MIRA INFORM REPORT

Report Date :

31.12.2014

IDENTIFICATION DETAILS

Name :	BIRENBAUM RAMI

Registered Office :	1 Jabotinsky Street, Diamond Exchange, Maccabi Bldg. Ramat Gan 5252001

Country :	Israel

Date of Incorporation :	2001

Legal Form :	Sole proprietorship

Line of Business :	Importers, exporters and marketers of diamonds (polished).

No. of Employee :	4

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate

Payment Behaviour :	Unknown

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, 2014

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

Israel

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. 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

Company name & address

BIRENBAUM RAMI

Telephone 972 54 397 57 07

Fax 972 3 575 23 38

1 Jabotinsky Street

Diamond Exchange, Maccabi Bldg.

RAMAT GAN 5252001 ISRAEL

HISTORY & LEGAL FORMATION

A sole proprietorship, established in 2001.

Operating under Licensed Dealer No. 054522669.

The business is registered with the Tax Authorities’ Files under the name of "BIRENBAUM RAM".

OWNERSHIP

Rami Birenbaum.

GENERAL MANAGER

Rami Birenbaum.

BUSINESS

Importers, exporters and marketers of diamonds (polished).

Operating from premises in Diamond Exchange, Maccabi Bldg. (21^st Floor, Room No. 51), Ramat Gan.

According to our having 4 employees.

MEANS

Financial data not forthcoming.

REVENUES

Sales figures not forthcoming.

BANKERS

Bank data not forthcoming.

CHARACTER AND REPUTATION

Nothing unfavorable learned.

So far subject's owner and General Manager refused to disclose any data. He asked us to send him a fax with our request – which we did – and he will consider our request.

In case he returns to us with further data, we will update you accordingly.

Rami Birenbaum is a member of the Diamond Exchange Audit Committee.

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 2^nd 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 1^st 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 said 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.

In July 2014 3 indictments were filed to the Tel Aviv District Court against central defendants in the affair, who provided foreign currency services to the "underground bank" (not against diamond dealers at this stage), for felonies of money laundering and tax evasion in volumes of US$ millions.

SUMMARY

Considering the lack of data from subject's owner, for the time being dealings are recommended on secured basis.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.74
UK Pound	1	Rs.98.87
Euro	1	Rs.77.32

INFORMATION DETAILS

Analysis Done by :	SUB

Report Prepared by :	DPT

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%)

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