TO THE MEMBERS OF FLAWLESS DIAMOND (INDIA) LIMITED.
The Directors hereby present their 23rd Annual Report on the business
and operations of the Company and the Financial Accounts for the year
ended 31st March, 2012.
Particulars (Rs. in Thousands)
Year ended Year ended
Total Income 755908.32 3356671.75
Profit/(Loss) Before Depreciation
& Taxes (1930.03) (15269.82)
Less: Depreciation 3558.12 4388.87
Profit/(Loss) Before Tax (5488.15) (19658.69)
Less: Provision for Current Tax 0 0
Less: Provision for Deferred
Taxation (8970.87) (328.77)
Less: Earlier Tax 0 205.01
Profit/(Loss) After Tax for
the year 3482.72 (19534.93)
Add: Balance in Reserves & Surplus 617918.66 637453.59
Less: Appropriations 0 0
Closing Balance 621401.38 617918.66
During the year the company has suffered a loss of Rs. 54.88 lakh
before tax against loss of Rs. 196.58 lakh for previous year. The loss
is due to global slowdown and lower economic growth resulting to non
realization of exports proceeds from the overseas parties. The company
is very hopeful that it will recover from the slowdown and achieve its
past glory in near future.
In view of Loss during the year, the Board of Directors has decided to
not to declare the dividend.
RESEARCH AND DEVELOPMENT
Research and Development is a vital area of the Company''s focus and has
been a key factor in maintaining the company''s growth. Leveraging on
its strong research and development department, your Company is
constantly developing new and latest designs of jewellery and lifestyle
products. Your Company keeps abreast with the latest trends in the
market and its users, which will be useful in coming years.
CONTRIBUTION OF EXPORT IN TOTAL REVENUE
The total contribution of exports in the Company is 69.84% of total
revenue of the company. During the year, export turnover was Rs.
Your Company is committed to maintain the highest standards of
Corporate Governance. Your Directors adhere to the stipulations set out
in the Listing Agreement with the Stock Exchange and have implemented
all the prescribed requirements. A separate report on Corporate
Governance is enclosed as a part of this Annual Report of the Company.
A certificate from Auditors of the Company regarding compliance of
Corporate Governance as stipulated under clause 49 of the Listing
Agreement is annexed to the report on Corporate Governance.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, It is
hereby confirmed that:
(i) In the preparation of the annual accounts, for the Financial Year
ended 31st March, 2012, the applicable accounting standards had been
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the Loss of the
Company for the year ended 31st March, 2012;
(iii) The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
iv) The Directors have prepared the annual accounts of the Company for
the Financial Year ended 31st March, 2012 on ''going concern'' basis.
However the company''s secured creditor ''ICICI Bank'' has filed winding
up petition u/s 439 of the Companies Act, 1956 in the Bombay High
Court, which may affect the ''going concern'' status.
Pursuant to Article 164 of the Article of Association of the Company
Shri Deepak K. Parekh and Shri Ashok Chheda, Directors of the
Company, retire by rotation at the forthcoming Annual General Meeting
and being eligible, offer themselves for re-appointment. During the
year Shri Gautam Banerjee Director of the Company resigned on
12.12.2011. The Board appreciates his association and contribution to
the Company during his tenure as Director of the company.
Your Company has not invited or accepted any fixed deposits from the
public during the year under review.
M/s. Suresh Anchaliya & Co., Chartered Accountants, the retiring
Auditors of the Company who holds Office in accordance with the
provisions of the Companies Act, 1956 up to the conclusion of the
forthcoming Annual General Meeting and being eligible offer themselves
The Company has received letter from the Auditors to the effect that
their re-appointment, if made, would be within the prescribed limit
under Section 224 (IB) of the Companies Act, 1956 and that they are not
disqualified for such re-appointment within the meaning of Section 226
of the said Act.
There is no adverse comment or qualification in the Auditors Report.
a. The Company''s account with the banks has been declared NPA (Non
Performing Assets) by the banks for non realization of export proceeds
and non-payment of loans and interest. The banks have moved the matter
before Debt Recovery Tribunal and initiated recovery proceeding under
SARFAESI Act, 2002 for recovery of their dues. The Directors of the
company are trying their best to realize the export proceeds at the
earliest and pay off the bank dues.
b. During the year the company has closed its operation at Dehradun
Unit. There is no manufacturing activities carried out during the year
c. The secured creditor ''ICICI Bank'' has moved winding up petition u/s
439 of the Companies Act, 1956 before the Bombay High Court for
dissolution of the company and the matter is pending before the
Honorable High Court.
The Company''s assets and goods are fully insured.
MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT
A detailed review of the progress of the project and the future outlook
of the Company and its business as stipulated under clause 49 of the
Listing Agreement with the Stock Exchange is presented in a separate
section forming part of the Annual Report.
PARTICULARS OF EMPLOYEES
The overall industrial and employee relations remained healthy. There
are no such employees pursuant to Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended by the Companies Amendment Act, 1988. Hence, no particulars
are required to be appended to this report in this regard.
DEMATERIALISATION OF SHARES
77.75% Shares of total equity capital is held in dematerialised form
with NSDL and 16.93% Shares of total equity capital is held in
dematerialised form with CDSL as on 31.03.2012.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS & OUTGO
The information pursuant to Section 217(i)(e) of the Companies Act,
1956, read with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988, is given as under.
A Conservation of Energy: As the Company is not covered in the list of
industries required to furnish information in form ''A'' in relation to
conservation of energy, the same is not given.
B. Technology Absorption, Research and Development (R&D): The
Company''s manufacturing unit is closed hence no information is
C. Foreign Exchange Earning & Outgo: The total exports for the year
2011-12 amounts to Rs. 4033.96 lakhs
Total Foreign Exchange used & earned : Rs. (In Lakhs)
Total Foreign Exchange used : 778.87
Total Foreign Exchange earned : 460.96
The Directors wish to place on record their appreciation for the
consistent assistance and co-operation received from the Central and
State Government Authorities, Company''s Bankers, Outgoing Director,
Vendors, Members and dedicated Employees for the confidence in the
Company and its management through the periods of prosperity and
On behalf of the Board of Directors
KAMAL U. JAIN
Mumbai - 4 00 004.
Place : Mumbai
Date : 28/08/2012