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International Diamond Services Ltd.

BSE: 530193 Sector: Consumer
NSE: N.A. ISIN Code: INE248F01016
BSE 05:30 | 01 Jan International Diamond Services Ltd
NSE 05:30 | 01 Jan International Diamond Services Ltd

International Diamond Services Ltd. (INTLDIAMOND) - Director Report

Company director report

INTERNATIONAL DIAMOND SERVICES LIMITED ANNUAL REPORT 2007-2008 DIRECTOR'S REPORT TO THE MEMBERS Dear Members Your Director have pleasure in presenting the Nineteenth Annual Report alongwith the audited Statement of Accounts for the year ended 31st March, 2008 (Rs. In lakhs) FINANCIAL RESULTS 2007-2008 2006-2007 Income 37.76 25.14 Depreciation 7.12 8.43 Profit/ Loss before Tax (30.73) (86,27) Provision for Tax & Deferred Tax 0.34 11.31 Prior Year Adj. 0 (.06) Prov. for Retirement benefit W/Back 0.15 .03 Profit/(Loss) after tax (30.49) (74,98) Balance Profit B/f (84,24) (9.26) Profit available for Appropriation (114.74) (84.24) Balance carried to Balance sheet (114,74) (84.24) OPERATION: During the year under review the Company earned a total income of Rs.37.76 Lakh as against Rs.25.14 Lakh in the corresponding year. The company incurred a net loss of Rs.30.49 Lakh against a net loss of Rs.74.98 Lakh in the previous year. During the year the export sales was Rs. Nil compare to Rs.nil in the previous year and domestic sales was Rs.36,46 Lakh compare to Rs.23.71 lakh in previous year. Due to increased competition, the operating margin of the Company has decline. Due to timely non-realization of export proceeds and investment in Stock, the Cash Credit Limit Account with Bank of India, Parliament Street Branch, New Delhi was declared NPA Account. The Company is trying to regularize the same by realizing the export proceeds and disposal of stocks. DIVIDEND Your Directors do not recommend any dividend during the year in view of Operational Losses ***DIRECTOR Your Director, Shri Praveen Jain & Kushal Jain retire by rotation and being eligible, offers themselves for reappointment. Mr. Ajay A. Modi has been resigned as a director from the company w.e.f, 20th June 2008. *** DELISTING OF SHARES The equity shares of your company have been delisted from Jaipur Stock Exchange. The Order of delisting from vododara and Delhi Stock Exchange are awaited. AUDITORS M/S AVS & Co., Chartered Accountants, the Auditors of the Company , retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. AUDITOR REPORT The observation of the Statutory Auditors in their Audit Report are self explanatory. The same have been noted for future compliance. FIXED DEPOSITS The Company has not accepted any fixed deposit during the year ended 31st March 2008. SHARE REGISTRY ACTIVITY In terms of SEBI Circular No. D & CC/HTTC/CIR-15/2002 dated 27 December 2002, M/s Mas Services Pvt. Ltd. A Registrar and Share Transfer Agent registered with SEBI is the common agency for share registry work. CORPORATE GOVERNANCE As per clause 49 of the Listening Agreements with the stock exchange a Management Discussion and Analysis report on Corporate Governance together with the Auditors certificate regarding compliance of condition of Corporate Governance, form part of the Annual Report. RESPONSIBILITY STATEMENT The Board of Director hereby confirm that; 1) In the preparation of the annual account for the ended March 31, 2008, the generally accepted accounting standard in India have been followed in all material respects. 2) Accounting policies have been selected and applied consistently and judgements and estimates made 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 March 31, 2008 and of the loss of the company for that period. 3) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities. 4) The annual account for the year ended March 31, 2008 have been prepared on a going concern basis. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO: Since the company was not engaged in direct manufacturing activity during the year under review report pertaining to the conservation of energy and technology absorption is not applicable. *** FOREIGN EXCHANGE EARNING AND OUT GO: 2007-08 2007-08 Foreign Exchange Earning Exports (FOB) - - Foreign Exchange Outgo - - Foreign travel ling - - Import of Diamond Export plants and initiative: Overseas demand for both cut & polished and jewellery has been increasing , proving India as the most sought after destination for gems & jewellery in the world. The Company has taken initiative to renew its old contact with its buyer. The Company proposes to maintain its relation with overseas buyers by regular overseas visits and offering competitively priced products. PARTICULARS OF EMPLOYEES There was no such employee in the company during the year whose particulars under Section 217(2A) of the Companies Act, 1956 are required to be reported. ACKNOWLEDGEMENT The Board records its sincere appreciation for the continuing support and cooperation from bank government authorities, shareholder clients and staff of the Company. For and on behalf of the board for INTERNATIONAL DIAMOND SERVICES LTD. Place : New Delhi Date : August 22, 2008. (ASHOK KUMAR JAIN) INDUSTRY STRUCTURE & DEVELOPMENT The global gems and jewellery industry can be divided into the following sub sectors based on its characteristics and preciousness in terms of price range, marketability and processing techniques: Gemstones: Diamond and coloured gemstones (precious, semi-precious and synthetic). Jewellery; Plain gold, studded, silver and costume. The global gems and jewellery sector is worth about $ 150 bn. The key markets of gems and jewellery reported an increase at a CAGR of 5-10 per cent across the decade. The global industry is largely unorganized generally managed as family-owned business entities. India's gem & jewelleij industry is a rising star of the Indian economy. The industry has performed extraordinarily well over the past few years and this growth trend is expected to continue in the years to come. Growing rapidly, this industry has exhibited remarkable energy and focus, registering an average growth of 25-30 percent year-on-year. Availability of skilled manpower , together with liberalized govt. policies catalysed continuous sectoral growth , making it a leading foreign exchange earner. The Indian gem and jewellery industry has beaten market expectations despite the difficult global market conditions and a seve. s pressure on margins. In 2007-08, it reported the following: 21.05 percent growth in exports of coloured gemstones in dollar terms and 19.09 percent in rupee terms. - 6.07 percent growth in export of cut and polished diamonds in dollar terms and 4.09 percent in rupee terms. - 6.32 percent growth in gem and jewellery exports in dollar terms and 4,35 percent in rupee terms. India is a leading producer of finished jewellery and polished stones. Gemstones and jewellery represents the most significant specialist segment of Indian retailing , accounting for a high proportion of total retail spend. According to the Gems and Jewellery Export Promotion Council, the total jewellery market in India is around USD 13 billion of which diamond jewellery makes up around 20%. The segment is dominated by very small family owned retailers and the total size of the market is difficult to measure. Indian households have traditionally relied on a family jeweller to provide a quality assurance. Consumer brand awareness is low. Most purchases take place at festival periods and to celebrate family rituals such as marriages and births. Now organized jewellery retailers are increasingly offering brand solutions to the demand for quality and value as consumers move away from traditional family retailers. OPPORTUNITIES & THREATS Global market is on the growth path. The Indian economy has been also registering growth of 8% to 9% leading to increased domestic consumption expenditure. The consumption expenditure is on the rise which is expected to further boost Indian exports. There are, therefore, good opportunities for the gems & jewellery business. Terrorist attacks, hardened rupee and increasing gold and diamond prices may pose a threat. The potential growth in manufacturing bases in China may effect the present dominant position of India. In respect of the domestic sale of gems and jewellery, vast opportunities are perceived on account of growth in Indian Economy and increase in number of middlcclass category persons as well as their buying power, Overflodding of foreign branded products and increase in price of gold may pose a threat to the industry. OUTLOOK As stated under Opportunities & Threats, the outlook for the gems & jewellery business is bright. SEGMENTWISE PERFORMANCE The exports made and the retail sales achieved during the year are as follow: 2007-08 2006-07 (Rs. In lakh) (Rs. In Lakh) Export Sales - - Domestic Sales 36.45 23.71 RISK AND CONCERN Apart from the normal business risks as generally apply to business organization, the company does not foresee any other serious area of concern, except the areas underlined under 'opportunities & threats'. INTERNAL CONTROL SYSTEM AND ITS ADEQUACY The company has an effective internal control system in place and this is periodically reviewed for its effectiveness. Cross-functional internal checks mechanism has been created to ensure compliance of procedures. The teams constituted for this purpose cover review of business processes. The audit committee reviews the observations of these teams at regular intervals. FINANCIAL VIS-A-VIS OPERATIONAL PERFORMANCE The company incurred a net loss of about Rs.74,98 lakh during the year ended. Highlights for the financial year ended March 31, 2008 are as under: 2007-08 (Rs. In Lakh ) 2006-07 (Rs.In Lakh) Sales 36.45 23.712 Other Income 1.30 1.43 Profit/(Loss) before Tax (30.72) (86.27) Net Profit/(Loss) (30.49) (74.98) HUMAN RESOURCES Yours company is deeply concerned about the safety, welfare and training of employees. Employee / employer relations were cordial throughout the year. As at March 31, 2008, the total number of employees stood at 6.