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Report No. : |
317054 |
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Report Date : |
18.04.2015 |
IDENTIFICATION DETAILS
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Name : |
K.G.K DIAMOND ISRAEL LTD. |
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Formerly Known As : |
KOTHARI DIAMONDS LTD., |
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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 : |
27.08.1993 |
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Legal Form : |
Private Limited Company |
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LINE OF BUSINESS : |
PROCESSORS, IMPORTERS, EXPORTERS AND MARKETERS OF DIAMONDS OF
VARIOUS TYPES AND SIZES. |
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No. of Employees : |
Number of employees not forthcoming. Having some 7,000 employees serving KGK
Group. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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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 – December 31, 2014
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Country Name |
Previous Rating (30.09.2014) |
Current Rating (31.12.2014) |
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Israel |
B1 |
B1 |
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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 2013, 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. Israel's economy
also has weathered the Arab Spring because strong trade ties outside the Middle
East have insulated the economy from spillover effects. Slowing demand
domestically and internationally and reduced investment due to uncertainties
caused by the Gaza conflict in summer 2014 have reduced GDP growth to about 2%
during 2014. 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 expected to come online no sooner than 2017, but
production from Tamar provided a one percentage point boost to Israel's GDP in
2013 and a 0.5% boost 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 and has started splitting up the oligopolies to address some of the
grievances but has maintained that it will not engage in deficit spending to
satisfy populist demands. 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.
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Source
: CIA |
K.G.K DIAMOND ISRAEL LTD.
Telephone 972 3 605 61 20
Fax 972 3 632 58
37
Email: enquiry.israel@kgkmail.com
1 Jabotinsky Street
Diamond Exchange, Maccabi Bldg.
RAMAT
GAN 5252001 ISRAEL
A private limited company, incorporated as
per file No. 51-184761-8 on the 27.08.1993.
Subject is part of the KGK Group, founded in
1905 in India.
Originally registered under the name KOTHARI
DIAMONDS LTD., which changed to K.G.K DIAMONDS LTD. on the 05.12.2005, which
changed to the present name on the 26.01.2006.
Authorized share capital NIS 17,000.00,
divided into -
17,000 ordinary shares of NIS 1.00 each, of
which 166 shares amounting to NIS 166.00 were issued.
1. ORIENTAL
VISION LTD., 51.2%, of Hong Kong,
2. Navrattan
Kothari, 33.7%, of India,
3. Aron
Gagawatt, 15.1%, of India (name nay be spelt differently).
1. Navrattan
Kothari,
2. Kashitij
Kumar Jain (name nay be spelt differently).
Name not forthcoming:
According to publications, Benjamin Porat
serves as subject's contact person.
Subject is part of the KGK Group.
Processors, importers, exporters and marketers
of diamonds of various types and sizes.
Operating from office premises in 1
Jabotinsky Street, Diamond Exchange, Maccabi Bldg. (rooms 942-943), Ramat Gan.
KGK Group operates from 22 offices and 8
plants in 15 countries.
Number of employees not forthcoming.
Having some 7,000 employees serving KGK
Group.
Financial data not forthcoming, though
enjoys the solid backing of the KGK Group, a DE BEERS (DCT) Sightholder.
There is 1 charge for an unlimited amount registered on the company's
assets (all assets), in favor of Israel Discount Bank Ltd. (charge placed
February 2014).
Sales figures not forthcoming.
KGK Group consists of many companies, among
them:
KGK DIAMONDS (I) PRIVATE LIMITED, India; KGK
CREATIONS PVT. LTD.-India; KGK GEMS PVT. LTD.-India; KGK CREATIONS (INDIA)PVT.
LTD.-India; KGK DIAMONDS (HK) LTD.-Hong Kong; KGK JEWELLERY (HK) LTD.-Hong
Kong; KGK JEWELLERY MFG., LTD.-Hong Kong; KGK DIAMONDS TAIWAN LTD.-Taiwan; KGK
DIAMONDS (SHANGHAI) LTD. –China; KGK CREATION (GUANGZHOU) LTD.-China; KGK
ENTICE JEWELLERY (SHENZHEN) LTD.-China; KGK DIAMONDS BVBA- Belgium; KGK
DIAMONDS CO. LTD.-Thailand; KGK DIAMONDS (FAR EAST) INC.-Japan; KGK JEWELLERY
INC.-Japan; S. D. DIAMONDS LLC-Russia; KGK KRISTALL JEWELS LLC-Russia; DDK
LLC-Russia; KGK STAR ROUGH (PTY) LTD.-South Africa; KGK DIAMONDS (PTY)
LTD.-South Africa; KGK DIAMONDS & JEWELLERY LLC-UAE; KGK DIAMONDS &
JEWELLERY DMCC-UAE; KGK DIAMONDS LLC-USA; KGK JEWELRY LLC-USA; KGK DIAMONDS
INC-USA; GR PRECIOUS COLOR INC.-USA; MARTIN FLYER JEWELRY LLC-USA.
Israel Discount Bank Ltd., Diamond Exchange
Branch (No. 080), Ramat Gan, account No. 565516.
A check with the Central Banks' database did not reveal any negative
information regarding subject's a/m account.
Nothing unfavorable learned.
Subjects' official, Mr. Benny (we assume its
Benjamin Porat, as he did not wish to identify), refused categorically to
disclose any details (was only willing to confirm address).
KGK Group is very long established and is a
De Beers Sightholder (via KGK DIAMONDS (I) PRIVATE LIMITED).
Israel's diamond
industry continued the growth trend in all trade parameters in 2014, after the
impressive growth in 2013 in most parameters, based on the data by Israel's
Diamond Administration (IDA) at the Ministry of Economics: Net export of
polished diamonds rose by 0.6% from 2013, reaching US$6.269 billion (after
rising 11.6% in 2013), and net rough diamond exports totaled US$3.061 billion
in 2014, up 4.2% from 2013 (after a mere rise in 2013). The market has been
volatile over the last years after experiencing its worst depression due to the
global economic crisis, then recovered in 2010 but fell again in 2012. The
recovery in 2013 and 2014 is positive news for the local branch (still away
from its peak on the eve of the crisis with export of polished diamonds of US$
7 billion), however it is reported that profit margins have been decreasing due
to smaller gaps between rough and polished diamond prices (leading the diamond
dealers to search for new rough sources in hope to decrease costs). Overall,
IDA reports that 2014 was tough year for the diamond industry in Israel and
globally.
Net imports of
polished diamonds in 2014 totaled US$4.514 billion, and net import of rough
diamonds totaled US$ 4.022 billion, marking 4.8% and 0.8% increase from 2013,
respectively (in 2013 import was in similar levels to 2012).
The United States
continued to be Israel’s major market for polished diamonds, accounting for 30.8%
of the market in 2014 (37% in 2013). Hong Kong is the next largest market with
29.7% of exports (27% in 2013), with Belgium 8.5%, Switzerland 6.5%, and U.K.
accounting for 3.7% 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 stood on US$ 1.5 billion, down from US$ 2.4 billion in the eve of the
global crisis.
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.
Notwithstanding the refusal to disclose
details, being part of the KGK Group, considered 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).
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.62.35 |
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1 |
Rs.93.10 |
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Euro |
1 |
Rs.67.13 |
INFORMATION DETAILS
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Analysis Done by
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RAS |
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Report Prepared
by : |
NIT |
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.