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Report No. : |
302587 |
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Report Date : |
10.01.2015 |
IDENTIFICATION DETAILS
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Name : |
M.A. ANAVI 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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Date of Establishment : |
1984 |
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Legal Form : |
Partnership |
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Line of Business : |
Processors,
importers, traders, exporters and marketers of rough and polished diamonds. |
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No. of Employees : |
18-20 Employees |
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 – June 1, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
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 |
M.A. ANAVI DIAM
Telephone972 3 613
12 77
Fax 972
3 613 12 76
Email: mail@anavi.com
21 Tuval Street
Diamond Exchange,
Yahalom Bldg.
RAMAT GAN,
5252236, ISRAEL
Originally established
as a sole proprietorship by Abraham (Avi) Anavi in 1984, under the name AVI
ANAVI DIAM
Converted into a
general partnership and registered as such as per file No. 54-021659-5 on the
29.06.2004.
1. Meir Anavi, 50%,
2. Abraham (Avi) Anavi, 50%, son of Meir.
1. Abraham (Avi) Anavi,
2. Meir Anavi.
Processors,
importers, traders, exporters and marketers of rough and polished diamonds.
Polishing is
carried out via subcontractors.
Some 15% of sales
are for export.
Operating from
office premises, owned by the partners, on an area of 250 sq. meters, in 21
Tuval Street (also referred to as 54 Bezalel Street), Diamond Exchange, Yahalom
Building (29th floor, Room #92), Ramat Gan.
Also operating
from office branches in USA (New York), Belgium, India and South Africa.
Having 18 - 20
employees.
Current stock of
diamonds was valued at US$
Other and later financial
data not forthcoming, though known to be financially strong.
Subject’s partners
own both the offices where subject is operating from in Yahalom Building, as
well as further 100 sq. meters in the Maccabi Building (leased to 3rd
parties). Those properties are highly valued (several US$ millions).
2013 sales claimed
to be US$ 400,000,000, 15% of which were for export.
ANAVI JEWELRY
LTD., inactive.
The First International
Bank of Israel Ltd., Diamond Exchange Branch (No. 026), Ramat Gan.
Mizrahi Tefahot Bank Ltd., Diamond Business Branch (No. 026), 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 2012,
the Tax Authority reported that Meir and Abraham Anavi, owners and managers of
subject, are among the 4 suspects in this affair, of omitting revenues of tens
of US$ million, via the underground bank. The two were arrested for
interrogation and were released a day later, under restrictions.
Meir and Abraham Anavi are suspected in not
reporting on income in volumes of US$ 7.2 million between the years 2009-2011,
by using the services of the said underground bank. They were released to their
homes, after depositing bails and restricting them from leaving the country.
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 the end of
December 2013 it was reported that Meir Anavi (together with other 4 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), in suspicion of severe felonies of violation of the Income Tax
Directive of receiving and issuing fictitious invoices in millions of dollars.
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.
This is a long
established family business, which started as a non-registered business by Avi
Anavi and converted into a registered partnership following the entrance of
Meir Anavi.
Meir Anavi served
as a member in the Israel Diamond Exchange (ISDE) Control Committee.
In 2007 list of
Israel's largest polished diamonds exporters, published by the Israel
Supervisor on Diamonds in the Ministry of Industry and Trade, subject was
ranked 28th largest diamond exporter with exports of US$ 30 million.
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.
Notwithstanding
a/m affair, we figure that subject is financially strong, therefore good for
trade engagements.
(Note: if
indicted, and at this stage we do not know if and when an indictment would be
filed against Meir Anavi, he may face prison and large fines).
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
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Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.62.39 |
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|
1 |
Rs.94.16 |
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Euro |
1 |
Rs.73.61 |
INFORMATION DETAILS
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Analysis Done by
: |
SUB |
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Report Prepared by
: |
DPT |
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.