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Report Date : |
21.05.2014 |
IDENTIFICATION DETAILS
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Name : |
B.S.M. 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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Date of Incorporation : |
29.07.1998 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Importers, manufacturers, polishers, exporters and marketers of diamonds. |
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No. of Employees |
8 |
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 31, 2014
|
Country Name |
Previous Rating (31.12.2013) |
Current Rating (31.03.2014) |
|
Israel |
A2 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
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 |
B.S.M. DIAMONDS LTD.
Telephone 972
3 613 09 53
Fax 972 3 613 09 52
Email: info@bsmdiamonds.com
21 Tuval Street
Diamond Exchange,
Yahalom Bldg.
RAMAT GAN 5252236 ISRAEL
A private limited company, incorporated as per file No. 51-266423-6 on the
29.07.1998, continuing diamond business activities by Menachemov family which
started over 30 years earlier.
Authorized share capital NIS 28,000.00, divided into –
28,000 ordinary
shares of NIS 1.00 each,
of which 120 shares amounting to NIS 120.00 were issued.
1. Benny Menachemov, 75.8%,
2. Elad Menachemov, 24.2%.
According to the Registrar of Companies, during the past year and a half
Elad Menachemov became a shareholder instead of Ofer Menachemov.
1. Benny Menachemov, General Manager,
2. Hanan Menachemov.
Importers, manufacturers, polishers, exporters and marketers of diamonds.
80% of sales are exports.
Operating from office premises, owned by Benny Menachemov, on an area of
120 sq. meters, in 21 Tuval Street (also referred to as 54 Bezalel Street), Diamond Exchange,
Yahalom Building (1st Floor, Suite #1879), Ramat
Gan.
Having 8 employees (same as in the last previous years).
Property owned by Benny Menachemov in the Diamond Exchange, Yahalom Building Ramat Gan (where subject is
operating from), was valued at
US$ 1 million in 2009 (may be valued even higher to-date).
Other financial data not forthcoming.
There are 2 charges for unlimited amounts registered on the company's
assets, in favor of Union Bank of Israel Ltd. Both charges placed back in 1998.
2005 sales claimed to be US$ 5,000,000.
2006 sales claimed to be US$ 6,000,000.
2007 sales claimed to be US$ 8,000,000, of which 80% were for export.
2008 sales claimed to be US$ 12,500,000, of which 80% were for export.
Later sales data not forthcoming.
SAHARA JEWELRY (2013) LTD.,
DIAM
Menachemov family is also involved in real estate, and owns several
properties.
Union Bank of Israel Ltd., Ramat Gan Branch (No. 062), Ramat Gan.
Nothing unfavorable learnt.
Subject's General Manager refused to disclose financial data.
Menachemov family is a veteran and wealthy diamond dealer.
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).
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.
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.
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).
Notwithstanding
the refusal to disclose financial data, considered good for trade engagements.
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
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.58.74 |
|
|
1 |
Rs.98.77 |
|
Euro |
1 |
Rs.80.52 |
INFORMATION DETAILS
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Analysis Done by
: |
KAR |
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Report Prepared
by : |
PDT |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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|
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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.