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Report No. : |
328985 |
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Report Date : |
29.06.2015 |
IDENTIFICATION DETAILS
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Name : |
DOMINO DIAMONDS LTD. |
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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 Incorporation : |
20.06.2005 |
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Com. Reg. No.: |
51-370007-0 |
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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 : |
Not Available |
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 – March 31, 2015
|
Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
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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 |
DOMINO DIAMONDS LTD.
Telephone 972 3 752 00 83
Fax 972 3 752 00 84
21 Tuval Street
Diamond Exchange,
Yahalom Bldg.
RAMAT GAN 5252236 ISRAEL
A private limited company, incorporated as per file No. 51-370007-0 on
the 20.06.2005.
Authorized share capital of NIS 100,000.00, divided into:- 100,000 ordinary
shares of NIS 1.00 each, of which 100 shares amounting to NIS 100.00 were
issued.
1.
Leon Marcell Gotlib, 70%, of Switzerland,
2.
Naftali Holtzer, 15%,
3.
David Gotlib, 15%, of Belgium.
1.
Naftali Holtzer,
2.
David Gotlib,
3.
Roy Meshulam.
1.
Naftali
Holtzer,
2.
Mr.
Yaron (surname not forthcoming).
Traders, importers, exporters and marketers of diamonds.
Operating from premises, in 21 Tuval Street (street name is also referred
to as 54 Bezalel Street), Diamond Exchange, Yahalom Building (29th
Floor, Room No. 66), Ramat Gan.
Number of employees not forthcoming.
Financial data not forthcoming.
There are 2 charges for unlimited amounts
registered (both in October 2013) on the company's assets (financial assets),
in favor of Mizrahi Tefahot Bank Ltd.
Sales data not
forthcoming.
Mizrahi Tefahot Bank Ltd., Diamond Exchange
Business Center Branch
(No. 466), Ramat Gan.
Nothing unfavorable learned.
We spoke with Mr. Yaron, who told us he is a joint General Manager,
though refused to disclose his family name. He added that subject's
shareholders Leon Marcell Gotlib and David Gotlib both sit permanently in
Belgium and their instruction is unequivocal not to disclose any data on the
company.
From our sources, this is a solid diamond firm.
We learn that Marcel and David Gotlib are known veteran Belgian diamond
dealers. We found that Mr. David Gotlib is the vice president of the Antwerp
Diamond Bourse (we are almost positive it concerns subject's
shareholder/director).
According to our, Mr. Marcel Gottlieb was involved in several
investments in the local market in the past, including in GAMA, Israel's
largest company for credit card financial and factoring services.
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. On June 15th 2015 the court made the first conviction in
the affair, sending a foreign currency dealer who pretended also to be a
diamond dealer, for 4 years prison and a fine (part of a plea bargain).
Notwithstanding
the refusal to disclose details, considered good for trade engagements.
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
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Indian Rupees |
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US Dollar |
1 |
Rs.63.60 |
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1 |
Rs.100.09 |
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Euro |
1 |
Rs.71.23 |
INFORMATION DETAILS
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Analysis Done by
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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.