MIRA INFORM REPORT

Report Date :

04.01.2011

IDENTIFICATION DETAILS

Name :	FISCHER DIAMONDS LTD.

Registered Office :	54 Bezalel Street, Diamond Exchange, Yahalom Bldg., Ramat Gan 52520

Country :	Israel

Date of Incorporation :	24.07.1986

Legal Form :	Private Limited Company

Line of Business :	Dealers, Importers, Exporters and Marketers of diamonds

RATING & COMMENTS

MIRA’s Rating :

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 – June 30, 2010

Country Name

Previous Rating

(01.04.2010)

Current Rating

(30.06.2010)

Israel

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name & address

FISCHER DIAMONDS LTD.

Telephone 972 3 575 25 90

Fax 972 3 575 01 03

54 Bezalel Street

Diamond Exchange, Yahalom Bldg.

RAMAT GAN 52520 ISRAEL

HISTORY & LEGAL FORMATION

A private limited company, incorporated as per file No. 51-113491-8 on the 24.07.1986.

SHARE CAPITAL

Authorized share capital of NIS 1,800.00, divided into:-

1,800 ordinary shares of NIS 1.00 each,

fully issued.

SHAREHOLDERS

1. Jeffrey Fischer, 66.66%,

2. Mrs. Rita Fischer, 33.33%.

DIRECTORS

1. Jeffrey Fischer,

2. Mrs Rita Fischer, both of USA.

JOINT GENERAL MANAGERS

1. Yakov Sabo,

2. Udi Sabo.

BUSINESS

Dealers, importers, exporters and marketers of diamonds (all types).

Operating from rented office premises, on an area of 100 sq. meters, in 54 Bezalel Street (street name is also referred to as 21 Tuval Street), Diamond Exchange, Yahalom Building (15^th Floor, Room 1576), Ramat Gan.

Having 10 employees (same as in 2009).

MEANS

Financial data not forthcoming.

There is 1 floating charge for an unlimited amount registered on the company's assets, in favor of Mizrahi Tefahot Bank Ltd.

ANNUAL SALES

Sales figures not forthcoming

BANKERS

Mizrahi Tefahot Bank Ltd., Diamond Business Center Branch (No. 466), Ramat Gan.

CHARACTER AND REPUTATION

Nothing unfavorable learned.

Subject's General Manager refused to disclose financial data.

Jeffrey Fischer currently serves as President of International Diamond Manufacturers Association (IDMA), 2^nd term.

During 2010 local diamond companies have been recovering from one of the worst depressions in the global diamond sector due to the severe economic crisis in global markets that erupted in September 2008. The diamond sector experienced almost an entire freeze in sales and collapse of about 70% in sales later. Only since mid 2009 a mild recovery has been felt (in some markets, such as the American, it is estimated that it will take long time till fully recovering). Further improvement witnessed during the first half of 2010.

Overall in 2009, export diamonds shrank by 40%. Export of cut diamonds (net) were US$ 3,922.6 million, representing 37% decrease compared to 2008. The depression in the diamond sector comes after year 2007 marked a record in the export of cut diamonds from Israel, with net sales for export of US$ 7.076 billion, while 2008 witnessed a decrease of 11.8% to US$ 6.240 billion.

In comparison to the parallel period in 2009, export of cut diamonds (net) in 2010 first 3 quarters increased by 62.5% to US$ 4,244 million, and export of rough diamonds (net) reached US$ 2,263 million, representing 80% rise. Yet, in comparison to previous years, export is still well lower.

Import of rough diamonds (net) in the first 3 quarters of 2010 grew by 64% to US$ 2,609 million, compared with the parallel period in 2009, while import of cut diamonds (net) saw 84% rise reaching US$ 2,803 million.

For the first time, Far East markets have become Israel’s diamond industry’s main target. Sales to Hong Kong in the first 9 months of 2010 are close to these of the USA, traditionally all the years the main market for Israel’s export of cut diamonds but decreased dramatically in view of the economic situation where the U.S. suffered the biggest hit. Some 35%-40% of total the export in 2010 was to the USA, comparing to 60%-65% in past years. Hong Kong (27%-38%), Belgium (5%-9%), India (4%), Switzerland (4%) and China (3%).

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

According to the President of the Israeli Diamonds Association, local banks contracted credit given to local diamond firms in view of the global financial crisis, however, he believes the local diamond sector is healthy: 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. Israel Ministry for Industry & Trade also committed to support local diamond exporters by providing bank guarantees in total scope of NIS 1 billion.

SUMMARY

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.67
UK Pound	1	Rs.69.45
Euro	1	Rs.59.37

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

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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