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Auditor Report of Mini Diamonds (India) Ltd.

Mar 31, 2013

Report on the Financial Statements

We have audited the attached financial statements of Mini Diamonds (India) Limited ("The Company"), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date 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, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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 an 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 Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements.

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. 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 qualified audit opinion.

Basis for Qualified Opinion

The Company has not made provision of it''s obligation under the defined benefit plan viz: Gratuity, which constitutes a departure from the Accounting Standard 15 "Employee Benefits" referred to in sub-section (3C) of section 211 of the Act.

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, the aforesaid financial statements, give the information required by the Companies Act, 1956 in the manner so required and gives, a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet of the state of affairs of the company as at 31st March, 2013; and

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

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

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 Section 227(4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in the 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 accounts as required by law have been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet , the Statement of Profit and Loss and cash flow statement dealt with by this report are in agreement with the books of accounts;

d) Except for the matter described in the basis for qualified opinion paragraph, in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report complies with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors, as on 31st March 2013 and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31 st March, 2013 from being appointed as a Director in terms of clause (g) of subsection (1) of section 274 of Companies Act, 1956.

ANNEXURE TO AUDITOR''S REPORT

Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date:

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

b) As explained to us, the assets have been physically verified by the management which in our opinion is reasonable, considering the size and the nature of its business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any substantial portion of fixed assets during the year.

ii) a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

c) In our opinion and according to the information and explanation given to us and based on our examination of the records of inventories, the Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

iii) a. The Company has not granted any loan (secured or unsecured) to companies, firms or other parties covered in the register maintained under Section 301 of the Act. In view of this sub clause (b), (c), and (d) of this clause are not applicable.

b. The Company has taken unsecured loan from a firm and other parties covered in the register maintained under Section 301 of the Act. The number of parties involved are three, the aggregate loan amount is Rs 2,76,21,000 /-, maximum amount involved is Rs 42,512,882/- and year end balance is Rs 38,287,182/-. The loans taken are unconditional and interest free, in view of this sub clause (f) and (g) of this clause are not applicable.

iv) There is an adequate internal system commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services.

v) a) In our opinion and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 have been properly entered in the said register.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of Companies Act, 1956 and exceeding the value of Rs. 500,000 in respect of each party during the year, have been made at prices which appear reasonable as per information available with the Company.

vi) The Company has not accepted any deposits from the public.

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

viii) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

ix) a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Customs Duty, Cess and other statutory dues with appropriate authorities. According to the information and explanations given to us, following undisputed amounts payable have remained outstanding as at 31 st March, 2013 for a period more than six months from the date they became payable:

Name of the Statute Nature of Dues Amount (Rs.) Financial Year: Due Date

Income Tax Act,1961 Self Assessment Tax 760,650/- 2011-12 30th Sept, 2012

Income Tax Act,1961 Tax Deducted at Source 6,798/- 2011-12 30th April, 2012

Income Tax Act, 1961 Tax Deducted at Source 28,581/- 2012-13 7th October, 2012

b) According to the records of the Company no statutory dues are payable which has not been deposited on account of disputes.

x) The company neither has any accumulated losses at the end of the financial year nor has it incurred any cash loss in the financial year under report or in the immediately preceding financial year.

xi) Based on our audit procedures, information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to the financial institutions and banks.

xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

xiii) The provisions of any Special Statute applicable to the Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the Company.

xiv) The Company is not a dealer or trader in Shares.

xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not obtained any term loans.

xvii) The short term funds raised by the Company have not been used for long term investment. The company has not raised any long term funds.

xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix) The Company has not issued any debentures.

xx) The Company has not raised any money by way of public issues during the year.

xxi) On the basis of our examination and according to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the year.

For V. A. Parikh &Associates

Chartered Accountants

F. R. No: 112787W

(Jinesh J. Shah)

Place: Mumbai Partner

Date : May 29, 2013 Membership No. 111155


Mar 31, 2012

We have audited the attached Balance Sheet of Mini Diamonds (India) Ltd. as at 31 st March, 2012 and the Statement of Profit and Loss for the year ended on that date. These financial statements are the responsibility of the entity's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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.

We report as follows:

1. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report) (Amendment) Order, 2004 (together the Order1) issued by the Central Government of India, in terms of Section 227(4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above:

a) 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;

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

c) The Balance Sheet and Statement of Profit and Loss dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss dealt with by this report complies with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts, read together with the Company'sAccounting Policies and the Notes thereto, give the information required by the Companies Act, 1956 in the manner so required and subject to:

Non provision of it's obligation under the defined benefit plan viz: Gratuity in accordance with Accounting Standard 15 (revised 2005) "Employee Benefits" issued by the Institute of Chartered Accountants of India.

give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet of the state of affairs of the company as at 31 st March, 2012; and

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

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

ANNEXURE TO AUDITOR'S REPORT

Referred to in paragraph 1 of our report of even date:

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

b) As explained to us, the assets have been physically verified by the management which in our opinion is reasonable, considering the size and the nature of its business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any fixed assets during the year.

ii) a) As explained to us, the Inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

c) In our opinion and according to the information and explanation given to us and based on our examination of the records of inventories, the Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

iii) a) The Company has not granted any loan (secured or unsecured) to companies, firms or other parties covered in the register maintained under Section 301 of the Act. In view of this sub clause (b), (c), and (d) of this clause are not applicable.

b) The Company has taken unsecured loan from a firm and other parties covered in the register maintained under Section 301 of the Act. The number of parties involved are three, the aggregate loan amount is Rs 79,60,516/-, maximum amount involved is Rs. 34,700,534/- and year end balance is Rs. 1,74,01,882/-. The loans taken are unconditional and interest free, in view of this sub clause (f) and (g) of this clause are not applicable.

iv) There is an adequate internal system commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services.

v) a) In our opinion and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 have been property entered in the said register.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of Companies Act, 1956 and exceeding the value of Rs. 500,000 in respect of each party during the year, have been made at prices which appear reasonable as per information available with the Company.

vi) The Company has not accepted any deposits from the public.

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

viii) The Central Government has not prescribed the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956.

ix) a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Customs Duty, Cess and other statutory dues with appropriate authorities, excepting if s dues under The Maharashtra State Tax on Professions, Trades Callings & Employments Act, 1975. According to the information and explanations given to us, following undisputed amounts payable have remained outstanding as at 31st March, 2012 for a period more than six months from the date they became payable:

Name of the Statute Nature of Dues Amount (Rs.) Financial Year: Due Date

Income Tax Act, 1961 Self Assessment Tax 349,293/- 2010-11 30th Sept 2011

b) According to the records of the Company no statutory dues are payable which has not been deposited on account of disputes.

x) The company has not incurred any cash loss in the financial year under report or in the immediately proceeding financial year.

xi) Since the Company has not taken any loan from any bank or financial institution, provision of clause (xi) are not applicable to the Company.

xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

xiii) The provisions of any Special Statute applicable to the Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the Company.

xiv) The Company is not a dealer or trader in Shares.

xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not obtained any term loans.

xvii) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not raised any short term funds.

xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix) The Company has not Issued any debentures.

xx) The Company has not raised any money by way of public issues during the year.

xxi) On the basis of our examination and according to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the year.

For V. A. Parikh & Associates

Chartered Accountants

F.R.No:112787W

(Jinesh J. Shah)

Place: Mumbai Partner

Date : August 27,2012 Membership No. 111155


Mar 31, 2011

We have audited the attached Balance Sheet of Mini Diamonds (India) Ltd. as at 31st March, 2011 and the Profit and Loss account for the year ended on that date. These financial statements are the responsibility of the entity''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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.

We report as follows :

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by Companies (Auditor''s Report) (Amendment) Order, 2004 (together ‘the Order'') issued by the Central Government of India, in terms of Section 227(4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above :

a) 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;

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

c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, Profit & Loss Account dealt with by this report complies with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts, read together with the Company''s Accounting Policies and the Notes thereto, give the information required by the Companies Act, 1956 in the manner so required and subject to:

Non provision of its obligation under the defined benefit plan viz: Gratuity in accordance with Accounting Standard 15 (revised 2005) "Employee Benefits" issued by the Institute of Chartered Accountants of India.

give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet of the state of affairs of the company as at 31st March, 2011; and

ii) in the case of Profit and Loss Account, of the profit of the company for the year ended on that date

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

Referred to in paragraph 1 of our report of even date :

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

b) As explained to us, the assets have been physically verified by the management which in our opinion is reasonable, considering the size and the nature of its business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any fixed assets during the year.

ii) a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

c) In our opinion and according to the information and explanation given to us and based on our examination of the records of inventories, the Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

iii) a) The Company has not granted any loan (secured or unsecured) to companies, firms or other parties covered in the register maintained under Section 301 of the Act. In view of this sub clause (b) , (c) , and (d) of this clause are not applicable.

b) The Company has taken unsecured loan from a firm and other parties covered in the register maintained under Section 301 of the Act. The number of parties involved are three, the aggregate loan amount is Rs 38,488,413/- , maximum amount involved is Rs. 36,678,413/- and year end balance is Rs. 32,922,013/-. The loans taken are unconditional and interest free, in view of this sub clause (f) and (g) of this clause are not applicable.

iv) There is an adequate internal system commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services.

v) a) In our opinion and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 have been properly entered in the said register.

b) The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of Companies Act, 1956, in our opinion, have been made at reasonable prices having regard to the prevailing market prices.

vi) The Company has not accepted any deposits from the public.

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

viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956.

ix) a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Customs Duty, Cess and other statutory dues with appropriate authorities, excepting it''s dues under The Maharashtra State Tax on Professions, Trades Callings & Employments Act, 1975. According to the information and explanations given to us, following undisputed amounts payable have remained outstanding as at 31st March, 2011 for a period more than six months from the date they became payable:

Name of the Statute Nature of Dues Amount (Rs.) Financial Year Due Date

Income Tax Act,1961 Self Assessment Tax 470,000/- 2009-10 30th Sept. 2010

b) According to the records of the Company no statutory dues are payable which has not been deposited on account of disputes.

x) The company has not incurred any cash loss in the financial year under report or in the immediately preceding financial year.

xi) Since the Company has not taken any loan from any bank or financial institution, provision of clause (xi) are not applicable to the Company..

xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

xiii) The provisions of any Special Statute applicable to the Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the Company.

xiv) The Company is not a dealer or trader in Shares.

xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not obtained any term loans.

xvii) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not raised any short term funds.

xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix) The Company has not issued any debentures.

xx) The Company has not raised any money by way of public issues during the year.

xxi) On the basis of our examination and according to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the year.

For V. A. Parikh & Associates

Chartered Accountants

F. R. No: 112787W

(Jinesh J. Shah)

Place : Mumbai Partner

Date : August 25, 2011 Membership No. 111155


Mar 31, 2010

We have audited the attached Balance Sheet of Mini Diamonds (India) Ltd. as at 31st March, 2010 and the Profit and Loss account for the year ended on that date. These financial statements are the responsibility of the entitys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 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.

We report as follows :

1. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004 (together the Order) issued by the Central Government of India, in terms of Section 227(4A) of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above :

a) 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;

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

c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, Profit & Loss Account dealt with by this report complies with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts, read together with the Companys Accounting Policies and the Notes thereto, give the information required by the Companies Act, 1956 in the manner so required and subject to:

Non provision of its obligation under the defined benefit plan viz: Gratuity in accordance with Accounting Standard 15 (revised 2005) "Employee Benefits" issued by the Institute of Chartered Accountants of India.

give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet of the state of affairs of the company as at 31s March, 2010; and

ii) in the case of Profit and Loss Account, of the profit of the company for the year ended on that date

iii) 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 1 of our report cf even date :

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

b) As explained to us, the assets have been physically verified by the management which in our opinion is reasonable, considering the size and the nature of its business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any fixed assets during the year.

ii) a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

c) In our opinion and according to the information and explanation given to us and based on our examination of the records of inventories, the Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

iii) a) The Company has not granted any loan (secured or unsecured) to companies, firms or other parties covered in the register maintained under Section 301 of the Act. In view of this sub clause (b), (c), and (d) of this clause are not applicable.

b) The Company has taken unsecured loan from a firm and other parties covered in the register maintained under Section 301 of the Act. The number of parties involved are six, the aggregate loan amount is Rs 7,878,931/-, maximum amount involved is Rs. 36,081,413/- and year end balance is Rs. 35,896,413/-. The loans taken are unconditional and interest free, in view of this sub clause (f) and (g) of this clause are not applicable.

iv) There is an adequate internal system commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services.

v) a) In our opinion and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 have been properly entered in the said register.

b) The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of Companies Act, 1956, in our opinion, have been made at reasonable prices having regard to the prevailing market prices.

vi) The Company has not accepted any deposits from the public.

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

viii) The Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956.

ix) a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Customs Duty, Cess and other statutory dues with appropriate authorities, excepting its dues under The Maharashtra State Tax on Professions, Trades Callings & Employments Act, 1975. According to the information and explanations given to us, following undisputed amounts payable have remained outstanding as at 31sl March, 2010 for a period more than six months from the date they became payable:

Name of the Statute Nature of Dues Amount (Rs.) Financial Year: Due Date

The Maharashtra State Tax Profession Tax 3,300/- 2006-07 March 3107

on Professions, Trades Callings deducted from 31,200/- 2007-08 March 3108

& Employments Act, 1975 salary payments 7,200/- 2009-10 March 3110



b) According to the records of the Company no statutory dues are payable which has not been deposited on account of disputes.

x) The company has not incurred any cash loss in the financial year under report or in the immediately preceeding financial year.

xi) Since the Company has not taken any loan from any bank or financial institution, provision of clause (xi) are not applicable to the Company.

xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

xiii) The provisions of any Special Statute applicable to the Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the Company.

xiv) The Company is not a dealer or trader in Shares.

xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not obtained any term loans.

xvii) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not raised any short term funds.

xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix) The Company has not issued any r-3bentures.

xx) The Company has not raised any money by way of public issues during the year.

xxi) On the basis of our examination and according to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the year.



For V. A. Parikh & Associates

Chartered Accountants

F.R.No:112787W

(Jinesh J. Shah)

Place :Mumbai Partner

Date : September 8,2010

Membership No. 111155


Mar 31, 2009

We have audited the attached Balance Sheet of Mini Diamonds (India) Ltd. as at 31st March, 2009 and the Profit and Loss account for the year ended on that date. These financial statements are the responsibility of the entitys management. Our responsibility is to express an opinion on these financial stater,,at,is jaseu on our audit 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 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.

We report as follows :

1. As required by the Companies (Auditors Report) Order. 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004 (together the Order1) issued by the Central Government of India, in terms of Section 227(4A) of the Companies Act, 1956 we enclose in theAnnexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above :

a) 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;

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

c) The Balance Sheet and Profit & Loss Account dealt with by this report are in agreement with the books of accounts;

d) In our opinion, the Balance Sheet, Profit & Loss Account dealt with by this report complies with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors, as on 31st March 2009 and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31st March. 2009 from being appointed as a Director in terms of clause (g) of subsection (1) of section 274 of Companies Act, 1956,

f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts, read together with the Companys Accounting Policies and the Notes thereto, give the information required by the Companies Act, 1956 in the manner so required and subject to:

Non provision of its obligation under the defined benefit plan viz: Gratuity in accordance with Accounting Standard 15 (revised 2005) "Employee Benefits" issued by the Institute of Chartered Accountants of India.

give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet of the state of affairs of the company as at 31st March, 2009; and

ii) in the case of Profit and Loss Account, of the profit of the company for the year ended on that date.

iii) 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 1 of our report of even date :

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

b) As explained to us, the assets have been physically verified by the management which in our opinion is reasonable, considering the size and the nature of its business. The frequency of verification is reasonable and no material discrepancies have been noticed on such physical verification.

c) The Company has not disposed off any fixed assets during the year.

ii) a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of the inventories followed by the management are reasonable and adequate in relation to the si2e of the Company and nature of its business.

c) In our opinion and according to the Information and explanation given to us and based on our examination of the records of inventories, the Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

lii) a. The Company has not granted any loan (secured or unsecured) to companies, firms or other parties covered in the register maintained under Section 301 of the Act. In view of this sub clause (b), (c), and (d) of this clause are not applicable.

e. The Company has taken unsecured loan from a firm and other parties covered in the register maintained under Section 301 of the Act. The number of parties involved are three, the aggregate loan amount is Rs 2,55,00,000 and year end balance is Rs. 28,132,452/-. The loans taken are unconditional and interest free, in view of this sub clause (f) and (g) of this clause are not applicable.

(v) There is an adequate internal system commensurate with the size of the Company and nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services.

v) a) In our opinion and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 have been properly entered in the said register.

b) The transactions made In pursuance of contracts or arrangements entered in the register maintained under section 301 of Companies Act, 1956, in our opinion, have been made at reasonable prices having regard to the prevailing market prices.

vi) The Company has not accepted any deposits from the public.

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

viii) The Central Government has not prescribed the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956.

ix) a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including Income Tax, Sales Tax, Customs Duty, Cess and other statutory dues with appropriate authorities, excepting its dues under The Maharashtra State Tax on Professions, Trades Callings & Employments Act, 1975. According to the information and explanations given to us, following undisputed amounts payable have remained outstanding as at 31s1 March, 2009 for a period more than six months from the date they became payable:

Name of the Statute Nature of Dues Amount (Rs.) Financial Year Due Date

The Maharashtra Profession Tax 3,300/- 2006-07 March 3107 State Tax on deducted from 31,200/- 2007-08 March 3108

Professions, Trades saiary payments

Callings & Employments Act, 1975

b) According to the records of the Company no statutory dues are payable which has not been deposited on account of disputes.

x) The company has not incurred any cash loss in the financial year under report or in the immediately preceeding financial year.

xi) Since the Company has not taken any loan from any bank or financial institution, provision of clause (xi) are not applicable to the Company.,

xii) The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

xiii) The provisions of any Special Statute applicable to the Chit Fund, Nidhi or Mutual Benefit Fund / Societies are not applicable to the Company.

xiv) The Company is not a dealer or trader in Shares.

xv) According to the information and explanations given to us, the Company has not given any guarantee f6r loans taken by others from banks and financial institutions,

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not obtained any term loans.

xvii) To the best of our knowledge and belief and according to the information and explanations given to us the Company has not raised any short term funds.

xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix) The Company has not issued any debentures.

xx) The Company has not raised any money by way of public issues during the year,

xxi) On the basis of our examination and according to the information and explanations given to us no fraud on or by the Ccmpahy has been noticed or reported during the year,

For V A. Parikh & Associates

Chartered Accountants

(Jinesh J. Shah)

Place: Mumbai Partner

Date : Septembers, 2009 Membership No. 111155

 
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