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Flawless Diamond (India) Ltd.

BSE: 523576 Sector: Consumer
NSE: N.A. ISIN Code: INE345E01021
BSE 05:30 | 01 Jan Flawless Diamond (India) Ltd
NSE 05:30 | 01 Jan Flawless Diamond (India) Ltd

Flawless Diamond (India) Ltd. (FLAWLESSDIAMOND) - Auditors Report

Company auditors report

FLAWLESS DIAMOND (INDIA) LIMITED ANNUAL REPORT 2011-2012 AUDITORS' REPORT TO THE MEMBERS OF FLAWLESS DIAMOND (INDIA) LIMITED 1. We have audited the attached Balance Sheet of FLAWLESS DIAMOND (INDIA) LIMITED as at 31st March, 2012 and also the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our Audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub*section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 2 above, we report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our Audit; b) In our opinion, proper books of account, as required by law, have been kept by the Company, so far as appears from our examination of those books; c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) In our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the mandatory accounting standards referred in sub-section (3C) of Section 211 of the Companies Act, 1956; e) On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the director is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and other notes thereon, gives the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India: (i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; (ii) In the case of the Statement of Profit and Loss, of the Loss of the Company for the year ended on that date; and (iii) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. Place: Mumbai FOR SURESH ANCHALIYA & CO., Date : 28/08/2012 Chartered Accountants Firm Regn. No: 112492W SURESH ANCHALIYA Partner Membership No. 044960 ANNEXURE REFERRED TO IN PARA 3 OF OUR REPORT OF EVEN DATE Re:- Flawless Diamond (India) Limited ('the company') In terms of information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under: 1. In respect of its fixed assets: a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. b. As explained to us, the fixed assets have been physically verified by the Management during the year in a periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification. c. In our opinion, the Company has not disposed off substantial part of fixed assets during the year and the going concern status of the Company is not affected. 2. In respect of its inventories: a. The inventories have been physically verified by the management at regular intervals during the year. In our opinion frequency of verification is reasonable. b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records. 3. a. The Company has not granted any secured or unsecured loan to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1961. b. In respect of loans, secured or unsecured taken by the company from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1961. i. The Company has taken loan from 2 parties and the amount involved is Rs.400000/-. ii. The rate of interest and other terms and conditions of loan taken are not prejudicial to the interest of the Company. iii. The payment of interest on loan and principal is regular. 4. In our opinion and according to the information and explanations given to us and as verified by us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls. In our opinion, and according to information and explanation given to us, there is no continuing failure to correct major weakness in the internal control system. 5. In respect of transactions covered under Section 301 of the Companies Act, 1956, in our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956, have been so entered. The transaction made pursuant to the contracts have been made at prices which are reasonable having regards to prevailing market price at the relevant time. 6. The Company has not accepted any deposits from the public in contravention of provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956. 7. In our opinion, the internal audit system of the Company is in commensurate with its size and nature of its business. 8. The Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956. 9. In respect of statutory dues: a. According to the records of the Company, there are no dues of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues which has not deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues which were outstanding as at 31st March, 2012 for a period of more than six months from the date they became due except a sum of Rs. 31,90,460/- due in respect of Income Tax demand for A.Y. 2010-11 b. The disputed statutory dues aggregating of Rs. 10.98 Crore that have not been deposited on account of disputed matters pending before appropriate authorities are as under: Sr. Name of Nature of Amount Period to which Forum where No. Statute Dues (Rs. In the amount dispute is crore) relates pending 1. Income Tax Income Tax 7.51 A. Y. 2008-09 Income Tax Act, 1961 Appellate Tribunal 2. Income Tax Income Tax 3.47 A. Y. 2009-10 Commissioner Act, 1961 of Income Tax (Appeal) 10. The Company does not have accumulated losses. The company has incurred cash losses during the financial year covered by our audit and also incurred cash losses in the immediately preceding financial year. 11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has defaulted in repayment of below mentioned dues to its bankers. Name of the Period from which Defaulted Amount Bank payment outstanding (Rs. In Crore) ICICI Bank 30.06.2011 44.02 Punjab and Sind Bank 30.06.2011 17.32 12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion and according to the information and explanation given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society. 14. According to information and explanation given to us, the Company is not dealing or trading in securities, debentures and other investments. 15. The Company has not given guarantees for loans taken by others from banks or Financial Institutions. 16. According to the information and explanations given to us, the Company has not taken any term loan during the year 17. According to the Cash Flow Statement and others records examined and the information and explanation given to us on overall basis, funds raised for shortterm basis have prima-facie not been used during the year for long-term investments. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the companies act, 1956. 19. The Company has not raised any money by way of Issue of Debentures. 20. The Company has not raised any money by way of Public Issue during the year. 21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated. Place: Mumbai FOR SURESH ANCHALIYA & CO., Date : 28/08/2012 Chartered Accountants Firm Regn. No: 112492W SURESH ANCHALIYA Partner Membership No. 044960