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Report No. : |
327284 |
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Report Date : |
17.06.2015 |
IDENTIFICATION DETAILS
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Name : |
INDIAM LTD. |
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Registered Office : |
3 Jabotinsky Street, Diamond Exchange, Shimshon Bldg., Ramat Gan5252005 |
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Country : |
Israel |
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Date of Incorporation : |
26.08.1998 |
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Com. Reg. No.: |
51-267413-6 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject is traders, importers, exporters and marketers of diamonds |
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No. of Employee : |
20,000 |
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 – December 31, 2014
|
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.
|
Source
: CIA |
INDIAM LTD.
Telephone 972
3 612 64 40
Fax 972
3 612 39 48
P.O. Box 195
(52101)
3 Jabotinsky
Street
Diamond Exchange,
Shimshon Bldg.
RAMAT GAN 5252005
ISRAEL
A private limited
company, incorporated as per file No. 51-267413-6 on the 26.08.1998.
Authorized share
capital of NIS 36,000.00, divided into:
36,000 ordinary
shares of NIS 1.00 each,
of which 100
shares amounting to NIS 100.00 were issued.
1.
Rajubani Sabany, 50%,
2. Vallabhbhai Premjibhai Sabany, 40%, father of
Rajubani, of India,
3. Bhalala Mayankkumar, 10%, of India.
Until 2010 50% of subject was held by Indian
firm BELADIYA VELAJIBHAI (other 50% held by Rajubani Sabany).
In March 2014, the 10% shares previously
held by Mrs. Sheetalben Sabany (wife of Rajubani) moved to another family
member, Mr. Bhalala Mayankkumar.
1. Rajubani Sabany, General Manager,
2. Vallabhbhai Premjibhai Sabany, of India.
Traders,
importers, exporters and marketers of diamonds.
In 2014 80% - 90%
of sales were for export, rest is sold locally.
Operating from rented offices premises, on
an area of 80 sq. meters, in 3 Jabotinsky Street, Diamond Exchange, Shimshon
Building (Room # 1609), Ramat Gan.
Subject’s General
Manager, Rajubani Sabany, is the only one working in subject, as of mid 2014
(same as in 2012 and 2013). We assume that is also valid to-date.
Financial data not forthcoming.
There are 2 charges (placed in 2009 and in December 2014) for an
unlimited amounts registered on the company's assets, in favor of The State
Bank of India Ltd.
Sales figures not
forthcoming.
SBI State Bank of
India, Main Branch (No. 001), Ramat Gan.
Nothing
unfavorable learned.
So far we have
been unable to make any contact with subject and its officials. We spoke with
another diamond dealer, a friend of Mr. Sabany, who told us that Mr. Rajubani
Sabany is presently abroad and expected to return to Israel only in July.
Hence, we shall call subject early next month and update you accordingly.
In previous
interviews Mr. Sabany refused to disclose financial data.
In the previous
years we learnt that local diamond company JP FANCY DIAM LTD., is an affiliate
and shared premises with subject. We believe to-date there is no connection, as
JP FANCY DIAM has other shareholders than in subject no longer share premises
with subject
Our sources
commented favorably on Mr. Sabany and on subject
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.
Despite the lack
of updated details from subject's officials, we figure the company to be good
for trade engagements. However, we prefer to wait till we get to speak with
them and then give our final recommendation.
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
|
Indian Rupees |
|
US Dollar |
1 |
Rs.64.15 |
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|
1 |
Rs.100.04 |
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Euro |
1 |
Rs.72.27 |
INFORMATION DETAILS
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Analysis Done by
: |
KAR |
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Report Prepared
by : |
ASH |
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.