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Directors Report of Vaibhav Global Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the 26th Annual Report together with the audited financial statements for the year ended 31st March, 2015.

Financial Performance and Highlights

The Standalone and Consolidated Audited Financial Results of the Company for year ended 31st March, 2015 are as follows:

RS. in Crore

Standalone ( F.Y) Particulars 2014-15 2013-14

Revenue from Operations and Other 415.82 379.42 Income

Less: Operating Cost 365.16 315.30

Operating Profit / PBDIT 50.66 64.12

Less : Interest & Finance Charge 5.33 11.75

Less : Depreciation & Amortization 5.58 2.46 Expenses

Profit Before Tax and Exceptional 39.75 49.91 Items

Add : Exceptional items - 3.39

Profit Before Tax (PBT) 39.75 53.30

Less : Tax Expenses 9.78 0.14

Less : Minority Interest - -

Profit after Tax (PAT) 29.98 53.16

Less: Interim Dividend (Previous year on Preference Shares; Current 9.32 3.39 year on Equity Shares)

Less: Transfer to General Reserve 5.00 -

Less: Transfer to Capital Redemption - 44.00 Reserve

Add: Impact on Inter transfer of - - Shares & Minority Interest

Surplus 15.65 5.77

Consolidated (F.Y) Particulars 2014-15 2013-14

Revenue from Operations and Other 1,388.45 1,333.31 Income

Less: Operating Cost 1,241.56 1,156.05

Operating Profit / PBDIT 146.89 177.25

Less : Interest & Finance Charge 7.33 14.50

Less : Depreciation & Amortization 11.88 7.47 Expenses

Profit Before Tax and Exceptional 127.67 155.28 Items

Add : Exceptional items - -

Profit Before Tax (PBT) 127.67 155.28

Less : Tax Expenses 24.50 2.75

Less : Minority Interest 0.00 -

Profit after Tax (PAT) 103.16 152.53

Less: Interim Dividend (Previous year on Preference Shares; Current 9.32 3.39 year on Equity Shares)

Less: Transfer to General Reserve 5.00 -

Less: Transfer to Capital Redemption - 44.00 Reserve

Add: Impact on Inter transfer of - 1.83 Shares & Minority Interest

Surplus 88.84 106.97

* Previous year figure have been re grouped and re- arranged wherever necessary.

Dividend

The Board of Directors at its meeting held on 11th November, 2014 declared an interim dividend of RS. 2.89 per equity share including dividend tax.

The Companies (Amendment) Bill, 2014 (which is passed by both Houses of Parliament) puts certain restriction on payment of dividend. In view of this no fina dividend has been proposed by the Board.

Transfer to Reserve

The Board of Directors proposes to transfer a sum of RS.5 crores to the General Reserve.

Business Review

Vaibhav Global Limited (VGL) is a global retailer of fashion jewelry and lifestyle accessories on its proprietary TV home shopping and e-commerce platforms with live telecasts in the US, the UK, Canada and Ireland. Our TV home shopping platform provides direct customer access to over 100 million households on full-time equivalent basis in our principal operating markets. Retail websites in these geographies further expand our customer visibility and engagement.

The fashion jewelry portfolio has been extended to incorporate lifestyle accessories, home textiles and cosmetics, all of which are adjacent markets with similar price points and buying behaviors that together targets a larger portion of the existing customers shopping basket. Products are outsourced from micro-markets across India, China, Thailand and Indonesia, while core manufacturing operations are in Jaipur, India. For details please refer to Business Overview Section in Management Discussion and Analysis Report.

Conversion of loan given to Genoa Jewelers Limited, wholly owned subsidiary of the Company

During the period under review, the Company has, out of loan of RS. 74.79 crores given to M/s Genoa Jewelers Limited, a wholly owned subsidiary of the Company, converted RS.27.81 crores into equity of the said subsidiary and accordingly, 45,00,000 equity shares of USD 1 has been issued by the subsidiary.

Repayment of Term Loan

During the period under review, your Company has repaid the entire amount of long term loan of RS.45.94 crores from its internal accruals and consequently, the Company has become zero debt Company on net basis. The Company has Cash and Bank Balance including liquid investments in liquid funds of RS.96.2 crores against Working Capital loan of RS. 76.2 crores as on 31st March, 2015.

Consolidated Financial Statements

The Consolidated Financial Statements prepared by the Company include financial information of its subsidiaries prepared in accordance with the Accounting Standards issued by Institute of Chartered Accountants of India (ICAI) and Listing Agreement, as prescribed by SEBI.

Audited Financial Statements of the Company''s Subsidiaries

The audited financial statements, the Auditors'' report thereon and the Boards report for the financial year ended 31st March, 2015 in respect of each subsidiary are available on the website of the Company i.e www.vaibhavglobal.com. A copy of said documents shall be provided to the shareholder upon request. A separate statement in form AOC-1 containing salient feature of the financial statement of its subsidiaries is enclosed herewith as Annexure 1 to this report. The statement also provides the details of performance and financial positions of each of the subsidiaries.

Particular of Loans, Guarantees and Investment

Particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note no. 13, 29, 11 respectively to the Standalone Financial Statements of the Company.

Income Tax

The demand of RS. 14.49 crores for the financial year 2009-10 on account of certain transfer pricing adjustments namely exports, loan and bank guarantees to wholly owned subsidiaries was contested and appeal was filed with the Hon''ble Income Tax Appellate Tribunal (ITAT) Jaipur, Bench. The Hon''ble ITAT has now issued order in favour of the Company except minor adjustments.

Details of Subsidiaries

The Company has the following major operating Subsidiaries and Step Down Subsidiaries:

a) Genoa Jewelers Limited, British Virgin Islands, a 100 percent subsidiary of the Company, which in turn holds 100% in The Liquidation Channel USA, The Jewellery Channel, UK and Jewel Gems USA Inc.

b) STS Jewels Inc., USA, a 100 per cent subsidiary of the Company, engaged in selling jewelry to the departmental stores, TV channels and others in USA on wholesale basis.

c) STS Gems Limited, Hong Kong, a 100 per cent subsidiary of the Company, engaged in outsourcing jewelry and lifestyle products for the group from China and Hong Kong.

d) STS Gems Thai Limited- a 100 percent subsidiary of the Company, engaged in outsourcing products for the group from Thailand.

e) Jewel Gems USA Inc. a wholly owned step down subsidiary of the Company engaged in providing call center and other support services to the VGL Group companies.

f) The Jewelery Channel Ltd. UK (TJC UK), a wholly owned step down subsidiary of the Company, engaged in sale and marketing of fashion jewelry and life style products through electronic media and operates a dedicated 24x7 hours TV shopping channel and Internet shopping website (www.tjc.co.uk) in UK.

g) The Liquidation Channel Inc, USA (TJC USA), a wholly owned step down subsidiary of the Company is engaged in marketing of fashion jewelry and life style products through electronic media and operates a dedicated 24x7 hours TV shopping channel and Internet shopping website (www.liquidationchannel.com) in USA.

h) PT STS BALI, a step down subsidiary of the Company, Hong Kong engaged in a outsourcing products for the group from Indonesia.

Change in Capital Structure

a) Conversion of Global Depository Receipts (GDRs)

During the year under review, Sonymike''s Holdings Limited, a promoter group Company and GDR holder has converted 1,80,000 (One Lac Eighty Thousand) GDRs, convertible into 18,00,000 (Eighteen Lac) Equity Shares of RS. 10 each. Pursuant to conversion of GDRs, the aggregate shareholding of Promoter & Promoter Group increased to 1,52,78,383 (One Crore Fifty Two Lac Seventy Eight Thousand Three Hundred Eight Three) Equity Shares.

b) Allotment of Equity Shares

During the year, the Company has allotted 2,26,765 Equity Shares of C 10 each to eligible employees /Vaibhav Global Employee Stock Option Welfare Trust, pursuant to exercise of Stock Options and consequently, the Paid Up Equity Share Capital of the Company increased from C32,17,56,180 (Thirty Two Crores Seventeen Lac Fifty Six Thousand One Hundred Eighty) to RS. 32,40,23,830 (Thirty Two Crores Forty Lac Twenty Three Thousand Eight Hundred Thirty). Further, the Company has not issued shares with differential voting rights.

Employee Stock Options under VGL ESOP (as Amended) - 2006

During the year, the Compensation Committee of the Board of Directors of the Company granted 5,36,555 (Five Lac Thirty Six Thousand Five Hundred Fifty Five) stock options convertible into 5,36,555 (Five Lac Thirty Six Thousand Five Hundred Fifty Five) Equity Share of C 10 each to various employees of the Company and its Subsidiaries.

The information as required by SEBI Guidelines and Companies Act, 2013 are set out in Annexure 2 to this report.

CREDIT RATING

Your Company''s credit rating has been strengthened for Long term facilities from CARE BB (Double B Plus) to CARE BBB (Triple BBB) and for short term facilities from CARE A4 (A Four Plus) to CARE A3 (A Three Plus).

Directors and Key Managerial Personnel (KMP)

The Central Government vide its letter dated 26th December, 2014 has approved the appointment of Mr. Sunil Agrawal as Chairman & Managing Director of the Company for a period of five years i.e. 1st February, 2014 to 31st March, 2019.

During the year, Mr. Santosh Madan, Nominee Director (Punjab National Bank) resigned w.e.f 14th May, 2014. On the recommendation of the Nomination & Remuneration Committee, the Board, subject to the consent of shareholders, appointed Mr. Peter D. Whitford as an Independent Director for a period commencing from 14th May, 2014 to 31st March, 2017 and also appointed Mr. P. N. Bhandari as a Director in casual vacancy as an Independent Director, caused due to demise of Mr. Mitha Lal Mehta w.e.f. 29th January, 2015 for the remaining period of Mr. Mehta i.e. upto 31st March, 2017. They gave a declaration that they meet the criteria of independence as mentioned in Section 149(6) of the Companies Act and Clause 49 of the Listing Agreement.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and articles of Association of the Company, Mr. Nirmal Kumar Bardiya, Director of the Company retire by rotation and being eligible, offer himself for re-appointment.

The Board of Directors designated the following persons as Key Managerial Personnel ( KMP) in terms of requirements of Section 203 of the Companies Act, 2013 :

i) Mr. Sunil Agrawal - Chairman & Managing Director

ii) Mr. Hemant Sultania - Group CFO

iii) Mr. Brahm Prakash - Company Secretary

Mr. Hemant Sultania, Group CFO resigned from the services of the Company and the Board accepted his resignation and placed on record its deep appreciation of the high quality work put in by him during his tenure. He will be relived from his duties on 27th July, 2015.

a. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, that of its Committees and individual Directors. The evaluation process has been explained in the Corporate Governance Report.

b. Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, senior management and their remuneration. The Remuneration Policy is given in the Corporate Governance Report.

c. Board Meetings

The Board of Directors met five times during the financial year 201415 on 14th May, 2014, 25th July, 2014, 5th November, 2014, 11th November, 2014 and 29th January, 2015 as detailed in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

d. Declaration by Independent Directors

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The terms & conditions for the appointment of Independent Directors are given at the website of the Company and separately disclosed in the Corporate Governance Report.

Committees of the Board

There are currently four Committee of the Board which are as follows :

a) Audit Committee

b) Nomination & Remuneration Committee

c) Corporate Social Responsibility (CSR) Committee

d) Stakeholders" Relationship Committee

e) Compensation Committee

The Board of Directors at its meeting held on 21st May, 2015 merged the "Nomination & Remuneration Committee" and "Compensation Committee". Details of all the Committees along with their composition, charters and meetings held during the year, are provided in the "Report on Corporate Governance", a part of this Annual Report.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that :

(a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) such accounting policies as mentioned in note 1 to the financial statements have been selected and applied them consistently and made judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the 31st March, 2015 and profit and loss of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts have been prepared on a going concern basis;

(e) proper internal financial controls have been laid down which are adequate and were operating effectively.

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Related Party Transactions

All related party transactions entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons and their relatives which may have a potential conflict with the interest of the Company at large. Particulars of contracts or arrangements with related parties referred to Section 188(1) of the Companies Act, 2013 in the form AOC 2 is annexed herewith as Annexure 3.

A list of all related party transactions is placed before the Audit Committee as well as the Board of Directors. The Board has also framed a policy on related party transactions and the same is available on Company''s website i.e. http://www.vaibhavglobal.com/vaibhav2/ investorsection/Policy-on-Related-Party-Transactions.pdf.

Pursuant to the provision of the Listing Agreement, the Board has framed a Policy on Material Subsidiaries and the same is available on Company''s website i.e. www.vaibhavglobal.com/vaibhav2/investorsection/Policy-on-Material- Subsidiaries.pdf

Vigil Mechanism / Whistle Blower Policy

The Company has established a Vigil Mechanism / Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The Policy has a systematic mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or policy. The policy is also available on the Company''s website at the link : www.vaibhavglobal.com/vaibhav2/investorsection/ Policy-of-Whistle-Blower-Vigil-Mechanism.pdf

Internal Control Systems and their Adequacy

The Company has well defined mechanisms in place to establish and maintain adequate internal controls over all operational and financial functions considering the nature, size and complexity of its business. The Company maintains adequate internal control systems that provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company assets. M/s S.S Surana & Co., Chartered Accountants appointed as an Internal Auditors of the Company. The Internal Auditors independently evaluate adequacy of internal controls and audit the majority of the transactions undertaken by the Company. Post audit reviews are carried out to ensure that audit recommendations have been implemented. The Audit Committee of the Board of Directors which comprises of majority of Independent Directors, inter alia, reviews the adequacy and effectiveness of internal Control and monitors implementation of Internal Audit observations. The Company has also appointed M/s Mahajan & Aibara, Chartered Accountants, Mumbai as consultant for review of certain Internal Control mechanism and Related Party Transactions of the Company.

Listing of Shares

The shares of the Company are listed at BSE Limited & National Stock Exchange of India Ltd. and the listing fee for the year 2015-16 has been duly paid. Global Depository Receipts (GDRs) of the Company are listed at Luxembourg Stock Exchange.

Deposits

The Company has not accepted any fixed deposits and, as such, no amount of principle or interest was outstanding as of the Balance Sheet date.

Award

During the year under review, your Company has been awarded "India Gem & Jewellery Awards 2014" in the category of "Silver Jewellery" continuously for the second time by the Gem & Jewellery

Export Promotion Council, sponsored by the Ministry of Commerce, Government of India.

Extract of Annual Return

The extract of the Annual Return as required by Section 134(3)(a) of the Companies Act, 2013 in form MGT 9 is annexed herewith as Annexure 4.

Auditors and Auditors'' Report

A. Statutory Auditors

M/s Haribhakti & Co. LLP Chartered Accountants, Mumbai and M/s B. Khosla & Co., Chartered Accountants, Jaipur, Joint Statutory Auditors of the Company will hold office till the conclusion of 26th Annual General Meeting and are eligible for re-appointment. The Company received a certificate from M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai and M/s B. Khosla & Co., Chartered Accountants, Jaipur, Joint Statutory Auditors to the effect that their re-appointment, if made, would be in accordance with the provisions of Section 141 of the Companies Act, 2013. As per the provisions of Companies Act, 2013, they are being re-appointed for one year.

There is no reservation, qualification or adverse remark contained in the Statutory Auditors'' Report attached to Balance Sheet as at 31st March, 2015. Information referred in Auditors'' Report are self-explanatory and don''t call for any further comments.

B. Secretarial Auditor

As per the provisions of Section 204 of Companies Act 2013 and rules made thereunder, every listed company is required to annex with its Board''s Report, a Secretarial Audit Report given by a Company Secretary in practice.

In line with this requirement, the Board of Directors has appointed M/s JAKS & Associates, Company Secretaries, Jaipur as Secretarial Auditor of the Company for the financial year 2015-16.

The Secretarial Audit Report for the financial year 2014-15 is attached herewith as Annexure 5. There is no reservation, qualification or adverse remark contained in the Secretarial Auditor Report. Information referred in Secretarial Auditor Report are self-explanatory and don''t call for any further comments.

C. Cost Auditor

Pursuant to Cost Record & Audit Rules, 2014 notified on 31st December, 2014, the products manufactured by the Company are not covered in Cost Audit w.e.f financial year 2014-15. Hence, the requirement of cost audit is not applicable to the Company.

Investor Relations

Your Company interacted with numerous Indian and overseas investors and analyst in many ways, including one on one meetings, attendance at investor conferences, regular quarterly meetings and annual analyst meet during the year. Earning call transcript thereof are posted on the website of the Company. During the year, reputed Foreign Institutional Investors Matthews Asia Funds and Grandeur Peak Funds invested in your Company.

Particular of Employees

The information required pursuant to Section 197(12) of the Companies Act, 2013 read with rules made thereunder, as amended from time to time, has been given in the annexure appended as 6.

Prevention of Insider Trading

In compliance with the provisions of Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, the Board has adopted a code of conduct and code of practices and procedures for fair disclosure of unpublished price sensitive information on 14th May, 2015 to preserve the confidentiality of price sensitive information, prevent misuse thereof and regulate the trading by Insiders. The code of practice and procedures for fair disclosure of unpublished price sensitive information is also available on the Company''s website i.e. www. vaibhavglobal.com.

Corporate Social Responsibility (CSR)

As required under Section 135 of the Companies Act, 2013, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to formulate and recommend to the Board, a Corporate Social Responsibility (CSR) Policy which shall indicate the activities to be undertaken by the Company as specified in ScheduleVII of the Companies Act, 2013, to recommend the amount of expenditure to be incurred on the activities and to monitor the Corporate Social Responsibility Policy of the Company from time to time. The composition of CSR Committee has been given in Annual Report on CSR activities.

Your Company has contributed a sum of C 1.06 crores to various social institutions in the field mid-day, education, health and scholarship. For details, please refer to CSR Activities under Management Discussion Analysis on page no. 56. The Annual Report on CSR activities is annexed herewith as Annexure 7.

Risk Management

The Company has framed and implemented a Risk Management Policy to identify the various business risks. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The risk management policy defines the risk management approach across the enterprise at various levels including documentation and reporting.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at the workplace (Prevention, Prohibition, Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress the complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No compliant has been received in this regard.

Transfer of Unclaimed Dividend to Investor Education and Protection Fund (IEPF)

The Company has transferred a sum of C 18,094 (Rupees Eighteen Thousand Ninety Four) during the year to the Investor Education and Protection Fund (IEPF) established by the Central Government under Section 205(C) the Companies Act, 1956 The said amount represents unclaimed dividend pertaining to financial year 2006-07 which was lying in unpaid dividend account of the Company for a period of seven years.

Trade Relations

The Company maintained healthy, cordial and harmonious Industrial relations at all levels. The Directors wish to place on record their appreciation for the valuable contribution by the employees of the Company.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report of the financial condition and results of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

Corporate Governance

The Company has complied with the corporate governance requirements as stipulated under the Listing Agreement with the stock exchanges. A separate section on corporate governance, along with certificate from the auditors confirming the compliance is annexed and forms part of the annual report. The Chairman & Managing Director has confirmed and declared that all the members of the board and the senior management have affirmed compliance with the code of conduct.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 :

A. Conservation of Energy

The operations of the Company are not energy intensive. We regularly evaluate and use new energy efficient technologies and make necessary investment in these equipment to make our infrastructure more energy-efficient. The Company has taken significant measures to reduce the energy consumption by the following means :

a) The installation of Solar Power System of 100 KVA which generates 10% of the energy needed by the Company.

b) The installation of efficient transformers and stabilizers to reduce the electric fluctuation and consumption.

c) To reduce process cycle of burnout furnaces by 40%.

d) More efficient use of investment of flask and casting machines by synchronizing the production process.

B. Technology Absorption

Your Company possesses an in-house research and development wing, which is continuously working towards more efficient jewellery production, improved processes and better designs. Your Company constantly strive for latest technology for its manufacturing processes. During the year, the Company has taken the following initiatives :

a) In house caming work (3D print) with latest technology.

b) Long lasting plating technology through Ion Plating Method.

c) Automatic wax injector for better productivity.

d) Investment in casting machines with maximum capacity of 10 flask per cycle.

e) Installation of plasma machine for electronic polishing and furnacing work.

f) Manufacturing of Stainless Steel Products with studded gems

g) CNC machine for gems production.

C. Foreign Exchange Earnings and Outgo

The information on foreign exchange earnings and outgo is furnished in the notes to accounts Note No 32 and 33 to the Standalone Financial Results of the Company.

Acknowledgement

Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and area as well as the efficient utilization of the Company''s resources for sustainable and profitable growth.

We thank the Government of India, Ministry of Commerce & Industry, Ministry of Corporate Affairs, Ministry of Finance, Department of Economic Affairs, Custom & Excise Department, Income Tax Department, Reserve Bank of India, BSE, NSE, NSDL, CDSL, Bankers, State Governments and other Government Agencies for their continuing support and look forward for the same support in the future.

For and on behalf of the Board of Directors



Sunil Agrawal Place: Jaipur Chairman & Managing Director Date: 21st May, 2015 DIN: 00061142


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 25th Annual Report together with the audited financial accounts for the year ended on 31st March, 2014.

FINANCIAL PERFORMANCE AND HIGHLIGHTS

The Standalone and Consolidated audited financial results of the Company for year ended March 31, 2014 are as follows:

Rs. in Lacs

Standalone ( F.Y) Consolidated (F.Y)

Particulars 2013-14 2012-13* 2013-14 2012-13*

Revenue from Operations and Other Income 37,941.79 25,749.88 1,33,330.51 93,055.79

Less: Operating Cost 31,630.03 22,725.76 1,15,838.79 83,103.62

Operating Profit / PBDIT 6,311.76 3,024.12 17,491.72 9,952.17

Less: Interest 1,074.82 1,063.19 1,215.90 1,241.95

Less: Depreciation & Amortization Expenses 246.44 219.40 747.46 732.03

Profit Before Tax and Exceptional Items 4,990.50 1,741.53 1,55,28.36 7,978.19

Add : Exceptional Items 339.35 898.10 - (16,372.74)

Profit Before Tax 5,329.85 2,639.63 1,55,28.36 (8,394.55)

Less: Tax Expenses 13.82 1.46 275.22 166.46

Profit After Tax and Exceptional Item 5,316.03 2,638.17 15,253.14 (8,561.01)

* Previous year figure have been re grouped and re- arranged wherever necessary.

BUSINESS REVIEW

Your Company is a vertically integrated electronic retailer of fashion Jewelery and lifestyle accessories in the US, Canada, UK and Republic of Ireland. We have access to over 100 million households in these countries through our own TV Shopping networks - The Liquidation Channel in USA and Canada and The Jewellery Channel in UK and Republic of Ireland as well through ecommerce in these advanced countries. Our TV shopping channels reach customers directly 24x7 on all the major cable, satellite and DTH platforms – Dish TV, DirecTV, Comcast, Verizon Fios, Time Warner, AT&T, Sky, Virgin, Free view, Freesat etc.

In addition to electronic retailing, VGL Group engages in traditional B2B wholesale distribution including sale through STS Jewels, which serves various retail chains in US and UK.

Our strategy is to deliver a deep value proposition to the customer, through lowest price guarantee. Our focus is on the discount seeking buyer, a market that has historically delivered secular growth across various stages of the economic cycle. Our customer proposition is supported by vertical integration with a strong supply chain infrastructure, which includes manufacturing operations in Jaipur and direct sourcing from micro markets in China, India, Thailand, Indonesia and other SE Asian, African & American countries.

Your company gave a strong performance during the year covering all financial parameters, leveraging its corporate strategy of creating multiple drivers of growth. This performance is even more encouraging against the backdrop of the extremely challenging business context in which it was achieved including the economic slowdown in the advanced markets.

Consolidated Gross revenue for the year grew by 45% to Rs. 1298.27 crores primarily driven by the impressive growth in all the business segments as stated below.

BUSINESS SEGMENTS:

A. RETAIL VIA 24x7 TV SHOPPING NETWORK

TV Sale comprises of 70% of the total sale. TV Sale takes place through live shows on all major cable, satellite and DTH platforms. Your company sold 6.4 million pieces during the current year against 5.2 million pieces during the last year. Average selling price per piece remained more or less constant.

B. WEB SALE

17% of the total sale came from Web Sale which increased from Rs. 107 crores to Rs. 225 crores in the current year. Web Sale comprises of Catalogue sale, rising auction and Live TV streaming on Web. Volume under this segment increased by 74% from 1.7 million pieces to 3.0 million pieces.

C. B2B SALE

B2B Sale comprises of wholesale distribution to various retails chains in US and UK as well as sale of rough stones to various parties. B2B sale increased from Rs. 119 crores to Rs. 162 crores which is an increase of 36%.

DIVIDEND

In view of accumulated losses brought forward and commitment of your company to repay the long term debts, your Directors do not recommend any dividend for the financial year 2013-14.

CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Financial Statements presented by the Company include financial information of its subsidiaries prepared in accordance with the Accounting Standard-21 issued by Institute of Chartered Accountants of India (ICAI) and Listing Agreement, as prescribed by SEBI and the same have been provided in the Annual Report of the Company.

DISCLOSURES

In accordance with general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, the statement of Profit and Loss and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However, the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular.

The Company will provide the annual accounts of the subsidiaries to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies are also available for inspection by any member. The same shall also be kept for inspection by any shareholder at the registered office of the Company and that of the subsidiary companies concerned.

DETAILS OF SUBSIDIARIES

The Company has the following major operating Subsidiaries and

Step Down Subsidiaries . :

a) Genoa Jewelers Limited, British Virgin Islands, a 100 percent subsidiary, which in turn holds 100% in The Liquidation Channel USA, The Jewellery Channel, UK and Jewel Gems USA Inc.

b) STS Jewels Inc., USA, a 100 per cent subsidiary, engaged in selling jewellery to the departmental stores, TV channels and others in USA on wholesale basis.

c) STS Gems Limited, Hong Kong, a 100 per cent subsidiary, engaged in outsourcing jewellery and lifestyle products for the group from China and Hongkong

d) STS Gems Thai Limited- a 100 percent subsidiary of Vaibhav Global Limited, engaged in outsourcing products for the group from Thailand.

e) Jewel Gems USA Inc. a wholly owned step down subsidiary of Vaibhav Global Limited engaged in providing call centre and other support services to the VGL Group companies.

f) The Jewelery Channel Ltd. UK (TJC UK), a wholly owned step down subsidiary of Vaibhav Global Limited, engaged in sale and marketing of fashion jewellery and life style products through electronic media and operates a dedicated 24x7 hours TV shopping channel and Internet shopping website (www.tjc.co.uk) in UK.

g) The Liquidation Channel Inc, USA (TJC USA), a wholly owned step down subsidiary of Vaibhav Global Limited is engaged in marketing of fashion jewellery and life style products through electronic media and operates a dedicated 24x7 hours TV shopping channel and Internet shopping website (www.liquidationchannel.com) in USA.

RESTRUCTURING

During the year, due to substantial reduction in net worth of Jewel Gem USA, Inc, a wholly owned subsidiary, the Company has sold its entire equity investment in Jewel Gem USA Inc. to Genoa Jewelers Limited, another wholly owned subsidiary Company for Rs. 1.98 crores. Pursuant to this sale, the loan of Rs. 11.67 crores given to Jewel Gem USA Inc., has also been assigned to Genoa Jewelers Limited.

REPAYMENT OF LOAN GIVEN TO GENOA JEWELERS LIMITED, WHOLLY OWNED SUBSIDIARY OF THE COMPANY During the year, Genoa Jewelers Limited has partly repaid the loan of Rs. 48.90 crores to the Company, which strengthened the cash flow of the Company. This has also resulted in a foreign exchange gain of Rs. 25.38 crores.

CORPORATE DEBT RESTRUCTURING MECHANISM (CDR) Subsequent to the approval of proposal for exit from CDR mechanism in the meeting of CDR Empowered group held on 25th March, 2013, the Company paid recompense interest amounting to Rs. 11.17 crores during the period under review, provision of which was duly made in the financial year 2012-13.

INCOME TAX & CENTRAL EXCISE

During the year, your Company got a demand of Rs. 16.15 crores for the financial year 2008-09 on account of certain transfer pricing adjustments namely exports, loan and bank guarantee to wholly owned subsidiaries.

The company also got a demand notice from Central Excise department of Rs. 6.3 crores along with penalty in connection with non-fulfilment of export obligations for the period 2000-01 to 2008-09.

In all the above instances, your Directors are of the view that your Company has a strong case and the demands are not sustainable.

CHANGE IN CAPITAL STRUCTURE

a) Redemption of Preference Shares

During the year under review, the Company has redeemed 44,00,000 non-convertible 1% redeemable cumulative preference shares of Rs. 100/- in accordance with the terms & conditions of the issue. These Preference Shares were allotted on 31st October, 2006 on preferential basis for a period of 7 years.

b) Allotment of Equity Shares

During the year, pursuant to exercise of 1,11,417 stock options, the Company has allotted 1,11,417 Equity Shares of Rs. 10 each to the employees of the Company and Subsidiaries and consequently, the paid up equity share capital increased from Rs. 32,06,42,010 (Thirty Two Crores Six Lac Forty Two Thousand Ten) to Rs. 32,17,56,180 (Thirty Two Crores Seventeen Lac Fifty Six Thousand One Hundred Eighty).

Employee Stock Option under VGL ESOP (As Amended)– 2006 During the year, the Compensation Committee of the Board of Directors of the Company at their meetings held during the year granted 2,05,895 stock options convertible into 2,05,895 Equity Share of Rs. 10 each to various employees of the Company and its Subsidiaries.

Details are set out in Annexure-I to this report.

INVESTOR RELATIONS

Your Company interacted with numerous Indian and overseas investors and analyst in many ways, including one on one meetings, attendance at investor conferences, regular quarterly meetings and annual analyst meet during the year.

CREDIT RATING

Your Company''s credit rating has been strengthened for long term facilities from CARE BB (Double B) to CARE BB (Double B Plus) and for short term facilities from CARE A4 ( A Four) to CARE A4 (A Four Plus) by CARE ( Credit Analysis & Research Limited ).

DIRECTORS

Your Company has appointed Mr. Pulak Chandan Prasad, Mr. Vikram Kaushik, Mr. Mahendra Kumar Doogar and Mr. Peter Duncan Whitford as Additional Directors w.e.f. 29th October, 2013, 21st December, 2013, 23rd January, 2014 and 14th May, 2014 respectively. Pursuant to Section 149 of the Companies Act, 2013, the Board at its meeting held on 14th May, 2014 recommended the appointment of Mr. Vikram Kaushik, Mr. Mahendra Kumar Doogar and Mr. Peter Duncan Whitford as Independent Directors of the Company, not liable to retire by rotation. These Directors have given the declarations to the Board that they meet the criteria of independence as provided under Section 149 of the said Act. Also, the Board has recommended the appointment of Mr. Pulak Chandan Prasad as a Director, liable to retire by rotation. Brief profile of the said Directors is as follows:

Profile of Mr. Pulak Chandan Prasad

Mr. Pulak is the founder of Nalanda Capital. Nalanda Capital takes large and long-term stakes in small to mid-cap listed companies in India on behalf of US and European institutional investors (primarily Endowments and Foundations). Prior to Nalanda, Pulak was with the global private equity firm Warburg Pincus for more than eight years where he was Managing Director and co-head of India. Before Warburg Pincus, Pulak spent 6 years at McKinsey in India, South Africa and the US. He joined McKinsey in 1992 from IIM Ahmedabad. Prior to the IIM, he was at Unilever India as a Production management Trainee. He has an engineering degree from IIT Delhi.

Profile of Mr. Vikram Kaushik

Mr. Vikram Kaushik is B.A (Hons) History & Economics, M. A, Diploma in Mandarin Chinese and Diploma in French. He has an overall rich experience of approx. 40 years in various industries. He started his career from Hindustan Uniliver Ltd. where he spent 16 years and has handled various brands i.e Lux, Liril, Fair & Lovely, Clinic, Sunsilk, Dalda & Flora. He has been Managing Director in Enterprise Advertising from 1989 to 1994, Vice President – Marketing & Exports in "Britannia Industries Limited" from 1994 to 1999, Director and Executive Vice President Marketing in "Colgate Palmolive (India) Limited from 1999 to 2004, Managing Director and Chief Executive Officer in "Tata Sky Ltd" from 2004 to 2010 and Director on the Board of "Prasar Bharti"" from May 2011 to November, 2013. He has also acted as management consultant / advisor to various groups like Voltas, Tata Strategic Management Group, Price Waterhouse coopers, AMAGI Media Labs and also has done shorter assignments for HSBC, Standard Chartered Bank and Warburg Pincus. He is currently holding directorship in Sistema Shyam Teleservices Limited from July 2011 and India Capital Growth Fund from June 2012.

Profile of Mr. Mahendra Kumar Doogar

Mr. Mahendra Kumar Doogar is a Chartered Accountant and having rich experience of about 38 years in Corporate Finance, Taxation, Statutory and Internal Audit, Merchant banking, financial structuring, project consultancy and fund management. He is presently on the Board of various Companies including PHD Chamber of Commerce and Industry, Shri Natraj Ceramics & Chemical Industries Limited, Frick India Limited, Morgan Ventures Limited, Kamdhenu Ispat Limited, D & A Financial Services (P) Ltd., and Radico Khaitan Limited. He has been member of Corporate Governance Committee constituted by Securities & Exchange Board of India under the Chairmanship of Mr. Narayan Murti. He has also been Chairman of the Capital Market Committee and Banking & Finance Committee of PHD Chamber of Commerce & Industry.He has been appointed as Co Chairman, Financial Services Committee of Indo American Chamber of Commerce .He successfully managed various international assignments with leading funds in Singapore, Hong Kong, UAE, USA, Japan, France, Italy and Nigeria and authored books on (a) Guide to Capital Issues (b) Guide to Sick Industrial Companies(c) Practice & Procedure of Public Issues.

Profile of Mr. Peter Duncan Whitford

Mr. Peter has an International career and brings almost 34 years of extensive experience in various public and private companies in various fields including consumer products, marketing, merchandising, planning and allocation, global branding, sourcing strategies, licensing strategies, media strategies, social compliance programs, growing and re-inventing organizations internationally. Peter has a strong international track record with global experience spanning multiple industries and deep expertise in emerging markets.

Mr. Whitford has Bachelor of Business degree from University of Technology, Austraila, Post Graduate Studies from Oregon State University, Australia and Post Graduate Diploma in Direct Marketing from Monash University, Australia. In his career, Peter has held senior positions in various Companies. He has been Group Chief Executive Officer of The Wet Sea Inc., President Worldwide of The Walt Disney Company Inc., Executive Vice President and General Merchandise Manager, President and Chief Executive Officer of The Limited, Inc., President and Chief Executive Officer of Country Road Australia Limited for United States and General Manager at Sheridan Textiles, which is a part of Textile Industries, Australia.

Peter has also served on a number of company boards, including The Wet Seal Inc, Kelato Animal Health, Lenox China and Dansk. He is presently on the Board of many Companies including Chairman of Whitmarks, LLC, Chairman of Parker and Morgan LLC, Chairman of Meridian Rapid Defense Group LLC and Lead Director of Normandy Capital LLC.

Peter''s rich experience in emerging markets, as well as his vast public and private Company Board experience, will complement our existing Board''s skills and further support successful execution and accomplishment of our strategies for delivering sustainable long-term growth.

Further, Mr. Mitha Lal Mehta and Mr. Surendra Singh Bhandari, Non Executive Independent Directors have been recommended by the Board as Independent Directors under Section 149 of the Companies Act, 2013. They have given the declarations to the Board that they meet the criteria of independence as provided under Section 149 of the said Act.

Mrs. Sheela Agarwal, Director of the Company retire by rotation and being eligible, has offered herself for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, your Directors confirmed that:

1. In the preparation of the annual Financial statements, the applicable accounting standards have been followed along with proper explanations to material departure;

2. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended on 31st March 2014 and the Company''s profit for the year ending on that date;

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the Company''s assets and for preventing and detecting fraud and other irregularities;

4. The Directors have prepared the Annual Accounts for the financial year ended 31st March 2014 on a "going concern basis."

LISTING OF SHARES

Your Company''s shares are listed at BSE Limited & National Stock Exchange of India Ltd. and the listing fee for the year 2014-15 has been duly paid.

FIXED DEPOSITS

The Company has not accepted any fixed deposits from public, shareholders or employees during the period under the review.

AUDITORS AND AUDITORS'' REPORT

M/s Haribhakti & Company, Chartered Accountants, Mumbai and M/s B. Khosla & Co., Chartered Accountants, Jaipur, Joint Statutory Auditors of the Company will retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company had received a letter from M/s Haribhakti & Company, Chartered Accountants, Mumbai and M/s B. Khosla & Co., Chartered Accountants, Jaipur, Joint Statutory Auditors to the effect that their re-appointment, if made, would be within the prescribed limits under Section 139 of the Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of Section 141 of the Act. As per the new provisions of Companies Act, 2013, they are being re-appointed for 1 year.

There are no reservations, qualifications or adverse remarks contained in the Auditor''s Report attached to Balance Sheet as at 31st March, 2014. Information referred in Auditor''s Report are self-explanatory and don''t call for any further comments.

COST AUDITOR

Pursuant to the order No. 52/26/CAB-2010 dated 6th November, 2012 issued By the Ministry of Corporate Affairs (MCA), M/S Rajesh & Co., Cost Accountants, Jaipur were appointed as Cost Auditors to carry out an audit of Cost Accounting Records of the Company for the financial year 2013 -14. The due date for filing the Cost Audit Report for the financial year 2013-14 with the Ministry of Corporate Affairs (MCA) is 180 days from the end of Company''s financial year i.e 27th September, 2014.

Further, the Board of Directors has appointed M/s Rajesh & Co., Cost Accountants, Jaipur as Cost Auditors of the Company for the financial year 2014 -15.

INTERNAL AUDITOR

As per Section 138 of the Companies Act 2013, every Listed Company shall be required to appoint an Internal Auditor or a firm of Internal Auditors.

At present M/s S.S Surana & Co., Chartered Accountants, Jaipur are Internal Auditors of the Company who will act as Internal Auditors of the Company in line with the provisions of Section 138 of the Companies Act, 2013.

SECRETARIAL AUDITOR

As per section 204 of Companies Act 2013, every listed company is required to annex with its Board''s report, a Secretarial Audit report given by a Company Secretary in practice.

In line with this requirement, the Board of Directors has appointed M/s JAKS & Associates, Company Secretaries, Jaipur as Secretarial Auditor of the Company for the financial year 2014-15.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has always discharged its social responsibility as a part of its Corporate Governance philosophy. Ethically and socially motivated VGL has contributed towards the economic development of the society at large. It follows the global practice of addressing CSR activities in an integrated multi stakeholders approach covering the education, mid day meals and health care services. As required under Section 135 of the Companies Act, 2013, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee to formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013, to recommend the amount of expenditure to be incurred on the activities and to monitor the Corporate Social Responsibility Policy of the company from time to time. During the year, the Company has contributed a sum of Rs. 26.63 lacs to various social institutions.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has transferred a sum of Rs. 52,808 ( Rs. Fifty Thousand Eight Hundred Eight only) during the year to the Investor Education and Protection Fund (IEPF) established by the Central Government under Section 205(C) the Companies Act, 1956 The said amount represents unclaimed dividend pertaining to financial year 2005-06 which was lying in unpaid dividend account of the Company for a period of seven years.

TRADE RELATIONS

The Company maintained healthy, cordial and harmonious Industrial relations at all levels. The Directors wish to place on record their appreciation for the valuable contribution by the employees of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report of the financial condition and results of operations of the Company for the year under review as required under Clause 49 of the Listing Agreement with the Stock Exchanges, is given as a separate statement forming part of this Annual Report.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated under the Listing Agreement with the stock exchanges. A separate section on corporate governance, along with certificate from the auditors confirming the compliance is annexed and forms part of the annual report. The Chairman & Managing Director has confirmed and declared that all the members of the board and the senior management have affirmed compliance with the code of conduct.

PERSONNEL

Particulars of Employees required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, form part of this report. However, in terms of Section 217(2A) of the Companies Act, 1956, the Annual Report is being sent to the Shareholders excluding the statement of particulars under Section 217(2A). The said statement is available for inspection at the registered office of the Company during working hours and a copy of the same may be obtained by writing to the Company at its registered office.

HUMAN RESOURCE DEVELOPMENT

Your Company believes in attracting and retention of high quality talent. Your company has undertaken engagement initiatives with premier campuses in order to attract both high quality entry level talent from premier technology and management institutes. Your Company''s unique management trainee programme has helped in developing a robust talent and leadership pipeline which has helped in the rapid growth of the business. Your Company sincerely believes that the growth depend largely on the ability to innovate, connect with customers and deliver superior and unmatched customer value. To achieve this, your Company has built a culture of continuous learning, coaching, mentoring and on the job training. The performance management system adopted by your Company has helped in creating a strong performance culture. Your Company has believe in alignment of all employees towards a shared vision of the organization and in building harmonious employee relations.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 :

A. Conservation of Energy

The operations of your Company are not energy-intensive. However, significant measures are taken to reduce energy consumption by using energy efficient equipment. We regularly evaluate and use new energy efficient technologies and make necessary investment in these equipments to make our infrastructure more energy-efficient.

B. Technology Absorption

Your Company possesses an in-house research and development wing, which is continuously working towards more efficient jewellery production, improved processes and better designs. Your Company constantly strive for latest technology for its manufacturing processes.

C. Foreign Exchange Earnings and Outgo

The information on foreign exchange earnings and outgo is furnished in the notes to accounts.

ACKNOWLEDGEMENT

Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and area as well as the efficient utilization of the Company''s resources for sustainable and profitable growth.

We thank the Government of India, Ministry of Commerce & Industry, Ministry of Corporate Affairs, Ministry of Finance, Department of Economic affairs, Custom & Excise Department, Income Tax Department, Reserve Bank of India, BSE, NSE, NSDL, CDSL, all stakeholders, Bankers, various State Governments and other Government Agencies for their continuing support and look forward for the same support in the future.

For and on behalf of the Board of Directors

Place: Jaipur

Date: 14th May, 2014 Sunil Agrawal

Chairman & Managing Director

DIN NO. 00061142


Mar 31, 2013

Dear Shareholders,

The are delighted to present 24th Annual Report and Audited Financial Statements for the year ended March 31, 2013.

Financial Highlights

The Standalone and Consolidated financial results of the Company for year ended March 31, 2013 are as follows:

The provision of Rs. 119.80 crore made on equity investment and Rs. 63.55 crore made on loan given to Genoa Jewelers Limited, a wholly owned subsidiary of the Company. The Company also made a provision of Rs. 151.10 crore and Rs. 12.10 crore as diminution in value of equity investment in STS Jewels INC and Jewel Gems USA respectively, wholly owned subsidiaries of the Company.

(Rs.in Lacs)

Standalone (F.Y) Consolidated (F.Y)

Particulars 2012-13 2011-12 2012-13 2011-12

Revenue from Operations and Other Income 25,749.88 18,892.82 93,055.79 67,481.60

Less: Operating Cost 22,725.76 16,177.14 83,103.62 57,418.10

Operating Profit / PBDIT 3,024.12 2,715.68 9,952.17 10,063.50

Less: Interest 1,063.19 1,103.41 1,241.95 1,276.05

Less: Depreciation & Amortization Expenses 219.40 152.69 732.03 908.30

Profit Before Tax and Exceptional Items 1,741.53 1,459.57 7,978.19 7,879.15

Add : Exceptional Items 898.10 (27.30) (16,372.74) (1,005.39)

Profit Before Tax 2,639.63 1,432.27 (8,394.55) 6,873.76

Less: Tax Expenses 1.46 22.93 166.46 22.93

Profit After Tax and Exceptional Item 2,638.17 1,409.34 (8,561.01) 6,850.83

Appropriations - - - -

Dividend on Preference Share Capital - - - -

Proposed Dividend on Equity Shares - - - -

Tax on Dividend - - - -

General Reserve - - - -

Profit for the year 2,638.17 1,409.34 (8,561.01) 6,850.83

During the year, on a standalone basis, total income increased to Rs. 25,749.88 lac from Rs. 18,892.82, registering a growth of 36.29 %. Profit after tax and exceptional items were Rs. 2,638.17, an increase of 87.19 % over the previous year.

The consolidated total income increased to Rs. 93,055.79 lac from Rs. 67,481.60 lac, an increase of 37.89 °% over the previous year.

During the year, the Company has written off the investment amounting to Rs. 6.20 crore made in STS Creation Thai Limited, a wholly owned subsidiary of the Company. The Company has also written back

Dividend

In view of the accumulated losses brought forward, your Directors do not recommend any dividend for the financial year 2012-13.

Corporate Debt Restructuring Mechanism (CDR)

During the year, the Company made a proposal to CDR Cell for exit from CDR mechanism. The said proposal was approved by the CDR Empowered Group in their meeting held on March 25, 2013 subject to the payment of recompense amount.

Consolidated Financial Statements

Consolidated Financial Statements are prepared in accordance with the Accounting Standard - 21 issued by Institute of Chartered Accountants of India (ICAI) and Listing Agreement, as prescribed by SEBI and the same have been provided in the Annual Report of the Company.

Statutory Disclosures

The Ministry of Corporate Affairs (MCA) vide general circular no. 2/2011 dated February 8, 2011 has granted general exemption to all companies under section 212(8) of the Companies Act, 1956 with respect to non attachment of the documents required under section 212(1) of the said act, subject to compliance of certain conditions. Hence, balance sheet, statement of profit & loss account and other documents of the subsidiary companies are not being attached with balance sheet of the Company. The statement pursuant to Section 212 of the Companies Act, 1956 containing key financials of the Company''s subsidiaries is included in this Annual Report.

The Company will make available the annual accounts of the subsidiaries to any member of the company who may be interested in obtaining the same. The annual accounts of the subsidiary Companies are also available for inspection by any member. The same shall also be kept for inspection by any shareholder at the head office of the holding company and concerned subsidiary Companies.

Subsidiaries

The Company has the following operating subsidiaries and step down subsidiaries. :

a) STS Jewels Inc., USA, a 100 per cent subsidiary is engaged in the wholesale segment and selling jewellery to the departmental stores, TV channels and others in USA.

b) STS Gems Limited, Hong Kong, a 100 per cent subsidiary is engaged in outsourcing, manufacturing for the group and marketing of jewellery across the globe.

c) The Jewellery Channel Ltd. UK (TJC UK), a wholly owned step down subsidiary of Vaibhav Global Limited, is engaged in marketing of fashion jewellery and life style products through electronic media and operates a dedicated 20 hours TV shopping channel and Internet shopping website (www.tic.co.uk) in the UK.

d) The Liquidation Channel, USA (TJC USA), a wholly owned step down subsidiary of Vaibhav Global Limited is engaged in marketing of fashion jewellery and life style products through electronic media and operates a dedicated 24 hours TV shopping channel and Internet shopping website (www.liquidationchannel.com) in the USA.

Change in Capital Structure

During the year, the Company allotted 3,65,728 Equity Shares of Rs. 10 each to the employees of the Company and its Subsidiaries, pursuant to exercise of Stock Options which resulted in increase of paid up equity share capital of the Company from Rs. 31,69,84,730 to Rs. 32,06,42,010.

Change in name of the Company

Pursuant to the approval of shareholders obtained by way of postal ballot, result of which was declared on November 26, 2012 and consequent upon receipt of fresh certificate of Incorporation issued by Registrar of Companies, Rajasthan, dated November 29, 2012, the name of the Company was changed from "Vaibhav Gems Limited" to "Vaibhav Global Limited".

Alteration in Object Clause of Memorandum of Association of the Company and Commencement of new business

During the year under review, the Company had obtained the approval of shareholders by way of postal ballot, result of which was declared on November 26, 2012, for commencement of new business and alteration in the main Object Clause of Memorandum of Association of the Company.

By altering the Main Object Clause of MOA, the Company has expanded fashion jewelry portfolio to include lifestyle accessories and fine jewelry.

Completion of Open Offer

Pursuant to the Open Offer made under Securities Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011, Mrs. Deepti Agarwal, Mr. Rahimullah, Mr. Nirmal Kumar Bardiya and M/s Shivram Properties Pvt. Ltd. had acquired 87,28,563 Equity Shares of Rs. 10 each, representing 27.53 % of the paid up capital of the Company.

Employee Stock Option Plan

During the year, the Compensation Committee of the Board of Directors of the Company granted 4,77,000 Stock Options convertible into 4,77,000 Equity

Shares of Rs. 10 each to the eligible employees of the Company and its subsidiaries at an exercise price of Rs. 45.30 per stock option. The Committee also reprised 41,324 Stock Options at an exercise price of Rs. 45.30 per stock option.

Details are set out in Annexure I to this Report.

Corporate Social Responsibility (CSR)

Your Company is sensitive to the needs of the local community and the impact of its operations on them. We honor our responsibility to give back to the society by focusing primarily on education, mid-day meals and healthcare services which are essential in promoting sustainable human development and economic growth. The Company believes that Corporate Social Responsibility delivered in the context of its business makes it more effective, impactful and sustainable. During the year, the Company has donated a sum of Rs. 17.94 lac to various social institutions.

Directors

During the period, Mr. Santosh Madan, Field General Manager, Punjab National Bank was appointed as a Nominee Director on the board of the Company w.e.f September 21, 2012.

Further, Mr. Anandi Lal Roongta has resigned from the directorship of the Company w.e.f. January 23, 2013. The Board places its deep appreciation for the contribution made by Mr. Roongta during his tenure. Further, Shri S. S Bhandari and Shri N.K. Baridya retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment.

As required by Clause 49 of Listing Agreement, a brief resume and other particulars of Directors retiring by rotation is provided in Annual Report.

Auditors and Auditors'' Report

M/s Haribhakti & Company, Chartered Accountants, Mumbai and M/s B. Khosla & Co., Chartered Accountants, Jaipur, Joint Statutory Auditors of the Company hold office until the conclusion of ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment and they have confirmed that their re-appointment, if made, shall be in conformity with the limit prescribed under section 224(1B) of the Companies Act, 1956.

There are no reservations, qualifications or adverse remarks contained in the Auditors'' Report attached to Balance Sheet as at March 31, 2013. Information referred in Auditor''s Report are self-explanatory and don''t call for any further comments.

Fixed Deposits

During the year under review, the Company has not accepted any public deposits under Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors'' responsibility statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the financial year ended 31st March 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

II. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and profit and loss account of the company for that period.

III. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

IV. The Directors have prepared the annual accounts on a going concern basis.

Transfer of unclaimed dividend to Investor Education and Protection Fund (IEPF)

The Company has transferred a sum of Rs. 1,21,410 during the year to the Investor Education and Protection Fund (IEPF) established by the Central Government under Section 205(C) of the Companies Act, 1956. The said amount represents unclaimed dividend pertaining to financial year 2004-05 which was lying in unpaid dividend account of the Company for a period of seven years.

Trade Relations

The Company maintained healthy, cordial and harmonious Industrial relations at all levels. The Directors wish to place on record their appreciation for the valuable contribution by the employees of the Company.

Management Discussion and Analysis Keport

Management Discussion and Analysis Report for the year under review, as required under clause 49 of the Listing Agreement, forms part of the Annual Report.

Corporate Governance

A separate section on Corporate Governance together with a certificate from the Statutory Auditors'' of the Company regarding compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report.

Personnel

Particulars of Employees required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, form part of this report. However, in terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to the Shareholders excluding the statement of particulars under section 217(2A). The said statement is available for inspection at the registered office of the Company during working hours and a copy of the same may be obtained by writing to the Company at its registered office.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo

Information in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. Conservation of Energy

The operations of your Company are not energy- intensive. However, significant measures are taken to reduce energy consumption by using energy efficient equipment. We regularly evaluate and use new energy efficient technologies and make necessary investment in these equipment to make our infrastructure more energy-efficient.

B. Technology Absorption

Your Company possesses an in-house research and development wing, which is continuously working towards more efficient jewellery production, improved processes and better designs. Your Company has not imported any technology for its manufacturing process and therefore, the question of adaptation/absorption does not arise.

C. Foreign Exchange Earnings and Outgo

The information on foreign exchange earnings and outgo is furnished in the notes to accounts.

Appreciation

Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and area as well as the efficient utilization of the Company''s resources for sustainable and profitable growth.

The Board wishes to express appreciation and place on record its gratitude for the faith reposed in and cooperation extended to the Company by the Government, various government departments / agencies, financial institutions, banks, customers, suppliers and investors of the Company. Your Directors also place on record their appreciation for the dedicated and sincere services rendered by the employees at all levels towards the continued growth and prosperity of the Company

Place: Jaipur For and on behalf of the Board of Directors

Date : 10th July, 2013 Sunil Agrawal

Chairman


Mar 31, 2011

DearShareholders

The Directors have pleasure in presenting 22nd Annual Report together with the Audited Accounts of the Company for the year ended 31st March 2011.

Financial Highlights

The standalone financial results of the Company for year ended 31st March,2011 were as follows:

Rs. in Lacs

Particulars 2010-11 2009-10

Sales and Other Income 14,683.47 12,151.96

Less: Operating Cost 13,138.43 12,111.93

Operating Profit/PBDIT 1,545.04 40.13

Less: Interest 1,121.11 1,280.75

Less: Depreciation & Amortization 120 26 120 77

Profit Before Tax 303.67 (1,361.39)

Less: Provision for Tax (0.71) (17.57)

Net Profit After Tax but before 304.38 (1,343.82)

Exceptional Items

Add:Exceptional Items - (Provision 1,432.63 1,557.60 for Doubtful Loans and Debts)

Profit After Tax and Exceptional 1,737.01 213.90

Items

Add : Balance brought forward (34,354.17) (34,568.08) from the previous year

Total Profit/(Loss) (32,617.15) (34,354.18) for Appropriations

Appropriations: Dividend on Preference Share Capital - -

Proposed Dividend on Equity - - Shares

Tax on Dividend - -

General Reserve - -

Total (32,617.15) (34,354.18)

Balance carried to Balance (32,617.15) (34,354.18) Sheet

Dividend

In view of accumulated losses brought forward, your Directors do not recommend any dividend for the financial year2010-11.

Corporate Social Responsibility

Your Company is a responsible corporate citizen. As a part of Corporate Social Responsibility, your Company has donated to various Charitable Institutions in the fields of Education and health. Main recipients have been Akshay Patra providing midday meals to the students of Government schools; Sumedha providing scholarship to needy students; Manav Seva Sangh Prem Niketan Hospital engaged in the distribution of medicines to the needy people; Jaipur Cancer Relief Control Society providing medical assistance to cancer patients.

Subsidiaries

The Company has the following operating Subsidiaries:

a) STS Jewels Inc., USA, a 100 per cent subsidiary is engaged in the wholesale segment and selling jewellery to the departmental stores, TV channels and others in USA.

b) STS Gems Limited, Hong Kong, a 100 percent subsidiary is engaged in outsourced manufacturing for the group and marketing of Jewellery in Europe.

c) The Jewellery Channel Ltd. UK (TJC UK), a

wholly owned step down subsidiary of Vaibhav Gems Limited, is engaged in marketing of jewellery through electronic media and operates a dedicated 20 hours jewellery TV shopping channel and Internet Jewellery shopping website in the UK.

d) The Liquidation Channel, USA (TJC USA), a wholly owned step down subsidiary of Vaibhav Gems Limited is engaged in marketing of jewellery through electronic media and operates a dedicated 24 hours jewellery TV shopping channel and Internet Jewellery shopping website in the USA.

Consolidated Financial Statements

Yours Directors also present the audited consolidated financial statements as prepared in compliance with the Accounting Standard 21 issued by Institute of Chartered Accountants of India (ICAI) and Listing Agreement as prescribed by SEBI.

Documents required under Section 212(1) of the Companies Act, 1956

The Ministry of Corporate Affairs (MCA) has, vide circular no. 2/2011 granted general exemption to all companies under Section 212(8) of the Companies Act, 1956 for not attaching thedocuments required under Section 212(1) of the said act, subject to Board's consent accorded through resolution and compliance of certain conditions as specified. Your Company has complied with all the conditions as stipulated in the said circular. Hence, the company present audited consolidated financial statements in annual report. The Company undertakes that annual accounts of the subsidiary companies and the related detailed information shall be made available to shareholders of the holding and subsidiary companies at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any shareholder at head office of the holding Company and of the subsidiary companies concerned and hard copyof the same shall be provided to any shareholder on demand.

Transfer of unclaimed dividend to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Section 205(A) of the Companies Act, 1956, the Company has transferred Rs. 75,045 on 24th December, 2010, lying in unpaid dividend account of the Company for a period of 7 years, to Investor Education and Protection Fund (IEPF) established by the Central Government under Section 205(C) of the said Act.

Fixed Deposits

The Company has not accepted any public deposits and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of Balance Sheet.

Directors

In accordance with the provisions of Companies Act, 1956 and Articles of Association of the Company, Mr. Nirmal Kumar Bardiya and Mr. Anandi Lai Roongta, retire by rotation atthe ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

As required by Clause 49 of Listing Agreement with the Stock Exchanges, the brief resume and other particulars of the aforesaid Directors are provided elsewhere in Annual Report.

Auditors and Auditors'Report

M/s Haribhakti & Company, Chartered Accountants, Mumbai and M/s B. Khosla &Co., Chartered Accountants, Jaipur, Joint Statutory Auditors of the Company retire at the conclusion of ensuing Annual General Meeting. The Company has received a letter from them to the effect that their appointment, if made by the Company for the year 2011-12 would be within the limit prescribed under Section 224(1B) of the Companies Act 1956.

Information referred in the Auditor's Report are self explanatory and don't call for any further comments.

Directors'Responsibility Statement

Pursuant to the provisions of Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors' responsibility statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the financial year ended 31st March 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures.

II. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and profit and loss account of the company for that period.

III. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities.

IV. The Directors have prepared the annual accounts on a going concern basis.

Employee Relations

Employee relations continued to be cordial throughout the year. Your Directors wish to place on record their sincere appreciation for the excellent spirit with which the entire team of the Company worked at all plants and offices and achieved commendable progress.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as required under clause 49 of the Listing Agreement is annexed to the Directors' Report.

Corporate Governance

A report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of this Annual Report. The requisite certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under clause 49 is also annexed with this report.

Particulars of Employees

Information as required under the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, are required to be set out in the annexure to the Directors' Report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the shareholders excluding the statement of particulars under Section 217 (2A). The Statement is open for inspection at the registered office of the Company during working hours and a copy of the same may be obtained by writing to the Company at its registered office.

Employee Stock Option Plan 2006

Employee Stock Option Plan was approved and implemented by the Company and options were granted to employees in accordance with Securities Exchange Board of India (Employee Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines 1999. The Compensation Committee constituted in accordance with SEBI guidelines administers and monitors the scheme. The applicable disclosures as stipulated under SEBI Guidelines as at 31st March 2011 are given in Annexure I to the Directors' Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo:

Information in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. Conservation of Energy

The operations of your Company are not energy- intensive. However, significant measures are taken to reduce energy consumption by using energy efficient equipments. We regularly evaluate and use new energy efficient technologies and make necessary investment in these to make our infrastructure more energy-efficient.

B. Technology Absorption

The Company has not carried out any specific research and development activities. Your Company possesses an in-house research and development wing, which is continuously working towards more efficient jewellery production, improved processes and better designs. Your Company has not imported any technology for its manufacturing process and therefore, the question of adaptation/absorption does notarise.

Acknowledgment

Your Directors wish to place on record their deep gratitude to the Shareholders, Customers, Bankers, Suppliers and various Government Authorities for their wholehearted support. Your Directors also recognize and appreciate the efforts and hard work of all employees of the Company and their continued contribution to its progress.

For and on behalf of the Board of Directors

Place: Jaipur Sunil Agrawal

Date :17th August, 2011 Chairman


Mar 31, 2010

The directors present the 21st Annual Report on the Companys operations and performance together with the audited financial statements for the year ended 31st March 2010.

FINANCIAL HIGHLIGHTS:

(Rupees in Lacs)

Particulars Standalone

2009-10 2008-09

Sales and Other Income 12,151.96 17,907.02

Less : Cost of Sales 12,111.93 18,511.73

Operating Profit/PBDIT 40.13 (604.67)

Less : Interest 1,280.75 1,460.53

Less : Depreciation & Amortization 120.77 150.13

Profit Before Taxes (1,361.39) (2,215.33)

Less : Provision for Taxes (17.57) 50.43

Net Profit after Tax but

before Extra-ordinary Items (1,343.82) (2,265.76)

Less : Extra- ordinary Items -

(Provision for Doubtful debt) 1,557.60 (23,152.73)

Profit after Tax and

Extra-ordinary Items 213.90 (25,418.49)

Add: Balance brought forward from

the previous year (34,568.08) (9,149.59)

Total Profits available for

Appropriations (34,354.18) (34,568.08)

Appropriations :

Dividend on Preference Share Capital - -

Proposed Dividend on Equity Shares - -

Tax on Dividend - -

General Reserve - -

Total - -

Balance to be carried forward (34,354.18) (34,568.08)

DIVIDEND:

Due to inadequacy of profits your Directors have not recommended any dividend for the current financial year.

SUBSIDIARIES:

Your Company has 8 subsidiaries and 7 step down subsidiaries. To conserve resources and successful turnaround of business your company closed the business operations of 5 of its direct subsidiaries and 5 step down subsidiaries. Brief detail of the operating subsidiaries is provided below:

Operating Subsidiaries:

1. STS Jewels Inc., USA, a 100 per cent subsidiary is engaged in the wholesale segment and market jewellery to the departmental stores, TV channels and others in USA.

2. STS Gems Limited, Hong Kong, a 100 per cent subsidiary is engaged in outsourced manufacturing for the group and marketing of Jewellery in Europe and America.

3. The Jewellery Channel Ltd. UK (TJC UK), (www.thejewellerychannel.tv) a wholly owned step down subsidiary of Vaibhav Gems Limited, is engaged in marketing jewellery through electronic media and operates a dedicated 24 hours jewellery TV shopping channel and Internet Jewellery shopping website in the UK.

4. The Liquidation Channel, USA (TJC USA), (www.liquidationchannel.com) a wholly owned step down subsidiary of Vaibhav Gems Limited is engaged in marketing jewellery through electronic media and operates a dedicated 24 hours jewellery TV shopping channel and Internet Jewellery shopping website in the USA.

EMPLOYEE STOCK OPTION PLAN 2006:

During the year, the compensation committee in their meeting held on 29th January 2010, granted 2,97,500 stock options to the eligible employees of the company and its subsidiaries under the Employees Stock Option Scheme 2006 (VGL ESOP 2006). The details of the options granted are set out in Annexure I to the Directors’ Report.

AWARDS AND RECOGNITION:

Your Company has, once again, been bestowed with the coveted GJEPC Export Award, the fifteenth successive award for being the largest Indian exporter of coloured gemstones on realization basis.

DIRECTORS:

During the year, on 29th January 2010, Shri Suresh Panjabi, Director of your company has resigned from the directorship of the company due to his personal pre-occupation. The Board recorded its appreciation for the valuable services rendered by him during his tenure.

During the year, on 30th June, 2009, Shri Sanjeev Agrawal and Shri Ikramullah, Directors of the company had resigned from the directorship of the company due to their personal pre-occupations. The Board recorded appreciation for the valuable services rendered by them during their tenure.

As per Article 61 of Articles of Association of the Company, Shri M.L. Mehta and Shri S.S. Bhandari, retire by rotation at the ensuing Annual General Meeting. Being eligible, offer themselves for reappointment.

A brief resume of the above Directors together with the nature of their expertise in specific functional areas and names of companies in which they hold the directorship and the membership / chairmanship of committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is given as an annexure to the notice of Annual General Meeting.

AUDITORS:

The Joint auditors M/s Haribhakti & Company, Chartered Accountants, Mumbai and M/s B. Khosla & Co., Chartered Accountants, Jaipur, retiring at the ensuing Annual General Meeting; have confirmed their eligibility and willingness to accept the office, if re-appointed.

Members are requested to consider their re-appointment for financial year ending 31st March 2011 on remuneration to be decided by the Board of Directors of your Company.

CONSOLIDATED FINANCIAL STATEMENTS:

Your directors present the consolidated financial statement, forming the part of the Annual Report. The consolidated financial statements are prepared in accordance with Accounting Standard prescribed by the Institute of Chartered Accountants of India.

PARTICULARS REQUIRED AS PER SECTION 212 OF THE COMPANIES ACT, 1956:

As per section 212 of the Companies Act, 1956, your Company is required to attach the Directors’ Report, Balance Sheet and Profit and Loss Account of the subsidiaries with its annual financial statements. We had applied to the Government of India for an exemption from such attachment as we present the audited consolidated financial statements in the annual report. We believe that the consolidated accounts present a full and fair picture of the state of affairs and the financial condition and are accepted globally. We will make available the audited annual accounts and related information of subsidiaries, where applicable, upon request by any of our investor.

Further, as required, the brief financial data of the subsidiaries has been furnished under the head “Statement pursuant to section 212(8) of the Companies Act, 1956, related to Subsidiary Companies” forming part of the Annual Report.

OUTLOOK:

Buoyancy in the economy, growing consumer aspiration in the urban India and a flurry of new products has provided a strong foundation for the growth of Indian Gems and Jewellery industry in recent past. Some of the main highlights for the financial year 2009-2010 are as follows:

GROWTH TRENDS:

The growth trends reported for the financial year 2009-2010 are:

- From export figures of US $ 24,495.58 million in the FY 2008-09, the exports in FY 2009-10 have shown considerable increase and have registered an export of US $ 28,414.64 million. This indicates an increase of 16 per cent in the total gems and jewellery exports. The performance of this industry is critical as it contributes 13 per cent to India’s total merchandise exports.

- Colored gems stone export increased by 10.55 per cent to US $ 286.65 million in 2009-10 compared to US $ 259.29 million in the previous fiscal, while gold jewellery exports rose by 9.38 per cent to US $ 9.42 billion during the period under review compared to US $ 8.61 billion in 2008-09.

- Gold Jewellery exports have also been on a rise accounting for 9.38 per cent increase in FY 2009-10, with exports increasing from US $ 8,616.43 million in 2008-09 to US $ 9,424.33 million in 2009-10.

The Indian Government has provided an impetus to the booming gems and jewellery industry with favorable Foreign Trade Policy 2009-2014:

- It has been decided to neutralize duty incidence on gold jewellery exports, to allow duty drawback on such exports.

- To promote export of gems and jewellery products, the value limits of personal carriage have been increased from US $ 2 million to US $ 5 million in case of participation in overseas exhibitions. The limit in case of personal carriage, as samples, for export promotion tours, has been increased from US $ 0.1 million to US $ 1 million.

Sources : http://www.pr.com, http://

www.indianyellowpages.com, http://www.gjepc.org, http://

www.commodityonline.com

INTERNAL CONTROL AND AUDIT:

The Corporate Audit function plays a key role in providing an objective view and reassurance of the overall control systems and effectiveness of the risk management process across Vaibhav Gems Limited and its Subsidiaries to both the operating management and the Audit Committee of the Board. Internal control system also assesses opportunities for improvement in the business processes and provides recommendations designed to add value to the operations and the group as a whole.

Strong internal control and their rigorous testing is one of the strengths of Vaibhav. Vaibhav’s Audit Committee along with Management oversees financial controls and their implementation. Your Company has an active Internal Audit Team. The Internal Audit team independently reviews the internal and financial controls, business processes and the financial transactions to provide the reasonable assurance of the integrity, confidentiality and availability of critical information and the effectiveness and efficiency of operations, safeguarding of assets and compliance with rules and regulations.

The internal Auditor report is placed to the Audit Committee and appropriate corrective action is being taken. The internal control procedures are well documented and are applied across the entire operations of your Company.

HUMAN RESOURCE DEVELOPMENT:

Your Company takes pride in its highly motivated and trained human resource, which has contributed its best for the Company to achieve newer heights.

Training and Development are being given paramount importance in your company and regular training and development opportunities are provided to the employees based on the need and requirements.

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

Information in accordance with the provisions of Section 217(1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.

A. Conservation of Energy

The operations of your Company are not energy-intensive. However, significant measures are taken to reduce energy consumption by using energy efficient equipments. We regularly evaluate and use new energy efficient technologies and make necessary investment in these to make our infrastructure more energy-efficient.

B. Technological Absorption

Your Company possesses an in-house research and development wing, which is continuously working towards more efficient jewellery production, improved processes and better designs. Your Company has not imported any technology for its manufacturing process and therefore, the question of adaptation/absorption does not arise.

C. Foreign Exchange Earnings and Outgo

The Company exports coloured gemstones, diamonds and studded gold jewellery. The foreign exchange earnings and outgo (FOB basis) of the Company is as follows:

Rs. in Lacs

2009-10 2008-09

Earnings 12194.30 17313.09

Outgo 4453.88 9076.69

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors Report. However as per the provisions of Section 219(1) (b) (IV) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the company and others entitled thereto. Member who is interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect of the Directors’ responsibility statement, it is hereby confirmed that:

I. In the preparation of the annual accounts for the financial year ended March 31st, 2010; the applicable accounting standards have been followed along with proper explanation relating to material departure.

II. The Directors have adopted such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and profit and loss account of the company for that period.

III. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities.

IV. The Directors have prepared the annual accounts on a going concern basis.

ACKNOWLEDGMENTS:

The Directors acknowledge the contributions made by the employees towards the success and growth of your company. The directors are also thankful for the cooperation and assistance received from the Government of India, various governmental authorities/departments, Financial Institutions, Banks and Vendors.

The Directors thank the companys valued and esteemed customers for their continued patronage.

The Directors would also like to acknowledge the continued support of the company’s shareholders in its entire endeavour.

For and on behalf of the Board of Directors

Place : Jaipur Sunil Agrawal

Date : 21st May, 2010 Chairman