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Report Date : |
02.01.2014 |
IDENTIFICATION DETAILS
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Name : |
SHANTI GEMS (1982) LTD. |
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Registered Office : |
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Country : |
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Date of Incorporation : |
01.02.1982 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers, traders, exporters and marketers of diamonds |
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No. of Employees : |
7 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
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Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
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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. 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
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Source : CIA |
SHANTI GEMS (1982)
LTD.
Telephone
972 3 575 71 36
Fax 972 3 752 18 48
52 Bezalel Street
Diamond Exchange,
Noam Bldg.
RAMAT GAN 5252137 ISRAEL
A private limited
company, incorporated as per file No. 51-091532-5 on the 01.02.1982.
Authorized share
capital of NIS 10.00, divided into:
100,000 ordinary shares of
NIS 0.0001 each,
of which 100 shares
amounting to NIS 0.01 were issued.
1. Shanti Dhadha, 95%,
2. Golecha Niraj, 5% (both a/m shareholders are
foreign citizens, of India).
In August 2010 both former shareholders
(Sati Rajchar, 15%, and Emit Chand Butara (5%) exited from subject, and shares
were taken over by Shanti Dhadha.
Note: According to the Registrar of Companies,
shareholder No. 1 name is “Kumar Dhadha”, however we are informed by Mr. Shanti
Dhadha that Mr. Kumar left years ago and the name in the Registrar is mistaken!
1. Shanti Dhadha, General Manager,
2. Golecha Niraj.
Note: Kumar Dhadha is still registered as a Director in subject.
Importers,
traders, exporters and marketers of diamonds.
As of mid 2011, some
50% of sales are for export (was 30%-40% in 2010 and 40% in 2009).
Operating from
rented office premises, on an area of 100 sq. meters, in 52 Bezalel Street
(also referred to as 23 Tuval Street), Diamond Exchange, Noam Building, Ramat
Gan.
Having 7 employees
in mid 2011 (same as in previous years). Current number of employees
unavailable, assumed to be similar.
Financial data not
forthcoming.
There are no
charges registered on the company's assets.
Sales figures not forthcoming.
SHANTI GEMS
INTERNATIONAL INVESTMENTS LTD.
The First
International Bank of Israel Ltd., Diamond Exchange Branch (No. 026), Ramat
Gan.
Nothing
unfavorable learnt (please refer to NOTE below).
So far subject's shareholder and General Manager, Mr. Shanti Dhadha, refused to update any data. He asked us to leave our contact details –
which we did, and he will return to us.
In case they return to us with further data, we will update you accordingly.
Subject is a very
long established business.
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.
On one hand,
subject is a veteran business, and no negative data has been traced during the
years. On the other hand, General Manager so far refused to update information (as
in 2012, but unlike in the previous years). We figure that subject is still
good for trade engagements.
NOTES:
1.
According to the Registrar of Companies subject has
a "Law Violating Company" Status.
As part of the
Registrar efforts in the last period to collect fees and supervision on meeting
all duties by Companies’ law, such status notes have been added to the
registry. Registration as a "Law Violating Company" is done due
certain violation by the subject company for not meeting the Registrar of Companies
regulations promptly, mainly for not paying Registrar fees, and/or not
submitting annual reports on time. The sanctions and penalties against the
company in such case include fines up to NIS 250,000, not allowing the company
to register new charges on its favor, not allow registration a charge on its
assets (which may deprive the company from taking new loans at their banks),
cannot make changes in the Registrar, and more.
It should be noted
that this may not necessarily be connected to the company's business activities
and financial standing (although in many cases there is a connection, we do
not know how it is in subject's case; It is also possible that there is a
technical or administrative problem, as such things also happen).
2. 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).
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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.61.93 |
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1 |
Rs.102.39 |
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Euro |
1 |
Rs.85.12 |
INFORMATION DETAILS
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Report Prepared
by : |
NIS |
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.