ahmed Shatta Administration
Manager
LEGAL
FORM & OWNERS
Date of Establishment : 2016
Legal Form : Sole
Proprietorship
Commercial Reg. No. : 26687, 6th of October City
Tax Card No. : 312-241-625
Invested Capital : EGP 20,000
Mrs Noura Mohamed Kamal Eddine is the sole proprietor of the business.
Note to the Legal Form An Sole Proprietorship 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 import of textiles and the manufacture of
garments.
Import Countries: Europe and the Far East
Subject has a workforce of 35 employees.
FINANCIAL
DATA
Financial highlights provided by local sources are given below:
Currency: Egyptian Pounds (EGP)
Year SALES
Year Ending 31/12/17: EGP
15,000,000
Local sources consider subject’s financial condition to be Fair.
Note: According to
Egyptian Commercial Law, only Joint Stock Companies SAE (Listed on the 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
Export Development Bank of Egypt
Plot 3/1
4th Industrial Region
Giza
6th of October City
Tel: (20-11) 38330577 / 38330599
Fax (20-11) 38330570 /
38330551
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
- Interview with Ahmed Shatta, Administration Manager
According to local sources, subject meets its payment obligations
in a timely manner and the business is considered to be a fair trade risk.
COUNTRY
OUTLOOK
Recent Developments
The first quarter of FY17 (July to
June) marked a slowdown in growth recording 3.4 percent compared to 5.1 percent
in the same quarter last year, with annual growth in FY16 registering 4.3
percent. Growth was constrained by severe shortages in hard currency, an
overvalued exchange rate and sluggish growth in Europe, Egypt’s main trading
partner. Key sectors continue to experience negative growth, particularly
tourism and the oil and gas extractives sector that has been suffering from
underinvestment and arrears.
The annual fiscal deficit in FY16
increased to 12.1 percent of GDP, up from 11 percent the year before. However,
in the first half of FY17 the deficit declined to 5.4 percent of GDP, down from
6.4 percent in the same period last year. The improvement in the first half is
solely driven by a decline in total expenditures, which compensates for a drop
in total revenues. Lower expenditures were driven by a decrease in subsidies
and public wages as a percentage of GDP.
The most recent data for the first
quarter of FY17 show an overall surplus in the balance of payments of 0.5
percent of projected GDP, compared to a deficit of 1 percent during the same
period of the previous year. The improvement in external accounts was mainly
due to the narrowing trade deficit induced by an increase in merchandise
exports (by 11.2 percent) and a decline in merchandise imports (by 4.8
percent). Meanwhile, Suez Canal receipts further deteriorated by 4.8 percent
and net private transfers also declined by 21.8 percent. As a result, the
current account deficit widened to 1.4 percent of GDP compared to 1.1 percent
in the same quarter of the previous year. More positively, FDI inflows
increased to US$1.9 billion over the same period, up from US$1.4 billion the
previous year.
To stimulate growth and address major
macroeconomic imbalances, the government embarked on a major economic reform
program. The key features include (i) the liberalization of the exchange rate regime;
(ii) fiscal consolidation through a combination of expenditure and revenue
measures, notably cuts in fuel subsidies, containment of the wage bill and
introduction of VAT; and (iii) reforms to the business environment and
addressing impediments to industrial activity.
The reform program was supported by an
IMF Extended Fund Facility of US$12 billion which contributes to cover Egypt’s
financing needs, the rest of which has been covered through disbursements under
the World Bank, the African Development Bank and a number of bilateral loans,
in addition to a recent issuance of Eurobonds in the amount of US$4 billion.
Following the floatation, the exchange rate displayed strong overshooting
(hitting its
lowest rate of 19.5 in December
compared to a pre-float fixed rate of 8.8), but has subsequently strengthened
as foreign investor confidence picked up and backlogs of USD orders to finance
imports eased. Net international reserves reached US$26.4 billion at-end
January (6 months’ imports), up from a pre-floatation level of US$19 billion.
Currency weakening has led to a sharp
rise in inflation, which reached its highest recorded level of 30.2 percent in
February 2017. Following the currency floatation, the CBE increased interest
rates by 300 basis points (bringing the cumulative increase to 550 basis points
since March 2016) to absorb excess liquidity and curb inflation. High inflation
has contributed to the aggravation of social conditions, given the persistently
high unemployment (12.6 percent in 2016). The recently adopted reform program
involves efforts to improve social safety nets, notably through the partial
reallocation of freed up resources from reduced energy and food subsidies; the
expansion of cash transfer programs; and an increase in the general pension
budget by 15 percent. Nonetheless, the mitigation of recent adverse
shocks will continue to depend on an
effective targeting mechanism.
Outlook
GDP is expected to grow by 3.9 percent
in FY17, and will be largely driven by public investment and to some extent net
exports. Private investment is expected to pick up only in the second half of
FY17, supported by enhanced competitiveness following the depreciation of the
currency and the gradual implementation of business climate reforms. Tourism is
also expected to steadily recover on the back of a weaker currency. Yet, growth
will likely be undermined by slower growth of private consumption, which is
expected to be negatively affected by record high inflation rates. Prudent
monetary policy is projected to bring inflation down over the forecast horizon
after the one off effects of depreciation, subsidy reforms, and the
introduction of VAT dissipate.
The fiscal deficit is projected to
narrow to 10.5 percent in FY17, contingent on the government’s commitment and
ability to sustain its fiscal consolidation plan. With the implementation of
the VAT, the expected increase in the VAT rate to 14 percent from the current
13 percent, and efforts to improve tax collection, revenues are expected to
improve, while expenditures will continue to be contained.
The current account deficit is expected
to start improving in FY17, supported by a positive exchange rate effect and an
increase in remittances transferred through formal channels.
In the near term high inflation is
likely to have negative short-term effects on households. Current efforts to
improve
targeting in the food smart-card
program, currently used to protect the vulnerable population from food price
shocks and ensure a minimum level of food security, could provide additional
resources for an improved safety net.
Risks
and challenges
Policy slippage and absence of
real-sector reforms may negatively impact the anticipated economic recovery.
Deteriorating security risks can adversely affect the recovery of the tourism
sector, traditionally a main source of revenue and foreign currency.
On the social front, resources from
fuel subsidy reform to be allocated to social programs may be lower than
expected
due to currency depreciation, but
efforts should continue to improve the efficiency of the safety net system.
Sustained high unemployment may lower households’ ability to improve their
living conditions.
Key Economic Indicators 2014 2015 2016* 2017* 2018 2019
Real GDP Growth (%) 2.9 4.4 4.3
3.9 4.6 5.3
Inflation Rate (%)
10.1 10.4 10.2 20.1 14.2 11.3
Current Account Balance (% of GDP) -0.9 -3.8 -6.1 -5.5
-4.4 -3.8
Fiscal Balance (% of GDP) -11.5 -11.0 -12.1 -10.5
-9.2 -7.3
* forecast
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 68.02 |
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1 |
INR 91.25 |
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Euro |
1 |
INR 80.07 |
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EGP |
1 |
INR 3.81 |
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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PRI |
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Report Prepared
by : |
KET |
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
·
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.