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Report Date : |
21.10.2014 |
IDENTIFICATION DETAILS
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Name : |
NOVEL COLLECTION LTD. |
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Formerly Known As : |
BIRAM DIAMONDS LTD. |
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Registered Office : |
54 Bezalel Street, Diamond Exchange, Yahalom Bldg., Ramat Gan, 5252138 |
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Country : |
Israel |
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Date of Incorporation : |
08.12.1992 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, processors, importers, exporters and marketers of natural
fancy color diamonds. |
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No of Employees : |
15 |
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 – June 1, 2014
|
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 |
NOVEL COLLECTION
LTD.
Telephone 972 3 575 77 60
Fax 972 3 751 73 03
Email: il@novel-collection.com
54 Bezalel Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 5252138 ISRAEL
A private limited company, incorporated as per file No. 51-174512-7 on
the 08.12.1992, continuing also Mashiah Family diamonds business activities
founded in 1972 (via ICAM JEMS CO., by Albert Mashiah).
Originally registered under the name RAMDIAR LTD., which its name to
BIRAM DIAMONDS LTD. on the 28.10.1996, which changed to present name on the
13.01.2005.
Authorized share capital of NIS 20,800.00 divided into:-
20,800 ordinary shares of NIS 1.00 each, of which 180 shares amounting
to NIS 180.00 were issued.
Eyal Mashiah, 27.77%,
RAM - CRESCENT TRADING (1995) LTD., 27.77%,
Ishay Oved, 16.66%,
Oz Mashiah, 15%,
Ms. Ifat Oved (nee Mashiah), 12.77%.
Eyal Mashiah, General Manager, Chairman of NOVEL COLLECTION Group,
Avraham Mashiah,
Ishay Oved.
Traders, processors, importers, exporters and marketers of natural fancy
color diamonds.
The Group purchases rough stones for production. Manufacturing is
carried out in Group's facilities in Israel and overseas.
Some 60% of sales are for export
Among local suppliers: NOGA DIAMONDS.
Operating from rented premises (large place, comprised of several offices),
in 54 Bezalel Street (also referred to as 21 Tuval Street), Diamond Exchange (1st
Floor, Suit 161), Yahalom Building (also referred to as Diamond Tower), Ramat
Gan. Also operating from Group's branches in Antwerp/ Belgium, Shanghai and
Shenzhen/China, Hong Kong, Bangkok/ Thailand, L.A. and N.Y./ USA.
Having 15 employees.
Financial data not forthcoming.
There are 2 charges for unlimited amounts registered on the company's assets
(all assets), in favor of Israel Discount Bank of Ltd. Charges placed in 1997
and in January 2014.
2012 sales claimed to be US$ 51,200,000, of which 60% were for export.
2013 sales claimed to be US$ 47,800,000, of which 60% were for export.
We are informed that 2014 sales are in the pace of US$ 50,000,000 per
year (60% for export).
Also in NOVEL COLLECTION Group:
NOVEL COLLECTION HOLDINGS LTD., Israel, incorporated in 2006, owned by
Mashiah Family, controlled by Eyal Mashiah.
RAMGEM LTD., Israel, incorporated in 1987, engaged in diamonds trade,
RAMJEWELRY MASHIAH LTD., Israel,
NOVEL COLLECTION BVBA, Belgium,
NOVEL COLLECTION INC., USA,
NOVEL COLLECTION LTD., Hong Kong,
NOVEL COLLECTION CO. LTD., Thailand,
NOVEL COLLECTION (SHANGHAI) LTD, China,
NOVEL COLLECTION (SHENZHEN) LTD., China.
Eyal Mashiah and Mashiah family has holdings in other companies,
commercial, investments, holdings and real estate companies, including:
RAM MASHIAH REAL ESTATE LTD.
MASHIAH INVESTMENTS LTD., investments company,
RAM (AL-NA) INVESTMENTS LTD.
Israel Discount Bank of Ltd., Diamond Exchange Branch (No. 080), Ramat
Gan.
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 January 2014, the Tax Authority reported that Eyal Mashiah, subject's
shareholder, director & General Manager, and his brother Oz Mashiah , were
arrested and questioned for being among the main customers of that
"underground bank" and are suspected in omitting revenues of at least
US$ 2.4 million against fictitious invoices. The two were released by Court
under restrictions.
The Police and Tax Authorities recommended on indictments against other
suspects in the affair, among them diamond dealers, for the said suspicions and
obstruction of the investigation.
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.
Apart from the above, nothing unfavorable learned.
Mashiah Family is one of the founders of the Israeli precious stone and
diamond industry and has been operating for four generations. The business was
established by Mr. Albert Mashiah, the father of subject's shareholders and
directors, a respectful and known diamond dealer in the local diamond industry
and one of Israel Diamond Industry Dignitaries.
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.
On one hand, subject and Mashiah family are veteran and well-known in
the diamond industry, therefore considered good for trade engagements. However,
in view of the above affair, which is still fresh and developing, we are unable
to access its impact on subject, therefore at this stage we prefer to remain
cautious and dealings on secured basis advised.
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
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Indian Rupees |
|
US Dollar |
1 |
Rs.61.29 |
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|
1 |
Rs.98.62 |
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Euro |
1 |
Rs.78.15 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
SMN |
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.