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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) - Director Report

Company director report

FLAWLESS DIAMOND (INDIA) LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT 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 31.03.2012 31.03.2011 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 BUSINESS OPERATION: 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 future. DIVIDEND: 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. CORPORATE GOVERNANCE: 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 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. DIRECTORS: 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. DEPOSITS: Your Company has not invited or accepted any fixed deposits from the public during the year under review. AUDITORS: 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. AUDITORS REPORT: There is no adverse comment or qualification in the Auditors Report. MATERIAL CHANGES: 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 review. 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. INSURANCE: 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(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 ACKNOWLEDGMENT: 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- 2012. The increasing gold prices may effect the jewellery making industry and slow down the consumption of diamonds to some extent.