Directors Report of Classic Diamonds (India) Ltd.

Mar 31, 2014

The Members,

The Directors have great pleasure in presenting their Twenty Seventh Annual Report together with the Audited Statement of Accounts for the financial year ended 31st March, 2014

1. FINANCIAL RESULTS:

(Rupees in Lacs) FOR THE YEAR FOR THE YEAR PARTICULARS ENDED ENDED 31-Mar-14 31-Mar-13

1. FINANCIAL RESULTS

Sales (Incl. Exch. Difference) NIL 1009.76

other Income 0.98 1141.56

Profit before Interest & Depreciation (A) (6,590.30) (18830.82)

Less: I) Interest 4737.32 3,885.83

2) Depreciation 228.60 325.41

Total of Interest and Depreciation (B) 4965.92 4211.24

Misc items (C) 338.64 381.63

Profit before taxation (A-B-C) (11894.87) (23423.68)

Provision for & Deferred Taxation Nil 1417.02

Profit after taxation (11894.87) (25126.45)

Bal in P & L Account brought/forward (8874.61) 16251.84

(20769.48) (8874.61)

2. APPROPRIATIONS

Proposed Dividend (incl Tax) - - Transfer to General Reserve

Balance carried forward (20769.48) (8874.61)

(20769.48) (8874.61)

2. DIVIDEND:

In view of loss during the year the management has decided not to declare the dividend

3. LISTING ON NSE & BSE:

The shares of your company are listed on the Bombay Stock Exchange Limited (BSE Code: 523200) and the National Stock Exchange of India Limited (NSE Code: CLASSIC EQ)

4. FINANCE:

The Company''s accounts where they were having limits with the Banks has been declared NPA (Non Performing Assets) by the Bank for non realization of export proceeds. The directors of the Company are trying their best to realize the export proceeds at the earliest

5. DIRECTORS:

The Company has 4 Directors. The following is the list of Directors of the Company:

Name of the Director Designation

Kumar C. Bhansali Chairman & Managing Director

Nirav Bhansali Whole Time Director

Madhukar G. Patankar Independent Non-Executive Director

NishikantJha Independent Non-Executive Director

6. AUDITORS:

M/s JMR & Associates Chartered Accountants will continue to hold the office of Auditor as per Section 139 of the Companies Act 2013 from the conclusion of this Annual General Meeting, until the conclusion of Twenty-Eight Annual General Meeting to be held after this meeting, subject to ratification at every Annual General Meeting and to fix their remuneration for the financial year ending 31st March, 2014.

7. CORPORATE GOVERNANCE:

A separate section on Corporate Governance is included in the Annual Report and the certificate from the company''s auditors confirm the compliance of conditions on Corporate Governance as stipulated in the said clause 49 of the Listing Agreement annexed thereto.

8. FIXED DEPOSIT:

The company has not invited or accepted any deposit during the financial year 2014- 2015 under review under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pursuant to Section 134(3) (m) of the Companies Act, 2013 is given below:

A. CONSERVATION OF ENERGY

As the company is not covered in the list of industries required to furnish information in Form A relating to conservation of energy, the same is not given.

B. TECHNOLOGY ABSORPTION

Research and Development (R & D)

1. Specific areas in which the company carries out R & D:

The Company has been successful in manufacturing its own Laser Cutting Machine for the Diamond factory. In the jewellery sector in house design and manufacture of certain consumables are carried out.

2. Benefits derived as a result of the above R & D:

The Company achieves better productivity and cost reduction.

Reduction in Production leads time Reduction in rework and rejection in the manufacturing process Total traceability of each piece during the entire manufacturing process through in house software development

3. Future plan of Action:

The company will strive to improvise the manufacturing methodology to effect further cost reduction and increase productivity.

4. Expenditure on R & D:

a. Capital NIL

b. Recurring NIL

c. Total R & D expenditure as included in the manufacturing cost percentage of total turnover NIL

5. Efforts in brief made towards Technology absorption and innovation:

The company keeps abreast of global technical developments, innovations and trends in its line of business and strives to constantly reduce costs and improve the quality of its products.

6. Benefits derived as a result of the above efforts e.g. cost reduction, product development and improvement; import substitution etc. will be reflected in precision manufacturing of high quality products and substantial

7. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) following information may be furnished:

The Company has not imported any technology.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information regarding foreign exchange earnings and outgo is given below:

Total Foreign Exchange used : NIL

Total Foreign Exchange earned : NIL

12. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 134(3) (c) of the companies act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

- that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- that they 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 profit and loss of the company for that period

- that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- that they have prepared the annual accounts on a going concern basis and

- that in case of listed company, had laid down internal function controls to be followed by the company and that such internal financial controls are adequate and were operating effectively

- that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

13. CAUTIONARY STATEMENT

Statements in this Directors Report and Management Discussion & Analysis describing the Companies objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable Securities laws and regulations Actual results could differ materially from those expressed or implied due to risk of uncertainties associated with our expectations with respect to, but not limited to, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business, technological changes, exposure to market risks, general economic and political conditions in India and which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, the performance of the financial markets in India and globally and raw material availability and prices, demand & pricing in the Company''s principal markets, and other incidental factors.

14. ACKNOWLEDGEMENT:

The Directors wish to convey their appreciation to all the employees of the company for their personal efforts as well as for the excellent contribution made by all employees of the Company through their commitment, competence, co- operation and diligence to duty their collective contribution in such trying times, which enabled the company to meet the challenges set before it.

Your Directors would like to express their grateful appreciation for the assistance and cooperation received from the banks during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the continued support of customers and suppliers of the company.

Your Directors thank the shareholders for their confidence in the company.

BY THE ORDER OF THE BOARD

Registered Office: Mr. Kumar C. Bhansali Off Premises No.701, 7th Floor, Chairman & Managing Director Majestic Shopping Centre Premises Co-op.Soc.ltd. J.S.S. Rd., Mumbai 400 004 Mr. Nirav K. Bhansali Dated: 30th May, 2014 Whole Time Director

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Mar 31, 2013

To The Members,

The directors of the Classic Diamonds are pleased in presenting Twenty Sixth Annual Report with the Audited Statement of Accounts for the financial year ended 31st March, 2013.

1. FINANCIAL RESULTS: (Rupees in Lacs)

Particulars Year Ended Year Ended 31-Mar-13 31-Mar-12

1. FINANCIAL RESULTS

Sales (Incl. Exch. Difference) 1009.76 22,554.93

Other Income 1141.56 606.59

Profit / (Loss) before Interest & Depreciation (A) (18830.82) 1641.88

Less : I) Interest 3885.83 5722.67

2) Depreciation 325.41 361.62

Total of Interest and Depreciation (B) 4211.24 6084.29

Misc items (C) 667.37

Profit / (Loss) before taxation (A-B-C) (23423.68) (4442.41)

Provision for Taxation & Deferred Taxation 1417.02 1403.18

Profit / (Loss) after taxation (25126.45) (3039.23)

Bal in P & L Account brought/forward 16251.84 19291.08

(8874.61) 16251.84

2. APPROPRIATIONS

Proposed Dividend (Incl Tax)

Transfer to General Reserve

Balance carried forward (8874.61) 16251.84

(8874.61) 16251.84

2. DIVIDEND:

In view of Loss during the year the Management has decided to not to declare the dividend.

3. LISTING ON NSE& BSE:

The shares of your company are listed on the Bombay Stock Exchange Limited (BSE Code: 523200) and the National Stock Exchange of India Limited (NSE Code: CLASSIC EQ)

4. CHANGE IN REGISTERED OFFICE OF THE COMPANY

During the year, the registered office of the company has been shifted from, 1002, Prasad Chambers, Opera House, Mumbai -400004 to 701, Majestic Shopping Centre, Girgaum, Mumbai 400004 for better working.

5. FINANCE:

The Company''s account where they were having limits with the banks has been declared NPA (Non Performing Assets) by the bank for non realization of export proceeds. The Directors of the company are trying their best to realize the export proceeds at the earliest.

6. DIRECTORS:

The Company currently has 4 Directors. The following is the list of Directors of the Company:

Name of the director Designation

Kumar Bhansali Chairman &Managing Director_

Nirav Bhansali Whole-Time Director_

Nishikant Jha Independent Non-Executive Director_

Madhukar Patankar Independent Non-Executive Director

7. AUDITORS:

M/s JMR & Associates, Chartered Accountants will retire at the conclusion of the Annual General Meeting and eligible for re-appointment. The company has obtained the certificate from the auditors that their appointment if made, will be within the limits prescribed under Section 224(1) of the Companies Act 1956.

8. CORPORATE GOVERNANCE:

A separate section on Corporate Governance is included in the Annual Report and the certificate from the company''s auditors confirming the compliance of conditions on Corporate Governance as stipulated in the said clause 49 of the Listing Agreement annexed thereto.

9. FIXED DEPOSIT:

The company has not invited or accepted any kind of deposit during the financial year 2012-2013 under Section 58-A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

10. PERSONNEL:

During the financial year 2012-2013 no employee of the company has drawn the remuneration exceeding the limits as stated in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

A. CONSERVATION OF ENERGY

As the company does not fall under the list of industries which requires to furnish information in Form A relating to conservation of energy, the same is not furnished.

B. TECHONOLOGY ABSORPTION

The Company''s manufacturing unit is set up with the ultra modern plant and machineries, with the latest and energy savvy technologies. As and when the need arises the Company will upgrade the technology.

12. DIRECTORS''RESPONSIBILITY STATEMENT:

'' The Directors confirm:

- That in the preparation of the annual accounts, the applicable accounting standards have been followed except AS 11 "The Effects of Changes in Foreign Exchange Rate"

- That they 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 forthat period;

- That they have 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;

- That they have prepared the annual accounts on a going concern basis.

13. CAUTIONARY STATEMENT:

Statements in this Directors Report and Management Discussion & Analysis describing the Companies objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied due to risk of uncertainties associated with our expectations with respect to, but not limited to, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business, technological changes, exposure to market risks, general economic and political conditions in India and which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, the performance of the financial markets in India and globally and raw material availability and prices, demand & pricing in the Company''s principal markets, and other incidental factors.

14. ACKNOWLEDGEMENTS:

The Directors wish to convey their appreciation to all the employees of the company for their personal efforts as well as for the excellent contribution made by ail employees of the Company through their commitment, competence, cooperation and diligence to duty their collective contribution in such trying times, which enabled the company to meet the challenges set before it.

Your Directors would like to express their grateful appreciation for the assistance and cooperation received from the banks during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the continued support of customers and suppliers of the company.

Your Directors thank the shareholders for their confidence in the company.

BY THE ORDER OF THE BOARD

Kumar Bhansali

Managing Director

Nirav Bhansali

Registered Office: Director

Off Premises No 701,

7th Floor, Majestic Shopping Center Premise,

Co-operative Society ltd,

J.S.S Road Mumbai- 400 004

Dated: 15th July, 2013

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Mar 31, 2011

The Members,

The Directors have great pleasure in presenting their Twenty Fourth Annual Report with the Audited Statement of Accounts for the financial year ended 31st March 2011.

I. FINANCIAL RESULTS:

(Rupees in Lacs)

PARTICULARS FOR THE YEAR FOR THE YEAR ENDED ENDED 3I-Mar-II 3I-Mar-I0

1. FINANCIAL RESULTS

Sales (Incl. Exch. Difference) 50,231.87 65,171.67

Other Income 182.38 408.56

Profit before Interest & Depreciation 4,303.77 5,360.17 (A)

Less: I) Interest 3,095.63 3,047.79

2) Depreciation 427.73 527.69

3,518.36 3,575.48 Total or Interest and Depreciation (B)

Misc items (26.41) (15.65)

Profit before taxation (A-B-C) 759.00 1,769.04

Provision for & Deferred Taxation 158.87 27.29

Profit after taxation 600.13 1,741.75

Bal in P & L Account 18,690.95 17,145.08 brought/ forward

19,291.08 18,886.83

2. APPROPRIATIONS

Proposed Dividend (incl Tax) - 45.88

Transfer to General Reserve - 150.00

Balance carried forward 19,291.08 18960.95

19,291.081 18,886.83

2. DIVIDEND:

Due to the inappropriate market conditions and the financial crisis, your company could barely maintain the level of revenue. The sale for the year 2010-11 has dipped down drastically by 23.12%. In order to honor the companies committed contracts to its esteemed customers it had to sell with squeezed margins, leading to the fall in net profit level. Considering of die lower earning of the company in the year the Directors do not recommend any dividend for the year.

3. LISTING ON NSE& BSE:

The shares of your company are listed on the Bombay Stock Exchange Limited (BSE Code: 523200) and the National Stock Exchange of India Limited (NSE Code: CLASSIC EQ)

4. BUSINESS PROSPECTS:

The year could not see a revival of business from the US sector, as there were differences in opinion by the customer there. However, your company now intends to penetrate this market all by itself starting from the scratch, which would take couple of years to gear up.

Your company is now geared up for the production of the larger type of diamonds, which would yield higher margins and a larger array of products for the customers to suit their requirements. The only constraint of this section of the business is that it involves huge amounts on rough procurement. Once the financial position of your company is eased out, this section could add better value to the overall business.

In order to optimize the cost of operations your company intends to shift its operations from the Opera House area of Mumbai to Bandra- The Diamond Bourse in the near future.

We also plan to start up a factory in the SurSEZ situated at Sachin, near Surat. This factory would be in a position to produce Diamonds as well as jewellery for the newer markets.

5. FINANCE:

The company has been struggling in materializing its Debtors at a faster pace due to the conflicts between the distribution arms worldwide. The company has laid out policies of trying to gain better credit terms from its creditors leading to a position which could end up in repaying the bank finance to the extent of over Rs. 18.83 Crores in Rupee terms. All diis has improved the Credit rating of your company which had deteriorated in the earlier year due to the given market conditions.

6. DIRECTORS:

The Company has 6 Directors.(Mr. Sumit B. Shah & Mr. Zubin N. Badiwalla resigned w.e.f 12th November, 2010 & 23 September, 2010 respectively) of which 3 are Independent Directors. Mr. Kumar C. Bhansali and Mr. Nirav K. Bhansali are liable to retire by rotation and being eligible have offered them for re- appointment.

7. AUDITORS:

M/s Apte & Co. Chartered Accountants were appointed by the Board of Directors in their meeting on 4 February, 2011 to fill the causal vacancy caused due to resignation of M/s A.N. Damania and Co. who were appointed as auditors at the Annual General Meeting held on 22nd September, 2010. M/s Apte & Co. having been appointed by the Board of Directors for filling up the casual vacancy vacates their office at this Annual General Meeting. The company has received the certificate from the auditors that their appointment if made, will be within the limits prescribed under Section 224( I) of the Companies Act 1956.

8. CORPORATE GOVERNANCE:

A separate section on Corporate Governance is included in the Annual Report and the certificate from the company's auditors confirm the compliance of conditions on Corporate Governance as stipulated in the said clause 49 of the Listing Agreement annexed thereto.

9. FIXED DEPOSIT:

The company has not invited or accepted any deposit during the year under review under Section 58-A of the Companies Act, 1956 read widi the Companies (Acceptance of Deposits) Rules, 1975.

10. PERSONNEL:

During the year under review no employee has drawn salary exceeding the limits as stated in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND 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 the Board of Directors) Rules, 1988 is given below:

A CONSERVATION OF ENERGY

As the company is not covered in the list of industries required to furnish information in Form A relating to conservation of energy, the same is not given.

B. TECHONOLOGY ABSORPTION

Research and Development (R & D)

1. Specific areas in which the company carries out R & D:

The Company has been successful in manufacturing its own Laser Cutting Machine for the Diamond factory.

In the jewellery sector in house design and manufacture of certain consumables are carried out.

2. Benefits derived as a result of the above R&D:

The Company achieves better productivity and cost reduction.

Reduction in Production lead time

Reduction in rework and rejection in the manufacturing process

Total traceability of each piece during the entire manufacturing process through in house software development

3. Future plan of Action:

The company will strive to improvise the manufacturing methodology to effect further cost reduction and increase productivity.

4. Expenditure on R & D:

a. Capital )

b. Recurring )

c. Total R&D expenditure as a ) included in the manufacturing cost percentage of total turnover )

5. Efforts in brief made towards Technology absorption and innovation:

The company keeps abreast of global technical developments, innovations and trends in its line of business and strives to constantly reduce costs and improve the quality of its products.

6. Benefits derived as a result of the above efforts e.g. cost reduction, product development and improvement; import substitution etc. will be reflected in precision manufacturing of high quality products and substantial cost reduction.

7. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) following information may be furnished:

The Company has not imported any technology.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information regarding foreign exchange earnings and outgo is given below:

Total Foreign Exchange used : Rs I0689.6547I Lacks

Total Foreign Exchange earned : Rs 30192.41217 Lacks 12. DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors confirm:

ii that they have selected such accounting policies and applied them consistendy 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 for that period; that they have 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;

iii that they have prepared the annual accounts on a going concern basis

13. CAUTIONARY STATEMENT:

Statements in this Directors Report and Management Discussion & Analysis describing the Companies objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied due to risk of uncertainties associated with our expectations with respect to, but not limited to, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business, technological changes, exposure to market risks, general economic and political conditions in India and which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, the performance of the financial markets in India and globally and raw material availability and prices, demand & pricing in the Company's principal markets, and other incidental factors.

14. ACKNOWLEDGEMENTS:

The Directors wish to convey their appreciation to all the employees of the company for their personal efforts as well as for the excellent contribution made by all employees of the Company through their commitment, competence, co-operation and diligence to duty their collective contribution in such trying times, which enabled the company to meet the challenges set before it.

Your Directors would like to express their grateful appreciation for the assistance and cooperation received from the banks during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the continued support of customers and suppliers of the company.

Your Directors thank the shareholders for their confidence in the company.

BY THE ORDER OF THE BOARD

Mr. Kumar C. Bhansali Managing Director

Mr. Nirav K. Bhansali Director

Mr. Mayank Mehta Director

Registered Office: 1002, Prasad Chambers, Opera House, Mumbai-400004

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Mar 31, 2010

The Directors have great pleasure in presenting their Twenty third Annual Report with the Audited Statement of Accounts for the financial year ended 31st March 2010.

1. FINANCIAL RESULTS:

(Rupees in Lacs)

FOR THE YEAR FOR THE YEAR PARTICULARS ENDED ENDED

31-Mar-10 31-Mar-09

1. FINANCIAL RESULTS

Sales (Incl. Exch. Difference) 65,171.67 67,722.26

Other Income 408.56 (531.25)

Profit before Interest & Depreciation (A) 5,360.17 4,006.64

Less: I) Interest 3,047.79 2,969.73

2) Depreciation 527.69 574.41

Total of Interest and Depreciation (B) 3,575.48 3,544.14

Misc items (C) (15.65) -

Profit before taxation (A-B-C) 1,769.04 462.50

Provision for & Deferred Taxation 27.29 105.42

Profit after taxation 1,741.75 357.08

Bal in P & L Account brought/forward 17,145.08 16,788.00

18,886.83 17,145.08

2. APPROPRIATIONS

Proposed Dividend (incl Tax) 45.88 -

Transfer to General Reserve 150.00 -

Balance carried forward 18,690.95 17,145.03

18,886.83 17,145.08

2. DIVIDEND:

The year 2009-10 has shown glimpses of recovery from the past two years where your company had to fulfill contracts at very squeezed margins. This year inspite of a slight downfall in revenues by about 3.77 % your company could achieve better margins than the previous year. Proactively, in order to maintain the balance between the twin objectives of appropriately rewarding shareholders with cash dividends and of retaining capital to maintain healthy capital adequacy ratio so as to support future growth, your Directors recommend a dividend of 5 %.

3. LISTING ON NSE& BSE:

The shares of your company are listed on the Stock Exchange, Mumbai (BSE Code: 523200) and the National Stock Exchange of India, Mumbai (NSE Code: CLASSIC EQ)

4. BUSINESS PROSPECTS:

The year could not see a good revival of business from the US sector, with its Unemployment rates still worsening every quarter especially during the last quarter of calendar 2009 where it had crossed the double digit mark. Further to add fuel to the fire the Bullion prices have sky rocketed to over USD 1220 in Dec 09 as against USD 900 levels as of the beginning of the year. Hence, affecting the demand of Jewellery from this sector. This has led your company to pierce through other lucrative markets such as the Europe, Middle East and Far East.

Your company is now geared up for the production of the larger type of diamonds, which would yield higher margins and a larger array of products for the customers to suit their requirements. The only constraint of this section of the business is that it involves huge amounts on rough procurement. Once the financial position of your company is eased out, this section could add better value to the overall business.

In order to optimize the cost of operations your company intends to shift its operations from the Opera House area of Mumbai to Bandra - The Diamond Bourse within the next year.

We also plan to start up a factory in the SurSEZ situated at Sachin, near Surat. This factory would be in a position to produce Diamonds as well as jewellery for the newer markets.

5. FINANCE:

The company has been successful in materializing its Debtors at a faster pace and also laid out policies of trying to gain better credit terms from its creditors leading to a position which could end up in repaying the bank finance to the extent of over Rs.38 Crores in Rupee terms. All this has improved the Credit rating of your company which had deteriorated in the earlier year due to the given market conditions.

6. DIRECTORS:

The Company has 6 (Mr.Hiren H. Shah & Mr. Chandrakant M. Bhansali resigned w.e.f 22nd June, 2010) Directors of which 3 are Independent Directors. Mr. Mayank R. Mehta and Mr. Sumit B. Shah are liable to retire by rotation and being eligible have offered themselves for re- appointment.

7. AUDITORS:

M/s A.N. Damania & Co., Chartered Accountants will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The company has received the certificate from the auditors that their appointment if made, will be within the limits prescribed under Section 224(1) of the Companies Act 1956.

8. CORPORATE GOVERNANCE:

A separate section on Corporate Governance is included in the Annual Report and the certificate from the companys auditors confirm the compliance of conditions on Corporate Governance as stipulated in the said clause 49 of the Listing Agreement annexed thereto.

9. FIXED DEPOSIT:

The company has not invited or accepted any deposit during the year under review under Section 58-A of the Companies Act, 1956 read with the Companies (Acceptance of Deposits) Rules, 1975.

10. PERSONNEL:

During the year under review no employee has drawn salary exceeding the limits as stated in Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND 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 the Board of Directors) Rules, 1988 is given below:

A. CONSERVATION OF ENERGY

As the company is not covered in the list of industries required to furnish information in Form A relating to conservation of energy, the same is not given.

B. TECHONOLOGY ABSORPTION

Research and Development (R & D)

1. Specific areas in which the company carries out R&D:

The Company has been successful in manufacturing its own Laser Cutting Machine for the Diamond factory.

In the jewellery sector in house design and manufacture of certain consumables are carried out.

2. Benefits derived as a result of the above R&D:

The Company achieves better productivity and cost reduction.

Reduction in Production lead time

Reduction in rework and rejection in the manufacturing process

Total traceability of each piece during the entire manufacturing process through in house software development

3. Future plan of Action:

The company will strive to improvise the manufacturing methodology to effect further cost reduction and increase productivity.

4. Expenditure on R&D:

a. Capital )

b. Recurring )

c. Total R&D expenditure as a) included in the manufacturing cost percentage of total turnover )

5. Efforts in brief made towards Technology absorption and innovation:

The company keeps abreast of global technical developments, innovations and trends in its line of business and strives to constantly reduce costs and improve the quality of its products.

6. Benefits derived as a result of the above efforts e.g. cost reduction, product development and improvement; import substitution etc. will be reflected in precision manufacturing of high quality products and substantial cost reduction.

7. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) following information may be furnished:

The Company has not imported any technology.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information regarding foreign exchange earnings and outgo is given below:

Total Foreign Exchange used : Rs 28,819.03 Lacs

* Total Foreign Exchange earned : Rs 66,160.96 Lacs

* Foreign Exchange earned includes bills to be realized.

12. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

ii. that they 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 for that period;

iii. that they have 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 andfor preventing and detecting fraud and other irregularities;

iv. that they have prepared the annual accounts on a going concern basis

13. CAUTIONARY STATEMENT

Statements in this Directors Report and Management Discussion & Analysis describing the Companies objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable Securities laws and regulations. Actual results could differ materially from those expressed or implied due to risk of uncertainties associated with our expectations with respect to, but not limited to, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business, technological changes, exposure to market risks, general economic and political conditions in India and which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, the performance of the financial markets in India and globally and raw material availability and prices, demand & pricing in the Companys principal markets, and other incidental factors.

14. ACKNOWLEDGEMENTS:

The Directors wish to convey their appreciation to all the employees of the company for their personal efforts as well as for the excellent contribution made by all employees of the Company through their commitment, competence, co-operation and diligence to duty their collective contribution in such trying times, which enabled the company to meet the challenges set before it.

Your Directors would like to express their grateful appreciation for the assistance and cooperation received from the banks during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the continued support of customers and suppliers of the company.

Your Directors thank the shareholders for their confidence in the company.