MIRA INFORM REPORT

 

 

Report Date :           

08.12.2011

 

IDENTIFICATION DETAILS

 

Name :

THANGAM LTD.

 

 

Registered Office :

54 Bezalel Street, Diamond Exchange, Yahalom Bldg., Ramat Gan 52521

 

 

Country :

Israel

 

 

Date of Incorporation :

11.05.1987

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Traders, Importers, Exporters and Marketers of diamonds of all sorts

 

 

No. of Employees :

5 Persons

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

 

 

Payment Behaviour :

Unknown

 

 

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 – September 30th, 2011

 

Country Name

Previous Rating

                   (30.06.2011)                  

Current Rating

(30.09.2011)

Israel

a2

a2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

Company name & address

 

THANGAM LTD.

Telephone         972 3 613 15 70

Fax                  972 3 575 28 97

54 Bezalel Street

Diamond Exchange, Yahalom Bldg.

RAMAT GAN    52521-ISRAEL

 

 

HISTORY & LEGAL FORMATION

 

A private limited company, incorporated as per file No. 51-119805-3 on the 11.05.1987.

 

 

SHARE CAPITAL

 

Authorized share capital of NIS 2,640.00, divided into:

                2,640 ordinary shares, of NIS 1.00 each,

of which 100 shares amounting to NIS 100.00 were issued.

 

 

SHAREHOLDERS

 

1.    Tiargraj Thiagrajan, 99%,

2.    Ms. Indira Thiagrajan, 1%, both of 16, Baltimore Street, Tel Aviv.

 

 

DIRECTORS

 

1.    Tiargraj Thiagrajan, General Manager,

2.    Aire Poza.

 

(Note: Names may be spelled differently, as they are written in Hebrew).

 

 

BUSINESS

 

Traders, importers, exporters and marketers of diamonds of all sorts.

 

Operating from rented offices, on an area of 60 sq. meters, in 54 Bezalel Street (also referred as 21 Tuval Street), Diamond Exchange, Yahalom Building (6th Floor, room No. 662), Ramat Gan. Offices shared with affiliated company PARK DIAM).

 

Having 5 employees (same as in previous years).

 

 

MEANS

 

Financial data not forthcoming.

 

There are 4 charges for unlimited amounts registered on the company's assets, in favor of Union Bank of Israel Ltd. and The State Bank of India.

 

 

REVENUES

 

Sales figures not forthcoming.

 

 

OTHER COMPANIES

 

PARK DIAM ISR. LTD., family affiliated company, operating from subject's premises, processors, traders, importers and exporters of diamonds.

 

 

BANKERS

 

·         Bank Leumi Le'Israel Ltd., Diamond Exchange Branch (No. 629), Ramat Gan.

·         State Bank of India (SBI), Main Branch (No.001), Ramat Gan.

 

 

CHARACTER AND REPUTATION

 

Nothing unfavorable learnt.

 

Subject's officials refused to disclose financial data on their company.

 

This is a long established company.

 

According to the President of the Israeli Diamonds Association, local diamond sector in general managed to cross the global economic crisis that erupted in September 2008, one of worst depressions in the global diamond sector, despite the sheer difficulties, including the fact that local banks contracted credit given to local diamond firms. The President said that trade in the sector rolls annual turnover of US$ 25 billion while total debt to the banks stands on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the crisis. The Ministry for Industry &


Trade also assisted the local diamond exporters by providing bank guarantees in total scope of NIS 1 billion.

 

The diamond sector experienced almost an entire freeze and collapse in sales of about 70% in the peak of the crisis and 2009 export diamonds shrank by some 40%. Only since mid 2009 a mild recovery has been felt and continued throughout 2010, into 2011. In 2011 first half, a significant improvement was recorded, 40% higher than 2010 first half, however the current fragile global economy and fear of another recession wave in USA and Europe has been negatively affecting the branch, with a notable drop in sales and slow-down signs.

 

Overall in 2010, export (net) of polished diamonds was US$ 5,832 million, representing 48% increase from 2009 (when it noted 37% decrease from 2008, also much less than 2007, a record year in polished diamonds export, with sales of US$ 7,076 million). In karat terms, net export of polished diamonds rose by 32%. Rough diamonds export (net) reached US$ 3,060 million, 62% up from 2009 and 36% increase in karat terms.

In the first 9 months of 2011, 37.1% increase was noted comparing to the parallel period in 2010 with net export of polished diamonds of US$5.830 million. Export of rough diamonds also climbed almost 32%, reaching US$ 2,980 million.

 

Import of rough diamonds (net) in 2010 grew by 51% to US$ 3,755 million (30% rise in karat terms) compared with 2009, and by 35% in the first 9 months of 2011 (compared to 2010) summing up to US$3,520 million. Import of polished diamonds (net) saw 68% rise in 2010 reaching US$ 4,218 million (39% rise in karat terms), and almost 49% rise  in 2011 first 9 months (US$ 4,170 million).

 

In terms of target export (polished diamonds) countries, overall in 2010 the USA returned to be main destination, with 41% of total export (37% in 2011). This comes after earlier in 2010, for the first time Far East markets became Israel’s diamond industry’s main target, with sales to Hong Kong being close to these of the USA, to whom sales decreased dramatically in view of the severe economic crisis (traditionally sales to the USA comprised some 60%-65% of total export). In 2011, export to Hong Kong comprised around 29% of sales. Other main target countries include Belgium, Switzerland, India, Thailand and China.

 

In February 2009, Israel was ranked as the world’s largest exporter of cut diamonds, followed by India, Belgium and South Africa.

 

 

SUMMARY

 

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

 

DIAMOND INDUSTRY – INDIA

 

-          From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8th Century B.C.  India, in fact, remained undisputed leader till 18th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

-          The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

-          The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

-          Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

-          Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

-          The diamond jewellery industry in India today may be more than Rs 60000 mil and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

-          Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

-          Excerpts from Times of India dated 30th October 2010 is as under –

 

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

 

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

-          Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.51.45

UK Pound

1

Rs.80.38

Euro

1

Rs.69.12

 

 

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.