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Report Date : |
05.08.2014 |
IDENTIFICATION DETAILS
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Name : |
NIRU DIAMONDS |
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Formerly Known As : |
NIRU SALES LTD |
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Registered Office : |
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Country : |
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Date of Incorporation : |
1979 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturers, processors, cutters, exporters and marketers of diamonds,
dealing with rough and polished diamonds. Subject specializes in square and
Baguette diamonds. |
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No. of Employees |
45 |
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 1, 2014
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Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
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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. Cut
diamonds, high-technology equipment, and pharmaceuticals are among the leading
exports. Its major imports include crude oil, grains, raw materials, and
military equipment. Israel usually posts sizable trade deficits, which are
covered by tourism and other service exports, as well as significant foreign
investment inflows. Between 2004 and 2011, growth averaged nearly 5% per year,
led by exports. 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. 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. The economy has recovered better
than most advanced, comparably sized economies, but slowing demand domestically
and internationally, and a strong shekel, have reduced forecasts for the next
decade to the 3% level. Natural gas fields discovered off Israel's coast since
2009 have brightened Israel's energy security outlook. The Tamar and Leviathan
fields were some of the world's largest offshore natural gas finds this past
decade. The massive Leviathan field is not due to come online until 2018, but
production from Tamar provided a one percentage point boost to Israel's GDP in
2013 and is expected to contribute 0.5% growth in 2014. In mid-2011, public
protests arose around income inequality and rising housing and commodity
prices. Israel's income inequality and poverty rates are among the highest of
OECD countries and there is a broad perception among the public that a small
number of "tycoons" have a cartel-like grip over the major parts of
the economy. 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. Over the long term, Israel
faces structural issues, including low labor participation rates for its
fastest growing social segments - the ultra-orthodox and Arab-Israeli
communities. Also, Israel's progressive, globally competitive, knowledge-based
technology sector employs only 9% of the workforce, with the rest employed in
manufacturing and services - sectors which face downward wage pressures from
global competition.
|
Source
: CIA |
NIRU DIAM
Telephone 972 3 575 23 52
Fax 972 3 575 23
51
Email: rakesh@nirugroup.com
1 Jabotinsky Street
Diamond Exchange, Maccabi Bldg.
RAMAT GAN 5252001 ISRAEL
A private limited company, incorporated as per file No. 51-121024-7 on
the 10.07.1987, continuing activities originally founded in 1979.
Originally registered under the name NIRU DIAM
Authorized share capital of NIS 2,640.00, divided into:
2,640 ordinary shares of NIS 1.00 each,fully issued.
Subject is fully owned by NEW CENTURY MARKETING LTD., a foreign company
from Hong Kong, owned by Ranjeet Barmecha.
Ranjeet Barmecha
Manufacturers, processors, cutters, exporters and marketers of diamonds,
dealing with rough and polished diamonds. Subject specializes in square and
Baguette diamonds.
Most (some 70% in 2010) sales are for export.
Manufacturing activities are carried out by NIRU Group's foreign
affiliates and via sub-contractors (also in China and Sri-Lanka).
Operating from premises, owned by the shareholders, on an area of 450
sq. meters (premises enlarged from 200 sq. meters in early 2013), in 1
Jabotinsky Street, Diamond Exchange, Maccabi Building (22nd floor),
Ramat Gan. Premises serve also subsidiary BARCODIAM.
Also operating from affiliated companies premises in New York, Hong
Kong, Geneva and Dubai, as well as other branches in other countries.
Having 45 employees (had 39 employees in early 2013, 38 employees in mid
2012, similar to previous years).
Known to be having over 1,500 employees serving NIRU Group worldwide
(including manufacturing).
Financial data not forthcoming, known to be of solid financial standing.
NIRU Group is a Diamond Trading Company (DCT)
Sightholder from DE BEERS for many years.
There are 3 charges for unlimited amounts registered on the company's
assets, in favor of Mizrahi Tefahot Bank Ltd. and SBI State Bank of India
(charges placed 1 in 1991 and 2 in 2009).
Sales for export of polished diamonds:
2007 sales were US$ 65,000,000.
2008 sales were US$ 91,000,000.
2009 sales were US$ 57,000,000.
2010 sales were US$ 68,000,000.
Sales for export comprised some 70% of overall sales in 2010, which
means that total sales were estimated at over to US$ 95,000,000.
2011 sales were US$ 111,000,000. Overall sales in 2011 were estimated at
circa US$ 150,000,000.
2012 sales were US$ 120,000,000.
2013 sales were US$ 112,000,000.
BARCODIAM LTD., 79%, Israel, established in 1998, importers, exporters
and marketers of diamonds.
Other foreign sister companies:
NIRU (NY) LTD., New York,
NIRU (SWISS) SA, Switzerland,
NIRU DIAMONDS (H.K) LTD, Hong Kong,
NIRU DIAMONDS (M.E) LLC, Dubai,
Also: DIAMOND CUTTERS LTD. (Sri Lanka), BLANCHE SA; La4ve LTD., IMPEX
ASSOCIATES; IMPEX DIAMONDS; SIM DIAM PVT. LTD. (India), AMORE JEWELS PVT LTD.,
AZORES TRADE & INVESTMENTS LTD.
S.E.V. SMALL ELECTRIC VEHICLE LTD., 50% owned by Ranjeet Barmacha,
importers and marketers of electrical bicycles.
Mizrahi Tefahot Bank Ltd., Diamond Business Center Branch (No. 466),
Ramat Gan – main account.
SBI State Bank of India, Diamond Exchange Branch (No. 001), Ramat Gan.
Nothing unfavorable learned.
Subject is a veteran business, well-known and among the leading in the
diamond branch.
According to the reports published by the Israel Supervisor on Diamonds
in the Ministry of Economy, subject is ranked 4th in the 2013 list
of Israel's largest polished diamonds exporters, after being ranked 5th
in 2012, 6th in 2011, 10th in 2010, 9th in 2008
and in 2009, after being ranked 16th place in the 2007, 19th
in 2006 and 30th in
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% in
value terms 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 fell again in 2012 (net
export fell 23% in 2012 from 2011).
Net export of polished diamonds continued to grow in the 1st
half of 2014 with 6% rise in value terms compared to 2013 (fell 6.7% in karat
terms), reaching US$3.55 billion.
Net rough diamond exports totaled US$2.9 billion in 2013, a mere rise
from 2012, and totaled US$1.75 billion in the 1stH 2014 (up 6% and 11.6% in
value and in karat terms, respectively).
Net imports of polished diamonds remained in 2013 similar level as 2012
(after drop by 25% in value in 2012 from 2011), totaling US$4.3 billion, and in
the 1stH 2014 reached US$2.05 billion (up 0.9% in value and 5.7% in karat). Net
rough diamonds imports rose 4% in 2013 summing up at US$4 billion, and summed
at US$ 2.2 billion in the 1stH of 2014 (3% rise in value, 10% fall in karat
terms).
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 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 July 2014 3 indictments were filed to the Tel Aviv District Court
against central defendants in the affair, for felonies of money laundering and
tax evasion in volumes of US$ millions.
Good for trade engagements.
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 –
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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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.61.02 |
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UK Pound |
1 |
Rs.102.69 |
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Euro |
1 |
Rs.81.91 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
SDA |
RATING EXPLANATIONS
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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 |
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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 |
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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.