Auditor Report of Goenka Diamond & Jewels Ltd.

Mar 31, 2023

Goenka Diamond and Jewels Limited

Report on the Standalone Ind AS Financial Statements

Disclaimer of Opinion

We were engaged to audit the accompanying standalone Ind AS Financial statements of Goenka Diamond and Jewels Limited (“the Company”), which comprise the Balance Sheet as at 31st March, 2023 and the Statement of Profit and Loss (including other comprehensive Income), Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to financial statements, including a summary of the significant accounting policies and other explanatory information.

We do not express an opinion on the accompanying standalone Ind AS financial statements of the Company. Because of the significance of the matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on this standalone Ind AS Financial Statements.

Basis for Disclaimer of Opinion

(a) We draw attention to Note No. 38 and 45 of the financial statement regarding commencement of Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Act, 2016 and appointment of Interim Resolution Professional (IRP) to carry function as mentioned under the Code. Consequently, the powers of Board stand suspended and are exercised by the IRP in line with the provisions of the Code. Subsequent to issue of public announcement by IRP, the claims submitted by the financial and operational creditors have been collated by the IRP and no accounting adjustment has been carried out for any excess, short or non-receipt of claims from operational and financial creditors.

(b) We draw attention to Note No. 17(B)(2) and 17(B)(3) of financial statement regarding default in repayment of loans and interest to banks (including ARC) owing to which the banks have classified the account as NPA and recalled its loans and has initiated various legal actions for recovery of its dues including legal action initiated under SARFESI Act, The Recovery of Debts due to Banks and Financial Institution Act, 1993. The outstanding loans, credit balances and interest due to banks (including ARC) amounting to Rs. 17710.38 lacs and adhoc / repayment of loan amount to an asset reconstruction company (ARC) of Rs. 1405.61 lacs for which no confirmation/ statements have been provided to us are subject to reconciliation and subsequent adjustments.

(c) Refer Note No. 9(a) and (b) of financial statement regarding non-provision of the expected credit loss/ impairment relating to overdue Trade Receivables of Rs. 69775.76 Lacs as per the requirement of Ind- AS 109 “Financial Instruments”. In view of defaults in payment obligations by the Trade Receivables on due date, non-recoveries from Trade Receivables, nonreceipt of confirmations/ reconciliation from Trade receivables, initiation of legal action/ suits against Trade Receivables by the company, notices/ summon to the Company from Enforcement Directorate, Reserve Bank of India, Development Commissioner of Surat SEZ and in absence of clear forward looking information regarding outcome of pending legal actions initiated and time frame and quantum of realisability of these Trade receivables, we are unable to determine the amount of expected credit loss/ impairment based on provision matrix as per the requirements of Ind-AS 109 “Financial Instruments” and its consequential impact, on the financial results.

(d) Trade payables and other payables amounting to Rs. 29717.66 lacs are outstanding since long for which neither any confirmation have been provided nor are we aware of any legal action initiated by the vendors against the Company. In absence of current status and relevant details, we are unable to comment on the payment obligation in this regard and its consequential impact on the financial statements.

(e) Refer Note No. 17(B)(2) regarding default in repayment of loans taken from the banks and non-provision of interest on such loans and consequently based on the calculation done by the management total interest amounting to Rs. 20979.19 Lacs determined at estimated rates, have not been provided for in the books of accounts including interest amounting to Rs. 2730.80 Lacs for year ended on March 31,2023. Accordingly, finance cost for the year ended on March 31,2023 is understated by Rs. 2730.80 lacs.

(f) Refer Note No. 9(b), 18(b) and 5(a) of the financial statement wherein, the company has not translated following monetary items denominated in foreign currency as at year ended closing rate and has been carried forward at the rate as at 31st March 2015, 31^st March 2016, and / or 31st March 2017, which is not in accordance with Ind-AS -21 “The Effect of changes in Foreign Exchange Rates” and accounting policy followed by the Company.

i. Trade receivable amounting to Rs. 69,703.18 lacs

ii. Trade payables and other payable amounting to Rs. 29717.66 lacs

iii. Loans to subsidiary (including accrued interest) amounting to Rs. 2062.30 lacs

The company has not provided for cumulative exchange gain (net) on the above items amounting to Rs. 12793.91 lacs including exchange gain of Rs. 4361.32 lacs pertaining to the year ended on March 31, 2023 respectively. Accordingly, exchange gain is understated by Rs. 4361.32 for the year ended March 31,2023.

(g) The Company has made provision for expected credited loss of Rs. 812.35 Lacs against the interest receivable on loan from a subsidiary and has recognized loss of Rs. 49.00 lacs on current investment designated through FVTPL. No deferred tax assets thereon amounting to Rs. 216.79 lacs have been recognized which is not in accordance with Ind AS-12 “Income Taxes.

Had the exchange difference as stated in para (f) above and deferred tax thereon and interest on loans as stated in para (e) above been provided, the loss before tax for the year would have been decreased by Rs. 1630.52 Lacs respectively. Consequently, the overstatement and understatement of assets and liabilities are as under: -

( Rs. In Lakh)
Head of Assets/ Liabilities	Assets		Liabilities
	Under statement	Over Statement	Under statement	Over statement
Trade Receivables (exchange gain)	19707.68	-	-	-
Trade Payables (exchange loss)	-	-	7407.54	-
Non-Current financial assets	336.77	-	-	-
Current Financial Assets	158.46	-	-	-
Borrowings			20979.19
Current financial liabilities			1.46
Deferred Tax Liability	-	-	197.66	-
Other Equity	-	-	-	8382.93
Total	20202.91	-	28585.84	8382.93

Due to uncertainties with respect to settlement of bank dues and interest, adjustments of trade receivables and payables and its consequential impact on taxation thereof, we are unable to ascertain the tax impact and liability, on the financial results.

(h) Refer Note No. 5(b) and 41 (c) of the financial statement, no provision for the expected credit loss/ impairment on loan to a subsidiary amounting to Rs. 1249.95 Lacs has been recognized as per the requirement of Ind- AS 109 “Financial Instruments”. The net worth of above subsidiary is negative and based on reasonable and supportable information regarding the current financial status and business condition of the subsidiary, there has been significant increase in credit risk and there could be delay/default in recovery of this amount. Considering the above, we are unable to comment on the amount of expected credit loss/ impairment and its consequential impact, on the financial results.

(i) The Inventory has been taken on the basis of physical verification carried out by the management (including inventory lying with franchisees on approval basis) as at the year end and its valuation is based on determination of estimated net realizable value and specific identification which involves technical judgment of management. In the absence of any valuation by an independent expert, we have relied upon by the physical verification and valuation of the Inventory as certified and determined by the management.

(j) Refer Note No. 41(b) of the financial statement regarding investment of Rs. 2.03 lacs in its subsidiary namely M.B. Diamonds LLC and Rs. 7.44 lacs in its subsidiary namely Goenka Diamond and Jewels DMCC, the net-worth of these subsidiaries is negative. The Company has not made any provision for Impairment against these investments and advance.

(k) Balances with Banks amounting to Rs. 1.55 lacs (debit balances), Other non-current deposits amounting to Rs. 13.23 lacs, other current assets (balance with government authorities) amounting to Rs. 32.48 lacs, Other Current Assets and Liabilities are subject to confirmations and consequential adjustment thereof.

(l) The company has made provision for Impairment of Residential flat/office building at Jaipur having gross block of Rs. 19.72 lacs (WDV of Rs. 5.34 lacs), for which the company neither has possession of such assets nor have any title deeds/ agreement.

Material Uncertainty related to going concern

The Company’s operating results have been materially affected due to various factors including non-realization of unconfirmed Trade receivables, defaults in repayment of loans and interest to banks, non-availability of finance due to recall of loans by banks in consortium, legal actions/ insolvency proceedings initiated by banks against company for recovery of its dues, notices/ summon to company/director(s) from Enforcement Directorate, Reserve Bank of India, Development Commissioner of Surat SEZ and from other regulatory authorities, commencement of CIRP proceedings as stated in Note No. 1, Debt Recovery Tribunals and other courts for recovery of banks dues and possession/attachment/sale of company’s properties, assignment and transfer of dues in favor of an asset reconstruction company (ARC), pending income tax demands and consequent attachment of bank accounts by Income tax department, reliance on occasional sales for meeting out expenses, overall substantial decrease in volume of business and sales, non-payment of statutory dues and taxes, overdue unconfirmed trade payable, non-realization of loan and interest thereon from a subsidiary etc. We are also unable to determine the impact of actions and forthcoming actions that may be taken by various legal and statutory authorities due to various factors mentioned herein above. These events cause significant doubts on the ability of the company to continue as a going concern. The appropriateness of the going concern assumption is dependent on the company’s ability to raise adequate finance from alternative means, settlement of its due from banks and ARC, outcome of CIRP process and recoveries from overseas Trade Receivables to meet its short term and long term obligations as well as to establish consistent business operation. The above situation indicates that material uncertainty exist that cast significant doubt on company’s ability to continue as a going concern.

Because of the significance of the matters described above in the “Basis of Disclaimer of Opinion” section of our report, absence of sufficient appropriate audit evidences and Material uncertainty related to Going Concern paragraph above, it is not possible to form an opinion on the financial statements due to the potential interaction of the multiple uncertainties and their possible cumulative effect on the financial statements. Accordingly, we do not express an opinion on the financial statements.

Responsibilities of Management for the Standalone Ind AS Financial Statements

In accordance with the applicable provisions of the Insolvency and Bankruptcy Code, 2016 (“the Code”) and related rules and regulations issued thereunder, Corporate Insolvency Process (“CIRP”) of Goenka Diamond and Jewels Limited was initiated by financial creditors. The Hon’ble National Company Law Tribunal (“NCLT”), Jaipur Bench, vide order no. CP(IB)2067/MB/2019 delivered on 9^th December 2022 appointed an Interim Resolution Professional (“IRP”) to manage affairs of the Company in accordance with the provisions of Code. Thereafter, NCLT vide order dated April 12, 2023 appointed Mr. Sourabh Malpani as IRP replacing the previous IRP appointed. Upon appointment of IRP under the Code, the powers of the Board of Directors of the Company remained suspended and vest with the IRP.

The Company’s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance, cash flows and changes in equity of the Company accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and the maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the financial reporting process of the Company.

Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our responsibility is to conduct an audit of the Company’s financial statements in accordance with Standards on Auditing and to issue an auditor’s report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone Ind-AS financial statements.

We are independent of the Company in accordance with the Code of Ethics and provisions of the Companies Act, 2013 that are relevant to our audit of the standalone Ind-AS financial statements in India under the Companies Act, 2013, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Companies act, 2013

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

a. As described in Basis of Disclaimer of Opinion paragraph, we are unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. Due to possible effects of the matters as described in the Basis of Disclaimer of Opinion paragraph, we are unable to state whether 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;

c. The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. Due to effects/ possible effects of the matters described in Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid standalone Ind-AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. As at March 31, 2023, there are no directors on the board of the Company. Accordingly, reporting on compliance of section 164 (2) of the Act is not applicable;

f. The matters described in Basis of Disclaimer of opinion paragraph and other observations made in statement on the matters specified in paragraph 3 and 4 of the Order above, may have an adverse effect on the functioning of the Company.

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B” to this report;

h. With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements of section 197(16) of the Act (as amended), in our opinion and to the best of our information and according to the explanation given to us, the remuneration paid by the Company to its Directors during the year is in accordance with the provisions of section 197 of the Act;.

i. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 39 to the Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. The amounts which were required to be transferred to the Investor Education and Protection Fund by the Company have been transferred.

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material

either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified

in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year and therefore compliance of Section 123 of the Act, is not applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

For Ummed Jain & Co.

Chartered Accountants ICAI Firm Reg. No.119250W

U. M. Jain

Partner

Membership No. 070863 Mumbai: May 30, 2023 UDIN No: 23070863BGQKCJ9858

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Mar 31, 2015

We have audited the accompanying standalone financial statements of Goenka Diamond and Jewels Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Basis of Qualified Opinion

Refer Note No. 16 (footnote) of Notes on financial statements regarding Trade Receivables amounting to Rs.6,27,82,40,130/-which includes Rs.5,38,73,16,029/- outstanding for more than 6 months from due date. Though, confirmations amounting to Rs.3,61,66,47,379/- were received from Trade receivables on request by the management, there have been defaults on payment obligations by the debtors on due date and recoveries from these debtors are not significant. In view of the above we are unable to comment on the realisability of the debts and any provision to be made for unrealisability of these balances and the consequential impact, on the financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information 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, of the state of affairs of the Company as at 31st March, 2015, its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to

i. Significant Accounting Policies No. 1(F) regarding Inventories wherein the determination of estimated net realizable value and specification identification involves technical judgment of the management which has been relied upon by us.

ii. Note No.37 (a) of Notes on Financial statements regarding dispute which has arisen in earlier year amongst promoters subsequent to which various allegations/counter allegation and legal cases were made amongst promoters and on the company. Thereafter, the promoters arrived at family settlement agreement, the terms and conditions of which are partially executed. The management has confirmed that there is no impact of above incidences on the financial statements of the company.

iii. Refer Note No.37 (b) regarding non-realization of debtors, overall substantial decrease in volume of business and sales, non-payment of statutory dues and taxes, overdue creditors, defaults in repayment of loans and interest owing to which some banks have classified account as NPA, dispute amongst promoters. Though the company has made profits for the year, these factors indicate liquidity crunch faced by the company and therefore its future operations are largely dependent on recoveries from overseas debtors, infusion of fresh capital and restructuring/ release of additional working capital from banks.

iv. Note No.37 (c) of the Notes on Financial Statements wherein certain banks have classified its advance to company as NPA and are not charging interest or have reversed the interest earlier charged. In order to account all probable liabilities the management in its best judgment has provided interest on such borrowings. Further, the company has not provided for Rs. 1,49,61,987/- on account of excess interest charged by one of the banks against which company has made representation. The management is of the opinion that any difference on account of interest, penal interest shall be accounted for as and when the interest is charged or settled by the banks.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. 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

c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. On the basis of written representations received from the directors as on March 31, 2015 except in case of Mr. Nitin Goenka, Managing Director, and taken on record by the Board of Directors, none of other directors are disqualified as on March 31,2015 from being appointed as a director in terms of Section 164 (2) of the Act. However, we are unable to comment of the said clause in respect of Mr. Nitin Goenka, Managing Director of the Company as no written representation was received from him as on March 31, 2015.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 35 and 37(a) to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts hence, the question of any material foreseeable losses does not arise;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' in the Independent Auditor's Report of even date to the members of Goenka Diamond and Jewels Limited on the standalone financial statements for the year ended March 31,2015]

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) During the year, the fixed assets of the Company have been physically verified by the management and as informed, no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory of raw material and finished goods except day to day production records. As informed no material discrepancies were noticed on physical verification carried out during the year.

(iii) The Company has granted unsecured loans to 1 subsidiary covered in the register maintained under section 189 of the Companies Act, 2013. The maximum amount involved during the year was Rs. 12.21 Crores and the year-end balance was Rs. 12.21 Crores.

(a) The terms of recovery of the loan made have not been stipulated and so we are not in a position to make specific comment as regard to the repayment of the principal amount to the Company.

(b) As informed to us, there is no overdue amount of interest and loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the Company.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.

(vi) As explained to us, the maintenance of cost records under sub section (i) of Section 148 of the Companies Act, 2013 has not been prescribed by the Central Government for the Company.

(vii) (a) The Company is not regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees' state insurance, income tax, wealth tax, service tax, value added tax and any other material statutory dues applicable to it.

According to the information and explanations given to us, undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, service tax, and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months are as under: -

Nature of Statute Nature of Dues Amount (Rs.)

Income Tax Act 1961 TDS 2,70,957

Employee Provident Provident Fund 1,29,150

Fund Organization

Central Excise and Service Tax 7,788

Customs Act

Employee State E.S.I.C. 51,709

Insurance Corporation

Department of Sales Profession Tax 24,650

Tax, Maharashtra

Income Tax Act 1961 Income Tax Rs.203.07 Lacs (excluding Interest)

Income Tax Act 1961 Income Tax 15.75 Lacs (Advance Tax)

Income Tax Act 1961 Tax on 53,87,415 Dividend (excluding Interest)

Nature of Statute Period to which Due Date Date of the amount relates Payment



Income Tax Act 1961 01/04/2014 to 07th of Next Not Yet 30/09/2014 Month paid

Employee Provident 01/04/2014 to 21st day of Not Yet Fund Organization 30/09/2014 next month paid

Central Excise and 01/06/2014 to 05th of Next Not Yet Customs Act 30/09/2014 Month paid

Employee State 01/06/2014 to 21st day of Not Yet Insurance Corporation 30/09/2014 next month paid

Department of Sales 01/07/2014 to 31st day of Not Yet Tax, Maharashtra 30/09/2014 next month paid

Income Tax Act 1961 FinancialYear March31,2013 Not Yet 2012-13 paid

Income Tax Act 1961 Financial Year 15th Sept 2014 Not Yet 2014-15 paid

Income Tax Act 1961 Financial Year 14th Oct 2013 Not Yet 2012-2013 paid

(b) According to the information and explanation given to us, the dues outstanding with respect to, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, on account of any dispute, are as follows:

Nature of Statute Nature of Dues Amount (Rs.)

Income Tax Act, 1961 Income Tax 7,53,690

1,14,02,209*

40,65,043

Central Excise and Service Tax 6,22,540 Customs Act

Nature of Statute Period to Forum where dispute which the is pending amount relates

Income Tax Act, 1961 AY 2008-2009 ITAT - Jaipur

AY 2010-2011 ITAT - Jaipur

AY 2011-2012 ITAT - Jaipur

Central Excise and FY 2008-2009 Commissioner of FY 2011-2012 Central Excise Customs Act (Appeal)

*estimated amount

(c) According to the information and explanations given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(viii) In our opinion, there are no accumulated losses of the Company as at the end of financial year. Further, the Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(ix) The Company has defaulted to various banks in re-payment of working capital - export credit facilities which have been crystallized and/or became overdue at various dates, the summarized position of such defaults as the balance sheet date is as under: -

Amount* of Default Date of Default Date of default with various banks Started ended

3,437,985 January-14 March-15

10,902,500 March-14 August-14

14,511,510 March-14 September-14

11,716,548 April-14 September-14

78,964,671 June-14 July-14

9,000,000 September-14 March-15

38,282,102 September-14 October-14

124,466,955 January-15 March-15

44,111,331 January-15 February-15

45,179,495 February-15 March-15

32,918,379 January-14 Continuing

17.890.000 March-14 Continuing

28.077.000 April-14 Continuing

5,800,000 May-14 Continuing

252,023,742 September-14 Continuing

29,751,480 November-14 Continuing

61,955,032 December-14 Continuing

142,387,556 February-15 Continuing

117,053,417 March-15 Continuing

*includes interest charged by bank up to date of crystallization

The above defaults are the amounts as on the date of the defaults as mentioned herein above and do not consider any levies of interest and penal interest charged by the banks / provided by the company after the date of the defaults or its subsequent reversals by some banks. We are unable to quantify and give period wise details of the defaults in interest for the reasons referred in Note No. 6B (footnote) of financial statement. However, under the head "Other Current Liabilities" (Note No. 8) amounts of Rs. 1,02,86,943/- and Rs.7,33,57,031/- being the "Interest Accrued and due" and "Other Payables -Overdrawn Current Account Bank Balances" respectively includes interest which is default, the amount and period of which is unascertainable.

We have not received balance confirmation from some banks and have relied on year-end balance statements of the banks.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions during the year.

(xi) The Company during the year has obtained Corporate Loan of Rs.2.50 Crores from a bank which according to information and explanations was applied for the purpose for which it was obtained.

(xii) We draw attention to Note No.37(a) of Notes on financial statement wherein management has stated various allegations, counter allegation, legal cases are amongst promoters and there is no case of fraud on or by the company is pending, which we have relied upon. Subject to the this, during the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the company, noticed or reported during the year, nor have we been informed of such case by the management.

As per our report of even date attached

For B. KHOSLA & CO. For RSVA & CO. Chartered Accountants Chartered Accountants F.R. No.: 000205C F.R. No.: 110504W

SANDEEP MUNDRA B N RAO Partner Partner M.No.: 075482 M.No.: 039555

Place - Mumbai Place - Mumbai Date - May 30, 2015 Date - May 30, 2015

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Mar 31, 2014

We have audited the accompanying statements of Goenka Diamond and Jewels Limited ("The Company") which comprise the Balance sheet as at March 31,2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance and Cash Flow Statement of the Company in accordance with new schedule VI and the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our Responsibility is to express opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountant of India. Those Standards require that we comply with ethical requirements and plan perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis of Qualified Opinion

Refer Note No. 15 (footnote) of Notes on financial statements regarding Trade Receivables amounting to Rs. 562.20 Crore which includes considerable amounts outstanding for more than 6 months from due date. As explained therein, the recoveries from these trade receivables have been slow but the same are considered as good and recoverable by the management. These Trade Receivables are subject to confirmation as we have not carried out direct confirmation procedure. The consequential adjustments, if any, arising out of these are not quantifiable.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for matter described in Basis of Qualified opinion above, the said accounts give the information required by the Companies Act, 1956, 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 March 31,2014;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter We draw attention to

i. Note 1(F) of Significant Accounting Policies regarding Inventories wherein the determination of estimated net realizable value and specification identification involves technical judgment of the management which has been relied upon by us.

ii. Note No. 36 of Notes on Financial statements wherein the management has confirmed that no financial adjustment is required to be made in the financial statements on account of various allegations, counter allegation and legal cases amongst promoters and also on account of dispute amongst promoters and settlement agreement executed thereafter.

Our opinion is not qualified in respect of this matter.

Report on other legal and regulatory requirements.

1. As required by the Companies (Auditor''s Report) Order,2003 ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the annexure, a statement on the matters specified in paragraphs 4 and 5 of the order.

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) Except for the matter described in basis of Qualified Opinion above, in our opinion, the Balance Sheet and Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

(e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of Directors are disqualified as on March 31,2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory requirements in the Independent Auditors Report of even date to the members of Goenka Diamond and Jewels Limited on the financial statements for the year ended March 31,2014)

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed assets on basis of available information.

(b) As explained to us, the fixed assets of the company have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

(ii.) (a) The Inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable

(b) The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventories. As explained to us, the discrepancies noticed on physical verification of stock as compared to book records are not material and the same have been properly dealt with in the books of accounts.

(iii) (a) The Company has granted unsecured loan to one (1) company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1224.15 lacs and the year-end balance of loans granted to such party was Rs. 1171.95 lacs..

(b) In our opinion and according to the information and explanations given to us the rate of interest and other terms and conditions for such loans are not prima-facie prejudicial to the interest of the Company

(c) The terms and conditions for repayment of loan and payment of interest on the loan granted to party has not been stipulated. In absence of the same, we are unable to comment on the same.

(d) In absence of terms and condition for repayment of loan granted, we are unable to comment whether there is overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4(iii) (f) and (g) of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) Due to peculiarity of good purchased from parties covered under section 301 of the Companies Act, we are unable to comment whether the transactions made in pursuance of such contracts or arrangements exceeding value of Rs. Five Lacs that have been entered into during the financial year are at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of accounts maintained by the company in respect of products where, pursuant to rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of Sub- Section (1) of Section 209(1) (d) Act, and we are of the opinion that prima facie, the prescribed accounts and records have been maintained.

(ix) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, wealth-tax and service tax dues applicable to it have not been regularly deposited with the appropriate authorities According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable except undisputed dues of income tax which is outstanding for more than six months from the date they became payable at the balance sheet date is as under:

Name of the Statute Nature of Amount Period to which dues (Rs. In Lacs) amount relates

Income Tax Act, 1961 Income Tax Rs. 203.07 Financial Year (excluding interest) 2012-2013

Name of the Statute Due date Date of Payment

Income Tax Act, 1961 March 31,2013 Not yet paid

(b) According to the information and explanation given to us, following are the disputed statutory dues pending to be deposited as at the year end

Name of The Statute Nature of the Dues Amount (Rs. ) Income Tax Act, 1961 Income Tax 11,62,19,970

35,78,698

28,95,08,100

Central Excise and Service Tax 6,22,540 Customs Act

Name of The Statute Period to which the Forum where dispute amount relates is pending

Income Tax Act, 1961 AY 2009-2010 ITAT, Jaipur

AY 2010-2011 ITAT, Jaipur

AY 2011-2012 CIT(Appeals), Jaipur

Central Excise and FY 2008-2009 Commissioner of

Customs Act FY 2011-2012 Central Excise (Appeal)

(x) In our opinion, there are no accumulated losses of the Company as at the end of financial year. Further, the Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has defaulted in repayment of dues to banks amounting to Rs. 617.70 lacs being the amount of overdue bills crystallized by banks to the tune of Rs. 363.56 Lacs and Rs. 254.14 lacs in the month of January and March, 2014 respectively.

(xii) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to information and explanations given to us, proper have been maintained of its transactions and contracts and timely entries have been made therein. The company held shares, securities, debentures and other investments in its own name.

(xv) In our opinion and according to information and explanations given to us, the Company has not given any guarantee for loan taken by others from banks or financial institutions during the year.

(xvi) The Company has not obtained any term loans during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company had in the previous financial year raised money by way of public issue. The management has disclosed end use of the money raised.

(xxi) We draw attention to Note No.36 of Notes on financial statement wherein management has stated that no financial adjustment is required on various allegations, counter allegation, legal cases amongst promoters. Subject to the this, during the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For B. Khosla & Co. For RSVA and Company Chartered Accountants Chartered Accountants FRN No.000205C FRN No.110504W

Sandeep Mundra B.N.Rao Partner Partner Membership No. 75482 Membership No. 039555

Place: Mumbai Place: Mumbai Date - November 29, 2014. Date - November 29, 2014.

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Goenka Diamond and Jewels Limited ('the Company') as at March 31,2012 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order

4. Without qualifying our opinion,

a) we draw attention to Note No. 37 to the financial statements, the Company has not complied with the provisions of section 295 of the Companies Act, 1956 in as much as it has not taken prior approval of the Central Government in respect of guarantee amounting to Rs. 69.2 million (amount outstanding as at March 31, 2012 - Rs. NIL) given on behalf of a firm in which a Director of the Company is a partner with more than 25% holding. The Company has made an application under Section 621A for compounding the offences. Pending the outcome of this application, no adjustments have been made to the financial statements.

b) Accounting Policy 6(c) with regard to identification of specific item of inventory and determination of estimated net realizable value which is based on technical judgment of management and relied upon by us.

5. Further to our comments in the paragraph 3 above, we report that:

i. 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;

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

iii. The balance sheet, the profit and loss account and the cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, the profit and loss account and the cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 March 31, 2012;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of the Auditors' Report of even date to the members of Goenka Diamond and Jewels Limited on the financial statements for the year ended March 31, 2012

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed asset on basis of available information.

(b) As explained to us, the fixed assets of the company have been physically verified by the management during the year. In our opinion, frequency of verification is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

(ii) (a) As explained to us, inventories have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventories. As explained to us, the discrepancies noticed on physical verification of stock as compared to book records are not material and same have been properly dealt with in the books of accounts.

(iii) As informed, the Company has not granted/taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses 4(iii)(b), 4(iii) (c) 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs that have been entered into during the financial year because of the unique nature of the items involved and the absence of comparable prices, we are unable to comment whether the transactions were made at prevailing market price at the relevant time.

(vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to rules made by the Central Government for the maintenance of records under Section 209(1 )(d) of the Companies Act, 1956. Based on such review and on the basis of an independent certificate from a practicing Cost Accountant, we are of the opinion that prima facie, the prescribed accounts and records have been maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees' state insurance, income-tax, sales-tax, wealth-tax, customs duty, cess have generally been regularly deposited with authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

(x) The Company does not have any accumulated losses at the end of the year. Further, the company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is dealing in or trading in shares, securities, debentures and other investments and maintains adequate records of its transactions and contracts in shares , securities, debentures and other investments. The company held shares, securities, debentures and other investments in its own name.

(xv) The Company in previous year had given guarantee to the bankers on behalf of a partnership firm in which the directors are interested and for which prior approval of the Central Government under section 295 had not been obtained when the guarantee was originally given. The said guarantee stands withdrawn. During the year the company has not given any guarantee for loans taken by others from Banks or financial institutions.

(xvi) The Company has not obtained any term loans during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company had in the previous financial year raised money by way of public issue. The management has disclosed end use of the money raised.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For B. Khosla & Co. For Haribhakti & Co.

Chartered Accountants Chartered Accountants

FRN NO.000205C FRN NO.103523W

Sandeep Mundra Sumant Sakhardande

Partner Partner

Membership No. 75482 Membership No. 34828

Place: Mumbai Place: Mumbai

Date: May 29, 2012 Date: May 29, 2012

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Goenka Diamond and Jewels Limited ('the Company') as at March 31, 2011 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order

4. Without qualifying our opinion, we draw attention to Note No. 17 of Schedule XXI to the financial statements, the Company has not complied with the provisions of section 295 of the Companies Act, 1956 in as much as it has not taken prior approval of the Central Government in respect of guarantee amounting to Rs. 69.2 million (amount outstanding as at March 31,2011 - Rs NIL) given on behalf of a firm in which a Director of the Company is a partner with more than 25% holding. The Company has made an application under Section 621A for compounding the offences. Pending the outcome of this application, no adjustments have been made to the financial statements.

5. Further to our comments in the paragraph 3 above, we report that:

i. 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;

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

iii. The balance sheet, the profit and loss account and the cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, the profit and loss account and the cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 March 31, 2011;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of the Auditors' Report of even date to the members of Goenka Diamond and Jewels Limited on the financial statements for the year ended March 31, 2011

(i) (a) The company has not maintained fixed assets register, we are given to understand that the Company is in the process of compiling the fixed assets register.

(b) The fixed assets of the company have been physically verified by the management during the year. In our opinion, frequency of verification is reasonable. However in the absence of fixed assets register, we are unable to comment on the discrepancies, if any, and adjustments to be dealt with in the books of account.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) As explained to us, inventories have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of examination of inventories records, we are of the opinion that the Company is maintaining proper records of inventories. As explained to us, the discrepancies noticed on physical verification of stock as compared to book records are not material and same have been properly dealt with in the books of accounts.

(iii) As informed, the Company has not granted/taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses 4(iii)(b), 4(iii)(c) 4(iii)(d), 4(iii)(f) and 4(iii)(g) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs that have been entered into during the financial year because of the unique nature of the items involved and the absence of comparable prices, we are unable to comment whether the transactions were made at prevailing market price at the relevant time.

(vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii)To the best of our knowledge and as explained, the Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees' state insurance, income-tax, sales-tax, wealth-tax, customs duty, cess have generally been regularly deposited with authorities.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

(x) The Company does not have any accumulated losses at the end of the year. Further, the company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is dealing in or trading in shares, securities, debentures and other investments and maintains adequate records of its transactions and contracts in shares , securities, debentures and other investments. The company held shares, securities, debentures and other investments in its own name.

(xv) The Company in previous year had given guarantee to the bankers on behalf of a partnership firm in which the directors are interested and for which prior approval of the Central Government under section 295 had not been obtained when the guarantee was originally given. During the year, the said guarantee stands withdrawn. During the year the company has not given any guarantee for loans taken by others from Banks or financial institutions.

(xvi) The Company has not obtained any term loans.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company during the year raised money by way of public issue and management has disclosed end use of the money raised.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For B. Khosla & Co. For Haribhakti & Co.

Chartered Accountants Chartered Accountants

FRN NO.000205C FRN No.103523W

Sandeep Mundra Prasad Paranjape

Partner Partner

Membership No. 75482 Membership No. 47296

Place: Mumbai

Date: May 24, 2011

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Mar 31, 2010

1. We have audited the attached Balance Sheet of Goenka Diamond and Jewels Limited (the Company) as at March 31, 2010 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order

4. Further to our comments in the paragraph 3 above, we report that:

i. 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;

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

iii. The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

vi. Without qualifying our opinion, we draw attention to Note No. 4 of Schedule XXI to the financial statements, the Company has not complied with the provisions of section 295 of the Companies Act, 1956 in as much as it has not taken prior approval of the Central Government in respect of guarantee amounting to Rs69.2. million (amount outstanding as at 31st March, 2010 – Rs. 69.2 million) given on behalf of a firm, in which the Director of the Company is a partner and holds more than 25% of the share. The Company has made an application under Section 621A for compounding the offences. Pending the outcome of this application, no adjustments has been to the financial statements.

vii. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 March 31, 2010;

b) in the case of the profit and loss account, of the profit for the year ended on that date; and

c) in the case of cash flow statement, of the cash flows for the year ended on that date. ANNEXURE TO AUDITORS REPORT Referred to in paragraph 3 of the Auditors Report of even date to the members of Goenka Diamond and Jewels Limited on the financial statements for the year ended March 31, 2010

(i) (a) The Company is in the process of compiling the fixed assets register.

(b) The fixed assets of the company have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) There was no substantial disposal of fixed assets during the year.

(ii) (a) As explained to us, inventories have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

(c) On the basis of examination of inventories records, we are of the opinion that the Company is maintaining proper records of inventories. As explained to us, the discrepancies noticed on physical verification of stock as compared to book records are not material and same have been properly dealt with in the books of accounts.

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the company.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses 4(iii)(f) and 4(iii)(g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. During the course of our audit, we have not observed any continuing failure to correct weakness in internal control system of the company.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In respect of the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs that have been entered into during the financial year because of the unique nature of the items involved and the absence of comparable prices, we are unable to comment whether the transactions were made at prevailing market price at the relevant time.

(vi) The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the services of the company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees state insurance, income- tax, sales-tax, wealth-tax, customs duty, cess have not been regularly deposited with the appropriate authorities and there has been delays in some cases.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act,1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of income tax, sales-tax, wealth tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute.

(x) The Company does not have any accumulated losses at the end of the year. Further, the company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) The Company has given guarantee to the bankers on behalf of a partnership firm in which the directors are interested and for which prior approval of the Central Government under section 295 have not been obtained.

(xvi) The Company has not obtained any term loans.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company did not raise any money by way of public issue during the year.

(xxi) During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.



For B. Khosla & Co. For Haribhakti & Co.

Chartered Accountants Chartered Accountants

FRN No.000205C FRN No.103523W

Sandeep Mundra Sarah George

Partner Partner

Membership No. 75482 Membership No. 45255

Place: Mumbai

Date: May 26, 2010.