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Report Date : |
06.04.2013 |
IDENTIFICATION DETAILS
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Correct Name : |
DIVINE DIAMONDS LTD. |
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Registered Office : |
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Country : |
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Date of Incorporation : |
19.01.2000 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, importers, exporters and marketers of diamonds for the industry |
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No. of Employees : |
Number of employees not forthcoming (estimated to be between 5 to 10 employees) |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Unknown |
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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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
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Israel |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
israel - ECONOMIC OVERVIEW
Israel has a technologically
advanced market economy. It depends on imports of crude oil, grains, raw
materials, and military equipment. Cut diamonds, high-technology equipment, and
agricultural products (fruits and vegetables) are the leading exports. Israel
usually posts sizable trade deficits, which are covered by tourism and other
service exports, as well as significant foreign investment inflows. The global
financial crisis of 2008-09 spurred a brief recession in Israel, but the
country entered the crisis with solid fundamentals - following years of prudent
fiscal policy and a resilient banking sector. The economy has recovered better
than most advanced, comparably sized economies. In 2010, Israel formally
acceded to the OECD. Natural gasfields discovered off Israel's coast during the
past two years have brightened Israel's energy security outlook. The Leviathan
field was one of the world's largest offshore natural gas finds this past
decade. In mid-2011, public protests arose around income inequality and rising
housing and commodity prices. The government formed committees to address some
of the grievances but has maintained that it will not engage in deficit
spending to satisfy populist demands.
|
Source : CIA |
DIVINE DIAMONDS LTD.
Telephone 972 3 575
04 71
Fax 972
3 575 33 46
Email: davidedel@gmail.com
1 Jabotinsky Street
Diamond Exchange,
Maccabi Bldg.
A private limited company, incorporated as per file No. 51-288732-4 on the
19.01.2000.
Subject is continuing part of Edel family business activity in the diamond
sector, which started in England over 50 years ago (see more below).
Authorized share capital NIS 34,300.00, divided into –
34,300 ordinary shares
of NIS 1.00 each,
of which 100 shares amounting to NIS 100.00 were issued.
1. DENZIL INVESTMENTS, 90%, a
foreign company,
2. David Edel, 5%,
3. Arieh Edel, 5%.
We were not informed on the owner of shareholder No. 1 - DENZIL
INVESTMENTS, though we assume it is owned or controlled by the Edel family.
David Edel
Traders, importers, exporters and marketers of diamonds for the industry.
Operating from owned office premises, on an area of 50 sq. meters, in 1
Jabotinsky Street, Diamond Exchange, Maccabi Bldg. (6th
floor, rooms 55-6), Ramat Gan.
Number of employees not forthcoming (estimated to be between 5 to 10
employees).
Financial data not forthcoming.
There are 3 charges for unlimited amounts registered on the company's
assets (financial assets and fixed assets), in favor of Union Bank of Israel
Ltd. Charges placed in years 2000 and 2004.
Sales figures not forthcoming.
EID LTD., of the U.K., owned by Edel family, providers of industrial
diamond stones, natural and synthetic diamond powders to the trade.
Union Bank of Israel Ltd., Ramat Gan Branch (No. 062), Ramat Gan.
Nothing
unfavorable learnt.
We were unable to
speak with subject's General Manager, David Edel, who told us he is extremely
busy.
In the past, Mr.
Edel, refused to disclose financial details on his company.
EID diamond firm
was established in 1948 by Mr. Lewis Edel in London, England. As an industrial
diamond trader specializing in natural diamonds for industry, he became known
as a leader in his field. His son (and subject's co-owner, director and General
Manager) David Edel, joined the company in 1970 and developed new areas,
introducing synthetic diamond to the EID product list.
An affair of an
underground bank shocked the local diamond branch, after in late January 2012
Police raided the Diamond Exchange (after a long undercover operation),
arrested several individuals for investigation, caught diamonds and various
assets worth NIS millions, and blocked several bank accounts. It is suspected
that a group of people, including diamond dealers, run an illegal bank in the
Diamond Exchange compound for loans, money transfer abroad based on fictitious
transactions and exchange in volume of NIS 1 billion for several years.
The affair has
already led to several of reported bankruptcies of local diamond firms, a
decrease of up to 70% in transactions in 2012, frozen bank accounts, a
paralysis (especially in purchase of raw diamonds) even with fear of the a
collapse of the sector, while dealers –local and foreign- face uncertainty.
In March 2012 the
Police decided to lower the profile of the investigation for a while a result
of the big pressure from the diamond branch (to stop the continuing damage
inflicted) and the Government (who is losing US$ hundred millions from decrease
in tax collection). In November 2012 the Police and Tax Authorities recommended
on indictments against the 25 suspects in the affair, among them diamond
dealers, for the said suspicions and obstruction of the investigation.
Export of polished
diamonds from Israel fell by 23% in 2012 from 2011, after the sector recovered
in 2010 and mainly in 2011 from one of the worst depressions in the global
diamond sector due to the economic crisis in global markets that erupted in 2008.
The sector experienced almost an entire freeze and collapse in sales of about
70% in the peak of the crisis. While the global diamond industry experienced
major declines during 2012, Israel saw a steady improvement in its diamond
trade in the third and fourth quarters of the year, according to the Diamond
Administration at the Ministry of Industry & Trade.
The Administration
reported on a strong first 2 months of 2013 with 45% rise in diamond activity,
although 2013 1stQ shows mixed indicators (see below), but it is due
to technical reasons (high goods return
rate due to a large exhibition).
Israel’s net
polished diamond exports stood at US$5.6 billion in 2012, compared a decline of
23% from 2011. Net rough diamond exports totaled US$2.8 billion in 2012, a 20%
decrease from 2011.
Net imports of
polished diamonds dropped 25% from 2011, totaling US$4.27 billion, while net
rough imports stood at US$3.8 billion, 13 % less than in 2011.
Net polished
diamond exports in 2013 1stQ witnessed 8.3% decrease comparing to
2012 1stQ (reaching US$ 1.601 billion), while export of rough diamonds saw a
2.7% rise (summed at US$ 826 million). Net imports of polished diamonds in the
1stQ 2013 reached US$ 891 million, 10.2% decrease compared with the
parallel period in 2012, whereas import of polished diamonds fell 13% to US$
962 million.
The United States
continued to be Israel’s major market for polished diamonds, accounting for 36%
of the market in 2012 (41% in 1stQ 2013). Hong Kong was the next
largest market with 28% of exports (35% in 1stQ 2013), with Belgium
accounting for 8%, Switzerland 5%, U.K. 5% and the rest of the world 18%.
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local diamond
sector rolled 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.
Local diamond
sector employs some 20,000 persons.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Notwithstanding
the lack of updated data from subject's officials, considered good for trade
engagements.
DIAMOND INDUSTRY –
INDIA
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.54.88 |
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UK Pound |
1 |
Rs.83.54 |
|
Euro |
1 |
Rs.70.90 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NB |
New Business |
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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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.