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Report Date : |
14.09.2013 |
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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Year of Establishment : |
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 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 – 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 |
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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. 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.63.78 |
|
UK Pound |
1 |
Rs.100.70 |
|
Euro |
1 |
Rs.84.66 |
INFORMATION DETAILS
|
Report
Prepared by : |
NLM |
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 |
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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 |
|
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 |
|
-- |
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.