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MIRA INFORM REPORT
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Report No. : |
510434 |
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Report Date : |
25.05.2018 |
IDENTIFICATION DETAILS
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Name : |
WALA GEMS LTD. |
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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 : |
16.04.2007. |
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Legal Form : |
Private limited company |
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Line of Business : |
Importers,
processors, exporters and traders in diamonds. |
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No. of Employees : |
6 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
B |
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Credit Rating |
Explanation |
Rating Comments |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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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
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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 Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
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 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
WALA
GEMS LTD.
Telephone 972
3 751 13 19
Fax 972
3 751 13 46
Email:
israel@walagroup.co.in
1
Jabotinsky Street
Diamond
Exchange, Maccabi Bldg.
RAMAT
GAN 5252001 ISRAEL
HISTORY
& LEGAL FORMATION
A
private limited company, incorporated as per file No. 51-396444-5 on the 16.04.2007.
SHARE
CAPITAL
Authorized share capital of NIS
30,000.00, divided into:
30,000 ordinary shares of NIS
1.00 each,
of which 100 shares amounting to
NIS 100.00 were issued.
SHAREHOLDERS
1. Bhupatbhai
Jedhabbai Wala, 80%,
2. Dharmesh Wala, 20%,
son of Bhupatbhai, both shareholders of India.
DIRECTORS
1.
Bhupatbhai Jedhabbai Wala, General
Manager,
2.
Dharmesh Wala.
BUSINESS
Importers,
processors, exporters and traders in diamonds.
Sales
are both in Israel and for export. 70% of sales are for export.
Operating from office premises,
owned by the shareholders, in 1 Jabotinsky Street, Diamond Exchange, Maccabi
Building (7th floor, Suite 36), Ramat Gan. WALA Group also operates from
headquarters in Mumbai, India, in Hong Kong and in Antwerpen, Belgium.
Website:
http://www.walagroup.co.in
Having 6 employees (including
shareholders/ directors).
MEANS
Financial data not forthcoming,
believed to be financially solid.
There are
4 charges for unlimited amounts, as well as 1 charge on the sum of NIS
1,939,000 registered on the company's assets (all assets, including financial):
2 charges placed in 2007 in favor of Union Bank of Israel Ltd., and 3 charges
placed in 2015, in favor of Mizrahi Tefahot Bank Ltd.
REVENUES
Sales
figures not forthcoming.
BANKERS
Mizrahi
Tefahot Bank Ltd., Diamond Exchange Business Branch (No. 466), Ramat Gan,
account No. 195063.
A check with the Central Banks'
database did not reveal any negative information regarding subject's a/m
account.
Union
Bank of Israel Ltd., Ramat Gan Branch (No. 062, aka Diamond Bourse Branch),
Ramat Gan.
CHARACTER
AND REPUTATION
Nothing
unfavorable learned.
Subject’s General Manager, Mr. Bhupatbhai
Wala, refused disclose financial details.
WALA GEMS Group is global
diamond manufacturers, importers and exporters. It is a family run partnership
business established in 1992 by three brothers namely Mr. Babubhai J. Wala,
Jayantibhai J. Wala and Bhupatbhai J. Wala. Group's diamond portfolio ranges
from .05 points to 5 carats in round and fancy shape, with various colors and
clarities in both certified and non-diamonds.
Export
(net) of polished diamonds from Israel in 2017 totaled US$ 4,478 million, some
4% lower than in 2016 and 2015 (US$ 4,675 million and US$ 4,996 million,
respectively), and well below 2014 (US$ US$ 6,269 million) and from its peak on
the eve of the crisis in the branch, with export of polished diamonds of US$ 7
billion.
The
diamonds 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, 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. 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, yet the market
is still volatile, as witnessed with the endurance of the depression trend
during most of 2017.
Export
(net) of rough diamonds fell 10.4% in the first 9 months of 2017 (compared to
the parallel period in 2016), reaching US$ 1,796 million (summed up to US$
2,702 million in all 2016, 23% higher than 2015).
Net
imports of polished diamonds in 2017 totaled US$ 2,700 million, compared to US$
3,282 million in 2016.
Net
import of rough diamonds summed at US$ 3,246 million in 2016, up 16.7% from
2015, and reached US$ 2,089 million in the first 9 months of 2017, down 11.6%
compared to 2016.
The
United States continued to be Israel’s major market for polished diamonds,
accounting for 45% of the market in the first 9 months 2017 (was 39% in 2016).
Hong Kong is 2nd largest market with 30% of exports (26% in 2016),
followed by Switzerland 9% (7%), Belgium 8% (8%), and the rest of the world
account for the remaining 8% of Israel's polished diamond export.
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).
Their cases are pending.
SUMMARY
Notwithstanding the refusal to disclose financial
details, considered 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 68.39 |
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1 |
INR 91.44 |
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Euro |
1 |
INR 80.14 |
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ILS |
1 |
INR 19.13 |
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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PRI |
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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
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Payment
record
·
Litigation
against the subject
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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.