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Report No. : |
326676 |
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Report Date : |
11.06.2015 |
IDENTIFICATION DETAILS
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Name : |
M.A. ANAVI DIAMOND GROUP |
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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 : |
1984 |
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Com. Reg. No.: |
54-021659-5 |
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Legal Form : |
General Partnership |
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Line of Business : |
Subject is Processors, Importers, Traders, Exporters and Marketers of
Rough and Polished Diamonds |
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No. of Employee : |
18 – 20 (Mid 2014) |
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 |
M.A. ANAVI DIAM
Telephone 972 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, as of mid 2014, current number of employees
unavailable.
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.
Later sales data not forthcoming.
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.
Meir Anavi refused
to disclose any data on the telephone, requesting we come to his office, and
then he will consider whether he will provide information.
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 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.
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
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Indian Rupees |
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US Dollar |
1 |
Rs.63.88 |
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|
1 |
Rs.98.47 |
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Euro |
1 |
Rs.72.15 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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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.