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Report No. : |
337194 |
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Report Date : |
18.08.2015 |
IDENTIFICATION DETAILS
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Name : |
YERUSHALMI BROTHERS DIAM |
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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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Year of Establishment : |
1975 |
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Legal Form : |
Private limited company |
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Line of Business : |
Importers, traders, polishers, processors
and exporters of diamonds of various kinds |
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No. of Employees : |
327 (2013) |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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, 2015
|
Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
|
Israel |
B1 |
B1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
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.
|
Source
: CIA |
YERUSHALMI
BROTHERS DIAM
21 Tuval
Street
Diamond Exchange, Yahalom Bldg.
RAMAT GAN 5252236 ISRAEL
Telephone972
3 575 01 51
Fax 972 3 575 01 52
Email: info@yerushalmi.com
Originally
established in 1975 as a non-registered business.
Converted
into a private limited company and registered as such as per file
No.
51-118058-0 on the 26.02.1987.
Authorized
share capital NIS 2,640.00, divided into -
2,640
ordinary shares of NIS 1.00 each,
of
which 100 shares amounting to NIS 100.00 were issued.
1. Aharon Yerushalmi, 34%,
2. Zion Yerushalmi, 33%,
3. Binyamin Yerushalmi, 33%.
1. Binyamin (Beni) Yerushalmi, General Manager,
2. Aharon Yerushalmi,
3. Zion Yerushalmi.
Importers,
traders, polishers, processors and exporters of diamonds of various kinds.
Most
sales are for export.
Operating
from offices premises, owned by the shareholders, in 21 Tuval Street (also
referred to as 54 Bezalel Street), Diamond Exchange, Yahalom Building (19th Fl., Room Nos. 73-74), Ramat Gan
(subject's offices capture half the floor). Also operating from a plant in
Botswana. In addition having facilities in India and international network of 7
offices in New York, Los Angeles, Hong Kong, Shanghai, Shenzhen, Taiwan and
Singapore.
Subject
operates in China under the brand name "Amorosso".
Had in
all 327 employees, of which 27 in Israel, and the rest serving subject's plant
in Botswana, as of mid 2013. Current employee number not forthcoming, according
to our searches, having 291 employees (we figure the number of employees in Israel
is similar to 2013).
Financial data not forthcoming,
however known to be financially solid.
Subject
is a DE BEERS' DCT Sightholder.
There is
1 charge for an unlimited amount registered on the company’s assets (fixed
assets), in favor of the First International Bank of Israel Ltd. (charges
placed January 2011).
2007 sales were US$ 210,000,000 (of which 77% for export –
see below).
According to the published by the Israel Supervisor on
Diamonds in the Ministry of Industry and Trade, subject sales for export of
polished diamonds were:
2007 export was US$ 161,000,000.
2008 export was US$ 150,000,000.
2009 export was US$ 136,000,000.
Subject's officials informed us
that a/m figures are only of polished diamonds, and that subject's 2009 turnover is well much higher than US$
136,000,000.
Later figures not forthcoming.
YERUSHALMI
BROS. BOTSWANA LTD., Botswana.
YERUSHALMI
BROS DIAMONDS (HK) LTD., Hong Kong.
YERUSHALMI
BROTHERS DIAMONDS USA INC., USA.
The First
International Bank of Israel Ltd., Avney Hen Branch (No. 126), Ramat Gan.
In February 2005 it was reported
that subject's shareholders were released on bail regarding allegations of tax
fraud of NIS 5.6 million. No further details were found on that matter,
we believe the matter was resolved (usually in compromise/ ransom payment).
Apart from that, nothing unfavorable
learnt (including not in any current affair).
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We left messages which so far remain
unanswered.
In 2006 subject received a
'Superbrand' status in China.
In July 2008 it was reported that
subject won the "Excellent Exporter" award fpr year 2007 from the
Israeli Ministry of Industry & Trade.
Subject is considered one of
Israel’s 10 leading diamond companies.
According
to the report published by the Israel Supervisor on Diamonds in the Ministry of
Industry and Trade, subject was ranked 4th in the 2009 list of Israel's
largest polished diamonds exporters. This marks a higher ranking than in
earlier years, when subject was ranked as follows: 5th in 2008, 6th
in 2007 and 6th in 2006. Since 2010, subject refrained from being
reported in the Israel Supervisor on Diamonds top exporters lists (which is up
to the company's own discretion).
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.
The
data published for the first quarter of 2015 (compared to the parallel period
in 2014) points on a negative reverse trend in all parameters: Net export of
polished diamonds plunged by close to 30% from the 1stQ 2014,
reaching US$1,610 million, and net rough diamond exports decreased by 23%,
totaled US$ 694 million. Net imports of polished diamonds fell by 12%, reaching
US$ 904 million, while net import of rough diamonds fell 18% totaling US$ 827
million.
The
United States continued to be Israel’s major market for polished diamonds, accounting
for 39% of the market in the 1stQ 2015 (31% in 2014). Hong Kong is 2nd
largest market with 33% of exports (30% in 2014), then Switzerland 13%, Belgium
7%, and U.K. accounting for 2% 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 lack of updated data from subject's officials, considered good for trade
engagements and high credits.
1. P.O. Box 315 is subject's internal
postal box in Yahalom Bldg.
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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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.65.22 |
|
UK Pound |
1 |
Rs.102.23 |
|
Euro |
1 |
Rs.72.39 |
INFORMATION DETAILS
|
Analysis Done by
: |
KAR |
|
|
|
|
Report Prepared
by : |
TRU |
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 |
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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 |
|
|
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 |
-- |
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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.