Flawless Diamond (India) Limited - Moneycontrol.com · Punjab & Sind Bank REGISTERED ... the 24th Annual General Meeting of Flawless Diamond (India) Limited will be ... adopt the

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24th Annual Report 2012-13


FlawlessDiamond

(India) Limited

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24th ANNUAL GENERAL MEETINGOn

Wednesday, 28th August, 2013

at 11.00 A.M.at

Novelty Chambers,Above Novelty Theatre,

Maulana Shaukatali Road, Grant Road (East),Mumbai – 400 007.

FLAWLESS DIAMOND (INDIA) LIMITEDBOARD OF DIRECTORS

Kamal U. Jain Chairman Bhawar U. Jain Managing Director Rajiv Kamdar Director

Deepak K. Parekh Independent Director Ashok Chheda Independent Director

AUDITORS

Suresh Anchaliya & Co. Chartered Accountants Mumbai.

BANKERS

ICICI Bank Ltd. Punjab & Sind Bank

REGISTERED OFFICE

136, Panchratna, Opera House, Mumbai - 400 004. Email:[email protected]

REGISTRAR & SHARE TRANSFER AGENTS

Adroit Corporate Services Pvt.Ltd.19/20, Jaferbhoy Industrial Estate,1st Floor, Makwana Road, Marol Naka,Mumbai - 400 059.

Phone: 91-22-28596060/28594060 Fax: 91-22-28503748

Fiawless Diamond (India) Limited.indd 2 02/08/2013 5:30:44 PM

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NOTICENOTICE IS HEREBY GIVEN THAT the 24th Annual General Meeting of Flawless Diamond (India) Limited will be held on Wednesday, 28th Day of August, 2013 at 11.00 a.m. at Novelty Chambers, above Novelty Theatre, Maulana Shaukatali Road, Grant Road (East), Mumbai – 400 007 to transact the following business:ORDINARY BUSINESS:1. Toreceive,considerandadopttheAuditedBalanceSheetasat31stMarch,2013andStatementofProfitandLossfortheyear

ended on that date and report of Directors and Auditors thereon.2. To appoint a Director in place of Shri Rajiv Kamdar who retires by rotation at the ensuing Annual General Meeting and being

eligible offers himself for re-appointment.3. To appoint a Director in place of Shri Kamal U Jain who retires by rotation at the ensuing Annual general Meeting and being

eligible offers himself for re-appointment.4. ToappointM/sSureshAnchaliya&Co.,CharteredAccountants,Mumbai,asAuditorsoftheCompanytoholdofficefromthe

conclusionofthismeetingtilltheconclusionofthenextAnnualGeneralMeetingandtofixtheirremuneration.

Registered Office: On behalf of the Board of Directors136, Panchratna,Opera House,Mumbai - 400 004.Place: Mumbai Kamal U. JainDate : 30th May, 2013 Chairman

NOTES:1. A Member entitled to attend and vote is entitled to appoint a Proxy to attend and vote instead of himself and Proxy need not be

amemberoftheCompany.HoweverProxyFormsshouldbedepositedattheRegisteredOfficeoftheCompanynotlaterthan48 hours before commencement of the meeting.

2. CorporateMembersarerequestedtosendadulycertifiedcopyoftheBoardResolutionauthorizingtheirrepresentativestoattend and vote at the Annual General Meeting.

3. The register of members and Share Transfer Books of the Company will remain closed from 23rd August to 27th August, 2013 (both days inclusive).

4. The Members are requested to:(a) Intimate to the Company’s Registrars and Share Transfer Agents - Adroit Corporate Services Pvt. Ltd. (for shares held in

physicalform)andtotheirDepositoryParticipants(DP)(forsharesheldindematerializedform)thechanges,ifany,intheir Registered Address, Bank Account Number/details etc. at an earlier date;

(b) Quote ledger folio numbers / DP Identity and Client Identity Numbers in all their correspondences;(c) BringtheircopiesoftheAnnualReportandtheAttendanceSlipdulyfilledinforattendingtheAnnualGeneralMeeting;(d) Members desirous of obtaining any information concerning the accounts and operations of the Company are requested to

addresstheirquestionstotheCompanyattheRegisteredOfficeaddresssoastoreachatleastsevendaysbeforethedateof the Meeting, to enable the information required to be made available at the Meeting, to the best extent possible.

5. Since the securities of the Company are compulsorily tradable in electronic form, to ensure better investor service and elimination of risk of holding securities in physical form, it is requested that the members holding shares in physical form to gettheirsharesdematerializedattheearliest.

6. Green Initiative in the Corporate Governance- Registration of email address The members are requested to register email address with the Depository Participant/ the Registrar and Share Transfer Agent

of the Company, i.e. Adroit Corporate Services Pvt. Ltd., as the case may be, for service of documents.

On behalf of the Board of DirectorsPlace: Mumbai Kamal U. JainDate : 30th May, 2013 Chairman


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FLAWLESS DIAMOND (INDIA) LIMITED

DIRECTORS’ REPORT

TO THE MEMBERS,FLAWLESS DIAMOND (INDIA) LIMITED,

The Directors hereby present their 24th Annual Report on the business and operations of the Company and the Financial Accounts for the year ended 31st March, 2013.

Particulars (` in Thousand)Year ended 31.03.2013

Year ended 31.03.2012

Total Income 87167.91 755908.32Profit/(Loss)BeforeDepreciation&Taxes (6407.97) (1930.03)Less: Depreciation 2869.52 3558.12Profit/(Loss)BeforeTax (9277.50) (5488.15)Less: Provision for Current Tax 0.00 0.00Less: Provision for Deferred Taxation (2865.18) (8970.87)Less: Earlier Tax 865.34 0.00Profit/(Loss)AfterTaxfortheyear (7277.66) (3482.72)Add: Balance in Reserves & Surplus 621401.38 617918.66Less: Appropriations 0.00 0.00Closing Balance 614123.72 621401.38

BUSINESS OPERATION

During the year the company has suffered a loss of ` 92.77 lakhs as against the loss of ` 54.88 lakhs for the previous year. The loss isduetoglobalslowdownandlowereconomicgrowthresultingtononrealizationofexportsproceedsfromtheoverseasparties.The company is very hopefull that it will recover from the slowdown and achieve its past glory in near future.

DIVIDEND

In view of the 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 has been constantly developing new and latest designs of jewellery and lifestyle products but due to overall slowdown and sudden break in the business activity of the company, the research work could not be carried out during the year.

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 onCorporateGovernanceisenclosedasapartofthisAnnualReportoftheCompany.AcertificatefromAuditorsoftheCompanyregarding compliance on 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,Itisherebyconfirmedthat:

(i) In the preparation of the annual accounts, for the Financial Year ended 31st March, 2013, the applicable accounting standards had been followed;

(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 financialyearandoftheLossoftheCompanyfortheyearended31st March, 2013;


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(iii) TheDirectorshadtakenproperandsufficientcareforthemaintenanceofadequateaccountingrecordsinaccordancewiththe 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, 2013 on ‘goingconcern’basis.Howeverthecompany’ssecuredcreditor‘ICICIBank’hasfiledwindinguppetitionu/s439oftheCompanies Act, 1956 in the Honourable Bombay High Court, which may affect the ‘Going Concern’ Status. The Punjab and Sind Bank has also initiated winding up petition u/s 439 of the Companies Act, 1956 in the Honourable Bombay High Court.

DIRECTORS

Pursuant to Article 164 of the Article of Association of the Company Shri Rajiv Kamdar and Shri Kamal U. Jain, Directors of the Company, retire by rotation at the forthcoming Annual General Meeting and being eligible, offer them selves for re-appointment.

DEPOSITS

YourCompanyhasnotinvitedoracceptedanyfixeddepositsfromthepublicduringtheyearunderreview.

AUDITORS

M/s.SureshAnchaliya&Co.,CharteredAccountants,theretiringAuditorsoftheCompanywhoholdsOfficeinaccordancewiththe 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 limitunderSection224(1B)of theCompaniesAct,1956andthat theyarenotdisqualifiedforsuchre-appointmentwithinthemeaning of Section 226 of the said Act.

AUDITORS REPORT

Theadversecommentorqualification in theAuditorsReportareselfexplanatoryandaremainly related tostatutoryduesanddefault in the repayment of bank loan

MATERIAL CHANGES

a. TheCompany’saccountwiththebankshasbeendeclaredNPA(NonPerformingAssets)bythebanksfornonrealizationofexport 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 Debt Recovery Tribunal in its order instructed the company to pay the ICICI Bank loan amount with interest at the rate 18% P.A. from 30th May, 2012 onwards.. TheDirectorsofthecompanyaretryingtheirbesttorealizetheexportproceedsattheearliestandpayoffthebankdues.

b. 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 Honourable Bombay High Court for dissolution of the company and the matter is pending before the Honourable Bombay High Court. However the company has entered into the consent term with the “ICICI Bank” for repayment of loan with interest on or before 31.03.2014.

LISTING

The shares of the company is listed at The Bombay Stock Exchange Ltd (BSE), Mumbai. The company has paid the listing fees to stock exchange.

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.


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SHORT TERM LOAN FROM BODIES CORPORATES

The Company has accepted short term loan from the bodies corporate to meet the requirement of repayment of loan to the bankers.

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

77.97% Shares of total equity capital is held in dematerialised form with NSDL and 16.77% Shares of total equity capital is held in dematerialised form with CDSL, as on 31.03.2013.

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 not in operation during the year.

C. Foreign Exchange Earning & Outgo: The total exports for the year 2012-13 amounts to ` NIL

Total Foreign Exchange used & earned : ` (In Lakhs) Total Foreign Exchange used : Nil Total Foreign Exchange earned : 945.98

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for the consistent assistance and co-operation received from the Central andStateGovernmentAuthorities,Company’sBankers,Directors,Vendors,MembersanddedicatedEmployeesfortheconfidencein the Company and its management through the periods of prosperity and adversity.

Registered Office: On behalf of the Board of Directors136, Panchratna,Opera House,Mumbai - 400 004.

Place : Mumbai Kamal U. JainDate : 30th May, 2013 Chairman


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REPORT ON CORPORATE GOVERNANCE(Pursuant to clause 49 of the Listing Agreement)

The Corporate Governance code introduced by Securities and Exchange Board of India (‘SEBI’) as adapted by incorporating a new clause No.49 in the listing agreement of the Stock exchange and also by applicable provisions of the Companies (Amendment) Act, 2000, is being implemented by the company. A report on Corporate Governance is given below:

I. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:- The Company believes that the Corporate Governance is aimed at achieving optimum performance at all levels in the

Organization.Itendeavorstoensurethathigheststandardsofethicsandtransparencyaremetwith.TheCompanycontinuestoreviewitsCorporateGovernancepracticetoensurethatthesereflectthebestCorporateGovernancepractices.Ittakesfeedback into accounts in its periodic review of the guidelines so as to ensure its continued relevance and maintain the transparency and accountability to all the concerns.

II. BOARD OF DIRECTORS (a) COMPOSITION OF THE BOARD The Board of Directors comprises of Five members, consisting of two promoter directors, one non executive non

independent director and two independent directors. No Director is member in more than ten Committees and Chairman ofmorethanfivecommitteesacrossallcompaniesinwhichtheyareDirectors.Duringtheyear,fiveBoardMeetingswereheld on 15.05.2012,14.08.2012, 28.08.2012,9.11.2012 and 14.02.2013.

The composition of the Board of Directors with reference to Executive and Non-Executive Directors, meets the requirement of code of Corporate Governance.

The composition of the Board of Directors and their attendance at the Board Meetings during the year and at the last Annual General Meeting as also number of other Directorships and other Committee Membership/Chairmanship as on 31.03.2013 are as follows :

Name of Directors Category ofDirectors

No. of BoardMeetings attended

AttendedLast

AGM

No of other Directorship

held

No. of other Committee

MembershipMember Chairman

Shri Kamal U. Jain Chairman(Promoter Director)

5 Yes 11 Two One

Shri Bhawar U. Jain ManagingDirector

(Executive)

5 Yes 9 None None

Shri Ashok R. Chheda (Non- Executive)Independent

5 Yes None One One

Shri Deepak K. Parekh (Non- Executive)Independent

4 Yes None One None

Shri Rajiv Kamdar (Non- Executive Non - Independent)

4 Yes 02 None None

(b) REMUNERATION TO EXECUTIVE DIRECTORS The Company has paid the gross remuneration of ̀ 2,40,000/- to Mr. Bhawar U. Jain, Managing and Whole-Time Director

of the Company. The Company has not paid any sitting fees to Non-Executive Directors during the year. Shareholding Pattern of Non-Executive Directors in the Company are as follows:

Directors No. of SharesShri Kamal U. Jain 4441902Shri Ashok R. Chheda NILShri Deepak K. Parekh NILShri Rajiv Kamdar 336510

The Company does not have any scheme for grant of stock options to its Directors or Employees. The term of appointment and remuneration payable to Managing / Whole-Time Directors is approved by the members.


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(c) BOARD PROCEDURE The Members of the Board have been provided with the requisite information mentioned in the Listing Agreement well

before the Board meetings and the same were dealt with appropriately. All the Directors, who are on various Committees are within the permissible limits of the Listing Agreement. The Directors

have intimated from time to time about their membership in the various Committees in other Companies.III. AUDIT COMMITTEE

(i) The Committee comprises of Directors namely Shri Deepak K. Parekh , Shri Ashok R. Chheda and Shri Kamal U. Jain.(ii) Shri Deepak K. Parekh and Shri Ashok R.Chheda are Independent Directors and Shri Kamal U. Jain is Promoter Director.(iii) Shri Deepak K. Parekh is Chairman of the Audit Committee.(iv) The Audit Committee Meetings were held on 15th May, 2012, 14th August, 2012, 28th August 2012 , 9th November, 2012

and 14th February, 2013.(v) TheroleandtermsofreferenceoftheAuditCommitteecoversthemattersspecifiedforAuditCommitteeunderClause

49 of Listing Agreement as well as in Section 292A of the Companies Act, 1956.(vi) The Audit Committee reviews the information periodically.(vii) The Chairman of the Audit Committee was present at the Annual General Meeting of the company held on 29/09/2012 to

attend the shareholders queries.IV. SHAREHOLDERS’ COMMITTEE The Company has constituted a Share Transfer cum Shareholders / Investors Grievance Committee consisting of Promoter

Directors and Non-Executive Directors comprise of Shri Kamal U. Jain, Shri Rajiv Kamdar and Shri Ashok R. Chheda. The Chairman of the committee is Mr. Kamal U. Jain. The Committee normally meets twice a month as required. During the year ended 31st March, 2013,4 (four) Investor Complaints were received and as of 31st March, 2013 there were no complaint pending. There were no share transfers pending for registration for more than 30 days as on 31st March, 2013.

V. DETAILS OF DIRECTORS SEEKING APPOINTMENT /RE-APPOINTMENT DetailsoftheDirectorsseekingre-appointmentattheensuingAnnualGeneralMeetingfixedonWednesday,the28th day of

August, 2013 are given hereunder:1. Name : Kamal U. Jain

Date of Appointment : 02.05.1989ExpertiseinSpecificFunctional Areas

: A visionary with great ideas and foresight has been behind the Company and nurtured it since it’s inception. He is very passionate about research and development which he feels is not just a step but a continuous process for innovation and enhancement of product lineandbrandequity.Knowledgeandexpertiseacrossdiverseindustrydisciplinesviz;Project and Finance Management in reality and jewellery industry has contributed to the multi-dimensional growth of the company. A name to reckon with among distinguished business personalities of the corporate world.

List of Directorship : Aaradhak Developers Private LimitedAum Realtors Private LimitedFlawless Developers Private LimitedGoodwill Theatres Private LimitedJalak Impex Private LimitedKanir Constructions Private LimitedSafe Heaven Builders Private LimitedSanaudit Synthetics Private LimitedSecure Builders Private Limited

2. Name : Rajiv KamdarDate of Appointment : 09.11.2006ExpertiseinSpecificFunctional Areas

: Heisintheprimeofhisorganizationallifewithaworldofaccoladeinimport-exportand international business acumen behind him. Formulating marketing strategy is his forte. Mr. Kamdar integrates the group’s Indianness with its global footprint. Articulate, Innovative and Market Savvy he is the fountain of new ideas, approaches and styles in drivingtheCompanytowardsnewhorizonsandunexploredshores.

List of Directorship : Multiplus Holding Limited


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VI. REPORT ON CORPORATE GOVERNANCE ComplianceCertificateforCorporateGovernancefromAuditorsoftheCompanyisannexedherewith.VII. CEO & CFO CERTIFICATION TheCEOandCFOcertificationontheFinancialStatementsandtheCashFlowStatementsfortheyearisannexedherewith.VIII. GENERAL BODY MEETING The details of the Annual General Meetings held in last three years are as under : -

AGM DAY DATE TIME VENUE 21st Tuesday 28.09.2010 03.00 P.M. Novelty Chambers, above Novelty Theatre, Maulana Shaukatali

Road, Grant Road (East), Mumbai – 400 007.22nd Friday 30.09.2011 03.00 P.M. Novelty Chambers, above Novelty Theatre, Maulana Shaukatali

Road, Grant Road (East), Mumbai – 400 007.23rd Saturday 29.09.2012 11.00 AM Novelty Chambers, above Novelty Theatre, Maulana Shaukatali

Road, Grant Road (East), Mumbai – 400 007. The details of Extra Ordinary General Meeting held in last three years are as under:- Nil Whether Special Resolution was put through Postal Ballot last year? No. Are Special Resolution proposed to be put through Postal Ballot this year? No.IX. DISCLOSURE

(i) TheCompanyhasnosignificantmaterialtransactionswithrelatedparties’viz.Promoters,DirectorsortheManagement,theirsubsidiariesorrelativesconflictingwithCompany’sinterest.

(ii) No penalties or strictures.X. MEANS OF COMMUNICATION

(i) Half–yearly report sent to each household of shareholders No(ii) Quarterly results:

Which newspapers normally published inThe Free Press Journal and Navashakti (Marathi).

(iii) Any website, where displayed Yes,www.flawlessdiamond.co.in(iv) WhetheritalsodisplaysofficialNewsreleasesandpresentations

made to Institutional investors / analystsNo

(v) Whether MD & A is a part of Annual Report YesXI. GENERAL SHAREHOLDER INFORMATION

(a) Annual General Meeting to be held: The 24th Annual General Meeting will be held on 28th Day of August, 2013 at 11.00 a.m. at Novelty Chambers, above

Novelty Theatre, Maulana Shaukatali Road, Grant Road (East), Mumbai – 400 007(b) Financial Calendar 2013 – 2014 (Tentative): Annual General Meeting : 28th August, 2013 First Quarterly Results : Before 15th August 2013 Second Quarterly Results : Before 15th November 2013. Third Quarterly Results : Before 15th February 2014. Fourth Quarterly Results : Before 15th May, 2014. Audited yearly Results for : Before end of September, 2014. the year ended 31st March, 2014.(c) Dates of Book Closure: 23rd August, 2013 to 27th August, 2013 (Both days inclusive).(d) Stock Exchange Listing: The Company’s shares are presently listed at The Bombay Stock Exchange Ltd, Mumbai. The Bombay Stock Exchange Ltd,

PhirozeJeejeebhoyTowers, Dalal Street, Mumbai – 400 001.


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Listing Fees has been paid to the above Stock Exchanges for the year 2013-14.(e) Stock Code: Equity Shares are listed on The Bombay Stock Exchange Ltd, Mumbai (Stock Code BSE: 523576) under the depository

System, the ISIN allotted to the Company’s equity share is INE 345E01021.(f) Stock Market Data: The monthly high and low quotations and volume of equity shares traded at The Bomaby Stock Exchange Ltd., Mumbai

is as follows:

PeriodBombay Stock Exchange

High (`) Low (`) Volume (Nos.)April, 2012 0.61 0.50 529589May, 2012 0.60 0.42 513971June, 2012 0.64 0.47 321965July, 2012 0.62 0.43 480388August, 2012 0.58 0.38 965318September, 2012 0.52 0.39 912171October, 2012 0.54 0.39 398185November, 2012 0.56 0.38 388343December, 2012 0.79 0.38 1022594January, 2013 0.90 0.43 1042636February, 2013 0.50 0.38 439090March, 2013 0.49 0.34 214986TOTAL 7229236

(g) Registrar and Transfer Agents: The Registrar and Transfer Agents of the Company are Adroit Corporate Services Pvt. Ltd. and they look after Physical

aswellasElectronicTransfer.Theyhavetheirofficeat: 19/20, Jaferbhoy Industrial Estate, 1st Floor, Makwana Road, Marol Naka, Mumbai- 400 059. Tel Nos. : 91 22 28596060/28594060. Fax : 91 22 28503748. Email:[email protected] (h) Share Transfer System: Share transfer requests received in physical form are registered within 30 days from the date of receipt and Demat requests

arenormallyconfirmedwithinanaverageperiodof10daysfromthedateofreceipt.(i) Shareholder Statistics and Distribution of Shareholdings as on 31st March, 2013:-

No. of EquityShares held

No. ofShareholders

% ofShareholders

No. ofShares

% ofShareholding

UPTO-500 1928 12.97 561561 0.34501-1000 7870 52.96 7796815 4.671001-2000 1627 10.95 3005023 1.802001-3000 722 4.86 2025408 1.213001-4000 312 2.10 1184357 0.714001-5000 770 5.18 3797613 2.285001-10000 811 5.46 6673940 4.00

10001 & above 820 5.52 141735283 84.98Grand Total 14860 100.00 166780000 100.00


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(j) Dematerialization of Equity Shares:

The Company’s Equity Shares are included in the list of Companies whose scrip have been mandated by SEBI for settlementonlyindematerializedformbyallinstitutionsandallinvestors.TheCompanyhadsignedagreementswithNational Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to offer depository services to its shareholders. As on 31st March, 2013 about 94.74% of Equity Share capital of the Company has beendematerialized.

(k) Nomination Facility:

Individual Shareholders can now avail of the facility of nomination. The nominee shall be the person in whom all rights of transfer and/or amount payable in respect of the shares shall vest in the event of the death of shareholder(s). A minor also can be a nominee provided the name of the guardian is given in the Nomination Form. The facility of nomination is not available to non-individual shareholders such as Bodies’ Corporate, Financial Institutions, Karta’s of Hindu undivided families and holders of Power of Attorney.

(l) Address for correspondence:

Company’s Registered Office Registrar and Transfer AgentsMr. Prem Kumar Uppal(ComplianceOfficer)136, Panchratna,Opera House,Mumbai - 400 004.Tel Nos.: 91 22 23682444Fax No. : 91 22 23633578E-mail:[email protected]

Adroit Corporate Services Pvt. Ltd.19/20, Jaferbhoy Industrial Estate,1st Floor, Makwana Road,Marol Naka,Mumbai- 400 059Tel Nos. 91 22 28596060/ 28594060Fax : 91 22 28503748Email:[email protected]

m) Green Initiative

The Ministry of Corporate Affairs (“MCA”), Government of India, through its Circular No. 17/2011 dated 21st April, 2011 and Circular No. 18/2011 dated 29th April, 2011, has allowed companies to send Annual Report comprising of BalanceSheet,StatementofProfitandLoss,Directors’Report,Auditors’ReportandExplanatoryStatementetc.,throughelectronic mode to the registered e-mail address of the members. Keeping in view the underlying theme and the circulars issued by MCA, we propose to send future communications in electronic mode to the e-mail address provided by you to the depositories and made available by them being the registered address. By opting to receive communication through electronicmodeyouhavethebenefitofreceivingcommunicationspromptlyandavoidinglossinpostaltransit.Memberswho hold shares in physical form and desire to receive the documents in electronic mode are requested to provide their details(name,foliono,e-mailid)ontheCompany’se-mailaddressviz.infoflawlessdiamond.co.inMemberswhoholdshares in electronic form are requested to get their details updated with the respective Depositories.

MANAGEMENT DISCUSSION AND ANALYSIS REPORTGems and Jewellery has been part and parcel of Indians since ages, both for its aesthetic and as well as investment value. The Indian GemandJewellerycanbeclassifiedintovarioussegmentslikediamond,colourstone,silverjewellery,pearls,andGoldstuddedjewellery. Looking at the trends in India it is still gold and diamonds is the preference for any occasion like birthday, wedding anniversary, weddings and many festivals where Indians have sentimental values.

The all of sudden rise in demand for gold in the country has led to various restriction by the government to curb the import of gold inthecountrytomaintaintheCAD(CurrentAccountDeficit)

The depreciation of rupee against US $ is also likely to effect the jewellery sector. The demand for gold is likely to remain unchanged in the country because of love for gold on the occasion of marriages and good liquidity value of gold in case of emergency.


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CEO/CFO CERTIFICATIONTheManagingDirectorandCFOheadingthefinancefunctionhavecertifiedtotheBoardthat:

(a) I have reviewed the Financial Statements and the Cash Flow Statement for the year and that to the best of my knowledge and belief:

(i) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) These statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

(b) There are, to the best of my knowledge and belief, no transactions entered into by the Company during the period which are fraudulent, illegal or in violation of the Company’s code of conduct.

(c) I accept responsibility for establishing and maintaining internal controls and I have evaluated the effectiveness of the internal controlsystemsof theCompanyandIhavedisclosedto theAuditorsandtheAuditCommittee,deficiencies in thedesignor operation of internal controls, if any, of which I am aware and the steps I have taken or propose to take to rectify these deficiencies.

(d) I have indicated to the Auditors and the Audit Committee:

(i) Significantchangesintheinternalcontrolduringtheyear;

(ii) Significant changes in accountingpoliciesduring theyear and that the samehavebeendisclosed in thenotes to theFinancial Statements; and

(iii) InstancesofsignificantfraudofwhichIbecomeawareandtheinvolvementtherein,ifany,oftheManagementoranEmployeehavingasignificantroleintheCompany’sinternalcontrolsystem.

Place: Mumbai Bhawar U. Jain Date : 30th May, 2013 Managing Director (CEO & CFO)

DECLARATIONAs provided under Clause 49 of the Listing Agreement with the Stock Exchange, it is hereby declared that all the Board Members oftheCompanyhaveaffirmedcompliancewiththeCodeofConductfortheyearended31.03.2013.

Place : Mumbai Bhawar U. JainDate : 30th May, 2013 Managing Director (CEO & CFO)


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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

To the Member of Flawless Diamond (India) Limited

We have examined the compliance of the conditions of Corporate Governance by Flawless Diamond (India) Limited (the Company) for the year ended 31st March, 2013 as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring the compliance of the conditions ofCorporateGovernance.ItisneitheranauditnoranexpressionoftheopiniononthefinancialstatementsoftheCompany.

In our opinion and to the best of our information and according to the explanations given to us and the representation made by the Directors and Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above-mentioned Listing Agreement.

We state that no Investor Grievances are pending for a period exceeding one month against the Company as per the records maintained by the Shareholders/Investors Grievance Committee as at the year end.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiencyoreffectivenesswithwhichthemanagementhasconductedtheaffairsoftheCompany.

FOR SURESH ANCHALIYA & CO. Chartered Accountants Firm Regn. No : 112492W

SURESH ANCHALIYAPlace : Mumbai Partner.Date : 30th May, 2013 Membership No. 044960


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INDEPENDENT AUDITOR’S REPORTTo the Members

Flawless Diamond (India) Limited

REPORT ON THE FINANCIAL STATEMENTS

WehaveauditedtheaccompanyingfinancialstatementsofFlawless Diamond (India) Limited, (“the Company”) which comprise the Balance Sheet as at 31stMarch,2013,theStatementofProfitandLossandtheCashFlowStatementfortheyearthenendedandasummaryofthesignificantaccountingpoliciesandotherexplanatoryinformations.

MANAGEMENT’S RESPONSIBILTY FOR THE FINANCIAL STATEMENTS

TheCompany’sManagementisresponsibleforthepreparationofthesefinancialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsoftheCompanyinaccordancewiththeAccountingStandardsreferredto in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenanceofinternalcontrolrelevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewand are free from material misstatement, whether due to fraud or error.

AUDITOR’S RESPONSIBILTY

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedourauditinaccordancewith the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply withtheethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsare free from material misstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsandthedisclosuresinthefinancialstatements.The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financialstatements,whetherdue tofraudorerror. Inmaking thoseriskassessments, theauditorconsiders the internalcontrolrelevant to theCompany’spreparationandfairpresentationof thefinancialstatements inorder todesignauditprocedures thatare appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonablenessoftheaccountingestimatesmadebytheManagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

OPINION

Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous,thefinancialstatementsgivetheinformation required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

(b) InthecaseoftheStatementofProfitandLoss,ofthelossoftheCompanyfortheyearendedonthatdate,and

(c) InthecaseoftheCashFlowStatement,ofthecashflowsoftheCompanyfortheyearendedonthatdate.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section(4A)ofsection227oftheAct,wegiveintheAnnexureastatementonthemattersspecifiedinparagraphs4and5ofthe Order.


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2. As required by Section 227(3) of the Act, we report that:

(a) AsmoreexplainedinNote5ofNotesonAccountstothefinancialsatetmentandtothefollowingparagraphqualifiedinthe annexure to the Auditor’s Report ;

Paragraph No. Regarding :

Annexure 4 Recovery of debts

Annexure 9 (b) Income Tax Liabilities

Annexure 11 Defaulted in repayment of loans to banks

Note 4 of Notes on Accounts NoManufacturingActivity

(b) 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.

(c) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(d) TheBalanceSheet,StatementofProfitandLoss,andtheCashFlowStatementdealtwithbythisreportareinagreementwith the books of account.

(e) Inouropinion,theBalanceSheet,StatementofProfitandLoss,andtheCashFlowStatementcomplywiththeAccountingStandards referred to in sub-section (3C) of section 211 of the Act.

(f) On the basis of the written representations received from the directors as on 31st March, 2013 taken on record by the Board ofDirectors,noneofthedirectorsisdisqualifiedason31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.




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ANNEXURE TO INDEPENDENT AUDITORS’ REPORT[Referred to in Paragraph 1 under the heading of “Report on Other Legal and Regulatory Requirement” 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. TheCompanyhasmaintainedproperrecordsshowingfullparticulars,includingquantitativedetailsandsituationoffixedassets.

b. Asexplainedtous, thefixedassetshavebeenphysicallyverifiedbytheManagementduringtheyear inaperiodicalmanner,whichinouropinionisreasonable,havingregardtothesizeoftheCompanyandnatureofitsassets.Nomaterialdiscrepancieswerenoticedonsuchphysicalverification.

c. Inouropinion,theCompanyhasnotdisposedoffsubstantialpartoffixedassetsduringtheyearandthegoingconcernstatus of the Company is not affected.

2. In respect of its inventories:a. The inventorieshavebeenphysicallyverifiedby themanagementat regular intervalsduring theyear. Inouropinion

frequencyofverificationisreasonableb. Inouropinionandaccordingto the informationandexplanationsgiventous, theproceduresofphysicalverification

ofinventoriesfollowedbytheManagementarereasonableandadequateinrelationtothesizeoftheCompanyandthenature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticedonphysicalverificationofinventoryascomparedtothebookrecords.

3. a. Thecompanyhasnotgrantedanysecuredorunsecuredloantocompanies,firmsorotherpartiescoveredintheregistermaintained under section 301 of the Companies Act, 1961.

b. Inrespectofloans,securedorunsecuredtakenbythecompanyfromcompanies,firmsorotherpartiescoveredintheregister maintained under section 301 of the Companies Act, 1956i. The company has taken loan from 3 parties and the amount involved is `1,78,50,000/-ii. The company has taken the interest free loan and the terms and conditions of loan taken are not prejudicial to the

interest of the company.iii. Thepaymentofprincipalisnotregular

4. Inouropinionandaccordingtotheinformationandexplanationsgiventousandasverifiedbyus,internalcontrolproceduresis notcommensuratewiththesizeoftheCompanyandthenatureofitsbusinessforthepurchaseofinventory,fixedassetsandalso for the sale of goods. During the course of our audit, we have observed that the company is in continuous failures with regard to collection of foreign debtors. The company has not taken any major initiative to recover the dues from the debtors.

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 except that the loan taken from the directors of the company.

7. Inouropinion,theinternalauditsystemofthecompanyisincommensuratewithitssizeandnatureofitsbusiness.Howeverthe company has not appointed an internal auditor as required under the Companies Act, 1956

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


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us, no undisputed amounts payable in respect of the aforesaid dues which were outstanding as at 31st March, 2013 for a period of more than six months from the date they became due except a sum of ` 31,90,460/- due in respect of Income Tax demand for A.Y. 2010 -11

b. The disputed statutory dues aggregating of ` 15.56 Crore that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Sr. No.

Name of Statute Nature of Dues

Amount (` In crore)

Period to which the amount relates

Forum where dispute is pending

1 Income Tax Act, 1961 Income Tax 7.51 Amount relates to A.Y. 2008-09

Income Tax Appellate Tribunal


Income Tax Appellate Tribunal


Commissioner of Income Tax (Appeal)

10. TheCompanydoesnothaveaccumulatedlosses.Thecompanyhasincurredcashlossesduringthefinancialyearcoveredbyourauditandalsoincurredcashlossesintheimmediatelyprecedingfinancialyear.

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 Bank Period from which payment Outstanding Defaulted Amount (` In Crore) as on 31.03.2013

ICICI Bank Since 30.06.2011 26.75Punjab and Sind Bank Since 30.06.2011 16.44

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 benefitfund/society.

14. According to information and explanation given to us, the Company is not dealing or trading in securities, debentures and other investments.

15. TheCompanyhasnotgivenguaranteesforloanstakenbyothersfrombanksorfinancialinstitutions.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 short term 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

orreportedduringtheyearthatcausesthefinancialstatementstobemateriallymisstated.




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(` In Thousands)Particulars Note As at 31.03.2013 As at 31.03.2012EQUITY AND LIABILITIESShareholder's FundsShare Capital 1 166780.00 166780.00Reserves and Surplus 2 766223.72 773501.38

Current LiabilitiesShort-Term Borrowings 3 613200.86 614701.15Trade Payables 4 1156013.41 1097941.58Other Current Liabilities 5 5299.16 5102.83TOTAL 2707517.15 2658026.94

ASSETSNon-Current AssetsFixed Assets

(i) Tangible Assets 6 15841.02 18712.04Deffered Tax Assets (Net) 7 10701.51 7836.34

Current AssetsInventories 8 1869.51 1869.51Trade Receivables 9 2672029.02 2616518.18Cash and Cash Equivalents 10 864.93 1306.37Short - Term Loans and Advances 11 6211.16 11719.61Other Current Assets 12 0.00 64.89

TOTAL 2707517.15 2658026.94SignificantAccountingPoliciesandNotesonFinancial Statement

1 to 21

As per our report of even date For and On behalf of the Board of Directors

For SURESH ANCHALIYA & CO. KAMAL U. JAIN ChairmanChartered Accountants BHAWAR U. JAIN Managing DirectorFirm Regn. No.- 112492W RAJIV P. KAMDAR Director

DEEPAK K. PAREKH Independent DirectorSURESH ANCHALIYA ASHOK R. CHHEDA Independent DirectorPartnerMembership No. 044960Place: MumbaiDate: 30th May, 2013

BALANCE SHEET AS AT 31ST MARCH, 2013


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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2013(` In Thousands)

Particulars Note 2012-13 2011-12

I INCOMERevenue from Operations 13 0.00 577581.12Other Income 14 87167.91 174679.56Total Revenue 87167.91 752260.68

II EXPENDITURECost of Materials Consumed and Purchases 15 0.00 317474.29Changes in Inventories of Finished Goods, Work-In-Progress and Stock-in-Trade

16 0.00 264364.85

EmployeeBenefitExpense 17 710.93 1566.92Finance Cost 18 90279.44 115057.28DepreciationandAmortizationExpenses 2869.52 3558.12Other Administrative Expenses 19 2585.52 59375.01Total Expenses 96445.41 761396.47ProfitBeforeExceptionalItemsandTax (9277.50) (9135.79)Exceptional Items 20 0.00 3647.65 ProfitBeforeTax (9277.50) (5488.15)Tax Expenses: (1) Current Tax 0.00 0.00 (2) Tax for Earliar Period 865.34 0.00 (3) Deferred Tax (2865.18) (8970.87)

Profit/(Loss) For The Period (7277.66) 3482.72

Earning Per Equity Share: (1) Basic (0.04) 0.02 (2) Diluted (0.04) 0.02

SignificantAccountingPoliciesandNotesonFinancial Statement

1 to 21





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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2013

PARTICULARSFor the year

ended 31st March, 2013

For the year ended 31st

March, 2012A CASH FLOW FROM OPERATING ACTIVITIES

Net Profit Before Tax And Extraordinary Items (9277.50) (5488.15)Adjustment for :Depreciation 2869.52 3558.12 ProfitonSaleofOffice 0.00 (3647.65)Interest (Net) 90272.49 93142.01 115050.33 Operating Profit Before Working Capital And Receivables 83864.51 109472.65 Adjustment for :(Increase) / Decrease in trade and other receivables (49935.98) (418713.51)(Increase) / Decrease in Inventories 0.00 314445.56 Increase / (Decrease) in Trade Payables and other liabilities 58268.15 8332.17 3725.09 Cash Generated From Operations 92196.68 8929.79 Income Tax Paid 865.34 3107.70 Cash Flow Before Extra-Ordinary Items 91331.34 5822.09 Net Cash From Operating Activities (a) 91331.34 5822.09

B CASH FLOW FROM INVESTING ACTIVITIESSale/(Purchase) of Investment 0.00 6360.74 Interest Received 6.95 6.95 Net Cash Used In Investment Activities (b) 6.95 6367.69

C CASH FLOW FROM FINANCING ACTIVITIESLoan Received and Paid (1500.29) 91491.49 Interest Paid (90279.44) (115057.28)Net Cash Used In Financing Activities (c) (91779.73) (23565.79)Net Increase In Cash And Cash Equivalents (a) + (b) + (c ) (441.44) (11376.01)Cash And Cash Equivalents As At The Commencement 1306.37 12682.38 of the Year (Opening Balance)Cash And Cash Equivalents As At The End of the Year 864.93 1306.37 Net Increase / (Decrease) As Disclosed Above (441.44) (11376.01)Note:Allfiguresinbracketsareoutflows





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(` In Thousands)As at

31.03.2013As at

31.03.2012Note No. 1Shareholder FundEquity Share Capitala) Authorised Share:

200000000 Equity Shares of ` 1/- each 200000.00 200000.00250 Preference Shares of ` 100/- Each 25.00 25.00

200025.00 200025.00b) Issued, Subscribed and Paid up:

166780000 Equity Shares of ` 1/- each Fully paid-up 166780.00 166780.00Total 166780.00 166780.00

c) Reconcilation of the Number of Equity Shares Outstanding at the beginning and at the end of the reporting periodParticularsOutstanding at the Beginning of the Reporting Year 166780000 166780000Add: Issued During the year 0 0Outstanding at the End of the Reporting Year 166780000 166780000

d) Terms / Right Attached to Equity SharesEquity SharesIn the event of liquidation of the company, the holder of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in the number of equity shares held by the shareholders at the time of liquidation

e) Details of Shareholders holding more than 5% share in the companyEquity Shares Fully Paid at ` 1/- each

As at 31st March, 2013 As at 31st March, 2012S.No. Name No. of Shares % of Holding No. of Shares % of Holding

1 Abhishek B Jain 11001000 6.60 11001000 6.602 Jalak K jain 11001885 6.60 11001885 6.603 Ashok kumar Geesulal Sethiya 11000000 6.60 11000000 6.604 Manmohan Gems Pvt Ltd 11000000 6.60 11000000 6.605 Sethia Gems Pvt Ltd 11000000 6.60 11000000 6.60

Note No. 2Reserve and Surplus

Particulars As at 31.03.2013

As at 31.03.2012

a) Securities Premium ReserveBalance as per Last Financial Statement 152100.00 152100.00Add: On issue of Equity Shares 0.00 0.00Closing Balance 152100.00 152100.00

b) Surplus / (deficit) in the Statement of Profit and LossBalance as per Last Financial Statement 621401.38 617918.66Add:Profit/(Loss)fortheYear (7277.66) 3482.72Net Surplus / (Deficit) in the Statement of Profit and Loss 614123.72 621401.38Total Reserve and Surplus 766223.72 773501.38

NOTES FORMING PART OF THE FINANCIAL STATEMENT


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31.03.2013As at

31.03.2012Note No. 3Short Term Borrowings

SecuredPost Shipment Export Finance 376261.55 321495.87Cash Credit 177909.74 292014.57Car Finance 109.57 790.71UnsecuredFrom Others 58920.00 400.00

613200.86 614701.15The short-term loan against foreign bills for collection and Cash Credit loan from the banks is secured by hypothecation of book debts,stockintrade,furthersecuredbycollateralsecurityofequitablemortgageofresidentialflatsandofficepremisesbelongingto Smt.Sunita K. Jain, Shri.Kamal U. Jain, Smt. Malli B. Jain, Jalak Impex Pvt. Ltd., Goodwill Theatres Pvt. Ltd. and equitable mortgage on the properties of the company and personal guarantee by Shri. Bhawar U. Jain, Shri.Kamal U. Jain, Smt.Sunita K. Jain, Shri.Abhishek B. Jain, Smt.Malli B. Jain and Corporate Guarantee by Jalak Impex Pvt. Ltd., Sanaudit Synthetics Pvt. Ltd. and Goodwill Theatres Pvt. Ltd.Note No. 4Trade PayablesOthers 1156013.41 1097941.58

1156013.41 1097941.58Note No. 5

Other Current LiablitityCreditors for Expenses 414.04 225.49Other Payables 4885.12 4877.33

5299.16 5102.83Note: - Other Payables include Statutory Dues and Payable for Expenses

Note No. 6Fixed Assets (` In Thousands)

GROSS BLOCK DEPRECITION NET BLOCKNAME OF ASSETS As On

01.04.12Addition/(Deletion) during the

year

As On 31.03.13

As On 01.04.12

Depreciation during the

year

Depreciation Adjustments

Total As On 31.03.13

As On 31.03.13

As On 31.03.12

Air Conditioners 799.91 0.00 799.91 523.23 38.49 0.00 561.72 238.19 276.69Computers 5138.68 0.00 5138.68 4656.77 192.76 0.00 4849.53 289.16 481.92Motor Cars 9238.32 0.00 9238.32 6545.11 697.27 0.00 7242.38 1995.93 2693.21Furniture & Fixtures 3698.59 0.00 3698.59 2218.21 259.59 0.00 2477.82 1220.77 1480.36Residential Flat 412.00 0.00 412.00 267.44 7.23 0.00 274.67 137.33 144.56OfficePremises 3624.85 0.00 3624.85 1762.49 93.12 0.00 1855.61 1769.24 1862.36OfficeEquipments 10803.21 0.00 10803.21 9566.53 172.02 0.00 9740.03 1063.18 1236.67Factory Premises 2592.77 0.00 2592.77 1044.09 154.87 0.00 1198.96 1393.81 1548.69Fire Extinguisher 57.12 0.00 57.12 42.39 3.81 0.00 46.20 10.92 14.73Inverter & Batteries 68.86 0.00 68.86 32.52 5.05 0.00 37.57 31.29 36.34Plant & Machineries 15206.05 0.00 15206.05 6874.49 1158.92 0.00 8033.40 7172.65 8331.56Motor Cycles 82.62 0.00 82.62 63.90 4.85 0.00 68.75 13.87 18.72Electronic Installation 1153.82 0.00 1153.82 567.59 81.55 0.00 649.14 504.68 586.23Total 52876.80 0.00 52876.80 34164.76 2869.52 0.00 37035.78 15841.02 18712.04Previous Year Total 52876.80 0.00 52876.80 30606.64 3558.12 0.00 34164.76 18712.04 22270.16



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31.03.2013As at

31.03.2012Note No. 7

Deffered Tax AssetsRelated to Business Loss 11285.00 8604.29Related to Fixed Assets (583.49) (767.96)

10701.51 7836.33

Note No. 8InventoriesFinished Goods 1869.51 1869.51

1869.51 1869.51

Note No. 9Trade ReceivablesFor period exceeding 6 months 2672029.02 2616518.18For period upto 6 months 0.00 0.00

2672029.02 2616518.18

Note No. 10Cash and Cash EquivalentBalances with Banks 41.90 263.58Cash on hand 731.96 958.67In Fixed Deposit Accounts 74.91 74.91Accrued Interest on Fixed Deposit 16.16 9.21

864.93 1306.37Fixed deposits of ` 74.91 (Thousands) with banks having maturity of more than 12 month

Note No. 11Short term Loans and Advances(Unsecured and Considered Good)Deposits 1051.30 1051.30Other amount recoverable in cash or kind * 5159.86 10668.31

6211.16 11719.61*Other amount recoverable include refundable from sales tax and advnces to suppliers

Note No. 12Other Current AssetsPreliminary Expenses not Written Off 0.00 64.89

0.00 64.89

Note No. 13Revenue From OperationSale of Goods 0.00 577581.12Less: Excise Duty/VAT/Service Tax 0.00 0.00

0.00 577581.12



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NOTES FORMING PART OF THE FINANCIAL STATEMENT (` In Thousands)

31st March, 2013

31st March, 2012

Note No. 14Other IncomeInterest Income on FDR 6.95 6.95Exchange Difference 86973.66 170973.86Government Grant 0.00 2597.1Miscellaneous Income 187.30 1101.67

87167.91 174679.56

Note No. 15Cost of Material ConsumedParticularsPurchase of Goods 0.00 266980.47Power & Fuel Expenses 0.00 413.10Add:- Opening StockRaw Material 0.00 50080.71

0.00 317474.29Less:- Closing StockRaw Material 0.00 0.00Raw Material Consumed 0.00 317474.29

Note No. 16(Increase)/Decrease in InventoryOpening Balance of Inventory 1869.51 266234.36Less: Closing Balance of inventory (1869.51) (1869.51)

0.00 264364.85

Note No. 17Employees Benefit ExpensesSalaries and Wages 623.82 1456.24Contribution to Provident Fund & ESIC 79.33 110.67Gratuity 7.78 0.00

710.93 1566.92

Note No. 18Finance CostInterest 90279.44 115057.28

90279.44 115057.28


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NOTES FORMING PART OF THE FINANCIAL STATEMENT (` In Thousands)

31st March,2013

31st March,2012

Note No. 19Other ExpensesAdvertisement Expenses 20.18 15.23Auditor's Remuneration 213.48 258.69Bank Charges 46.28 199.97Bad Debts 0.00 12285.76Books and Periodicals 0.00 0.90Conveyance Expenses 9.25 33.35Electricity Expenses 0.43 0.00Export Expenses 0.00 153.23Insurance Expenses 90.72 147.76Managerial Remuneration 240.00 240.00Membership Fees & Subscription 176.35 111.34Miscellaneous Expenditure 383.98 234.54Motor Car Expenses 34.67 32.46Postage & Telegram 3.07 113.92Printing & Stationery 49.99 244.71Loan Processing Fees 0.00 457.75Preliminery Expenses w/o 64.89 128.00Professional Fees 910.62 818.97Profession Tax 2.50 5.00Rent Rates & Taxes 216.00 240.72Repair and MaintenanceBuilding 12.29 44.24Other 2.85 15.14 57.75Sundry Balance W/off 0.00 43360.01Telephone Expenses 107.97 178.83Travelling Expenses 0.00 11.89

2585.52 59375.01

Note No. 20Exceptional ItemsProfitonSaleofOffice 0.00 3647.65

0.00 3647.65


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NOTE : 21

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting:-

Thefinancialstatementsarepreparedunderthehistoricalcostconventiononaccrualbasisinaccordancewiththegenerallyaccepted accounting principles and provision of the Companies Act, 1956 as adopted consistently by the Company.

2. Use of Estimates:-

ThepreparationoffinancialstatementrequiresthemanagementoftheCompanytomakeestimatesandassumptionstobe made that affect the reported amount of assets and liabilities and disclosures relating to the contingent liabilities as at thedateofthefinancialstatementofandreportedamountsofincomeandexpensesduringtheperiod.Examplesofsuchestimateincludesprovisionfordoubtfuldebts,futureobligation,employeesretirementbenefitplans,provisionforincometaxes,usefullivesoffixedassetsandintangibleassets.Contingenciesarerecordedwhenitisprobablethataliabilitywillbe incurred and the amount can be reasonably estimated. Actual results may differ from such estimates.

3. Fixed Assets:-

Allfixedassetsarevaluedatcostlessaccumulateddepreciation.

4. Depreciation:-

Depreciation on Fixed Assets is provided on written down value method in accordance with the Schedule XIV of the Companies Act, 1956 on pro-rata basis.

5. Inventories:-

InventoriesofdiamondarevaluedatcostonspecificidentificationmethodsexceptinthecaseofinventoryofRoughDiamondRejectionwherethevalueiscarriedatthenetrealizablevalue.InventoriesofJewelleryarevaluedatcost,whichincludes cost of material used and proportionate expenses incurred to manufacture jewellery.

6. Foreign Currency Transactions:-

(i) Transactions in foreign currencies are normally recorded at the average exchange rate prevailing during the period of transaction.

(ii) Monetary item denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates except where there is no virtual certainty of recovery of export proceeds, and those covered by forward exchange contracts are translated at the average rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, suchdifferencehavingbeenrecognizedoverthelifeofthecontract.

(iii) AnyincomeorexpensesonaccountofexchangedifferenceeitheronsettlementorontranslationisrecognizedintheStatementofProfitandLoss.

7. Taxation:-

ProvisionforcurrenttaxmadeaftertakingintoconsiderationbenefitsadmissibleundertheprovisionsoftheIncome-Tax Act, 1961. Deferred tax resulting from “timing difference” between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognizedandcarriedforwardonlytotheextentthatthereisvirtualcertaintythattheassetwillberealizedinfuture.

8. Employee’s Retirement Benefits:-

Company’scontributiontoProvidentFundandESICarechargedtoStatementofProfitandLoss.LiabilityforGratuityisdeterminedontheBalanceSheetdateandchargedtoStatementofProfitandLoss.


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10. Revenue Recognition:-

In appropriate circumstance, revenue is recognizedwhenno significantuncertaintyas todeterminationor realisationexists. Turnover includes sale of goods net of VAT and sales tax.

11. Contingent Liability:-

These are disclosed by way of notes on the Balance Sheet date. Provision is made wherever applicable for those contingencies whicharelikelytomaterializeintoliabilitiesaftertheyearendtillthefinalizationofaccountsandhavematerialeffectonthe position stated in Balance Sheet.

12. Impairment:-

At each Balance Sheet date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the assets is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of assets net selling priceandvalue inuse. Inassessingvalue inuse, theestimatedfuturecashflowexpectedfromthecontinuinguseoftheassetsandfromitsdisposalisdiscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectsthecurrentmarketassessmentsoftimevalueofmoneyandrisksspecifictotheassets.ReversalofimpairmentlossisrecognizedimmediatelyasincomeintheStatementofProfitandLoss.

13. Earning Per Share:-

TheearningconsideredinascertainingEPScomprisetheNetProfitafterTax.Thenumberofsharesusedincomputingbasic EPS is the weighted average number of shares outstanding during the year.

(B) NOTES ON ACCOUNTS: -

1. Previousyearfigureshavebeenregrouped,reworked,rearrangedandreclassifiedwhenevernecessary.

2. The company is in default for making payment to the banks. The banks have declared the company’s bank account as NPA andalsoinitiatedrecoveryproceedingandfiledanapplicationinDebtRecoveryTribunalforrecoveryofloanamount.The Debt Recovery Tribunal in its order instructed the company to pay the ICICI Bank loan amount with interest at the rate 18% p.a. from 30th May, 2012 onwards.

3. TheinterestonoutstandingloanfromICICIbankisprovidedattheratespecifiedintheDebtRecoveryTribunalandinterestonPunjab&SindhBankhasprovidedbythebankintheloanrecoveryletter.Howeverthefinalsettlementwiththe bank may change the actual liability of interest.

4. During the year the company has not carried out any manufacturing activity due to its liquidity crisis and market conditions.

5. Thesecuredcreditorsofthecompany‘ICICIBank’hasfiledwindinguppetitionu/s439oftheCompaniesAct,1961inthe Bombay High Court. The matter is pending before Honorable Bombay High Court. The said petition may affect the company’s “going concern” status.

(` in Thousands)

As at 31st March, 2013 As at 31st March, 20126. Contingent Liabilities 155600.00 109800.007. Estimated amount of contract remaining to be executed on

Capital Account and not provided for the year NIL NIL8. Amount Outstanding to SSI Units NIL NIL9. Managerial Remuneration:-

Managing Directors’ Salary 240.00 240.00240.00 240.00


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10. Payments to Auditors:-(i) Audit Fees 155.00 155.00(ii) Tax Audit Fees 20.00 20.00(iii) CertificationandTaxationMatters 16.00 56.55(iv) Service Tax 22.48 27.14

213.48 258.69

11. Deferred Tax:-

The Company has accounted for Deferred Taxation in respect of timing differences in accordance with the requirement of Accounting Standard 22 “Accounting for Taxes on Income”. The Deferred Tax liability comprises the followings :

Deferred Tax Assets Current Year Previous YearOn Account of Business Loss 11284996 27845605Onaccountoffixedassets (583487) (2485295)Deferred Tax Assets 10701509 7836336

12. Segment Reporting:-

TheCompanyhasbeenoperatingsignificantlyinasinglesegmentofDiamond&Jewellery.

13. There are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under “The Micro, Small and Medium Enterprises Development Act, 2006.”

14. Related Party Disclosure as per AS 18 (As identified by the Management) :

(i) Related Party Relationship

(a) Where Control Exists 1) Kamal & Co.

(b) Key Management Personnel 1) Shri Bhawar U. Jain

2) Shri Kamal U. Jain

(c) Relatives of Key Management Personnel 1) Sanaudit Synthetics Pvt Ltd

(d) Other Related Parties NIL

(ii) Transaction with Related Parties : (` in Thousands)

Type of Related Party Description of the Nature of Transaction Volume of Transaction 2012-13 2011-12

(a) Where Control Exists (a) Total Loans/ Advances / Deposits Paid or repaid - -(b) Total Loans / Advance Recd. or recovered - -(c) Total Rent Paid to Jalak Impex Pvt. Ltd. - -(d) Rent paid to Kamal & Co. 180.00 180.00

(b) Key Management Personnel (a) Total Loans / Advances Paid 400.00 -- (b) Total Loans / Advances Received 17450.00 400.00

(c) Managing Directors Remuneration 240.00 240.00(c) Relatives of Key Management

Personnel(a) Total Loans / Advances Paid -- --

(b) Total Loans / Advances Recd. -- --(d) Other Related Parties NIL NIL


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(iii) Amount outstanding at the end of year Transaction with Related Parties :

( ` in Thousands)

Type of Related Party Description / Nature of Account Amount outstanding 2012-13 2011-12

(a) Where Control Exists a) Total Loans/ Advances / Deposits (Rent Deposit with Jalak Impex Pvt. Ltd.)

850.00 850.00

(b) Key Management Personnel - -(c) Relatives of Key Management

Personnel- -

(d) Other Related Parties NIL NIL

15. Earning Per Share:-

TheEarningPerSharehasbeencomputedbydividingtheprofitaftertaxbynumberofEquitySharesoutstanding.

Current Year PreviousYear(a) NetprofitavailableforEquity (7277.66) 3482.72

Shareholders (` Thousand)(Numerator used for calculation)

(b) Weighted Average number of equity shares 166780000 166780000used as denominator for calculating EPS (in 000)

(c) Basic and Diluted Earnings per share of `1 each (`) : (0.04) 0.02

16. (a) Value of Imports on CIF basisCurrent Year Previous Year

Traded Goods NIL NIL(b) Amount remitted during the year in foreign currency on account of : -

Dividend NIL NILTravelling NIL NILPurchase of Goods on CIF Basis NIL 77887.11

(c) Earning in foreign exchangeExport of goods on FOB basis NIL 4033.97

17. TheamountsintheBalanceSheetandStatementofProfitandLossareroundedofftothenearestOneThousandRupees.





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FLAWLESS DIAMOND (INDIA) LIMITEDRegisteredOffice:136,Panchratna,OperaHouse,Mumbai-400004

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL

DP.Id * Folio No. :Client Id

NAME AND ADDRESS OF THE SHAREHOLDER ____________________________________________________________________________________________________________________________________________No. of shares held :____________________________

I hereby record my presence at the 24th ANNUAL GENERAL MEETING of the Company held on 28th Day of August, 2013 at 11.00 a.m. at Novelty Chambers, above Novelty Theatre, Maulana Shaukatali Road, Grant Road (East), Mumbai – 400 007* Applicable for investors holding shares in Electronic Form.** Strike out whichever is not applicable.

SIGNATURE OF THE SHAREHOLDER OR PROXY**

Proxy formFLAWLESS DIAMOND (INDIA) LIMITED.

RegisteredOffice:136,Panchratna,OperaHouse,Mumbai-400004.

DP.Id * Folio No. :Client Id

I/We _________________________________________________________________________________being a Member/Members of FLAWLESS DIAMOND (INDIA) LIMITED hereby appoint___________________________________________of_________________________________________________________(or failing him)______________________________ of_________________________________________________________(or failing him)______________________________ of_______________________________________________________________________________________________________________________________________________________________

as my/our Proxy to attend and vote for me/us and on my/our behalf at the 24th Annual General Meeting of the Company, to be held on 28th Day of August, 2013 at 11.00 a.m. at Novelty Chambers, above Novelty Theatre, Maulana Shaukatali Road, Grant Road (East), Mumbai – 400 007. and at any adjournment thereof.______________________________________________________________________________________________________

As WITNESS my hand/our hands that________________________day of____________________________2013. Signature_____________________________________________________________

* Applicable for investors holding shares in Electronic Form.Note: The Proxy must be deposited at the Registered Office of the Company at 136, Panchratna, Opera House,

Mumbai - 400 004, not less than 48 hours before the time of holding the Meeting. The Proxy need not be a member of the Company.

Re.1.RevenueStamp


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BOOK-POST

If undelivered, please return to :

Adroit Corporate Services Pvt.Ltd.(UNIT : FLAWLESS DIAMOND (INDIA) LIMITED)19/20, Jaferbhoy Industrial Estate,1st Floor, Makwana Road, Marol Naka,Mumbai - 400 059.Phone : 91-22-28596060/28594060

AK

PR

INTE

RS

961

9053

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Flawless Diamond (India) Limited - Moneycontrol.com · Punjab & Sind Bank REGISTERED ... the 24th Annual General Meeting of Flawless Diamond (India) Limited will be ... adopt the