Notes to Accounts of Flawless Diamond (india) Ltd.

Mar 31, 2013

1. Previous year figures have been regrouped, reworked, rearranged and reclassified whenever necessary.

2. The company is. in default for making payment to the banks. The banks have declared the company''s bank account as NPA and also initiated recovery proceeding and filed an application in Debt Recovery Tribunal for recovery of loan amount. 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. The interest on outstanding loan from ICICI bank is provided at the rate specified in the Debt Recovery Tribunal and interest on Punjab & Sindh Bank has provided by the bank in the loan recovery letter. However the final settlement with the 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. The secured creditors of the company ''ICICI Bank'' has filed winding up petition u/s 439 of the Companies Act, 1961 in the Bombay High Court. The matter is pending before Honorable Bombay High Court. The said petition may affect the company''s "going concern" status.

(Rs. in Thousands)

As at 31st March, 2013 As at 31st March, 2012

6. Contingent Liabilities 155600.00 109800.00

7. Segment Reporting:-

The Company has been operating significantly in a single segment of Diamond & Jewellery.

8. There are no delays in payments to Micro, Smail and Medium Enterprises as required to be disclosed under "The Micro, Small and Medium Enterprises Development Act, 2006."

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

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

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

2) Shri Kama! U. Jain

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

(d) Other Related Parties NIL

10. The amounts in the Balance Sheet and Statement of Profit and Loss are rounded off to the nearest One Thousand Rupees.

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Mar 31, 2012

1. Previous year figures have been regrouped, reworked, rearranged and reclassified whenever necessary.

2. The company is in default for making payment to banks. The banks have declared company's bank account as NPA and also started recovery proceeding and filed an application in Debt Recovery Tribunal for recovery of loan amount.

3. The company had applied for settlement with banks and arrived the final settlement with Punjab and Sind Bank and in process of settlement with ICICI Bank.

4. The secured creditors of the company 'ICICI Bank' has filed winding up petition u/s 439 of the Companies Act, 1961 in the Bombay High Court. The matter is pending before Honorable Bombay High Court. The said petition may affect the company's "going concern" status.

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

(i) Related Party Relationship (a) Where Control Exists 1) Kamal & Co.

2) Sumona Jewels Private Limited

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

2) Shri Kamal U. Jain

3) Shri Gautam T. Banerjee

(c) Relatives of Key Management Personnel NIL

(d) Other Related Parties NIL

6. The amounts in the Balance Sheet and Statement of Profit and Loss are rounded off to the nearest One Thousand Rupees.

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Mar 31, 2010

1. Previous year figures have been regrouped, reworked, rearranged and reclassified whenever necessary.

(Rs. in Thousands)

As at 31ST As at 31ST

March, 2010 March, 2009

2. Contingent Liabilities NIL NIL

3. Estimated amount of contract remaining to be executed on Capital Account and not provided for the year NIL NIL

4. Amount Outstanding to SSI Units NIL NIL



5. Segment Reporting:-

The Company has been operating significantly in a single segment of Diamond & Jewellery.

6. 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."

7. Pursuant to Accounting Standard 19 "Leases", disclosure on leases is as follows:

The Companys significant leasing arrangements are in respect of showrooms taken on operating lease basis. The aggregate lease rentals payable are charged to rent and taxes under the head Selling and Administrative Expenses under "Schedule - J".

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

(a) Where Control Exists 1) Jalak Impex Private.Limited

2) Goodwill Theatres Private Limited

3) Sumona Jewels Private Limited

4) Flawless Jewellery

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

2) Shri KamalU. Jain

3) Shri Gautam T. Banerjee

(c) Relatives of Key Management Personnel NIL

(d) Other Related Parties NIL

9. The amounts in the Balance Sheet and Profit and Loss Account are rounded off to the nearest one thousand rupees.