MIRA INFORM REPORT

 

 

 

Report Date :

02.01.2012

 

IDENTIFICATION DETAILS

 

Name :

INFINITY GEMS LTD.

 

 

Registered Office :

1 Jabotinsky Street Diamond Exchange, Maccabi Building Ramat Gan 5252

 

 

Country :

Israel

 

 

Date of Incorporation :

29.01.2007

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Importers, exporters and traders of diamonds.

 

 

No. of Employee:

8

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No Complaints

 

 

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

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

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

 

Name and address

 

INFINITY GEMS LTD.

Telephone  972 3 575 00 99

Fax           972 3 575 53 67

1 Jabotinsky Street

Diamond Exchange, Maccabi Building

RAMAT GAN 52520 ISRAEL

 

 

HISTORY & LEGAL FORMATION

 

A private limited company, incorporated as per file No. 51-393301-0 on the 29.1.2007.

 

Subject was established in view of continuing most of the activities of ARJAV INTERNATIONAL LIMITED, a local private limited company established in October 1988, after the exit of one of ARJAV shareholders (ARJAV INTERNATIONAL LIMITED is currently voluntarily liquidated)

 

 

SHARE CAPITAL

 

Authorized share capital of NIS 20,000.00 divided into:

                   20,000 ordinary shares of NIS 1.00 each,

of which 1,000 shares amounting to NIS 1,000.00 were issued.

 

 

SHAREHOLDERS

 

1.    Mukesh Parikh Suryakant, 80%,

2.    Hitesh Patel Lalubai, 20%.

 

 

SOLE DIRECTOR AND GENERAL MANAGER

 

Mukesh Parikh Suryakant.

 

 

BUSINESS

 

Importers, exporters and traders of diamonds.

 

Operating from office premises, owned by the shareholders,on an area of 25 sq. meters, in 1 Jabotinsky Street, Diamond Exchange, Maccabi Building (20th Floor, Room 2044), Ramat Gan.

 

Having 8 employees (had 5 employees in 2007).

 

 

MEANS

 

Financial data not forthcoming.

 

There are 3 charges for unlimited amounts registered on the company's assets (financial and fixed assets), in favor of Union Bank of Israel Ltd. and Israel Discount Bank Ltd.

 

 

ANNUAL SALES

 

Sales 2007 started in March 2007.

Sales figures not forthcoming.

 

 

BANKERS

 

Israel Discount Bank Ltd., Diamond Exchange Branch (No. 080), Ramat Gan.

Union Bank of Israel Ltd., Ramat Gan Branch (No. 062), Ramat Gan.

 

 

CHARACTER AND REPUTATION

 

Nothing unfavorable learned.

 

Subject is continuing activities of a veteran company.

 

Local diamond companies have been facing a deep depression in business due to the severe economic crisis in global markets that erupted in September 2008. Israeli diamond dealers have been especially hit from the sharp fall in orders from the U.S., which has been the No. 1 export market and suffered the biggest hit. In order to face the situation many companies have increased their marketing to Far Eastern markets. 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, though still far from the rates of the recent years, while in some markets, such as the American, it is estimated that it will take long time till fully recovering. December 2009 (holidays period in USA and Europe) was considered good (80% - 90% rise comparing to December 2008) and further improvement witnessed during the first couple of months of 2010.

 

Import of rough diamonds (net) in 2010 first quarter grew by 234% to US$ 917 million, compared with the parallel period in 2009, while import of cut diamonds (net) saw a 105% rise reaching US$ 835 million.

 

Export of cut diamonds (net) in 2010 first quarter increased by 55% to US$ 1,451 million, and export of rough diamonds (net) reached US$ 832 million, representing 164% rise compared to the parallel period in 2009. Yet, in comparison to 2008 first quarter, export of cut diamonds in 2010 is 27% lower.

 

Overall in 2009, export diamonds shrank by 40%. Export of cut diamonds (net) were US$ 3,922.6 million, representing 37% decrease compared to the parallel period in 2008, while export of rough diamonds (net) fell by 43% to US$ 1,891.5 million compared with 2008.

Import of rough diamonds (net) went down by 42.5% to US$ 2,508 million, compared with 2008, and import of cut diamonds (net) witnessed a 44% fall reaching US$ 2,497.4 million.

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.

 

The USA is still the main market for Israel’s export of cut diamonds, although its portion decreased significantly in view of the economic situation – some 47% of total the export from Israel in 2010, comparing to 60%-65% in past years. Secondary markets are Hong Kong (27%), Switzerland (8%) and Belgium (7%).

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

 

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.54.83

UK Pound

1

Rs.89.22

Euro

1

Rs.72.48

 

INFORMATION DETAILS

 

Report Prepared by :

PRL

 

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%)

 

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.