Notes to Accounts of Goenka Diamond & Jewels Ltd.

Mar 31, 2023

Note: The country of incorporation of above subsidiaries is their principle place of business. The subsidiaries are engaged in Diamond and Gold Jewellery trading.

d The Company in earlier year has subscribed to 49,00,000 12% Optionally Convertible Debentures of Rs. 100 each valuing at 429.29 lacs of Gem Gold Mining Private Limited (issuing company) which were due in August, 2021. However, the issuing company has expressed its inability to redeem these debentures and payment of cumulative interest as the net-worth of the issuing company has been completely eroded and has no liquidity. The Company had right to excercise its option for conversion of its debentures and cumulative interest into equity of the issuing company which would have resulted in issuing company becoming subsidiary of the Company and would not have resulted in any cash-inflow. Therefore, the company and issuing company arrived at settlement wherein the issuing company has issued 49,00,000 equity shares of Rs. 1 each against the outstanding OCD’s and payment of Rs. 50.00 lacs against the cumulative interest. Accordingly, the company has relinquished its option rights and charged off amount of OCD of Rs. 429.29 lacs and differential accumulated interest amounting to Rs. 149.50 lacs to Profit and Loss Account. The newly alloted 49,00,000 equity shares of Rs. 1 each under settlement of OCD’s have been fair valued at Rs. NIL.

(a) Contrary to Ind AS 21 , Loan given to Subsidiary denominated in foreign currency amounting to Rs. 1249.95 lakhs have not been restated based on exchange rate as at the end of the year, as it is deemed prudent not to take cognizance of unrealised exchange difference on notional basis due to uncertainties with regard to expected time frame for realisation. The company shall account for the actual exchange difference at the time of realization. Consequently, the Loan is understated Rs.336.77 lakhs (Previous Year Rs. 211.97 lakhs) as at the year end.

(b) The Loan to subsidiary is in the nature of long term investment and was given for set up of business of the subsidiary and is part of net investment in the subsidiary,. Though due to certain unfavourable conditions in the past and slow down of business activity, the working of subsidiary is kept in abeyance. As and when the conditions turn favourable, the management is hopeful that they will be able to revive the business of the subsidiary and shall be able to recover the loan (including accrued interest) in near future. The company during the year has provided for expected credited loss of Rs.63.57 lacs (Previous Year Rs. 58.48 lacs ) against the accrued interest on the loan to subsidiary. The time frame of recovery of loan cannot be estimated and therefore amount of expected credit loss required to be recognised cannot be ascertained.

Notes

1. The management has not created deferred tax assets on unabsorbed depreciation and carried forward of losses due to lack of reasonable certainty that sufficient future taxable income will be there against which deferred tax assets will be set off.

2. Net deferred tax (credit)/charge for the year of Rs. 0.34 lakhs (Previous year Rs. 3.58 lakhs) has been recognised in the Statement of Profit and Loss for the year.

a. There have been defaults on payment obligations by the trade receivables on due date and recoveries from these trade

receivables are not significant, due to certain unfavourable developments in earlier years and economic slowdown especially in diamond sector. No confirmation have been received by these trade receivables. The Company is taking all possible efforts to recover old trade receivables and had initiated legal action wherever considered necessary. However, looking at the past record regarding recovery from Trade receivables, the management is of the opinion that looking to the uncertainty regarding time frame and quantum of realisation from these trade receivables, amount of expected credit loss required to be recognised cannot be estimated and therefore no provision for expected credit loss is required to be made against these trade receivables.

b. Contrary to Ind AS 21, trade receivables denominated in foreign currency amounting to Rs. 69,703.18 lakhs have not been restated based on exchange rate as at the end of the year. These trade receivables have been carried forward based on exchange rate as at the end of March 31, 2015 and/ or March 31, 2016, as it is deemed prudent not to take cognizance of unrealised exchange difference on notional basis due to uncertainties with regard to expected time frame for realisation of trade receivables. The company shall account for the actual exchange difference at the time of realization of these trade receivables. Consequently, the trade receivables are understated Rs. 19707.68 lakhs as at the year end.

a) The Company has given Rs. 1405.61 lacs ( P.Y. Rs. 1405.61 Lacs ) to Alchemist Asset Reconstruction Company Ltd (ARC) as adhoc / repayment of loans to show its intent of settlement of its dues with four lender banks assigned to ARC. The terms and conditions of the settlement are yet to be finalised.

c Rights, preferences and restrictions attached to shares:

(i) The company has one class of equity shares having a par value of Rs.1 per share. Each shareholder is eligible for one vote per share held In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(ii) Subsequent to dispute between promoters during the year under review, hon’ble Company Law Board (CLB) has directed that 4,09,76,250 equity shares of Goenka Diamond & Jewels Limited shall not carry any voting rights, pending the disposal of company petition before CLB.

(iii) During the earlier year PNB has sold 409.76 lakhs equity shares of promoters pledged with consortium against the borrowing limits. The sale proceed of these shares have not been adjusted by the PNB against the outstanding dues and therefore no adjustment for the same has been made in the books of account.

a. Retained earnings

Retained earnings are the profits of the company earned till date after all distribution made to shareholders.

b. Securities Premium

This reserve is created by excess of amount received over face value of shares. This reserve will be utlilised as per the provision of Companies Act, 2013.

c. General Reserve

This reserve is created by transferring amount from retained earning. This reserve is freely available for distribution.

1. Date of default is considered as date of NPA

2. The above defaults does not includes defaults of payment of interests, as the company is not accounting for any interest from April 1, 2016 even though the banks have either charged interest but subsequently reversed or have not charged interest. Further, it has been decided by the Board not to provide any interest amounting to Rs. 20979.19 lakhs (Current year interest Rs. 2,730.80 lakhs) as calculated by the management @17 % (approx.) on working capital borrowing availed by the Company, due to pending proposal for settlement of entire dues, envisaging part-payment of principal amount due to the banks. In some instances banks have charged interest from current account which has resulted in credit balances in current account as at year end and is shown above “Current Borrowings”. The above amount of interest calculated by the management may differ from the amount of claims received from the secured financial creditors which is pending verification by the IRP.

3. Lead Bank Punjab National Bank, on behalf of all consortium banks, had issued fresh notice u/s 13(2) of the SARFAESI Act (after withdrawing its earlier notice) on October 22, 2018 for an amount of Rs. 216.62 crores owed by company to the consortium banks (excluding dues of one bank) and Asset Reconstruction Company up to March 31,2018 and subsequently issued possession notices for company’s properties and thereafter for sale of secured assets of the company which was stayed by DRT-1, Mumbai vide its order dated December 30, 2019. Further, Punjab & Sind Bank

(one of the consortium bank) has issued separate notice u/s 13(2) of the SARFAESI Act on January 07, 2020 for recovery of an amount of Rs. 77.26 Crores (including interest upto December 31,2019) within 60 days of the receipt of notice, which as per the management is already covered under the above stay order by DRT. Further, Mumbai DRT has also issued summons dated June 3, 2019 on application made by Punjab & Sind Bank (one of the consortium bank) under section 19(4) of The Recovery of Debts due to Banks and Financial Institution Act, 1993 for recovery of an amount of Rs. 56.92 crores owed by company to the bank, which is pending for final outcome. Further on appilcation by the Corporation Bank, DRT- Mumbai has also issued summons dated September 16,2020 under The Recovery of Debts due to Banks and Financial Institution Act, 1993 for recovery of Rs.30.41 crs, the proceeding for which is still pending. Four lender banks up to the reporting date have already transferred and assigned its outstanding dues against company to an Asset Reconstruction Company. State Bank of India accepted the One Time Settlement (OTS) proposal submitted by the Company. However, OTS proposal submitted to other banks has been rejected by the banks. One of the secured financial creditor has filed appeal at the National Company Law Tribunal, Jaipur on 24th April 2019 against the company for recovery of its dues. The National Company Law Tribunal, Jaipur has passed order no. CP No. (IB) -114/7/JPR/2019, IA/(IB) 580/JPR/2022 dated December 9, 2022 and has appointed IRP to carry function as mentioned under the Code for recovery of dues.

*Credit Facilities are secured by:

i) First pari passu charge on all tangible and intangible assets including current assets viz., stock of raw materials, work in progress and finished goods.

ii) Further secured, on pari-passu basis: -

a) Equitable Mortgage of Land and Building at C-114 & C-115A, Shivaji Marg, Tilak Nagar, Jaipur in the name of one of the director, Flat No. 4, Mount Unique Bldg., 62-A, Peddar Road, Mumbai, Factory land and building at surat, Shop No. 1, 2 & Garage of Parekh Mansion Mumbai and Office at 1305, Pancharatna, Mumbai belonging to director and their relatives. Further secured by Land at Badlapur belonging to group company and 4.09 crore equity shares in name of one of the director.

b) Personal Guarantees of Chairman, Vice Chairman & Managing Director and Director & their relatives **Credit Facilities are secured by:

First pari-passu charge on Ground plus 3 storied commercial building located at plot no. 13, Municipal Corporation House No. 14, Ward no. 30, Kh No. 86, Street No. 161, City Survey No. 223, C A Road, Nagpur

C. Since, the loans of the Company has been recalled and the Company has been declared NPA by the Banks, the

banks are neither allowing any transactions nor calculating drawing power or reviewing the account performance and therefore it is not necessary to submit any quarterly returns/statements to any of the banks from which it has taken borrwings on the security of current assets.

D. The management has not received any communication from banks regarding declaration of the Company as willful defaulter. Further, the management of the Company has also performed search of defaulters lists available on banks website and the name of the Company is not appearing on defaulters list in any of the banks website.

E. The Charges amounting to Rs. 19,800 lacs has been registered in favour of the security trustee (for consortium), Rs.

993 lacs in favour of ARC and Rs.248 lacs in favour of a bank against the borrowings of the Company. During the

previous years, the borrowings have been assigned to ARC’s by a few banks and OTS has been entered with a Bank. The Company is not in a position to give effect of these transactions as cumulative charges are registered in favour of security trustee and the Bank shall only give effect of this transaction on complete settlement of its dues.

Note: In absence of any evidence which supports or corroborates the fact of disagreement, the trade payables have been considered as un-disputed.

(a) Trade Payables include overdue amounts (mainly unclaimed) of Rs. Nil (Previous Year Rs. Nil) including interest of Rs. Nil (Previous Year Rs. Nil) payable to Micro & Small enterprises. The company does not owe any amount to Micro & Small enterprises. These enterprises have been identified on the basis of information available to the Company and relied upon by the auditors.

(b) Contrary to IND AS 21, trade payables denominated in foreign currency amounting to Rs. 29,717.66 lakhs have not been restated based on exchange rate as at the end of the year. These trade payables have been carried forward based on exchange rate as at the end of March 31,2016 or at transaction date rate whichever is later, as it is deemed prudent not to take cognizance of unrealised exchange difference on notional basis due to uncertainties with regard to expected time frame for payment of these trade payables which is dependent of recovery from trade receivables. The company shall account for the actual exchange difference at the time of payment of these trade payables. Accordingly, the trade payables are understated by Rs.7,407.54 lakhs as at the year end.

30 Financial Instruments

The significant accounting policies, including the criteria of recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability are disclosed in note 4-6,9-12,16,18-20 of the Ind AS financial statements.

Carrying amounts of cash and cash equivalents, trade receivables, loans, other financial assets, current borrowings, trade payable and other financial liabilities as at March 31,2023 and March 31,2022 approximate the fair value because of their short term nature.

Fair Value Hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are whether observable or unobservable and consists of the following three levels:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2: Inputs are other than quoted prices included within level 1 that are observable for the asset or liability either directly (i.e. prices) or indirectly (i.e. derived from prices).

Level 3: Inputs are not based on observable market data unobservable inputs. Fair value are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

(b) Financial Risk Management

The Board of Directors reviews the risk management policy from time to time and the said policy aims at enhancing shareholders’ value and providing an optimum risk-reward trade off. The risk management approach is based on clear understanding of variety of risk that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.

A brief description of the various risks which the company is likely to face are as under:

(i) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market conditions. Market risk comprises three types of risk: interest rate risk, credit and default risk and liquidity risk. Financial instruments affected by market risk include loans and borrowings, deposits.

(ii) Interest Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company borrowings from banks which have been declared NPA by the banks and interest at a higher rate is charged by the banks. So, interest rate risk is high in case of Company.

Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to interest rates for both fixed and floating rate borrowings at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. Since all the consortium bankers has recalled their loans, details of interest charged by banks are not available from FY 2016-17 onwards, hence disclosure required for interest rate sensitivity cannot be given.

(iii) Credit Risk and Default Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables, business advances/deposit given) and from its investing activities (primarily loans granted to various parties including related parties). Since, the Company is not able to timely realize amount due from trade receivables, credit risk in case of Company is very high.

(iv) Liquidity risk

The company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and loans. The liquidity position of the company is not good. As the company’s account has been declared NPA by the bank and the company is unable to get new finance from banks. Also, the company is highly dependent on cash sales to meet its day to day expenses.

(v) Foreign Currency Risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the Establishment’s functional currency. The company have significant currency risk as the company have significant amount outstanding which is denominated in foreign currency.

Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of March 31,2023 is as follows.

Defined Benefit Plan

The company provides gratuity benefits to its employees as per the statute. Present value of gratuity obligation (NonFunded) based on actuarial valuation done by an independent valuer using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The following table sets out the status of the gratuity plan and the amounts recognised in the Company’s financial statements as at March 31,2023:

The estimates of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is extracted from the report obtained from Actuary.

Risk exposure and asset liability matching Liability Risks:-

(a) Asset-liability Mismatch Risk

Risk which arise if there is a mismatch in the duration of the assets relative to the liabilities by mismatching duration with the defined benefit liabilities, the company is successfully able to neutralize valuation swings caused by interest rate movements.

Hence Companies are encouraged to adopt assets- Liability management.

(b) Discount Rate Risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practise can have a significant impact on the defined benefit liabilities.

(c) Future salary Escalation and inflation risk

Since the price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments regulating in a higher present value of liabilities especially unexpected salary increases provide at management''s discretion may lead to uncertainties in estimating this increasing risk.

(d) Unfunded Risk

This represents unmanaged risk and growing liability. There is an inherent risk here that the company may default on paying the benefits in adverse circumstances. Funding the plan removes volatility in company''s financials and also benefit risk through return on the funds made available for the plan

There is no contribution under defined contribution plans and defined benefit plans in respect of Key Management Personnel.

The Expected contribution for the next year is Rs.1.79 lakhs

The average outstanding term of obligation (years) as at valuation date is 6.64 year.

31.7 Sensitivity Analysis

Sensitivity analysis indicates the influence of a reasonable change in certain significant assumptions on the outcome of the Defined benefit obligation (DBO) and aids in understanding the uncertainty of reported amounts. Sensitivity analysis is done by varying one parameter at a time and studying its impact.

(a) The current service cost recognised as an expenses included in the Note 27 ‘Employee benefits expense’ as gratuity. The remeasurement of the net defined benefit liability is included in other comprehensive income.

(b) The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the Actuary.

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analysis above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

(a) Impact of change in discount rate, future salary increase, withdrawal rate on defined benefit obligation when base assumption is decreased/increased.

32 Income Taxes

Indian companies are subject to Indian income tax on a standalone basis. Entity is assessed to tax on taxable profits determined for each fiscal year beginning on April 1 and ending on March 31.

Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the (Indian) Income Tax Act, 1961. The adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, deduction for tax holidays, the set-off of tax losses and depreciation carried forward and retirement benefit costs. Statutory income tax is charged at 22% plus a surcharge and higher education cess.

33 Segment Reporting

The operating segments have been identified on the basis of nature of products.

i. Segment revenue includes sales and other income directly identifiable with the segment including inter-segment revenue.

ii. Expenses that are directly identifiable with the segment are considered for determining the segment result.

iii. Expenses / Incomes which are not directly allocable to the segments are included under un-allocable expenditure / incomes.

iv. Segment results include margins on inter-segment sales which are reduced in arriving at the profit before tax of the Group.

v. Segment assets and liabilities include those directly identifiable with the respective segments. Un-allocable assets and liabilities represent the assets and liabilities that relate to the Group as a whole and not allocable to any segment.

vi. Inter - Segment revenue :- Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.

During the financial year 2010-2011, the Company had completed its Initial Public Offer (IPO) comprising of Rs. 93.71 lakhs equity shares of Rs. 10/- which were issued at a price of Rs. 135/- per equity share (including share premium of Rs. 125/- per equity share) and raised funds amounting to Rs. 12650.85 lakhs. Out of the said proceeds, Rs. 12573.87 lakhs have been utilised on objects approved by the Board of Directors and Share Holders. The Remaining amount of Rs.76.98 lakhs have been attached / adjusted by the Government authorities against the disputed dues.

38 (A) The Union Bank of India (Formerly known as Corporation Bank) has filed appeal at the National Company Law

Tribunal, Jaipur on 24th April 2019 against the company for recovery of its dues. The National Company Law

Tribunal, Jaipur has passed order no. CP No. (IB) -114/7/JPR/2019, IA/(IB) 580/JPR/2022 dated December 9, 2022 mentioning appointment of Mr. Vishal Bidawatjika as the Interim Resolution Professional(“IRP”) of the company. On April 12, 2023, the National Company Law Tribunal, Jaipur has passed order to appointed Mr. Sourabh Malpani as IRP of the company replacing the previous IRP Mr. Vishal Bidawatjika. Upon commencement of the CIRP, the powers of the Board of Directors of the Company stand temporarily suspended and are exercised by the IRP

(B) The financial creditors (secured) of the Company have submitted their claims of Rs. 45083.13 lakhs, out of which

partial claim of principal amount of Rs. 42679.31 lakhs have been admitted and amount of claims under verification is Rs. 2403.82 lakhs. The operational creditors (Unsecured) of the company has submitted its claimed of Rs. 23.42 lakhs and same has been admitted by the IRP. The Income Tax Department has also submitted it’s claimed of Rs. 5068.52 lakhs which is admitted by the IRP of the company. The amount of claim admitted by the IRP may be different than the amounts reflecting in the financial statements of the Company as on March 31, 2023. Pending final outcome of the CIRP, no adjustment has been made in these financial statements for the differential amounts, if any.

39 Contingent Liabilities

(a) Claims against the Company not acknowledged as debts

In respect of Interest on recalled loans or loans classified by the banks as NPA where interest in earlier years is either not applied or penal interest / higher rate of interest is applied. The Company till March 2016 has provided in its best judgement all probable interest liability. Thereafter the company has not recognised any interest liability payable to banks. The secured financial creditors have filed claims amounting to Rs. 45083.13 lakhs against the outstanding amount of Rs. 17710.38 lakhs is appearing in the financial statements. The differential amount of Rs. 27372.75 lakhs has not been acknowledged as debts by the company. Apart for above, claims from operational creditors and tax authorities have been admitted by the IRP which may be different from the amount recognized in the books of accounts and to that extent the company has not acknowledged these claims as debts.

40 The Income tax Authorities during the search u/s 132 of I.T Act 1961 on 13th August 1993 seized 5580 cts. of emerald cut valued at Rs. 8.19 lakhs. The same has been shown in the closing stock of emerald cut in the books of Accounts

41 (a) Due to certain unfavourable developments and sluggish market in earlier periods, there is substantial decrease in

sales and volume of the business. Recoveries from trade receivables are slow and there is a temporary mismatch in the cash flow resulting in overdue creditors, default in repayment of statutory dues and dues to banks owing to which all banks have classified the account as NPA and recalled their loans. The management is hopeful that these old trade receivables shall be recovered as the company has initiated legal actions against such debtors, wherever considered necessary. Further, the management is taking all possible steps to revive the business operations and intend to approach consortium bankers for restructuring/ one-time settlement of the its entire loan dues and assumes that Company will have adequate cash flow from export realisation to defray its entire debt obligation in phased manner. At the same time, management is hopeful that it will be able to raise adequate finance from internal accruals and alternate means to meet its short term and long term obligations. Hence the accounts of the Company are prepared on going concern basis.

(b) No provision has been made on an investment of Rs. 2.03 lakhs by the Company in its subsidiary namely M/s. M. B. Diamond LLC (Russia) and investment of Rs. 7.44 lacs in subsidiary namely Goenka Diamond & Jewels DMCC, (Dubai) whose net-worth are negative as the management is of view that the investments are in the nature of long term investments and the diminution in value is temporary in nature. The management is confident that these subsidiaries shall revive its business operations in near future.

(c) Loan given to subsidiary is in the nature long term loan for set up of business of the subsidiary and is part of net investment in subsidiary. The operation of the subsidiary shall soon be revived and this loan will be recovered in near future and therefore no provision for expected credit loss is required. However, the company during the previous years adnd current year has provided for expected credited loss of Rs. 812.35 lacs against the accrued interest on the loan to subsidiary.

43 In the opinion of the Board, all assets other than property, plant & equipment and non current investment have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

44 Other Statutory information

(i) The Company do not have any benami property, and no proceeding has been initiated against the Company for holding any benami property;

(ii) The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:

(a) 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

(b) provide any guarantee, security or the like to or on behalf of the ultimate Beneficiaries;

(iii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year;

(iv) The Company has not revalued any of its property, plant and equipment, right-of-use assets or intangible assets and the Company does not hold any immovable property or investment property;

(v) No search or seizure operation has been carried out on Company during the year;

(vi) The Company do not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956;

(vii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013;

(viii) The Company is not covered under section 135 of the Companies Act, 2013;”

45 Point for financial statements

These financial statements of the Company for the year ended March 31, 2023 pertains to period both prior and post commencement of CIRP. These financial statements have been signed by the Interim Resolution Professional (IRP) while exercising the powers of the Board of Directors of the company, which has been conferred upon him in terms of the provisions of Section 17 of the Insolvency and Bankruptcy Code 2016. Since these financial statements also belong to the period when the affairs of the Company were being managed and ‘governed by the erstwhile Board of Directors of the Company, these financial statements have been prepared with the same ‘basis of preparation’ as adopted by the erstwhile Board of Directors as enumerated upon the Board under Section 134 (5) of the Companies Act, 2013 and related regulations..

Due to suspension of Board of Directors of the Company, it was not feasible or practical to provide requisite information for assessment of internal financial control relating to transactions for financial Year 2022-23 which pertains to the period prior to appointment of IRP

46 Previous year figures have been re-grouped / re-arranged wherever necessary.

---

Mar 31, 2015

1. Nature of Security

Credit Facilities are secured by:

i) First pari passu charge on all tangible and intangible assets including current assets viz., stock of raw materials, work in progress and finished goods.

ii) Further secured, on pari-passu basis: -

a) Equitable Mortgage of Land and Building at C-114 & C-115A, Shivaji Marg, Tilak Nagar, Jaipur in the name of one of the director, Flat No. 4, Mount Unique Bldg., 62-A, Peddar Road, Mumbai, Factory land and building at surat, Shop No. 1,2 & Garage of Parekh Mansion Mumbai and Office at 1305, Pancharatna, Mumbai

b) Personal Guarantees of Chairman, Vice Chairman & MD and MD of the Company.

2. The Company has classified various benefits provided to employees as under:

A. Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plan

c. Employers' Contribution to Employees' State Insurance

3. Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships: Subsidiaries (Direct)

1. M.B. Diamonds LLC - Russia

2. Goenka Diamond & Jewels DMCC - Dubai

Enterprises in which Key management personnel are interested :

1. Goenka Diamonds Private Limited

2. Mystique Jewels

3. Goenka Jewellers

4. Geet Holdings Private Limited

5. Yash Complex Private Limited

6. Sonam Complex Private Limited

7. Goenka Infra Projects Private Limited

8. Goenka Mining Resources Private Limited

9. Goenka Entertainments Private Limited

10. Goenka Properties Private Limited

11. Gem Gold Mining Private Limited

12. Top Minerals Private Limited

13. Aureus Gold Mines Private Limited

14. Shree Vriddhi Mines and Minerals Private Limited

15. Gold Mineral Resources Development Private Limited

16. Chrome Mines and Minerals Private Limited

17. Goenka Power and Infra Limited

18. D.V.Exports

19. Dinyog Finvest Private Limited

20. Nand Lal Goenka(HUF)

21. Solitaire Diamond Exports

22. Shobhagya Capital Options Limited

23. Shobhagya Securities Limited

Key Management Personnel (KMP):

1. Sh Nandlal Goenka

2. Sh Navneet Goenka

3. Sh Nitin Goenka

Relative of Key Management Personnel

1. Smt. Namita Jain (Daughter of Sh Nandlal Goenka)

2. Smt. Neeta Saraf (Daughter of Sh Nandlal Goenka)

3. Smt. Nirmala Goenka (Wife of Sh Nandlal Goenka)

4. Smt. Bhawna Goenka (Wife of Sh Navneet Goenka)

5. Smt. Dhriti Goenka (Wife of Sh Nitin Goenka)

4. Contingent Liabilities & Commitments

Year ended Year ended March 31, 2015 March 31, 2014

Capital Commitment: Rs. Rs.

Estimated amount of contracts remaining to be NIL 5,618,000

Executed and not provided for Contingent Liabilities

(a) Claims against the Company not acknowleged as debts

i) Income Tax Matters (Against which company has preferred appeals) 16,220,942 409,306,768

(Pertaing to AY 2004-05, AY 2008-09 to AY 2011-12)

ii) Service Tax matter (Appeal filed by company) 622,540 622,540

5.The Income tax Authorities during the search u/s 132 of I.T Act 1961 on 13th August 1993 seized 5580 cts. of emerald cut valued at Rs. 819000/-. The same has been shown in the closing stock of emerald cut in the books of Accounts

6.(a) In the financial year 2013-2014, disputes amongst promoters arose under which allegations and counter allegation were made and legal actions were initiated amongst promoters. However, thereafter the promoters arrived at the settlement with the help of court mediation vide settlement agreement executed on March 18, 2014 which is still pending for final implementation. The management reiterates that no adjustment is required in the financial statements for the terms and conditions of settlement agreement executed and on account of the above disputes, allegations and legal actions.

(b) Consequent to dispute amongst promoters resulting in certain unfavourable development, the recovery from Trade receivables was slow and the sales decreased substantially. This has resulted in mismatch in cash flow and adverse effect on working capital cycle, consequent to which the company has defaulted in payment of statutory dues, creditors and in re-payment of dues to certain banks owing to which two out of eight bankers have classified the account as NPA. The bankers have formed Joint Lenders Forum (JLF) on May 29, 2014, in accordance with RBI guidelines wherein some additional facilities are sanctioned/proposed to be sanctioned to the Company, so that it can revive its operations and come out of the financial crises.

(c) Consequent to the account being classified as NPA by certain banks, the management as a matter of prudence and in order to account all probable interest liability has provided interest wherever banks have not applied or have reversed the interest on loan. Any difference on account of interest and penal interest shall be accounted for as and when the interest is charged or settled by the banks. In case of one bank, interest to the tune of Rs. 1,49,61,987 has been charged in excess against which company has made representation to the bank. The management is very much confident that the same will be decided in the favour of the Company and therefore no provision for the same has been made in the financial statements for the year ended March 31,2015

7. Due to inadequacy of profit and liquidity crunch faced by the company, Mr. Nandlal Goenka, Chairman and Mr. Navneet Goenka, Vice Chairman & Managing Director reduced their remuneration in last year from Rs. 5,00,000/-p.m. and Rs. 4,00,000/- p.m. to Rs. 50,000/- p.m. and Rs. 40,000/- p.m respectively w.e.f April 1,2013. Thereafter, the Remuneration Committee in its meeting held on November 14, 2014 recommended to reduce the remuneration of Mr. Nitin Goenka, Managing Director of the Company from Rs. 4,00,000 p.m. to Rs. 40,000 p.m. w.e.f. April 1, 2014 to bring it in line with the remuneration drawn by Mr. Nandlal Goenka, Chairman & Mr. Navneet Goenka, Vice Chairman & Managing Director of the Company. Subsequently, the Board in its meeting held on November 29, 2014 took a note of it and later in its meeting held on February 13, 2015 passed resolution to this effect and accordingly the remuneration is provided in the financial statements of the Company.

8. Segment Reporting

a) Segment has been identified in line with the Accounting Standard - 17 "Segment Reporting" issued by ICAI taking in to consideration the organization structure as well as the differential risks and returns of these segments.

b) The differential risks and rewards of the company is more identifiable and associated with the method of distribution of Products and hence, the company has identified two reportable segment viz. Diamond & Gems and Retail Jewellery Operations.

c) The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on reasonable basis. The amounts, which are not allocable to any segment, are shown unallocable under respective heads.

9. Pursuant to the provisions of Schedule II to the Companies Act, 2013 effective from 1st April, 2014, the Company has reassessed the useful lives of its fixed assets. As a result of the change, the charge on account of depreciation for the year ended 31st March, 2015 is higher by 35.87 Lacs. In case of assets whose useful lives have ended, the carrying values, net of residual values as at 1st April, 2014 amounting to 19.32 Lacs have been charged to profit and loss account for the year.

10. In the opinion of the Board, all assets other than fixed assets and non current investment have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

11. Previous year's figures have been regrouped or rearranged wherever necessary.

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Mar 31, 2014

A The company has one class of equity shares having a par value of Rs. 1 per share. Each shareholder is eligible for one vote per share held In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b Subsequent to dispute between promoters during the year under review, hon''ble Company Law Board (CLB) has directed that 4,09,76,250 equity shares of Goenka Diamond & Jewels Limited shall not carry any voting rights, pending the disposal of company petition before CLB.

A Nature of Security

Credit Facilities are secured by:

i) First pari passu charge on all tangible and intangible assets including current assets viz., stock of raw materials, work in progress and finished goods.

ii) Further secured, on pari-passu basis: -

a) Equitable Mortgage of Land and Building at C-114 & C-115A, Shivaji Marg, Tilak Nagar, Jaipur in the name of one of the director, Flat No. 4, Mount Unique Bldg., 62-A, Peddar Road, Mumbai, Factory land and building at surat, Shop No. 1, 2 & Garage of Parekh Mansion Mumbai and Office at 1305, Pancharatna, Mumbai

b) Personal Guarantees of Chairman, Vice Chairman & MD and MD of the Company.

B 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 (though,fully repaid during FY 2014-15) in the month of January and March, 2014 respectively. The interest amounting to Rs. 51.86 lacs remained unpaid from the Jan 14 to Feb 14.

Trade Payables include overdue amounts (mainly unclaimed) of Rs. Nil (Previous Year Rs. Nil) including interest of Rs. Nil (Previous Year Rs. Nil) payable to Micro, Small & Medium enterprises. The company does not owe any amount to Micro, Small & Medium enterprises. These enterprises have been identified on the basis of information available to the Company and relied upon by the auditors.

* Investor Education and Protection Fund to be credited by the amount as and when required.

# Includes Rs. 6,39,900 (Previous year Rs. "NIL") liabilities of outstanding foreign currency forward contracts arising on account of re-statement at closing rate

Notes:

1. Building include Flat at Jaipur which is not yet registered in the name of company.

2. Building includes 5 No. of shares held in Mount Unique CHS.

Net deferred tax charge/(credit) for the year of Rs. 169,205 (Previous year Rs. (10,01,268)) has been recognized in the Statement of Profit and Loss for the year.

In the opinion of the management, trade receivables outstanding for more than 6 months from the date they are due for payments are good and recoverable, though the recovery has been slow, due to economic slowdown especially in diamond sector and also on account of dispute between promoters, which had temporarily affected the working capital cycle adversely. However, a settlement agreement has been executed between the promoters with help of court mediation on 18th March 2014, post which the management hopes that the company would be able to revive its operations. Nonetheless, the company has directly obtained confirmation from all its overseas Trade receivables and the management is of the opinion that looking at the past record, the Trade Receivables are good and recoverable and therefore no provision is required to be made against these Trade Receivables

# Includes Rs. "NIL" (P/Y Rs. 180,114/-) given as advance to an enterprise in which directors are interested.

c Based on the Acturial valuation by Independent Actuary, there is decrease in gratuity obligation by Rs. 6,28,719/- as at March 31, 2014. However, the company has continued with the existing provision and has not reversed such decrease in obligation.

In view of the highly competitive and dynamic nature of the industry in which the Company operates and due to changing requirement of the company, the Board of Directors had approved at their meeting held on May 24th, 2011 and the shareholders had also approved in the annual general meeting held on Septmeber 30th, 2011 the following inter-se reallocation of utilisation of the IPO proceeds:

1 Contingent Liabilities & Commitments Year ended Year ended March 31, 2014 March 31,2013

Capital Commitment: Rs. Rs.

Estimated amount of contracts remaining to be 5,618,000 5,618,000

Executed and not provided for

Contingent Liabilities

(a) Claims against the Company not acknowleged as debts

i) There are certain disputed tax demands amounting to Rs. 40.93 crores raised by Income Tax Authorities for AY 2009- 10, AY 2010-11 & AY 2011-12, mainly relating to allowalibility of tax exemption u/sec. 10AA of the Income Tax Act 1961, in respect of which the company has filed appeal before appropriate forum (CIT (A) / ITAT). However, the company has already got favorable order from ITAT on the same issue for AY 2008-09. Hence it is confident that for other assessment years also, the company would be able to get favorable orders.

ii) Service Tax matter (Appeal filed by company) Rs. 622,540 -

b) During the financial year 2013-2014, independent directors and one of the joint statutory auditors resigned and therefore there was inadvertent delay in compliance of listing agreement and certain provisions of the Companies Act. Any fees, penalty or other financial obligations, if any, arising due to such delay in compliances shall be accounted for as and when the same are determined/ finalized by the appropriate authority.

2 The Income tax Authorities during the search u/s 132 of I.T Act 1961 on 13th August 1993 seized 5580 cts. of emerald cut valued at Rs. 819000/-. The same has been shown in the closing stock of emerald cut in the books of Accounts

3 There were disputes amongst promoters which arose during the financial year 2013-2014 under which allegations and counter allegation were made and legal actions were initiated amongst promoters. However, thereafter the promoters arrived at the settlement with the help of court mediation vide settlement agreement executed on 18th March, 2014. The management is of the opinion that no adjustment is required to be made on account of the above disputes, allegations, legal actions and settlement agreement on the financial statements of the company for the year ended March 31,2014.

4 Segment Reporting

a) Segment has been identified in line with the Accounting Standard - 17 "Segment Reporting" issued by ICAI taking in to consideration the organization structure as well as the differential risks and returns of these segments.

b) The differential risks and rewards of the company is more identifiable and associated with the method of distribution of Products and hence, the company has identified two reportable segment viz. Diamond & Gems and Retail Jewellery Operations.

c) The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on reasonable basis. The amounts, which are not allocable to any segment, are shown unallocable under respective heads.

5 In the opinion of the Board, all assets other than fixed assets and non current investment have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

6 Previous year''s figures have been regrouped or rearranged wherever necessary.

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Mar 31, 2013

1 The Company has classified various benefits provided to employees as under:

A. Defined Contribution Plans

a. Provident Fund

b. State Defined Contribution Plan

c. Employers'' Contribution to Employees'' State Insurance

2 During the previous year 2011-12, the Company had the practice of recording all import and export transactions at the rate declared by the Customs department every month. Due to high volatility in the rates of USD during that year, there had been substantial differences in the Customs declared rate and the general rates prevailing on the date of the transactions. Had each of the import and export transactions been recorded at the RBI reference rate on the date of the transaction, the foreign exchange gain would have been lower by Rs. 6,03,77,480/- and normal trading profits would have been higher by the same amount.

3 Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships: Subsidiaries (Direct)

1. M.B. Diamonds LLC - Russia

2. Goenka Diamond & Jewels DMCC - Dubai

Enterprises in which Key management personnel are interested :

1. Goenka Diamonds Private Limited

2. Mystique Jewels

3. Goenka Jewellers

4. Geet Holdings Private Limited

5. Yash Complex Private Limited

6. Sonam Complex Private Limited

7. Goenka Infra Projects Private Limited

8. Goenka Mining Resources Private Limited

9. Goenka Entertainments Private Limited

10. Goenka Properties Private Limited

11. Gem Gold Mining Private Limited

12. Top Minerals Private Limited

13. Aureus Gold Mines Private Limited

14. Shree Vriddhi Mines and Minerals Private Limited

15. Gold Mineral Resources Development Private Limited

16. Chrome Mines and Minerals Private Limited

17. Goenka Power and Infra Limited

18. D.V. Exports

19. Dinyog Finvest Private Limited

20. Nand Lal Goenka(HUF)

21. Solitaire Diamond Exports

22. Goenka Diamond & Jewels SDN BHD

23. Shobhagya Capital Options Limited

24. Shobhagya Securities Limited Key Management Personnel (KMP):

1. Sh Nandlal Goenka

2. Sh Navneet Goenka

3. Sh Nitin Goenka

Relative of Key Management Personnel

1. Smt. Namita Jain (Daughter of Sh Nandlal Goenka)

2. Smt. Neeta Saraf (Daughter of Sh Nandlal Goenka)

3. Smt. Nirmala Goenka (Wife of Sh Nandlal Goenka)

4. Smt. Bhawna Goenka (Wife of Sh Navneet Goenka)

5. Smt. Dhriti Goenka (Wife of Sh Nitin Goenka)

4 The Income tax Authorities during the search u/s 132 of IT Act 1961 on 13th August 1993 seized 5580 cts. of emerald cut valued at Rs. 819000/-. The same has been shown in the closing stock of emerald cut in the books of Accounts

5 Disclosure in respect of derivative instruments as at March 31, 2013

a) Following derivative instruments have been acquired for hedging purposes against our Export Receivables

6 Segment Reporting

a) Segment has been identified in line with the Accounting Standard - 17 "Segment Reporting" issued by ICAI taking in to consideration the organization structure as well as the differential risks and returns of these segments.

b) The differential risks and rewards of the company is more identifiable and associated with the method of distribution of Products and hence, the company has identified two reportable segment viz. Diamond & Gems and Retail Jewellery Operations.

c) The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on reasonable basis. The amounts, which are not allocable to any segment, are shown unallocable under respective heads.

7 In the opinion of the Board, all assets other than fixed assets and non current investment have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

8 Previous year''s figures have been regrouped or rearranged wherever necessary.

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Mar 31, 2012

1 A) The Company has the practice of recording all import and export transactions at the rate declared by the Customs department every month. Due to high volatility in the rates of USD during the year, there have been substantial differences in the Customs declared rate and the general rates prevailing on the date of the transactions. Had each of the import and export transactions been recorded at the RBI reference rate on the date of the transaction, the foreign exchange gain would have been lower by Rs. 6,03,77,480/- and normal trading profits would have been higher by the same amount. B) During the previous year, the Company's GM-Treasury excecuted forwards contracts on behalf of the company in excess of the limits as specified in the employment contract duly signed by him on account of which the company suffered a loss to the tune of Rs. 9,37,87,000/- which has been netted off against exchange loss / (gain) in P/L A/c of Rs. 5,64,81,632/- of the previous year.

2 Related Party Disclosures:

A. List of related parties with whom transactions have taken place and relationships: Subsidiaries (Direct and Step down)

1. MB Diamonds LLC

Enterprises in which Key management personel are interested :

1. Goenka Diamonds Private Limited

2. Mystique Jewels

3. Goenka Jewellers

4. Geet Holdings Private Limited

5. Yash Holdings Private Limited

6. Sonam Complex Private Limited

7. Goenka Infra Projects Private Limited

8. Goenka Mining Resources Private Limited

9. Goenka Entertainments Private Limited

10. Goenka Properties Private Limited

11. Gem Gold Mining Private Limited

12. Top Minerals Private Limited

13. Aureus Gold Mines Private Limited

14. Shree Vriddhi Mines and Minerals Private Limited

15. Gold Minerals Private Limited

16. Chrome Mines and Minerals Private Limited

17. Goenka Power and Infra Limited

18. D.V. Exports

19. Dinyog Finvest Private Limited

20. Nand Lai Goenka(HUF)

21. Solitaire Diamond Exports

Key Management Personnel (KMP):

1. Sh Nandlal Goenka

2. Sh Navneet Goenka

3. Sh Nitin Goenka

Relative of Key Management Personnel

1. Smt. Nirmala Goenka

2. Smt. Bhawna Goenka

3. Smt. Dhriti Goenka

4. Smt. Neeta Saraf

5. Smt. Namita Jain

3. The Income tax Authorities during the search u/s 132 of l.T Act 1961 on August 13, 1993 seized 5580 cts. of emerald cut valued at Rs. 819000/-. The same has been shown in the closing stock of emerald cut in the books of Accounts

4. The Company had given guarantee of Rs. 692 lacs for a loan borrowed by an associate firm in which Directors were interested. At the time of providing the guarantee the Company was exempt U/s. 295 (2) of the Companies Act, 1956 to obtain prior approval from the Central Government. However, on renewal of the same the Company was a public limited company and consequently the guarantee given to bankers was in contravention to Section 295 of the Companies Act. Punjab and Sind Bank vide its letter dated 10.02.2011 and UCO Bank vide its letter dated .05.02.2011, have released the company from the Corporate Guarantee issued by it in favor of the firm in respect of working capital facilities of Rs. 28.00 crores enjoyed by the firm from the above banks. The Company has made a composite application u/s. 621A for compounding of the offence with Hon. CLB, Northern Region Bench which is pending for disposal.

5. Segment Reporting

a) Segment has been identified in line with the Accounting Standard - 17 "Segment reporting" issued by ICAI taking in to consideration the organization structure as well as the differential risks and returns of these segments.

b) The differential risks and rewards of the company is more identifiable and associated with the method of distribution of Products and hence, the company has identified two reportable segment viz. Diamond & Gems and Retail Jewellery Operations.

c) The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on reasonable basis. The amounts, which are not allocable to any segment, are shown unallocable under respective heads.

6. Advances to Subsidiary / Partnership Firm

a) To M/s. M B Diamonds LLC ( a company under same management). Maximum Balance outstanding during the year Rs. 95,058,024 (Previous Year Rs. 74,726,005).

b) To M/s. Solitaire Diamond Exports ( a Partnership Firm). Maximum Balance outstanding during the year Rs. 1,036,000 (Previous YearRs. NIL).

7. As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended March 31, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

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Mar 31, 2011

1. Contingent Liabilities (Figures In Rs.)

Particulars As at Mar 31, 2011 As at March 31, 2010

A Guarantees given to banks for loans taken by other (refer note. 2) - 692,97,000

B Disputed Tax Matters

- Income Tax 33,89,347 33,89,347

C Estimated amount of contract remaining to be 83,57,170 - executed on capital account and not provided for (net)

2. The Company had given guarantee of Rs. 692 lacs for a loan borrowed by an associate firm in which Directors were interested. At the time of providing the guarantee the Company was exempt U/s. 295 (2) of the Companies Act, 1956 to obtain prior approval from the Central Government. However, on renewal of the same the Company was a public limited company and consequently the guarantee given to bankers was in contravention to Section 295 of the Companies Act. Punjab and Sind Bank vide its letter dated 10.02.2011 and UCO Bank vide its letter dated :05.02.2011, have released the company from the Corporate Guarantee issued by it in favor of the firm in respect of working capital facilities of Rs. 28.00 crores enjoyed by the firm from the above banks. The Company has made a composite application u/s. 621A for compounding of the offence with Hon. CLB, Northern Region Bench which is pending for disposal.

The Audit Committee in their meeting held on 24th May, 2011 has recommended the above inter-se reallocation of utilization of IPO proceeds and the Board of Directors in their meeting held on 24h May 2011 has approved the above. As required by the provisions of Section 61 of the Companies Act, 1956, the approval of the shareholders for the above inter-se reallocation would be sought at the ensuing Annual General Meeting.

3. The net worth of the subsidiary M. B. Diamonds LLC has been completely eroded. No provision against the investment made in the subsidiary is considered necessary as the management is committed to provide the necessary financial and operational support to carry on the business of the subsidiary.

4. The Income tax Authorities during the search u/s 132 of IT Act 1961 on 13th August 1993 seized 5580 cts. of emerald cut valued at Rs 819000/-. The same has been shown in the closing stock of emerald cut in the books of Accounts.

Increase in Deferred Tax Assets for the year of Rs.35,15,748 (Previous Year Rs. 5,17,432) has been recognized in profit and loss account for the year.

5. The Disclosures with respect to Accounting Standard (AS -15) (Revised 2005)" Employee Benefits" are as under: - 1. Defined Contribution Plans

a. Employer's Contribution to Provident Fund

b. Employers Contribution to Employees' State Insurance

c. Employers Contribution to Maharashtra Labour Welfare Fund

The Company has recognized the following amounts in Profit & Loss Account

6. Related Party Disclosure

A. List of related parties

Subsidiary

MB Diamonds LLC

Enterprises in which directors are interested/Associates

1. Goenka Diamonds Private Limited

2. Mystique Jewels

3. Goenka Jewellers

4. Geet Holdings Private Limited

5. Yash Holdings Private Limited

6. Sonam Complex Private Limited

7. Goenka Infra Projects Private Limited

8. Goenka Mining Resources Private Limited

9. Goenka Entertainments Private Limited

10. Goenka Properties Private Limited

11. Gem Gold Mining Private Limited

12. Top Minerals Private Limited

13. Aureus Gold Mines Private Limited

14. Shree Vriddhi Mines and Minerals Private Limited

15. Gold Minerals Private Limited

16. Chrome Mines and Minerals Private Limited

17. Goenka Power and infra Limited

18. D.V.Exports

19. Dinyog Finvest Private Limited

20. Nand Lai Goenka(HUF)

Key Managerial Personnel

1. Sh.NandLal Goenka

2. Sh.Nitin Goenka

3. Sh.Navneet Goenka

Relative of Key Managerial Personnel

1. Smt. Namita Jain

2. Smt. Nitu Saraf

3. Smt. Nirmala Goenka

4. Smt. Bhawna Goenka

7. Segment Reporting

a) Segment has been identified in line with the Accounting Standard - 17 "Segment reporting" issued by ICAI taking in to consideration the organization structure as well as the differential risks and returns of these segments.

b) The differential risks and rewards of the company is more identifiable and associated with the method of distribution of Products and hence, the company has identified two reportable segment viz. Diamond & Gems and Retail Jewellery Operations.

c) The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on reasonable basis. The amounts, which are not allocable to any segment, are shown unallocable under respective heads.

8 Advance to Subsidiary

To M B Diamonds LLC ( a company under same management). Maximum Balance outstanding during the year Rs. 74,726,005 (Previous Year Rs. 15,620,057).

9 Sundry Creditors include overdue amounts (mainly unclaimed) of Rs. Nil (Previous Year Nil) including interest Rs. Nil (Previous Year Rs. Nil) payable to Micro, Small & Medium Enterprises. The company does not owe any amount to Micro, Small & Medium Enterprises. These enterprises have been identified on the basis of information available to the Company.

10 During the year, the Company's, GM - Treasury, ( since suspended pending enquiries) executed forward contracts oh behalf of the company in excess of the limits as specified in the employment contract duly signed by him on account of which the company suffered a loss to the tune of Rs.937.87 lacs which has been netted off against exchange loss / (gain) in P/L A/c of Rs.564.82 lacs.

11 In the opinion of the Directors the Current Assets including Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and all known liabilities have been provided in accounts.

12 Previous year figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary, to make them comparable to those of the current year.

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Mar 31, 2010

1. Contingent Liabilities (Amount in Rupees) Particulars March 31, 2010 March 31, 2009 A Guarantees* given to banks for loans taken by other 692,97,000 692,97,000

B Disputed Tax Matters -Income Tax 33,89,347 3,3,89,347

C Estimated amount of contract remaining to beexecuted on - - capital account and not provided for

*Notes: In respect of working capital limits of Rs.28.00 crore, to one of the associate group concern, for which the company has given corporate guarantee to the lender banks, the lender banks vide letters dated 15th September 2009 confirmed that the corporate guarantee given by the company is only to the extent of Rs. 692.97 lakhs, which is the value of company’s properties given as collateral security. The contingent liability for the respective year has been disclosed accordingly.

2. The Company came out with its Initial Public Offer pursuant to which 93,71,000 equity shares of the Company were allotted on 8th April, 2010 at a premium of Rs. 125 per share..Expenses incurred in relation to the IPO amounting to Rs. 322.97 lacs as on 31st March 2010 have been carried in the Balance sheet as Miscellaneous Expenditure to be adjusted against the securities premium account as per the provisions of Section 78 of the Companies Act.

3. The net worth of the subsidiary M. B. Diamonds LLC have completely eroded. No provision against the investment made in the subsidiary is considered necessary as the management is committed to provide the necessary financial and operational support to carry on the business of the subsidiary.

4. The Company has given guarantee of Rs. 692 lacs for a loan borrowed by a firm in which Directors are interested. At the time of providing the guarantee the Company was exempt U/s. 295 (2) of the Companies Act, 1956 to obtain prior approval from the Central Government. However, on renewal of the same the Company was a public limited company and consequently the guarantee given to bankers was in contravention to Section 295 of the Companies Act. The Company has made a composite application u/s. 621A for compounding of the offence with Hon. CLB, Northern Region Bench which is pending.

5. The Income tax Authorities during the search u/s 132 of I.T Act 1961 on 13th August 1993 seized 5580 cts. of emerald cut valued at Rs 819000/-. The same has been shown in the closing stock of emerald cut in the books of Accounts.

6. The Disclosures with respect to Accounting Standard (AS -15) (Revised 2005) " Employee Benefits" are as under: -

7. Related Party Disclosure A. List of related parties Subsidiary MB Diamonds LLC Enterprises in which directors are interested/Associates 1. Goenka Diamonds Private Limited 2. Mystique Jewels 3. Goenka Jewellers 4. Geet Holdings Private Limited 5. Yash Holdings Private Limited 6. Sonam Complex Private Limited 7. Goenka Infra Projects Private Limited 8. Goenka Infra Builders Private Limited 9. Goenka Entertainments Private Limited 10.Goenka Properties Private Limited 11.Nand Lal Goenka(HUF) Key Managerial Personnel 1. Shri Nandlal Goenka 2. Shri Navneet Goenka 3. Shri Nitin Goenka Relative of Key Managerial Personnel 1. Smt. Nirmala Goenka 2. Smt. Bhawna Goenka 3. Smt. Neeta Saraf 4. Smt. Namita Jain

8. Segment Reporting

a) Segment has been identified in line with the Accounting Standard – 17 "Segment reporting" issued by ICAI taking in to consideration the organization structure as well as the differential risks and returns of these segments.

b) The differential risks and rewards of the company is more identifiable and associated with the method of distribution of Products and hence, the company has identified two reportable segment viz. Diamond & Gems and Retail Jewellery Operations.

c) The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on reasonable basis. The amounts, which are not allocable to any segment, are shown unallocable under respective heads.

9. Advance to Subsidiary

To M B Diamonds LLC Rs. 15,095,815 (6,154,800). Maximum Balance outstanding during the year Rs. 15,620,057 (6,154,800).

10. Sundry Creditors include overdue amounts (mainly unclaimed) of Rs. Nil (Previous Year Nil) including interest Rs. Nil (Previous Year Rs. Nil) payable to Micro, Small & Medium Enterprises. The company does not owe any amount to Micro, Small & Medium Enterprises. These enterprises have been identified on the basis of information available to the Company.

11. In the opinion of the Directors the Current Assets including Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and all known liabilities have been provided in accounts.

12. The title deed of office premises of Panchratna, Mumbai, Flat at Ajmer Road, Jaipur and Office space at MI Road, Jaipur has been mortgaged to UCO Bank and Punjab and Sind Bank respectively against loan given to M/s Goenka Jewellers, a firm is which directors are partners. Further, FDR of Rs. 15.05 lacs have also been pledged with bank for loan given to M/s Goenka Jewellers, a firm is which directors are partners.

13. Previous year figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary, to make them comparable to those of the current year.