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Report Date : |
05.04.2014 |
IDENTIFICATION DETAILS
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Name : |
GAFNI DIAMONDS LTD. |
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Registered Office : |
1 Jabotinsky Street, Diamond Exchange, Shimshon Bldg., Ramat Gan
5252001 |
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Country : |
Israel |
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Date of Incorporation : |
11.01.1988 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, Importers, Exporters and Marketers
of Diamonds of Various Sorts. |
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No. of Employees : |
4 |
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 : |
Slow but correct |
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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 – September 30, 2013
|
Country Name |
Previous Rating (30.06.2013) |
Current Rating (30.09.2013) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
|
High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
|
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 since 2011 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 Tamar
field started meeting all of Israel's natural gas demand in 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. In May 2013 the Israeli government, in a politically difficult
process, passed an austerity budget to reign in the deficit and restore
confidence in the government’s fiscal position.
|
Source
: CIA |
GAFNI DIAM
Telephone 972 3 575 97 02
Fax 972 3 613 09
43
1 Jabotinsky Street
Diamond Exchange, Shimshon Bldg.
RAMAT GAN 5252001 ISRAEL
A private limited company, incorporated as per file No. 51-126382-4 on the
11.01.1988.
Originally
registered under the name R & B DIAM
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.
Subject is fully owned by Yuval Gafni (until 2013/4 held 85%, while Gideon
Gafni held 15%).
Yuval Gafni
Traders, importers, exporters and marketers of diamonds of various sorts.
Some 30% of sales are for export.
Among customers are the Tel Aviv Diamond Exchange members.
Diamond purchasing is both from import and from the local market.
Among local suppliers: YORAI BOROCHOV.
Operating from rented office premises, in 1 Jabotinsky Street, Diamond
Exchange, Shimshon Bldg, Ramat Gan (to where subject moved from
54 Bezalel Street, Diamond Exchange, Yahalom Bldg., Ramat Gan).
Having 4 employees.
Financial data not forthcoming.
There are 5 charges for unlimited amounts registered on the company's assets
(financial assets), in favor of Union Bank of Israel Ltd. (last charge placed
April 2012).
Sales figures not forthcoming.
We are informed that subject’s shareholders also hold real estate
companies.
Union Bank of Israel Ltd., Ramat Gan Branch (No. 062), Ramat Gan, account
No. 96529/72.
A
check with the Central Banks' database did not reveal anything detrimental on
subject’s a/m account.
Nothing
unfavorable learnt on subject itself.
In February 2008,
the Tel Aviv Magistrate Court sent Yuval Gafni (subject’s
shareholder and General Manager) and business colleagues Oded Dasao and Ricco
Shirazi on a house arrest for couple of days, in suspicion of violating
Securities Laws of inside trading, with regard to publicly traded company GOLAN
FINE CRAFTS (1977) LTD. (dealing in real estate). Allegedly, Mr. Shirazi, whom
the Police define as heading a criminal organization, received inside
information from Oded Dasao (who control and manage GOLAN) and from Yuval
Gafni.
An indictment was filed in November 2009 (File No. 6775-11-09). In April
2011 the Court convicted Gafni, based on his confession and plea bargain, in
violating securities inside information rules, and in September 2011 Gafni was
sentenced for 6 months community services works and fine of NIS 300,000. Gafni
was forbidden from leaving the country while the said verdict period.
Yuval Gafni is a relatively known figure, also to local football audience,
from the years he used to own a major league football team.
Subject is long
established.
Israel's diamond
industry remarked on impressive growth in almost all trade parameters in 2013,
from the data by Israel's Diamond Administration at the Ministry of Economics:
Net export of polished diamonds rose by 11.6% from 2012, reaching US$ 6.2
billion. The market has been volatile in recent years: the branch –in Israel as
well as globally- experienced its worst depression in the 2nd half
of 2008 and 2009 due to the global economic crisis (almost an entire freeze and
collapse in sales of about 70% in the peak of the crisis), then recovered in
2010 and mainly in and fell again in 2012 (net export fell by 23% in 2012 from
2011).
Net rough diamond
exports totaled US$2.9 billion in 2013, a mere rise from 2012.
Net imports of
polished diamonds remained in similar level as 2012 (after drop by 25% in 2012
from 2011), totaling US$4.3 billion, while net rough diamonds imports summed at
US$ 4 billion, 4% up from 2012 (when it fell 13% from 2011).
The United States
continued to be Israel’s major market for polished diamonds, accounting for 37%
of the market in 2013 (35% in 2013). Hong Kong is the next largest market with 27%
of exports, with Switzerland accounting for 9.3%, Belgium 7.3%, and India
accounting for 2.3% of Israel's polished diamond export.
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
global crisis. The Ministry of Economics also assisted the local diamond
exporters by providing bank guarantees in total scope of NIS 1 billion.
In February 2009,
Israel was ranked as the world’s largest exporter of cut diamonds, followed by
India, Belgium and South Africa.
Local diamond
sector employs some 20,000 persons.
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. The Attorney General is in process of
preparing indictments.
In the end of
December 2013 it was reported that 5 diamond dealers were summoned to a hearing
(not mandatory) regarding the a/m affair, prior to filing an indictment, before
the Tel Aviv District Attorney (Tax and Finance sector).
We figure that the
above mentioned affair related to Mr. Yuval Gafni is now over, subject being a
veteran business, therefore good for trade engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.60.32 |
|
|
1 |
Rs.100.04 |
|
Euro |
1 |
Rs.82.65 |
INFORMATION DETAILS
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Analysis Done by
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SUM |
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Report Prepared
by : |
NIT |
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 |
|
-- |
NB |
New Business |
-- |
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.