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Report Date : |
13.10.2014 |
IDENTIFICATION DETAILS
|
Name : |
NIRU DIAM |
|
|
|
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Registered Office : |
1 Jabotinsky
Street, Diamond Exchange, Maccabi Bldg., Ramat
Gan 5252001 |
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Country : |
Israel |
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Date of Incorporation : |
10.07.1987 |
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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 Employees |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
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
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
Israel |
A2 |
A2 |
|
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 |
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
-
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 –
-
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.61.16 |
|
|
1 |
Rs.98.62 |
|
Euro |
1 |
Rs.77.67 |
INFORMATION DETAILS
|
Analysis Done by
: |
SUB |
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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.