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Report Date : |
14.02.2013 |
IDENTIFICATION DETAILS
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Name : |
SHANTI GEMS (1982) LTD. |
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Registered Office : |
52 Bezalel Street, Diamond Exchange, Noam Bldg., Ramat Gan 5252137 |
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Country : |
Israel |
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Date of Incorporation : |
01.02.1982 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers,
traders, exporters and marketers of diamonds |
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No. of Employees : |
07 employees |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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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 – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2011) |
Current Rating (30.06.2012) |
|
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
SHANTI GEMS (1982) LTD.
Telephone 972 3 575 71 36
Fax 972
3 752 18 48
52 Bezalel Street
Diamond Exchange, Noam Bldg.
RAMAT GAN 5252137 ISRAEL
A private limited
company, incorporated as per file No. 51-091532-5 on the 01.02.1982.
Authorized share
capital of NIS 10.00, divided into:
100,000 ordinary shares of
NIS 0.0001 each,
of which 100
shares amounting to NIS 0.01 were issued.
1. Shanti Dhadha, 95%,
2. Golecha Niraj, 5% (both a/m shareholders are
foreign citizens, of India).
In August 2010 both former shareholders
(Sati Rajchar, 15%, and Emit Chand Butara (5%) exited from subject, and shares
were taken over by Shanti Dhadha.
Note: According to the Registrar of Companies,
shareholder No. 1 name is “Kumar Dhadha”, however we are informed by Mr. Shanti
Dhadha that Mr. Kumar left years ago and the name in the Registrar is mistaken!
1. Shanti Dhadha, General Manager,
2. Golecha Niraj.
Note: Kumar Dhadha is still registered as a Director in subject.
Importers,
traders, exporters and marketers of diamonds.
As of mid 2011,
some 50% of sales are for export (was 30%-40% in 2010 and 40% in 2009).
Operating from
rented office premises, on an area of 100 sq. meters, in 52 Bezalel Street
(also referred to as 23 Tuval Street), Diamond Exchange, Noam Building, Ramat
Gan.
Having 7 employees
in mid 2011 (same as in previous years). We assume that number of employees is
similar.
Financial data not
forthcoming.
There are no
charges registered on the company's assets.
Sales figures not
forthcoming.
SHANTI GEMS
INTERNATIONAL INVESTMENTS LTD.
The First International
Bank of Israel Ltd., Diamond Exchange Branch (No. 026), Ramat Gan.
Nothing
unfavorable learnt.
So far subject's shareholder and General Manager, Mr. Shanti Dhadha, refused to update any data. He asked us to leave our contact details –
which we did..
In case they return to us with further data, we will update you
accordingly.
Subject is a very
long established business.
An affair of an
underground bank has been shocking the local diamond branch in these days,
after in late January 2012 Police raided the Diamond Exchange (after a long
undercover operation, in cooperation with the Exchange officials), arrested
several individuals for investigation and blocked several bank accounts (which
led to a chain reaction of not respecting checks of dealers).
The Police suspect
that a group of people, including diamond dealers, run an illegal bank in the
Diamond Exchange compound for loans, money transfer abroad 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, frozen bank accounts, a paralysis (especially in purchase of raw
diamonds) with substantial fear of the a collapse of the sector, while dealers
–local and foreign- face uncertainty.
In early March
2012 the Police announced it suspends the investigation of further suspects for
the time being. This move is 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).
The Supervisor of
Diamonds at the Ministry of Industry, Trade & Labor published the diamond's
sector import-export data for the 1st half of 2012, which reveals a
19% fall in net sale of cut diamonds, and a fear of another deep crisis in the
branch. The sector recovered in 2010 and mainly in 2011 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 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%.
In 2011 the local diamond
sector recorded US$ 7,202 million in net sales of cut diamonds, 23.5% higher
than in 2010. This was thanks to the strong first 2 thirds of 2011, which were
stalled in the last third, reflecting the fragile global economy and fear of
another recession wave in USA and Europe. It should be noted that in karat
terms, net export of cut diamonds rose only by 4% from 2010.
Net export of
rough diamonds in 2011 also climbed almost 15%, reaching US$ 3,515 million
(fell almost 29% in karat terms).
Net import of cut
diamonds in 2011 summed up to US$ 5,682 million, representing 34.7% increase
comparing to 2010 (18% rise in karat terms), while net import of rough diamonds
rose by 17.5% from 2010, totaling US$ 4,413 million (11% fall in karat terms).
In the 1st
half of 2012, export (net) of cut diamonds was US$ 3,264 million, down 18.9%
from the 1st half of 2011, and rough diamonds export (net) reached
US$ 1,516 million, a 33% decrease. Import of rough diamonds (net) in the 1st
half of 2012 were down 19.3% to US$ 1,993 million compared with the parallel
period in 2011, while import of polished diamonds (net) saw 21.7% fall
reaching US$ 2,201 million.
In terms of target
export (polished diamonds) countries, in 2011 the USA continued to be the main
destination, with 47% of total export (39% in 2011). This comes after in early
2010, for the first time Far East markets became Israel’s diamond industry’s
main target (traditionally sales to the USA comprised some 60%-65% of total
export). Hong Kong is the 2nd largest target country, comprising 29%
of sales in 2011 (26% in 2010). Other main target countries included Belgium
(7%), Switzerland (6%), UK (2%) and the rest of the World (9%).
According to the
President of the Israeli Diamonds Association, in 2010 the trade in the local
diamond 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.
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.
On one hand,
subject is a veteran business, and no negative data has been traced during the
years. On the other hand, General Manager was reluctant to cooperate this time
(unlike in the previous years), and it may be related also to the slow-down in
the local diamond branch. We figure that despite that, subject is still 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
|
Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.53.85 |
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UK Pound |
1 |
Rs.84.42 |
|
Euro |
1 |
Rs.72.40 |
INFORMATION DETAILS
|
Report Prepared
by : |
PRL |
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 |
|
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.