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Report Date : |
19.12.2013 |
IDENTIFICATION DETAILS
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Name : |
YERUSHALMI BROTHERS DIAMONDS LTD. |
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Registered Office : |
21 Tuval Street, Diamond
Exchange, Yahalom Bldg., Ramat Gan 5252236 |
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Country : |
Israel |
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Date of Incorporation : |
1975 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers, traders, polishers, processors and
exporters of diamonds of various kinds. |
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No. of Employees : |
327 |
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 : |
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 – March, 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
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. Its major imports include crude oil, grains, raw materials, and military equipment. Cut diamonds, high-technology equipment, and pharmaceuticals are among 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. Israel's economy also has weathered the Arab Spring because strong trade ties outside the Middle East have insulated the economy from spillover effects. 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, and production from the Tama field is expected to meet all of Israel''s natural gas demand beginning mid-2013. 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 |
YERUSHALMI BROTHERS DIAM
Telephone 972
3 575 01 51
Fax 972 3 575 01 52
Email: info@yerushalmi.com
21 Tuval Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 5252236 ISRAEL
Originally established in 1975 as a
non-registered business.
Converted into a private limited company and
registered as such as per file
No. 51-118058-0 on the 26.02.1987.
Authorized share capital 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.
1. Aharon
Yerushalmi, 34%,
2. Zion
Yerushalmi, 33%,
3. Binyamin
Yerushalmi, 33%.
1. Binyamin
Yerushalmi, General Manager,
2. Aharon
Yerushalmi,
3. Zion
Yerushalmi.
Importers, traders, polishers, processors and
exporters of diamonds of various kinds.
Most sales are for export.
Operating from offices premises, owned by the shareholders,
in 21 Tuval Street (also referred to as 54 Bezalel Street), Diamond Exchange,
Yahalom Building (19th Fl., Room No. 71), Ramat Gan
(subject's offices capture half the floor). Also operating from a plant in
Botswana. In addition having facilities in India and international network of 7
offices in New York, Los Angeles, Hong Kong, Shanghai, Shenzhen, Taiwan and
Singapore.
Subject operates in China under the brand name
"Amorosso".
Having in all 327 employees, of which 27 in
Israel, and the rest serving subject's plant in Botswana.
Financial data not forthcoming, however known to be financially solid.
Subject has been a DCT Sightholder.
There are 3 charges for an unlimited amount
registered on the company’s assets, in favor of the First International Bank of
Israel Ltd. and Bank Leumi Le'Israel Ltd. (charges placed in 2008
and 2011).
2007 sales were US$ 210,000,000 (of which 77% for export – see below).
According to the published by the Israel Supervisor on Diamonds in the
Ministry of Industry and Trade, subject sales for export of polished diamonds
were:
2007 export was US$ 161,000,000.
2008 export was US$ 150,000,000.
2009 export was US$ 136,000,000.
Subject's officials informed us that a/m figures are only of
polished diamonds, and that subject's 2009 turnover is well
much higher than US$ 136,000,000.
Later figures not forthcoming.
YERUSHALMI BROS. BOTSWANA LTD., Botswana, also a
DCT Sightholder.
YERUSHALMI BROS DIAMONDS (HK) LTD., Hong Kong.
YERUSHALMI BROTHERS DIAMONDS USA INC., USA.
The First International Bank of Israel Ltd.,
Avney Hen Branch (No. 126), Ramat Gan.
In February 2005 it was reported that subject's
shareholders were released on bail regarding allegations of tax fraud of NIS
5.6 million. No further details were found on that matter, we believe the
matter was resolved.
Apart from that, nothing unfavorable learnt.
Subject's officials refused to disclose
financial information.
In 2006 subject received a 'Superbrand' status
in China.
In July 2008 it was reported that subject won an
"Excellent Exporter" award from the Ministry of Industry and
Trade.
Subject is considered one of Israel’s 10 leading
diamond companies.
According to the report published by the Israel Supervisor on Diamonds
in the Ministry of Industry and Trade, subject was ranked 4th in the
2009 list of Israel's largest polished diamonds exporters. This marks a higher
ranking than in earlier years, when subject was ranked as follows: 5th
in 2008, 6th in 2007 and 6th in 2006.
In 2010, 2011 and 2012 subject refrained from being reported in the
Israel Supervisor on Diamonds top exporters lists (which is up to the company's
own discretion).
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.
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
Net imports of polished diamonds dropped 25% from 2011, totaling US$4.27
billion, while net rough imports stood at US$3.8 billion, 13 % less than in
2011.
The diamond sector has been keeping a steady trend in the first half of
2013.
Net polished diamond exports in 2013 1st half witnessed a
slight decrease (2%) comparing to 2012 1stH, reaching US$ 3.233 billion, while
export of rough diamonds saw a 8.1% rise. Net imports of rough diamonds in the
1st half of 2013 reached US$ 2.037 billion, 2.8% increase compared
with the parallel period in 2012, whereas import of polished diamonds fell by
5.3% to US$ 2.084 billion.
Expectations in the local diamond sector for 2013 2nd half is
for further recovery.
The United States continued to be Israel’s major market for polished
diamonds, accounting for 44% of the market in 2013 1st half (36% in
2012). Hong Kong is the next largest market with 29.7% of exports (28% in
2012), with Switzerland accounting for 7.8%, Belgium 6.7%, and Thailand with
1.1%.
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.
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, and for a while to paralysis (especially in purchase of raw diamonds)
due to uncertainty among local and foreign dealers.
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.
In June 2013 it was reported that the Police resumed its raids on the
diamonds branch, and although names of suspects were not released, sources say
that it is also related to the above underground bank affair. In parallel, it
is also reported that the Tax Authorities and diamonds dealers' representatives
are trying to reach an arrangement for past debts.
Notwithstanding the refusal to disclose financial data, considered good for
trade engagements and high credits.
Note: Since February 2013 Israel Post has started using a new area code
method of 7 digits (the old method of 5 digits is no longer valid).
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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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 –
-
Gem & Jewellery Export Promotion Council in its statistical data has
shown the export of polished diamonds to have increase by 28 % in February
2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012,
India exported $ 1.84 billion worth of polished diamonds in February 2013. A
senior executive of GJEPC said, “Export of cut and polished diamonds started
falling month-wise after the imposition of 2 % of import duty on the polished
diamonds. But February, 2013 has given a new ray of hope to the industry as the
export of polished diamonds has actually increased by 28 %. It means the
industry is on the track of recovery and round tripping of diamonds has
stopped completely.” Demand has started coming from the US, the UK, Japan and
China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.
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The banking sector has started exercising restraint while following
prudent risk management norms when lending money to gems and jewellery sector.
This follows the implementation of Basel III accord – a global voluntary
regulatory standard on bank capital adequacy, stress testing and market
liquidity.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.92 |
|
|
1 |
Rs.100.83 |
|
Euro |
1 |
Rs.85.27 |
INFORMATION DETAILS
|
Report Prepared
by : |
NNA |
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 |
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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 |
|
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 |
|
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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.