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Winsome Diamonds & Jewellery Ltd Management Discussions

0.4
(-11.11%)
Mar 23, 2015|12:00:00 AM

Winsome Diamonds & Jewellery Ltd Share Price Management Discussions

CURRENT SCENARIO

The company witnessed unprecedented turn of events during last four years. The company has not carried out any activity since the last three years post its devolvement saga. The company could not meet the commitment to the banks due to non-realisation of its export bills from its defaulting overseas customers.

The bankers appointed independent audit firms i.e. Kroll and E & Y to carry out the forensic and investigative audit for which the company offered explanations. Despite our repeated request Bankers has not obliged us by providing a copy of Kroll and E & Y Report. We have however requested them to confirm whatever report we have received from unconfirmed sources is genuine one or not, but they have not replied to us.

The company initiated legal proceedings against its 13 defaulting overseas customers before the Sharjah Federal Court of first instant in Sharjah, UAE to recover its outstandings. The judgment of the Sharjah Federal Court of First Instance in Sharjah, UAE have been in favour of the company. The Court has directed the defaulting overseas customers to repay the outstanding amount alongwith interest @ 5% per annum.

The overseas customers have gone in further Appeal against the orders of Sharjah Federal Court of First Instance. The following are the status of the appeals pending before the Appellate Court/ Supreme Court.

Name of the defaulting UAE customers Status of the appeal Name of the Appellate authority
Dana Jewellery FZE Appeal No.1191/2015 Pending for expert Report Appellate Court
Al Subhi Jewellery FZE Case No. 14/2016 Pending for Judgement Supreme Court
Al Minhaj Jewellery FZE Case No. 16/2016 Pending for Judgement Supreme Court

The bankers to the company have declared the company and its directors as willful defaulters which the company has vehemently objected . The Punjab National Bank has even declared independent directors as willful defaulter, contrary to RBI Circular on Willful defaulter, Independent Directors has also objected to it in writing but PNB has not replied to it. The company has reiterated that they are victim of circumstances beyond their control and are taking all possible steps to recover the amounts due.

The company has also received notice from Debt Recovery Tribunal and the matter is in progress. The Company also received notice under the SARFAESI Act, for attachment of its assets at all locations.

The bankers have lodged complaints with the agencies like the Central Bureau of Investigation and Enforcement Directorate. The company officials and its directors have fully co-operated with the agencies during the investigation. The Bankers has not provided us the copies of the complaint filed with these agencies despite our several requests.

The Directorate of Enforcement vide the letter F.No. ECIR/20/ MZO/2014/1202 dated 31st May, 2016 issued provisional attachment order 08/2016 by attaching our properties situated at

Bangalore, Jodhpur-Rajasthan. Surat, Goa, Kolkatta and Mumbai, under Sub - Section (1) of section 5 of the Prevention of Money Laundering Act, 2002 (15 of 2003).

Registrar/Administrative Officer, Adjudicating Authority (PMLA), New Delhi has issued notice to show Cause under section 8 of PML Act, 2002 vide OC. NO. 609/2016 dated 01.07.2016.

COMPANYS PERFORMANCE

The unexpected development forced the company to shut all its activities. There have been no significant performance during the current year under consideration. Salient figures of the Company are as under.

(Rs. In Crores)
Particulars 2016-17 (12 months ) 2015-16 (12 months )
Total Revenue 63.94 325.58
PBT (835.61) (327.81)
PAT (836.02) (326.87)
EPS (78.52) (30.70)

OUTLOOK

With little realization of about 1.5 lacs US $ export proceeds during the year under review, the company is hoping for an early favourable outcome of its legal suit filed against the defaulting overseas customers in the court in U.A.E. The Company has entered into a tripartite One time settlement (OTS) Agreement with State Bank of Mauritius and UAE based defaulting party.

OPPORTUNITIES, THREAT, RISKS AND CONCERNS

With unforeseen developments over the last three years the relevancy of opportunities, threats, risks and concerns are not applicable at the moment.

INTERNAL CONTROL SYSTEM

The Company has internal control system commensurate with its size and current activities to ensure efficiency of operation, compliance and applicable laws and other statutory regulations as well as with internal controls, protection of resources and assets.

HUMAN RESOURCES

During the year under review, there were no significant activities in the company as all its locations have stopped normal operations due to unforeseen development as mentioned above. The Company has only administrative personnel and relation with them is cordial.

CAUTIONARY STATEMENT

The company has not made any projections, estimate nor any expectations for the future. The company is looking forward to the outcome of the legal suit filed in the UAE against its defaulting overseas customers.

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