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MIRA
INFORM REPORT
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Report No. : |
503066 |
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Report Date : |
09.04.2018 |
IDENTIFICATION DETAILS
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Name : |
NIRU DIAM |
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Registered Office : |
1 Jabotinsky Street Diamond Exchange, Maccabi Bldg. Ramat Gan 5252001 |
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Country : |
Israel |
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Date of Incorporation : |
10.07.1987 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Traders, importers processors, cutters, exporters and marketers of
diamonds, dealing with rough and polished diamonds. |
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No. of Employees : |
Having 31
employees (same as in end of 2016, had 40 employees in the beginning of 2016,
45 employees in mid-2014, had 39 employees in early 2013, 38 employees in
mid-2012). |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January
2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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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
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Country Name |
Previous Rating (30.09.2017) |
Current Rating (31.12.2017) |
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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 free market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among its leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are offset 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 weathered the 2011 Arab Spring because strong trade ties outside the Middle East insulated the economy from spillover effects.
Slowing domestic and international demand and decreased investment resulting from Israel’s uncertain security situation reduced GDP growth to an average of roughly 2.8% per year during the period 2014-17. 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 in the last decade. Political and regulatory issues have delayed the development of the massive Leviathan field, but production from Tamar provided a 0.8% boost to Israel's GDP in 2013 and a 0.3% boost in 2014. One of the most carbon intense OECD countries, Israel generates about 57% of its power from coal and only 2.6% from renewable sources.
Income inequality and high housing and commodity prices continue to be a concern for many Israelis. 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. Government officials have called for reforms to boost the housing supply and to increase competition in the banking sector to address these public grievances. Despite calls for reforms, the restricted housing supply continues to impact the well-being of younger Israelis seeking to purchase homes. Tariffs and non-tariff barriers, coupled with guaranteed prices and customs tariffs for farmers kept food prices high in 2016. Private consumption is expected to drive growth through 2018 with consumers benefitting from low inflation and a strong currency.
In the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultraorthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only about 8% of the workforce, with the rest mostly employed in manufacturing and services - sectors which face downward wage pressures from global competition. Expenditures on educational institutions remain low compared to most other OECD countries with similar GDP per capita.
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Source
: CIA |
Company name and address
NIRU DIAM
Telephone 972 3 575 23 52
Fax 972
3 575 23 51
Email: rakesh@nirugroup.com
1 Jabotinsky
Street
Diamond Exchange,
Maccabi Bldg.
RAMAT GAN 5252001 ISRAEL
HISTORY & LEGAL FORMATION
A private limited
company, incorporated as per file No. 51-121024-7 on the 10.07.1987, continuing
activities originally founded in 1979.
Originally
registered under the name NIRU DIAM
SHARE CAPITAL
Authorized share
capital of NIS 2,640.00, divided into:
2,640 ordinary shares of NIS
1.00 each,
fully issued.
SHAREHOLDERS
Subject is fully owned by NEW CENTURY
MARKETING LTD., a foreign company from Hong Kong, owned by Ranjeet Barmecha.
DIRECTORS
1. Ranjeet Barmecha, General
Manager,
2. Ms. Nirmala Barmecha,
3. Sanjay Baid.
BUSINESS
Traders, importers
processors, cutters, exporters and marketers of diamonds, dealing with rough
and polished diamonds. Subject specializes in square and Baguette diamonds.
85% sales are for
export.
Manufacturing
activities are carried out by NIRU Group's plant in Sri-Lanka (owned by
subject's parent company).
Operating from
premises, owned by the shareholders, on an area of 450 sq. meters (premises
enlarged from 200 sq. meters in early 2013), in 1 Jabotinsky Street, Diamond
Exchange, Maccabi Building (22nd floor), Ramat Gan. Premises serve
also subsidiary BARCODIAM.
Also operating
from Group's branches in New York, Hong Kong and Switzerland.
Having 31
employees (same as in end of 2016, had 40 employees in the beginning of 2016,
45 employees in mid-2014, had 39 employees in early 2013, 38 employees in
mid-2012).
Known to be having
over 1,500 employees serving NIRU Group worldwide (including manufacturing
facility in Sri Lanka with 1,200 employees).
MEANS
Financial data not
forthcoming, known to be of solid financial standing.
Subject is a Diamond Trading Company (DCT) Sightholder from DE BEERS for many years.
Property owned by
shareholder in 1 Jabotinsky Street, Diamond Exchange, Maccabi Building (22nd
floor), Ramat Gan (where subject is operating from) is highly valued.
There are 4
charges for unlimited amounts registered on the company's assets (all assets),
in favor of Mizrahi Tefahot Bank Ltd. and SBI State Bank of India (last charge
placed March 2015, prior charges placed 1 in 1991 and 2 in 2009).
REVENUES
Data provided by
subject's CFO:
2014 sales were
US$ 160,000,000, 85% were for export.
2015 sales were
US$ 165,000,000, 85% were for export.
2016 sales were
around US$ 165,000,000, 85% for export.
Sales for export (net) of polished diamonds as
published by the Supervisor on Diamonds in the Israeli Ministry of Economy
& Industry:
2011 sales were
US$ 111,000,000. Overall sales in 2011 were estimated at circa US$ 150,000,000.
2012 sales were
US$ 120,000,000.
2013 sales were
US$ 111,077,153.
2014 sales were
US$ 156,025,071.
2015 sales were
US$ 155,000,000.
2016 sales were
US$ 131,000,000.
OTHER COMPANIES
BARCODIAM LTD.,
96.8%, Israel, established in 1998, buyers –from import and from local
suppliers- and marketers of diamonds.
Other foreign
sister companies:
NIRU (NY) LTD.,
New York,
NIRU (SWISS) SA,
Switzerland,
NIRU DIAMONDS
(H.K) LTD, Hong Kong,
NIRU DIAMONDS
(M.E) LLC, Dubai (activities were sold in last period),
Also: DIAMOND
CUTTERS LTD., NIRO LANKA EXPORT LTD. (both in Sri Lanka), BLANCHE SA
(non-active); La4ve LTD.; SIM DIAM PVT. LTD. (India), AMORE JEWELS PVT LTD.
AZORES TRADE &
INVESTMENTS LTD., a local real estate company.
BANKERS
Mizrahi Tefahot Bank Ltd., Diamond Business Center Branch (No. 466),
Ramat Gan – main account.
SBI State Bank of India, Diamond Exchange Branch (No. 1), Ramat Gan.
CHARACTER AND REPUTATION
Nothing
unfavorable learned.
Subject’s CFO did
not update sales data so far, asking for an email with our request, which we
sent. In case they return with fresh figures, we shall update you accordingly.
Subject is a
veteran business, enjoys excellent reputation and among the leading in the
diamond branch.
In December 2014 subject was awarded the Ministry of Economy & Industry's 'Outstanding Exporter' award for 2013 by the President of
Israel and the Ministry's Minister, being one of the 9 Israeli export companies
that were awarded for the remarkable rise in sales for export.
According to the
reports published by the Israel Supervisor on Diamonds in the Ministry of
Economy, subject is ranked 2nd in the 2016 list of Israel's largest
polished diamonds exporters, 3rd in the 2015 list, 4th in
the 2014 and 2013 list, after being ranked 5th in 2012, 6th
in 2011, 10th in 2010, 9th in 2008 and in 2009, after
being ranked 16th place in the 2007, 19th in 2006 and 30th
in
2016 figures show
signs of recovery for the Israeli diamond trade, coming after the export of
diamonds from Israel experienced a drastic fall by 20% in 2015 from 2014 (down
40% from 2011).
Net export of
polished diamonds in 2016 decreased by 6.4% from 2015, reaching US$ 4,675
compared to US$ 4,993 million in 2014 (after 0.6% rise in 2014 and 11.6% in
2013), however net rough diamond exports jumped 23.1% to US$2,702 million (in
2015 fell 28.3% from 2014, after 4.2% rise in 2014, and a mere rise in 2013).
The market has been volatile over the last years after experiencing its worst
depression due to the global economic crisis, then recovered in 2010 but fell
again in 2012. According to Israel's Diamond Administration (IDA) at the
Ministry of Economics, the recovery in 2013 and 2014 is positive news for the
local branch (still away from its peak on the eve of the crisis with export of
polished diamonds of US$ 7 billion), however it is reported that profit margins
have been decreasing due to smaller gaps between rough (increasing) and
polished (decreasing) diamond prices.
In addition, the
local diamond sector has been negatively affected by other significant factors:
the production of counterfeit diamonds, whose quality keeps improving (harming
the raw diamonds market), the entrance of new rules by the local Tax
Authorities on the Diamond Exchange for enforcing money laundering, and the
"underground bank" affair – as below.
As a result, local
diamond dealers report on difficulties in executing transactions and bad
atmosphere in the branch. The first signs of recovery appeared towards the last
quarter of 2016 – mainly due to the growing stability of the market and the
industry’s agreement with the Israel Tax Authority in December.
Net imports of
polished diamonds totaled US$ 3,282 million in 2016, 5.7% decrease from 2015,
while net import of rough diamonds reached US$ 3,246 million, up 16.7% from
2015.
The United States
continued to be Israel’s major market for polished diamonds, accounting for 39%
of the market in 2016 (was 40% in 2015). Hong Kong is 2nd largest
market with 26% of exports (27% in 2015), followed by Belgium 8% (9%),
Switzerland 7% (7%), U.K. 4% (was 3% in 2015), and the rest of the world
account for the remaining 16% of Israel's polished diamond export.
In 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" (known as the "Check List" Affair)
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, and for a while to paralysis (especially in raw
diamonds purchase) due to uncertainty among local and foreign dealers. Later in
2012 the Police decided to lower the profile of the investigation for a while
(pressure from the diamond branch due to the continuing damage inflicted and
the Government (losing US$ hundred millions from decrease in tax collection),
but resumed investigation in 2013.
In mid-2014, based
on the Police and Tax Authorities recommendations, the State Attorney started
the process of filing indictments against central defendants in the affair,
initially against dealers who provided foreign currency services to the
"bank" (in June 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, a fine and confiscation of assets in volume of NIS
millions, part of a plea bargain). Since late 2015 indictments for severe
charges pressed against 11 diamond dealers and their firms for tax felonies
committed and issuing fictitious invoices in volumes of millions US$ (latest
indictments filed by the Tel Aviv District Attorney in August 2016).
SUMMARY
Good for trade
engagements.
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.99 |
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1 |
INR 90.96 |
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Euro |
1 |
INR 79.51 |
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ILS |
1 |
INR 18.41 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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VIV |
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Report Prepared
by : |
TRU |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on secured
terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.