FLAWLESS DIAMOND (INDIA) LIMITED
ANNUAL REPORT 2011-2012
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 hopefull
that it will recover from the slowdown and achieve its past glory in near
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. 4033.97 Lakhs.
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
(i) In the preparation of the annual accounts, for the Financial Year ended
31st March, 2012, the applicable accounting standards had been followed;
(ii) The Directors have selected such accounting policies and applied them
consistently and made judgments 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 irregularities;
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 them selves for re-appointment. During the year Shri Gautam Banerjee
Director of the Company resigned on 12.12.2011. The Board appreciate 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 for re-appointment.
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(1B) 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 under
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 &
The information pursuant to Section 217(1)(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 required.
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 adversity.
Registered Office: On behalf of the Board of Directors
136, Panchratna, Opera House,
Mumbai - 400 004.
Place: Mumbai KAMAL U. JAIN
Date : 28/08/2012 Chairman
MANAGEMENT DISCUSSION AND ANALYSIS
The India is an economic powerhouse with strong GDP growth, rising
disposable incomes, huge inspirational population, and is the 4th largest
economy in the world. The Gem and Jewellery is one of the largest
contributors to Indian Foreign Exchange earner for the country with a
staggering 13% to its credit. One of india's leading foreign exchange
earning sectors has witnessed a considerable growth in the volume of
exports. The world is eying India for trade across various sectors be it
Diamonds, Colourstone or Jewellery.
The Gem and Jewellery Export Promotion Council (GJEPC) said the Indian Gem
and Jewellery industry has witnessed a marginal decline of 0 .36% in of FY
2011-2012 owing to the decrease in trading exports of diamonds. The total
Gem & Jewellery Industry Exports were recorded at $42839 million in FY
2011-12 as compared to $ 42995 million in FY 2010-2011. The Gem & Jewellery
sector accounted for 14% of India's total merchandise exports in FY 2011-
The increasing gold prices may effect the jewellery making industry and
slow down the consumption of diamonds to some extent.