Directors Report of Goenka Diamond & Jewels Ltd.

Mar 31, 2023

The company’s bank accounts turned out to be Non-Performing Assets from the financial year 2015-16, subsequently one of the member bank of consortium approached National company Law tribunal (“NCLT)National company Law Tribunal (“NCLT”), the case was admitted by NCLT in December 2022, at the first place NCLT appointed Mr. Vishal Bidawatjika as an Insolvency Resolution Professional (“IRP”) and subsequently in April , 2023 has appointed Mr. Sourabh Malpani as Insolvency Resolution Professional (IRP). In this annual report the words Director(s) and Board of Directors shall be construed as Suspended Director(s) and Suspended Board Respectively.

Suspended Board and IRP presents the Thirty Third Annual Report together with the Audited Financial Statements for the financial year ended March 31,2023

Financial Highlights

(Rs In Lakhs)
Particulars	31.03.2023	31.03.2022
Sales and Other Income	217.71	481.11
Less: Expenses	351.39	607.46
Profit / (Loss) before tax and depreciation	(133.68)	(127.32)
Less: Depreciation	54.01	43.54
Net Profit/(Loss) before Tax	(187.69)	(170.86)
Less : Exceptional Item	-	-
Less: Income tax provision	0.00	0.00
Less: Deferred Tax	(0.19)	1.63
Less: Earlier Years’ Income Tax	0.00	0.00
Less: MAT Credit Entitlement	0.00	0.00
Profit/(Loss) after tax and exceptional items	(187.51)	(172.48)
Balance brought forward from previous year	11,099.78	1,1272.27
Profit available for appropriation	10,912.27	11,099.78
Appropriation
Issue of Bonus shares	—	-—
Transfer to General Reserve	—	-—
Proposed Dividend on Equity shares	—	-—
Tax on Proposed Dividend	—	-—
Profit carried over to Balance Sheet	10,912.27	11,099.78
Earnings per share	(0.06)	(0.05)

State of Company’s Affairs

Your Directors wish to inform you that during the current financial year ended March 31,2023, the sales and other income of the Company were Rs. 217.71 lakhs in comparison of Rs. 481.11 Lakhs for the Financial Year ended on March 31,2022. During the Financial Year 2022 - 23 the company incurred Net Loss before tax of Rs. 187.69 Lakhs against Net loss before tax of Rs. 170.86 lakhs in the previous year.

Dividend

Due to losses incurred by the company during the year, the directors do not recommend any dividend.

IPO Fund Utilization

The details of IPO proceeds which have been utilized by the Company are as given under. The Company has utilized major portion of IPO proceeds for expansion as and when the correct opportunity and favorable market conditions were available. However, insignificant portion of the proceeds allocated for the expansion is left

unutilized and the remaining amounts of Rs.76.98 lakhs have been attached / adjusted by government authorities against disputed dues.

Directors and Key Managerial Personnel

The Suspended Board comprises of 6 directors comprising of 2 promoter directors, 1 professional director and 3 independent directors including one woman director. Definition of ‘Independent Director’ is derived from Regulation 16(b) of the SEBI LODR and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors under section 149(7) of the Companies Act 2013 and on evaluation of the relationships disclosed, the Non-Executive Independent Directors - Mr. Bhau Dhure. Mr. Tushar Momaiyah and Mrs. Dhara Atul Shah are considered as Independent Directors, who are not liable to retire by rotation.

In compliance with the requirements of Section 203 of the Companies Act, 2013, Mr. Nandlal Goenka, Chairman, Mr. Navneet Goenka, Vice Chairman & Managing Director and CFO and, Ms. Dimple Jaiswal, Company Secretary & Compliance Officer of the Company continued as Key Managerial Personnel. Mr. Sourabh Malpani is at present IRP of the company.

Directors’ Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013 (‘the Act’), in relation to the Annual Financial Statements for the Financial Year 2022-2023, your Directors, to the best of their knowledge and ability, confirm that:

a) i n the preparation of the annual accounts for the year ended March 31,2023, the applicable Ind As, which is adopted first time in preparation of financial statements for the year ended March 31, 2023 as per the applicable laws and rules and regulations for the time being in force the read with requirements set out under Schedule III to the Act, have been followed along with proper explanation relating to material departures;

b) t he 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 as at March 31,2023 and of the loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a “going concern” basis. However, the Statutory Auditors have expresses doubts on the ability of the company to continue as a going concern.

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively, except that the credit given to the overseas buyers in the previous year(s). The present outstanding amount of debtor’s receivable is majorly due to the credit sales made in the previous year(s). Likewise, the payments of statutory dues and bank dues need to be regularized, though the same is the result of the liquidity crunch the company is presently facing mainly due to extending credit to buyers. The company has initiated legal proceedings against the debtors in the respective courts.

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

Subsidiary Company and Consolidated Financials

In compliance with Section 129 of the Act, a statement containing requisite details including performance and financial position of each of the subsidiary companies is annexed to this report in Form AOC-1.

As per the requirements of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, and other rules and regulations as may be applicable from time to time, the audited consolidated financial statements of your company is prepared in accordance with applicable Indian Accounting Standards (Ind AS) are enclosed herewith

Board Evaluation

Evaluation of performance of Independent Directors is not applicable as the Board is suspended.

Remuneration Policy

The current policy is an appropriate mix of executive and independent directors to maintain the independence of the Board. The Nomination & Remuneration Committee framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel, Senior Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013. No remuneration has been paid to the Directors after appointment of first IRP by the NCLT as board stands suspended.

The salient features of the Remuneration Policy are stated in the Corporate Governance Report. Deposits and Unclaimed Dividend

During the year under review, your company has not accepted any public deposit under Chapter V of the Companies Act, 2013.

During the year under review, pursuant to section 124 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016 (the “Rules”) framed there under,

Number of Meetings of the Board

The Board met Six times in financial year 2022-2023, on May 26, 2022, August 08, 2022, November 11, 2022, February 04, 2023, February 14, 2023 and February 18, 2023. The maximum interval between any two meetings did not exceed 120 days.

Details of Committees of the Board

The Company has following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

1. Audit Committee

The Present Audit Committee comprises namely Mr. Bhau Dhure, Mr. Navneet Goenka, Mrs. Dhara Shah and Mr. Tushar Momaiyah.

Mr. Bhau Dhure - Chairman

Mr. Navneet Goenka - Member. Mrs. Dhara Shah - Member.

Mr. Tushar Momaiyah - Member

All the recommendations made by the committee were accepted by the Board

2. Nomination and Remuneration Committee

The Present Nomination and Remuneration Committee comprises namely Mrs. Dhara Shah, Mr. Bhau Dhure and Mr. Tushar Momaiyah.

Mr. Tushar Momaiyah - Chairman

Mrs. Dhara Shah - Member

Mr. Bhau Dhure - Member

All the recommendations made by the committee were accepted by the Board.

3. Stakeholders Relationship Committee

The Present Stakeholders Relationship Committee comprises namely Mr. Bhau Dhure, Mr. Navneet Goenka and Mrs. Dhara Shah.

Mr. Bhau Dhure - Chairman

Mr. Tushar Momaiyah - Member

Mrs. Dhara Shah - Member

All the recommendations made by the committee were accepted by the Board.

The details of the meetings held and attendance of the members of the above committees of the Board are provided in the Corporate Governance report.

Statutory Auditors

M/s. Ummed Jain & Co., (Firm Regn. No. 119250W) Chartered Accountant, Mumbai Statutory Auditors of the Company, was re-appointed as statutory auditor of the company, to hold office from the conclusion of Annual General Meeting held for the Financial Year ended march 31,2022 to the conclusion of the Annual General Meeting for the Financial Year ended march 31,2027.

Auditors’ Report

In respect of the observations made by Auditors in their report, your Directors wish to state that the replies in that respect have been given in the Directors Report in a separate section.

Secretarial Auditor

The Board has appointed Mr. Vishal N. Manseta, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2022-2023. The Secretarial Audit Report for the financial year ended March 31,2023 is annexed to this Report.

Secretarial Audit Report

In respect of the observations made by Secretarial Auditor in his report, your Directors wish to state that the replies in that respect have been given in the Directors Report in a separate section.

Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material. Accordingly, the particulars of the transactions as prescribed in Form AOC-2 of the rules prescribed under Chapter IX relating to Accounts of Companies under Companies Act, 2013 are not required to be disclosed as they are not applicable.

Members are requested to refer Note 35 and 42 to the Standalone financial statements which sets out related party disclosures.

As per Regulation 23 of the SEBI LODR, the Board has adopted a ‘Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions’ which may be accessed on the Company’s website i.e. www.goenkadiamonds.com

Extract of Annual Return

The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report as on March 31,2023.

Sexual Harassment

The Company is committed to provide a safe and conducive work environment to its employees and has detailed procedure for the redressal of complaints pertaining to sexual harassment. Your Directors further state that during the year under review, there were no cases filed pursuant to the sexual harassment at workplace.

Material Changes and Commitments, affecting the financial position of the Company

During the current financial year the hon’ble NCLT has appointed IRP in December 2022, the company is going through IBC Process. The board of directors of the company stands suspended since the order is passed to appoint IRP. The operations of the company are under supervision of the IRP, presently Mr. Sourabh Malpani is the IRP of the company, looking after entire CIRP process as well as monitoring the operations of the company. Entire Board stands suspended as per the applicable provisions.

None of the suspended directors has any power whatsoever in relation to decision making in context of the company. All the decisions are with prior permission of the IRP.

There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report. Lead Bank Punjab National Bank, on behalf of all consortium banks, had issued fresh notice u/s 13(2) of the SARFAESI Act (after withdrawing its earlier notice) on October 22, 2018 for an amount of Rs. 216.62 crores owed by company to the consortium banks (excluding dues of one bank) and Asset Reconstruction Company up to March 31, 2018 and subsequently issued possession notices for company''s properties and thereafter for sale of secured assets of the company which was stayed by DRT-1, Mumbai vide its order dated December 30, 2019. Further, Punjab & Sind Bank (one of the consortium bank) has issued separate notice u/s 13(2) of the SARFAESI Act on January 07, 2020 for recovery of an amount of Rs. 77.26 Crores (including interest upto December 31, 2019) within 60 days of the receipt of notice, which as per the management is already covered under the above stay order by DRT. Further, Mumbai DRT has also issued summons dated June 3, 2019 on application made by Punjab & Sind Bank (one of the consortium bank) under section 19(4) of The Recovery of Debts due to Banks and Financial Institution Act, 1993 for recovery of an amount of Rs. 56.92 crores owed by company to the bank, against which company has filed appeal. The Corporation Bank (one of the consortium bank) has filed petition with National Company Law Tribunal under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiating corporate insolvency resolution process which are still pending for hearing. Further on appilcation by the Corporation Bank, DRT- Mumbai has also issued summons dated September 16, 2020 under The Recovery of Debts due to Banks and Financial Institution Act, 1993 for recovery of Rs.30.41 crs, the proceeding for which is still pending. Four lender banks up to the reporting date have already transferred and assigned its outstanding dues against company to an Asset Reconstruction Company. In previous year State Bank of India has accepted the One Time Settlement (OTS) proposal submitted by the Company and the company during the period has paid full amount as per settlement terms. However, OTS proposal submitted to other banks has been rejected by the banks and they have requested to improve the OTS proposal. However, the directors will intimate the members of the company and the regulators from time to time as per the regulations as may be applicable from time to time.

Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Company’s operations in future

The Hon’ble NCLT has passed order admitting the company’s case into CIRP process. The first IRP was appointed in December 2022, subsequently IRP was changed in April 2023. At present Mr. Sourabh Malpani is IRP of the Company, as on date of this report there is no material outcome with regards to the insolvency process.

Corporate Social Responsibility

The provisions related to Corporate Social Responsibility as mentioned in the Act are not applicable to the company. Risk Management Policy

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company’s management systems, organizational structures, processes, standards, code of conduct and behaviors govern how the company conducts the business and manages associated risks. At present the company is going through CIRP.

Internal Financial Controls

The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively, except that the credit given to the overseas buyers in the previous year(s). The present outstanding amount of debtor’s receivable is majorly due to the credit sales made in the previous year(s). Likewise, the payments of statutory dues and bank dues need to be regularized, though the same is the result of the liquidity crunch the company is presently facing mainly due to extending credit to buyers. The company has initiated legal proceedings against the debtors in the respective courts. The board has monitored till November 2022, subsequently board was suspended and company is under control of IRP till date of this report.

Share Capital

The paid up equity share capital of the Company as on March 31, 2023 was Rs. 31,70,00,000/- During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.

Vigil Mechanism

The Company has established Vigil Mechanism and adopted Whistle blower policy for its directors and employees to report concern about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy. The mechanism provides adequate safeguards against victimization of persons who use such mechanism. Protected disclosures can be made by a whistle blower through an e-mail or dedicated telephone line or a letter to the senior executives or to the Chairman of the Audit Committee. During year under review, no personnel were denied access to the Audit Committee.

Corporate Governance

As per SEBI LODR, a separate section on corporate governance practice which is followed by your Company, together with a certificate from Mr. Vishal N. Manseta, Practicing Company Secretary is given in this annual report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The prescribed particulars of employees required under section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached and form part of this report.

Green Initiatives

Electronic copies of the Annual Report 2022-23 and Notice of the 33^rd Annual General Meeting are sent to all members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their email addresses are requested to register their email ids with their DPs in order to cooperate with the company in implementation of green initiative; and help to protect the environment.

STATUTORY AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

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

Management Reply: The management has provided the major audit evidence to excepting the at certain occasions the account confirmation of overseas debtors and creditors and few bank confirmations owing to the frozen bank accounts and bank accounts converted in NPA. The Company has approached consortium bankers and ARC for settlement of loan dues and assumes that Company will have adequate cash flow from export realisation to defray its entire debt obligation and payment to creditors in phased manner The promoters of the Company are also ready to infuse funds in the company and to raise fund from alternate means to meet short term and long term obligations of the Company.

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

Management Reply: Management noted the same.

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

Management Reply: Factual description of status of legal cases. Since, the banks are not allowing any operation and no statements/ confirmations are being issued by the banks. However, the Management to the best of its knowledge and belief has recorded all the transactions.The Company has received letters from ARC and Banks for assignment of debts of UCO Bank, Karnataka Bank, AXIS Bank and Central Bank of India in favour of ARC. The company has made payment of Rs. 1405.61 to ARC to adjust loans of above four banks debts assigned to ARC

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

Management Reply: It was deemed prudent not to take cognizance of unrealised exchange difference on notional basis due to uncertainties with regard to expected time frame for realisation of Trade Receivables and loans & advances to subsidiaries. Consequently, the payment to creditors is also dependent on recovery

from these Trade receivables and loans & advances to subsidiaries. The company shall account for the actual exchange difference at the time of realization of these trade receivables, Loans and advances and at the time of payment to trade payables.

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

Management Reply: The company has filed legal suits in Mumbai High Court against majority of debtors and is in process of filing legal suits against other major debtors for recovery of dues. Due to delay in realization of debtors, there is a delay in payment to creditors. However, the Management to the best of its knowledge and belief has recorded all the transactions.

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

Management Reply: The Management is taking all possible steps to revive the business operations and has approached consortium bankers for one-time settlement (OTS) of entire loan dues and assumes that Company will have adequate cash flow from export realization to defray its entire debt obligation in phased manner. Further, four lender banks have transferred and assigned its outstanding dues against company to an Asset Reconstruction Company and State Bank of India accepted the One Time Settlement (OTS) proposal submitted by the Company and Company has paid full OTS amounts to State Bank of India. However, OTS proposals submitted by the company to other banks are still under consideration. The Board have decided not to provide Interest on working capital borrowings availed by the Company. However, the Management to the best of its knowledge and belief has recorded all the transactions.

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

1) Trade receivable amounting to Rs. 69,703.18 lacs

2) Trade payables and other payable amounting to Rs. 29717.66 lacs

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

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

Management Reply: There have been defaults on payment obligations by the trade receivables on due date and recoveries from these trade receivables are not significant, due to certain unfavourable developments in earlier years and economic slowdown especially in diamond sector. No confirmation have been received by these trade receivables. The Company is taking all possible efforts to recover old trade receivables and had initiated legal action wherever considered necessary. However, looking at the past record regarding recovery from Trade receivables, the management is of the opinion that looking to the uncertainty regarding time frame and quantum of realisation from these trade receivables, amount of expected credit loss required to be recognised cannot be estimated and therefore no provision for expected credit loss is required to be made against these trade receivables. Contrary to Ind AS 21, trade receivables denominated in foreign currency amounting to Rs. 69,703.18 lakhs have not been restated based on exchange rate as at the end of the year.

These trade receivables have been carried forward based on exchange rate as at the end of March 31,2015 and/ or March 31,2016, as it is deemed prudent not to take cognizance of unrealised exchange difference on notional basis due to uncertainties with regard to expected time frame for realisation of trade receivables. The company shall account for the actual exchange difference at the time of realization of these trade receivables.

h) Auditors observation : The Company has made provision for expected credited loss of Rs. 812.35 Lacs against the interest receivable on loan from a subsidiary and has recognized loss of Rs. 49.00 lacs on current investment designated through FVTPL. No deferred tax assets thereon amounting to Rs. 216.79 lacs have been recognized which is not in accordance with Ind AS-12 “Income Taxes. Had the exchange difference as stated in para (f) above and deferred tax thereon and interest on loans as stated in para (e) above been provided, the loss before tax for the year would have been decreased by Rs. 1630.52 Lacs respectively. Consequently, the overstatement and understatement of assets and liabilities are as under:-

1. Trade Receivables Rs. 19707.68 lacs (Understatement)

2. Trade Payables Rs. 7407.54 lacs (Understatement)

3. Non-Current financial assets Rs. 336.77 lacs (Understatement)

4. Current Financial Assets Rs. 158.46 lacs (Understatement)

5. Borrowings 20979.19 lacs (Understatement)

7. Current financial liabilities Rs. 1.46 lacs (Understatement)

8. Deferred Tax Liability Rs. 197.66 lacs (Understatement)

9. Other Equity Rs. 8382.93 (Overstatement)

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

Management Reply: The Management is taking all possible steps to revive the business operations and has approached consortium bankers for one-time settlement (OTS) of entire loan dues and assumes that Company will have adequate cash flow from export realization to defray its entire debt obligation in phased manner. Further, four lender banks have transferred and assigned its outstanding dues against company to an Asset Reconstruction Company and State Bank of India accepted the One Time Settlement (OTS) proposal submitted by the Company and Company has paid full OTS amounts to State Bank of India. However, OTS proposals submitted by the company to other banks are still under consideration. The Board have decided not to provide Interest on working capital borrowings availed by the Company. However, the Management to the best of its knowledge and belief has recorded all the transactions.

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

Management Reply: With regard to loan due from subsidiary of Rs. 1249.95 lacs, the same is in the nature of long-term loan for set up of business of the subsidiary and is part of net investment in the subsidiary. The operation of the subsidiary shall soon be revived and these loans will be recovered in near future

j) Auditors observation : The Inventory has been taken on the basis of physical verification carried out by the management (including inventory lying with franchisees on approval basis) as at the year end and its valuation is based on determination of estimated net realizable value and specific identification which involves technical

judgment of management. In the absence of any valuation by an independent expert, we have relied upon by the physical verification and valuation of the Inventory as certified and determined by the management

Management Reply: Management has physically verified the inventory as at year end and has properly valued the inventory based on determination of estimated net realizable value and specific identification.

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

Management Reply: The management is of the opinion that all the transactions have been recorded on the books properly. Efforts are being made regularly for obtaining confirmations statements .

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

Management Reply: In absence of title deeds of buildings (including building as mentioned above) having total Gross value of Rs. 19.72 lakhs and WDV of Rs. 5.34 lakhs as on March 31,2023 have been impaired and the impairment loss of Rs. 5.34 lakhs is included in depreciation charged during the year.

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

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

Management Reply: The management is of the view that due to certain unfavourable developments and slugglish market in earlier periods, the recovery from trade receivables are slow and there is a mismatch in the cash flow resulting in default in payment to creditors, payment of statutory dues and repayment of dues to banks owing to which banks have classified the account as NPA and recalled their loans. The management is hopeful that these trade receivables shall be recovered as the company has initiated legal action by way of sending legal notices and filing court cases. The company has filed legal suits in Mumbai High Court against majority of debtors and is in process of filing legal suits against other major debtors. Further, the management

is taking all possible steps to revive the business operations and has approached consortium bankers for one-time settlement of entire loan dues and assumes that Company will have adequate cash flow from export realisation to defray its entire debt obligation and payment to creditors in phased manner. At the same time, management is hopeful that it will be able to raise adequate finance from internal accruals and alternate means to meet its short term and long-term obligations. Hence, the accounts of the Company are prepared on going concern basis.

n) Regarding auditors’ observations at point no. (a) to (d), point no. as reported by them under section 143(3), management replies may be found in the above paragraphs.

o) Regarding observation made by Auditors at point No. vii (a) and (b) of the Annexure “A" to Auditors Report:

Management reply: The company is committed to pay all its outstanding undisputed statutory dues. Regarding the disputed outstanding taxes, the appeal is pending before ITAT Mumbai and regarding PVAT, Company is confident that it will be able to get favorable orders from the concerned appellate authorities.

p) Regarding observation made by the Auditors in the point no (a) of Annexure “B" to Auditors Report, whereby they have pointed out internal control weakness relating to ascertainment of customers’ credit worthiness etc., which has resulted in huge old outstanding dues from customers

Management Reply: Though the company has taken all due care at the time of sale of goods to customers, it strongly feels that the internal financial control system in this regard needs to be improvised. The management is of the view that due to certain unfavourable developments and slugglish market in earlier periods, the recovery from trade receivables is slow. The management is hopeful that these trade receivables shall be recovered as the company has initiated legal action by way of sending legal notices and filing court cases.

q) Regarding observation made by the Auditors in the point no (b) Annexure “B" to Auditors Report, whereby they have pointed out irregularities in payment of statutory dues / taxes and interest and loan repayment to banks

Management Reply: Due to slow recovery from trade receivables, there is a temporary deficit in the cash flow resulting in default in payment of statutory dues / taxes; and repayment of dues to banks. The Company is taking all possible efforts to recover old trade receivables and revive its business operations. Nonetheless, the management is committed to pay all statutory dues/ taxes. Regarding repayment of dues to banks, the company has approached bankers with proposal of One Time Settlement.

SECRETARIAL AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

1) Auditors Observation on legal action taken by the banks

Management Reply: the management has taken requisite steps with regards to legal action initiated by the banks

2) Auditors Observation on assignment and transfer of dues of three bank in favor of an asset reconstruction company (ARC)

Management Reply : The banks have classified the account as NPA and recalled their loans. And as consequence two banks dues were assigned and transfer to an asset reconstruction company (ARC)

3) Auditors Observation made on delay in payment of statutory dues:

Management Reply: The management is of the view that due to certain unfavourable developments and slugglish market in earlier periods, the recovery from trade receivables are slow and there is a mismatch in the cash flow resulting in default in payment of statutory dues.

4) Auditors Observation made on long outstanding Trade Receivables and non realization of overseas debtors for more than 180 days:

Management Reply: The Company has already filed legal suits against the major overseas buyers in respective courts. Legal suits against other overseas buyers are in the process of being filed for the recovery of Export Outstanding.

5) Auditors observation relating to default in repayment of principal and interest to bankers, declaration of company’s account as NPA; and recall of loans:

Management Reply: Due to slow recovery from trade receivables, there is a temporary deficit in the cash flow resulting in default in repayment of dues to banks owing to which the bankers have classified the account as NPA and recalled their loans. The Company is taking all possible efforts to recover old trade receivables and has also initiated legal action where ever considered necessary. The Company is taking steps to revive its business operations and has approached consortium bankers with proposal of One Time Settlement (OTS) and also management is in discussion with ARC.

6) Auditors observation regarding legal actions/ insolvency proceedings initiated by banks against company for recovery of its dues, notices/ summon from Enforcement Directorate, Reserve Bank of India, Development Commissioner of Surat SEZ and from other regulatory authorities, pending proceeding with National Company Law Tribunal, Debt Recovery Tribunals and other courts for recovery of banks dues

Management Reply: Due to default in repayment of dues to banks owing to which the bankers have classified the account as NPA and recalled their loans. the matter is pending with the legal authorities and with regards to NCLT matter is pending before NCLT, Jaipur and regarding notice from development commissioner of Surat SEZ, matter is pending for hearing.

7) Auditors observation regarding order passed by the hon’ble NCLT commencing CIRP and appointment of IRP

Management Reply : the management has made consistent efforts to get accounts settled under onetime settlement process to which couple of banks disagreed and the matter was admitted by Hon’ble NCLT.

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

The Company is engaged in manufacturing of gems and jewellery and as such its operations do not account for substantial energy consumption. However, the Company is taking all possible measures to conserve energy, in its endeavor towards conservation of energy. Your Company ensure optimal use of energy, avoid wastages and conserve energy as far as possible. Several environment friendly measures were adopted by the Company such as minimising air-conditioning usage, Shutting off all the lights when not in use.

Sustainability Report

The company is involved in cutting and polishing of diamonds, color stones, precious and semi-precious stones. This is related to fashion and astronomic industry and does not involve generation of any kind of pollution and hence the environment sustainability is not applicable to the company.

Technology Absorption, Adoption and Innovation

The Company continuously monitors and keep track of technological upgradation in the field of Jewellery manufacturing and the same are reviewed and considered for implementation. Your Company continued its focus on quality up-gradation and product enhancements. The company uses indigenous technology for its operations.

Research and Development

The nature of the business of the company is categorically end user business of large size diamonds and high end jewellery wherein research and development expense are more in the nature of designing rather than development of new technology.

Foreign Exchange Earnings and Outgo

The information regarding foreign exchange earnings and outgo is contained in note no. 31 (v) of notes on Financial Statements.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of sweat equity shares to employees of the company under any scheme.

2. Issue of shares under Employee Stock Option Scheme.

3. Re-appointment of an independent director for second term of five years.

4. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries.

5. There were no companies which have become or ceased to be Subsidiaries, Joint Ventures or associate companies during the year.

6. There was no change in nature of business.

7. There were no loans, guarantees or investments given / made by the Company under Section 186 of the Act. Acknowledgement

Your Directors place on record their gratitude to Central Government, State Governments, Financial Institutions and Company’s Bankers for assistance, co-operation and encouragement they extended to the Company. The Directors are also grateful to the valued customers, esteemed shareholders, dedicated employees and public at large for their patronage and confidence reposed in the company.

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Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty Fifth Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended March 31,2015.

Financial Highlights

(Rs. In lacs)

31.03.20151 31.03.2014

Sales and Other Income 11467.13 38331.97

Less: Expenses 11244.22 38172.03

Profit before tax and depreciation 222.91 159.93

Less: Depreciation 114.63 100.75

Net Profit/(Loss) before Tax 108.28 59.18

Less: Income tax provision 35.00 23.00

Less: Deferred Tax (18.54) (35.63)

Less: Earlier Years' Income Tax 0.00 33.68

Less: MAT Credit Entitlement (5.00) (23.00)

Profit/(Loss) after tax 96.82 61.13

Balance brought forward from previous year 15897.40 15836.27

Profit available for appropriation 15994.22 15897.40

Appropriation

Issue of Bonus shares ---- ---

Transfer to General Reserve ---- ---

Proposed Dividend on Equity shares ---- ---

Tax on Proposed Dividend ---- ---

Profit carried over to Balance Sheet 15994.22 15897.40

Earnings per share 0.03 0.02

State of Company's Affairs

Your Directors wish to inform you that during the current financial year ended March 31,2015, the sales and other income of the Company were Rs. 11,467.13 lacs and during the previous year it was Rs. 38,331.97 lacs. The Net Profit before tax stood at Rs. 108.28 lacs as against Rs. 59.18 lacs in the previous year. The Net Profit after tax stood at Rs. 96.82 lacs as against Rs. 61.13 lacs in the previous year. The decline in the performance was partially due to promoters' dispute and partially due to volatile economical environment. However, the management expects that the performance will improve form the current financial year onwards.

Dividend

Due to reduced profits and in order to conserve the financial resources for future growth plans of the Company, the Directors do not recommend any dividend.

IPO Fund Utilization

The details of IPO proceeds which have been utilized by the Company are as given under. The Company has utilized major portion of IPO proceeds for expansion as and when the correct opportunity and favorable market conditions were available. However, insignificant portion of the proceeds allocated for the expansion is left unutilized and the management of your Company has infused those funds in to financial instruments for the investment purpose. The management has taken this step considering the fact that as and when the Company will require funds for expansion the requisite funds will be transferred from investment to expansion and till the time the shareholders money will fetch good returns which will be further helpful in future expansion and new projects of the Company.

Amount received from IPO 12650.85

Sr. Particulars of proposed reallocated expenditure Amount No- amount in Lacs (as on 31.3.2015)

1. For expansion and establishment of new retails stores either by way of lease or outright purchase 1143.84 and increase in production capacity of Diamond and Jewellery manufacturing facilities & other general capex required for expansion.

2. Funding to subsidiaries and such entities by way of equity, capital, loans and advances or 1845.02 in any other manner

3. Working Capital Requirement for business 8459.96

4. General Corporate Purposes 218.37

5. Issue Expenses 828.68

Total 12495.87

Unutilized Amount Represented by

Bank Balance/Time Deposit 154.98

Directors and Key Managerial Personnel

Your Board comprises of 6 Directors including 3 Independent Directors. Definition of 'Independence' of Directors is derived from Clause 49 of the Listing Agreement with Stock Exchanges and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors under section 149(7) of the Companies Act 2013 and on evaluation of the relationships disclosed, the Non-Executive Directors - Mr. Anant Upadhyay, Ms. Neetam Singh and Mr. Kevin Shah are considered as Independent Directors, who are not liable to retire by rotation.

APPOINTMENT

Mr. Anant Upadhyay was appointed as an Additional Director of the Company on August 21, 2014 and appointed as an Independent Director in the Annual General Meeting held on December 30, 2014.

Ms. Neetam Singh was appointed as an Additional Director of the Company on September 19, 2014 and appointed as an Independent Director in the Annual General Meeting held on December 30, 2014.

Mr. Kevin Shah was appointed as an Additional Director of the Company on November 25, 2014 and appointed as an Independent Director in the Annual General Meeting held on December 30, 2014.

The above referred appointments as Independent Directors made in the Annual General Meeting held on December 30, 2014 was for a specific tenure in accordance with Section 149 of the Companies Act, 2013 ("the Act") and Clause 49 of the Listing Agreement.

Mr. Kundan Tanawade was appointed as Company Secretary and Compliance Officer of the Company w.e.f. October 27, 2014.

CESSATION

Mr. Naresh Manchanda, Independent Director was appointed on September 19, 2014 and had resigned from the Company w.e.f. November 15, 2014. The Board placed on record its deep appreciation for the valuable guidance and advice given by Mr. Naresh Manchanda, during his tenure as an Independent Director of the Company.

Ms. Rajni Ahuja, the Company Secretary and Compliance Officer of the Company had resigned w.e.f August 15, 2014.

Mr. Navneet Goenka is Chief Financial Officer of the Company. As per provisions of the Companies Act, 2013 requisite forms have been filed with RoC.

In compliance with the requirements of Section 203 of the Companies Act, 2013, Mr. Nandlal Goenka, Chairman, Mr. Navneet Goenka, Managing Director & CFO, Mr. Nitin Goenka, Managing Director and Mr. Kundan Tanawade, Company Secretary & Compliance Officer of the Company were nominated as Key Managerial personnel.

Directors' Responsibility Statement

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed along with proper explanation relating to material departures;

b) 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a 'going concern' basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

Subsidiary Company and Consolidated Financials

In compliance with Section 129 of the Act, a statement containing requisite details including performance and financial position of each of the subsidiary company is annexed to this report.

In accordance with Accounting Standard AS 21 - Consolidated Financial Statements read with Accounting Standard AS 23 -Accounting for Investments in Associates, and Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

Board Evaluation

Pursuant to the provisions of companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Grievance committee.

The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.

Remuneration Policy

The Nomination & Remuneration Committee framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel, Senior Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

The salient features of the Remuneration Policy are stated in the Corporate Governance Report.

Deposits and Unclaimed Dividend

During the year under review, your company has not accepted any public deposit under Chapter V of the Companies Act, 2013. There were no funds required to be transferred to Investor Education and Protection fund, in respect of unclaimed dividend.

Number of Meetings of the Board

The Board met eight times in financial year 2014-2015, on May 19, 2014, August 21, 2014, September 19, 2014, October 31, 2014, November 14, 2014, November 25, 2014, November 29, 2014 and February 13, 2015. The maximum interval between any two meetings did not exceed 120 days.

Details of Committees of the Board

The Company has following Committee of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Grievance Committee

1. Audit Committee

The Audit Committee comprises independent directors namely Mr. Kevin Shah, Mr. Anant Upadhyay and Ms. Neetam Singh.

Mr. Kevin Shah - Chairman.

Mr. Anant Upadhyay - Member.

Ms. Neetam Singh - Member.

All the recommendations made by the committee were accepted by the Board.

2. Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises independent directors namely Ms. Neetam Singh, Mr. Kevin Shah and Mr. Anant Upadhyay.

Ms. Neetam Singh - Chairperson

Mr. Kevin Shah - Member.

Mr. Anant Upadhyay - Member.

All the recommendations made by the committee were accepted by the Board.

3. Stakeholders Grievance Committee

The Stakeholders Grievance Committee comprises independent directors namely Mr. Anant Upadhyay, Mr. Kevin Shah and Ms. Neetam Singh.

Mr. Anant Upadhyay - Chairman.

Mr. Kevin Shah - Member.

Ms. Neetam Singh - Member.

All the recommendations made by the committee were accepted by the Board.

The details of the meetings held and attendance of the members of the above committees of the Board are provided in the Corporate Governance report.

Statutory Auditors

M/s. B. Khosla & Co., Chartered Accountants and M/s. RSVA & Co., Chartered Accountants, Joint Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The proposal for their re-appointment is included in the notice for Annual General Meeting sent herewith.

Auditors' Report

In respect of the observations made by Auditors in their report, your Directors wish to state that the replies in that respect have been given in the Directors Report in a separate section.

Secretarial Auditor

The Board has appointed Mr. Vishal N. Manseta, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31,2015 is annexed to this Report.

Secretarial Audit Report

In respect of the observations made by Secretarial Auditor in his report, your Directors wish to state that the replies in that respect have been given in the Directors Report in a separate section.

Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material.

Members are requested to refer Note 32 to the financial statement which sets out related party disclosures.

Extract of Annual Return

The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report as on March 31,2015.

Sexual Harassment

Your Directors further state that during the year under review, there were no cases filed pursuant to the sexual harassment at workplace.

Material Changes and Commitments, affecting the financial position of the Company

There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.

Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Company's operations in future

There are no significant material orders passed by the Regulators/ Courts/ Tribunals which would impact the going concern status of the Company and its future operations.

Corporate Social Responsibility

The provisions related to Corporate Social Responsibility as mentioned in the Act are not applicable to the company.

Risk Management Policy

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company's management systems, organisational structures, processes, standards, code of conduct and behaviors govern how the company conducts the business and manages associated risks. The Company has introduced several improvements to Integrated Enterprise Risk Management, Internal Controls Management and Assurance Frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.

Internal Financial Controls

The Company has in place adequate internal financial controls and internal audit procedures with regard to financial statements, to commensurate with the size of the business. During the year, no reportable material weakness or cases of fraud were observed.

Share Capital

The paid up equity share capital of the Company as on March 31,2015 was Rs. 31,70,00,000/- During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.

Vigil Mechanism

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes intimation to the senior executives of the Company in case any threat or misconduct or unethical behavior or violation of company's code of conduct or ethics policy is observed. Protected disclosures can be made by a whistle blower through an e-mail or dedicated telephone line or a letter to the senior executives or to the Chairman of the Audit Committee.

Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by your Company, together with a certificate from Mr. Vishal N. Manseta, Practising Company Secretary on compliance with Clause 49 of the Listing Agreement with Stock Exchanges is given in this annual report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The prescribed particulars of employees required under section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached and form part of this report.

Green Initiatives

Electronic copies of the Annual Report 2014-15 and Notice of the 25thAnnual General Meeting are sent to all members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their email addresses are requested to register their email ids with their DPs in order to co-operate with the company in implementation of green initiative; and help to protect the environment.

STATUTORY AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

1) Regarding Auditors Observation on recoverability of long outstanding Trade Receivables,

There have been defaults in payment obligations by the trade receivables on due date and recoveries from them are not significant, due to economic slowdown especially in diamond sector and also on account of dispute amongst promoters. However, a settlement agreement was executed between the promoters with help of court mediation on 18th March 2014, post which the management has started taking all the initiatives to revive Company's operations. Nonetheless, the Trade receivables amounting to Rs.3,61,66,47,379/- have confirmed the balances by way of confirmations directly sent to auditors and/or Company. Looking at the past record regarding recovery from Trade receivables, the management is of the opinion that trade receivables outstanding for more than 6 months from the date they are due for payments are good and recoverable and therefore no provision is required to be made against these Trade Receivables

2) Regarding auditors observation on Inventory valuation wherein the determination of estimated net realizable value and specification identification which involves technical judgment of the management has been relied upon by auditors:

The management is of the opinion that the inventories are properly valued.

3) Regarding auditors' observation wherein they have referred to Note No. 37(a) of notes on Financial statements wherein the management has confirmed that no financial adjustment is required to be made in the financial statements for the terms & conditions of the settlement agreement executed and on account of various disputes, allegations and legal actions.

The above note is self explanatory and the management is of the view that no financial adjustment is required to be made in the financial statements since the promoters have already arrived at the settlement with the help of court mediation vide settlement agreement executed on March 18, 2014; the terms & conditions of which have been partially executed.

4) Regarding auditors' observation wherein they have referred to Note No. 37(b) of notes on Financial statements; and have mentioned that factors such as non-realization of debtors, decrease in sales, non-payment of statutory dues and taxes, overdue creditors, defaults in repayment of loans and interest etc, indicate the liquidity crunch faced by the company.

The company expects faster debtors realization in near future. Moreover, with the formation of Joint Lenders Forum (JLF) by consortium of bankers in accordance with RBI guidelines, additional credit facilities are sanctioned / to be sanctioned by the consortium bankers, in order to enable the company to meet its working capital requirements and revive its operations.

5) Regarding auditors' observation wherein they have referred to Note No. 37(C) of notes on Financial statements, wherein the management has confirmed that it has provided interest wherever banks have not applied or have reversed the interest on loan. Any difference on account of interest and penal interest shall be accounted for as and when the interest is charged or settled by the banks. In case of one bank, interest to the tune of Rs. 1,49,61,987 has been charged in excess against which company has made representation to the bank. The management is very much confident that the same will be decided in the favour of the Company and therefore no provision for the same has been made in the financial statements for the year ended March 31,2015.

The above note is self explanatory; and the management is of the view that it has in its best judgment accounted for all probable interest liability; and difference, if any, will be accounted for as and when the interest is charged or settled by the bank.

6) Observations by the auditors made in point no. vii (a) & (b) of the Annexure to Auditors Report:

The management states that the company is committed to pay all its outstanding undisputed statutory dues. Regarding the disputed outstanding taxes, the Company is confident that it will be able to get favorable orders.

7) Regarding observation made by the Auditors at Point No. (ix) of the Annexure to Auditors Report:

Certain factors such as promoters dispute, slow debtors realization, inadequate inventory levels, global economic slow down, highly volatile foreign exchange rates and significant weakening of rupee against the dollar had material impact on the liquidity position of the Company, due to which there was default in payment of a few bank debts obligations. Some of the overdue outstanding debts had already been repaid during FY 2014-15 and in case of continuing defaults; some of the debts have been repaid during the FY 2015-16. The company is committed towards honoring all its debt obligations.

SECRETARIAL AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

1) Auditors Observation made on delay in payment of statutory dues

Though there is a delay in payment of statutory dues, the management states that the company is committed to pay all its outstanding statutory dues.

2) Regarding auditors observation that the composition of the Board of the company was not in compliance with the provisions of listing agreement and the Companies Act, 2013 till September 19, 2014.

The Board states that the non-compliance was for a particular period of time owing to certain external factors. Since September 19, 2014, the Board and its Committees are duly constituted.

3) Regarding auditors' observation made on non-compliance of clause 41 of the Listing Agreement.

Due to resignation of the statutory auditors at the beginning of the financial year; and also in absence of the audit committee, the company could not submit to stock exchanges financial results for the quarters ended March 31, 2014 and June 30, 2014 in time. The non-compliances were regularized subsequently on appointment of statutory auditors and constitution of audit committee in the month of September 2014. As on date the company is complaint with the respective provisions of the Listing Agreement.

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

The Company has taken adequate measures to conserve energy. The company is into diamond and jewellery business where the operations are not energy intensive. We regularly evaluate and use new energy efficient technologies and make necessary investment in these equipments to make our infrastructure more energy efficient, whenever required.

Technology Absorption, Adoption and Innovation

Since the company's products are designed and not mechanically developed, technology absorption or innovations are not of material significance.

Research and Development

The nature of the business of the company is categorically end user business of large size diamonds and high end jewellery wherein research and development expense are more in the nature of designing rather than development of new technology.

Foreign Exchange Earnings and Outgo

The information regarding foreign exchange earnings and outgo is contained in note no. 29 & 30 of notes on Financial Statements.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Re-appointment of an independent director for a second term of five years.

2. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries.

3. There were no companies which have become or ceased to be Subsidiaries, Joint Ventures or associate companies during the year

4. There was no change in nature of business.

5. There were no loans, guarantees or investments by the Company under Section 186 of the Act.

Acknowledgement

Your Directors place on record their gratitude to Central Government, State Governments, Financial Institutions and Company's Bankers for assistance, co-operation and encouragement they extended to the Company. The Directors are also grateful to the valued customers, esteemed shareholders, dedicated employees and public at large for their patronage and confidence reposed in the company.

On behalf of the Board of Directors For Goenka Diamond and Jewels Limited

NANDLAL GOENKA NAVNEET GOENKA CHAIRMAN VICE CHAIRMAN & MANAGING DIRECTOR

Place: Mumbai Date: August 14, 2015

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Mar 31, 2014

Dear Members,

The Directors take pleasure in presenting before the members the Twenty Fourth Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March 2014.

Financial Highlights

(Rs. In lacs)

31.03.20141 31.03.2013

Sales and Other Income 38331.97 74397.00

Less: Expenses 38172.03 72072.96

Profit before tax and depreciation 159.93 2324.04

Less: Depreciation 100.75 120.44

Net Profit/(Loss) before Tax 59.18 2203.60

Less: Income tax provision 23.00 380.00

Less: Deferred Tax (35.63) (10.01)

Less: Earlier Years'' Income Tax 33.68 2.83

Less: MAT Credit Entitlement (23.00) (290.00)

Profit/(Loss) after tax 61.13 2120.78

Balance brought forward from previous year 15836.27 14086.37

Profit available for appropriation 15897.40 16207.15

Appropriation

Issue of Bonus shares - -

General Reserve - -

Proposed Dividend on Equity shares - 317.00

Tax on Proposed Dividend - 53.87

Profit carried over to Balance Sheet 15897.40 15836.27

Earnings per share 0.02 0.67

* EPS is based on face value per share of Rs. 1/- each.

Turnover & Profits

Your Directors wish to inform you that during the current financial year ended March 31, 2014, the sales and other income of the Company were Rs. 38,331.97 lacs and during the previous year it was Rs. 74,397.00 lacs. The Net Profit before tax stood at Rs. 59.18 lacs as against Rs. 2203.60 lacs in the previous year. The Net Profit after tax stood at Rs. 61.13 lacs as against Rs. 2120.78 lacs in the previous year. The decline in the performance of the company was mainly due to promoters dispute, due to which promoters could not devote sufficient time toward business. However, this was a temporary phase, since a settlement between the promoters took place with the help of court mediation in March, 2014. Now the management is confident that from current year onwards the performance will improve.

Dividend

Due to reduced profits and in order to conserve the financial resources for future growth plans of the Company, the Directors do not recommend any dividend for the current financial year.

IPO fund utilization

The details of IPO proceeds which have been utilized by the Company are as given under. The Company has utilized major portion of IPO proceeds for expansion as and when the correct opportunity and favorable market conditions were available. However, insignificant portion of the proceeds allocated for the expansion is left unutilized and the management of your Company has infused those funds in to financial instruments for the investment purpose. The management has taken this step considering the fact that as and when the Company will require funds for expansion the requisite funds will be transferred from investment to expansion and till the time the shareholders money will fetch good returns which will be further helpful in future expansion and new projects of the Company.

Amount received from IPO 12650.85

Sr. Particulars of proposed reallocated expenditure amount Amount No. in Lacs

1. For expansion and establishment of new retails stores either by way of lease or outright purchase and 1143.84 increase in production capacity of Diamond and Jewellery manufacturing facilities & other general capex required for expansion.

2. Funding to subsidiaries and such entities by way of equity, capital, loans and advances or in any other 1810.94 manner

3. Working Capital Requirement for business 8459.96

4. General Corporate Purposes 218.37

5. Issue Expenses 828.68

Total 12461.79

Unutilized Amount Represented by

Bank Balance/Time Deposit 189.06

Subsidiary Company and Consolidated Financials

The Board is exempted from attaching the balance sheet of subsidiary companies i.e. M. B. Diamonds, a Limited Liability Company, Russia, and Goenka Diamond & Jewels DMCC, Dubai, vide General Circular No.51/12/2007-CL-MI dated February 8, 2011. Any Shareholder interested in obtaining copy of the financial statements of subsidiary companies may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

Fixed Deposits

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public or its employees within the meaning of Section 58A of the Companies Act, 1956 and Rules made thereunder.

Related Party Transactions

A statement of related party transactions pursuant to Accounting Standards 18 forms a part of the Annual Report.

Directors

During the year, the Independent Directors of the Company namely Mr. Vijay Kalantri, Mr. D.R. Mehta and Dr. C.D. Arha resigned from the Company w.e.f. 26th November, 2013. Mr. Naresh Manchanda was appointed as an Independent Director of the company w.e.f. September 19, 2014 and has resigned w.e.f. November 15, 2014 The Board places on record its sincere appreciation of the invaluable and mature guidance and advice contributed by Mr. Vijay Kalantri, Mr. D.R. Mehta, Dr. C.D. Arha and Mr. Naresh Manchanda during their tenure.

Mr. Anant Upadhyay, Ms. Neetam Singh and Mr. Kevin Shah are appointed as Independent Directors in the Company.

Brief resume of the directors to be appointed is given in the annexure to the notice convening the 24th Annual General Meeting of the Company.

As per the Companies Act, 2013 and the Articles of Association of the Company, Mr. Anant Upadhyay was appointed as an Additional Director designated as an Independent Director w.e.f. August 21,2014 and he shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Mr. Anant Upadhyay for appointment as an Independent Director.

Ms. Neetam Singh was appointed as an Additional Director designated as an Independent Director w.e.f. September 19, 2014 and she shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Ms. Neetam Singh for appointment as an Independent Director.

Mr. Kevin Shah was appointed as an Additional Director designated as an Independent Director w.e.f. November 25, 2014 and he shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Mr. Kevin Shah for appointment as an Independent Director.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

Directors'' Responsibility Statement

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

a) In the preparation of the annual accounts for the financial year ended March 31,2014, the applicable Accounting Standards had been followed along with proper explanations relating to material departures;

b) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the Company for that period;

c) 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 assets of the company and for preventing and detecting fraud and other irregularities;

The Directors had prepared the accounts for the financial year ended March 31,2014 on a ''going concern'' basis.

Auditors

M/s. Haribhakti & Co., Chartered Accountants and M/s. B. Khosla & Co., Chartered Accountants, Joint Statutory Auditors of the Company resigned as Auditors of the Company w.e.f. July 08, 2014 and July 14, 2014 respectively.

M/s. B. Khosla & Co., Chartered Accountants, have been re-appointed as Joint Statutory Auditors of the Company w.e.f. September 19, 2014 The Company has received a letter from M/s. B. Khosla & Co., Chartered Accountants to the effect that they are not disqualified to be re-appointed as Statutory Auditors of the Company pursuant to Section 139 and 141 of the Companies Act, 2013.

M/s. RSVA & Co., Chartered Accountants, have been appointed as Joint Statutory Auditors of the Company w.e.f September 19, 2014. The Company has received a letter from M/s. RSVA & Co., Chartered Accountants to the effect that they are not disqualified to be appointed as Statutory Auditors of the Company pursuant to Section 139 and 141 of the Companies Act, 2013.

COST AUDITOR

The Company has appointed M/s. Jitendrakumar & Associates as the cost auditor for conducting the audit of cost records of the Company for the financial year 2013-14

AUDITORS'' REPORT

In respect of the observations made by Auditors in their report, your Directors wish to state that the replies in that respect have been given in the Directors Report in a separate Section.

PARTICULARS OF EMPLOYEES

There are no employees in the Company whose particulars are required to be given under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

1) Regarding auditors observation on Inventory valuation wherein the determination of estimated net realizable value and specification identification which involves technical judgment of the management has been relied upon by auditors:

The management is of the opinion that the inventories are properly valued.

2) Regarding auditors observation wherein they have referred to Note No. 36 of notes on Financial statements wherein the management has confirmed that no financial adjustment is required to be made in the financial statements on account of various allegations, counter allegation and legal cases amongst promoters and also on account of dispute amongst promoters and settlement agreement executed thereafter.

The above note is self explanatory and the management is of the view that no financial adjustment is required to be made in the financial statements since the promoters have already arrived at the settlement with the help of court mediation vide settlement agreement executed on March 18, 2014.

3) Regarding Auditors Observation on recoverability of long outstanding Trade Receivables,

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

4) Regarding observations by the auditors made in point no. ix (a) & (b) of the Annexure to Auditors Report:

The management states that the company is committed to pay all its outstanding undisputed statutory dues. Regarding the disputed outstanding taxes, the Company is confident that it will be able to get favorable orders.

5) Regarding observation made by the Auditors at Point No. (xi) of the Annexure to Auditors Report:

Certain factors such as promoters dispute, slow debtors realization, global economic slow down, adverse forex movement and significant weakening of rupee against the dollar had significant impact on the liquidity position of the Company, due to which there was delay in payment of a few bank debts obligations. Some of the overdue outstanding debts have already been repaid during the Financial Year 2014-15. The company is committed towards honoring all its debt obligations.

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

A. Conservation of Energy:

The Disclosure of particulars with respect to conservation of energy pursuant to 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 are not applicable to the Company. However, the Company makes its best effort and corrective steps to utilize the energy in the most optimal manner.

B. Technology Absorption, Adaptations & Innovation:

The Company has not carried out any specific research and development activities.

The Company uses indigenous technology for its operations. Accordingly, the information related to technology absorption, adaptation and innovation is reported to be NIL.

Acknowledgement

Your Directors place on record their gratitude to Central Government, State Governments, Financial Institutions and Company''s Bankers for assistance, co-operation and encouragement they extended to the Company. The Directors are also grateful to the valued customers, esteemed shareholders, dedicated employees and public at large for their patronage and confidence reposed in the company.

On behalf of the Board of Directors For Goenka Diamond and Jewels Limited

NANDLAL GOENKA NAVNEET GOENKA Place: Mumbai Chairman Vice Chairman & Managing Date: November 29, 2014 Director

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Mar 31, 2013

Dear Shareholders,

The Directors take pleasure in presenting before the members the Twenty Third Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March 2013.

Financial Highlights

(Rs.In lacs) 31.03.2013 31.03.2012

Sales and Other Income 74397.00 54120.46

Less: Expenses 72072.96 51638.23

Profit before tax and depreciation 2324.04 2482.23

Less: Depreciation 120.44 129.30

Net Profit/(Loss) before Tax 2203.60 2352.93

Less: Income tax provision 380.00 305.45

Less: Deferred Tax (10.01) (10.70)

Less: Earlier Years'' Income Tax 2.83 4.46

Less: MAT Credit Entitlement (290.00) (25.00)

Profit/(Loss) after tax 2120.78 2078.72

Balance brought forward from previous year 14086.37 12376.08

Profit available for appropriation 16207.15 14454.79

Appropriation

Issue of Bonus shares

General Reserve

Proposed Dividend on Equity shares 317.00 317.00

Tax on Proposed Dividend 53.87 51.43

Profit carried over to Balance Sheet 15836.27 14086.37

Earnings per share 0.67 0.66 (*)

* EPS is based on face value per share of Re. 1/- each.

Turnover & Profits

The Directors wish to inform you that during the current financial year ended March 31, 2013, the sales and other income of the Company was Rs. 74397.10 lacs and during the previous year it was Rs. 54120.46 lacs. The Net Profit before tax stood at Rs. 2203.59 lacs as against Rs. 2352.93 lacs in the previous year. The Net Profit after tax stood at Rs. 2120.78 lacs as against Rs. 2078.72 lacs in the previous year. As compared to previous year, the company has been able to achieve 43% more sales in the current year.

Dividend

The Board, for the year ended March 31, 2013 has recommended a dividend of 10%. The payment of dividend is subject to the approval of shareholders at the Annual General Meeting and will be paid on 31,70,00,000 Equity Shares @ Re.0.1 per share.

IPO fund utilization

The detail of IPO proceeds which has been utilized by the Company is as given under. The Company has utilized major portion of IPO proceeds for expansion as and when the correct opportunity and favorable market conditions were available. However, insignificant portion of the proceeds allocated for the expansion is left unutilized and the management of your Company has infused those funds in to various financial instruments for the investment purpose. The management has taken this step considering the fact that as and when the Company will require funds for expansion the requisite funds will be transferred from investment to expansion and till the time the shareholders money will fetch good returns which will be further helpful in future expansion and new projects of the Company.

I Amount received from IPO I 12650.85]

Sr. No. | Particulars of proposed reallocated expenditure amount Rs. in Lacs

1. For expansion and establishment of new retails stores either by way of lease or outright purchase 1143.84 and increase in production capacity of Diamond and Jewellery manufacturing facilities & other

general capex required for expansion.

2. Funding to subsidiaries and such entities by way of equity, capital, loans and advances or in 1733.70 any other manner

3. Working Capital Requirement for business 8459.96

4. General Corporate Purposes 218.37

5. Issue Expenses 828.68 Total 12384.55 Unutilized Amount Represented by

Bank Balance 219.83 Government Bonds (tradable) 46.47

Subsidiary Company and Consolidated Financials

The Board is exempted from attaching the balance sheet of subsidiary companies i.e. M. B. Diamonds, a Limited Liability Company, Russia, and Goenka Diamond & Jewels DMCC, Dubai, vide General Circular No.51/12/2007-CL-lll dated February 8, 2011. Any Shareholder interested in obtaining copy of the financial statements of subsidiary companies may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

Fixed Deposits

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public or its employees within the meaning of Section 58A of the Companies Act, 1956 and Rules made thereunder.

Related Party Transactions

Related party transactions have been disclosed in the notes on financial statements attached with this Annual Report.

Directors

During the year, there were no changes in the Board of directors of your company since last Annual General Meeting.

Mr. D. R. Mehta and Mr. CD. Arha Independent Directors of the Company are liable to retire by rotation. However, Mr. D.R.

Mehta and Mr. CD. Arha being eligible, offers themselves for re-appointment.

Brief resume of the directors to be re-appointed is given in the annexure to the notice convening the 23rd Annual General Meeting of the Company.

Directors'' Responsibilities Statement

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

a) In the preparation of the annual accounts for the financial year ended March 31, 2013, the applicable Accounting Standards had been followed along with proper explanations relating to material departures;

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

c) 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 assets of the company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the accounts for the financial year ended March 31, 2013 on a ''going concern'' basis.

Auditors

M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants, Joint Auditors of the Company hold office till the conclusion of the this Annual General Meeting and are eligible for re-appointment. The company has received a letter from M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants to the effect that their reappointment as Joint Auditors, if made, would be within the limits under Section 224(1-B) of the Companies Act, 1956.

Auditors'' Report

In respect of the observations made by Auditors in their report, your Directors wish to state that the respective notes on financial statements are self-explanatory and do not call for further comments.

Particulars of Employees

There are no employees in the Company whose particulars are required to be given under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

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

A. Conservation of Energy:

The Disclosure of particulars with respect of conservation of energy pursuant to 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 are not applicable to the Company. However, the Company makes its best effort for conservation of energy.

B. Technology Absorption, Adaptations & Innovation:

The Company has not carried out any specific research and development activities.

The Company uses indigenous technology for its operations. Accordingly, the information related to technology absorption, adaptation and innovation is reported to be NIL.

C. Foreign Exchange Earnings and Outgo:

The information regarding Foreign exchange earnings and outgo is contained in note no.28 & 29 of notes on financial statements.

Acknowledgement

Your Directors place on record their gratitude to the Central Government, State Governments Financial Institutions and Company''s Bankers for the assistance, co-operation and encouragement they extended to the Company. The Board of Directors is also grateful to the valued customers, esteemed shareholders, dedicated employees and public at large for their patronage and confidence reposed in the company.

On behalf of the Board of Directors

For Goenka Diamond and Jewels Limited

NAVNEET GOENKA NITIN GOENKA

Place: Mumbai Vice Chairman & Managing Director Managing Director

Date: August 10, 2013

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Mar 31, 2012

The Directors take pleasure in presenting before the members the Twenty Second Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended March 31, 2012.

Financial Highlights

(Rs. In lacs)

31.03.2012 31.03.2011

Sales and Other Income 54120.46 56499.76

Less: Expenses 51638.23 52027.91

Profit before tax and depreciation 2482.23 4471.85

Less: Depreciation 129.30 130.10

Net Profit/(Loss) before Tax 2352.93 4341.75

Less: Income tax and provision 305.45 82.26

Less: Deferred Tax (10.70) (35.16)

Less: Excess Provision of Income Tax W/back 4.46 (1.22)

Less: Reversal of Fringe Benefit Tax

Less: MAT Credit Entitlement (25.00) -

Profit/(Loss) after tax 2078.72 4295.87

Balance brought forward from previous year 12376.08 8448.64

Profit available for appropriation 14454.8 12744.50

Appropriation

Issue of Bonus shares - -

General Reserve - -

Proposed Dividend on Equity shares 317.00 317.00

Tax on Proposed Dividend 51.43 51.43

Profit carried over to Balance Sheet 14086.37 12376.08

Earning per share 6.56 13.63

Turnover & Profits

The Directors wish to inform you that during the current financial year ended March 31, 2012, the sales and other income of the Company was Rs. 54120.46 lacs and during the previous year it was Rs. 56,499.76 lacs. The Net Profit before tax stood at Rs. 2,352.93 lacs as against Rs. 4,341.75 lacs in the previous year. The Net Profit after tax stood at Rs. 2,078.72 lacs as against Rs. 4,295.87 lacs in the previous year. Though there is a small decrease in sales and other income as compared to previous year mainly due to global slowdown and increasing dollar prices, the Company's performance including sales and margins is still better than many other major players in diamond industry.

Dividend

The Board, for the year ended March 31, 2012 has recommended a dividend of 10%. The payment of dividend is subject to the approval of shareholders at the Annual General Meeting and will be paid on 3,17,00,000 Equity Shares @ Rs. 1 per share. IPO fund utilization

The detail of IPO proceeds which has been utilized by the Company is as given under. The Company has utilized a major portion of IPO proceeds for expansion as and when the correct opportunity and favorable market conditions were available. However, insignificant portion of the proceeds allocated for the expansion is left unutilized and the management of your Company has infused those funds in to various financial instruments for the investment purpose. The management has taken this step considering the fact that as and when the Company will require funds for expansion the requisite funds will be transferred from investment to expansion and till the time the shareholders money will fetch good returns which will be further helpful in future expansion and new projects of the Company.

Amount received from IPO 12650.85

Sr. Particulars of proposed reallocated expenditure amount Rs. in lacs No.

1. For expansion and establishment of new retails stores either by way of lease or outright purchase and 1115.23 increase in production capacity of Diamond and Jewellery manufacturing facilities & other general cape required for expansion.

2. Funding to subsidiaries and such entities by way of equity, capital, loans and advances or in any other 310.14 manner

3. Working Capital Requirement for business 8459.96

4. General Corporate Purposes 218.37

5. Issue Expenses 828.68

Total 10932.38

Unutilised Amount Represented by

Investment in Mutual Funds 1218.47

Fixed Deposits 500.00

Subsidiary Company and Consolidated Financials

The Board is exempted from attaching the balance sheet of subsidiary company i.e. M. B. Diamonds, a Limited Liability Company, Russia, vide General Circular No.51/12/2007-CL-lll dated February 8, 2011. Any Shareholder interested in obtaining copy of the financial statements of subsidiary company may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

Fixed Deposits

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public or its employees within the meaning of Section 58A of the Companies Act, 1956 and Rules made there under.

Related Party Transactions

Related party transactions have been disclosed in the notes on financial statements attached with this Annual Report.

Directors

During the year, there were changes in the Board of directors of your company.

The Board deeply regrets the passing away of Dr. A C Shah, Independent Director on January 16,2012. He had been associated with the Company since July 31, 2009. As a member of the Board and the Chairman of the Audit Committee he lent his vast knowledge and experience to the Company. His presence and guidance will be greatly missed. Mr. CD. Arha took his place in casual vacancy.

Mr. S.N. Sharma has voluntarily resigned from the Board of the Company on May 30, 2012. The Board places on record its gratitude for the services rendered by Mr. S.N. Sharma during his tenure as Independent Director of the Company.

Mr. D. R. Mehta was appointed as an Additional Director with effect from May 30, 2012 and holds office up to ensuing Annual General Meeting of the Company. The Company has received a Notice in writing from a member proposing the candidature of Mr. D. R. Mehta for the office of the Director of the Company under the provision of Section 257 of the Companies Act, 1956.

Mr. Vijay Kalantri and Mr. CD. Arha Independent Directors of the Company retire by rotation and being eligible, offer themselves for re-appointment.

Brief resume of the directors to be re-appointed is given in the annexure to the notice convening the 22ndAnnual General Meeting of the Company.

Directors' Responsibilities Statement

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

a) In the preparation of the annual accounts for the financial year ended March 31,2012, the applicable Accounting Standards had been followed along with proper explanations relating to material departures;

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

c) 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 assets of the company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the accounts for the financial year ended March 31, 2012 on a 'going concern' basis.

Auditors

M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants, Joint Auditors of the Company hold office till the conclusion of this Annual General Meeting and are eligible for re-appointment. The company has received a letter from M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants to the effect that their reappointment as Joint Auditors, if made, would be within the limits under Section 224(1-B) of the Companies Act, 1956.

Auditors' Report

In respect of the observations made by Auditors in their report, your Directors wish to state that the respective Notes on Financial Statements are self-explanatory and do not call for further comments.

Particulars of Employees

There are no employees in the Company whose particulars are required to be given under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

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

A. Conservation of Energy:

The Disclosure of particulars with respect of conservation of energy pursuant to 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 are not applicable to the Company. However, the Company makes its best effort for conservation of energy.

B. Technology Absorption, Adaptations & Innovation:

The Company has not carried out any specific research and development activities.

The Company uses indigenous technology for its operations. Accordingly, the information related to technology absorption, adaptation and innovation is reported to be NIL.

C. Foreign Exchange Earnings and Outgo:

The information regarding Foreign exchange earnings and outgo is contained in the note no. 27 and 28 of Notes on Financial Statements.

Acknowledgement

Your Directors place on record their gratitude to the Central Government, State Governments Financial Institutions and Company's Bankers for the assistance, co-operation and encouragement they extended to the Company. The Board of Directors is also grateful to the valued customers, esteemed shareholders and public at large for their patronage and confidence reposed in the company.

On behalf of the Board of Directors

For Goenka Diamond and Jewels Limited

NAVNEET GOENKA NITIN GOENKA

Vice Chairman & Managing Director Managing Director

Place: Mumbai

Date : May 29, 2012

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Mar 31, 2011

Dear Shareholders,

The Directors take pleasure in presenting before the members the 21st Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March 2011.

Financial Highlights

(Rs. In lacs)

31.03.2011 31.03.2010

Sales and Other Income 56442.30 53684.32

Less: Expenses 51970.45 49235.43

Profit before tax and depreciation 4471.85 4448.88

Less: Depreciation 130.10 105.41

Net Profit/(Loss) before Tax 4341.75 4343.47

Less: Income tax and provision 82.26 222.04

Less: Deferred Tax (35.16) 5.17

Less: Excess Provision of Income Tax W/back (1.22) -

Less: Reversal of Fringe Benefit Tax - (2.01)

Profit/(Loss) after tax 4295.87 4118.27

Balance brought forward from previous year 8448.64 5743.26

Profit available for appropriation 12744.50 9861.53

Appropriation

Issue of Bonus shares - 1042.02

Proposed Dividend on Equity shares 317.00 317.00

Tax on Proposed Dividend 51.43 53.87

Profit carried over to Balance Sheet 12376.08 8448.64

Earning per share ( Basic and diluted) 13.63 18.44

Turnover & Profits

The Directors wish to inform you that during the financial year ended 31st March 2011, the sales and operating income increased from Rs. 53684.32 lacs to Rs. 56442.30 lacs showing a increase of 5% over previous year. The Net Profit before tax stood at Rs. 4341.75 lacs as against Rs. 4343.47 lacs in the previous year. The Net Profit after tax stood at Rs. 4295.87 lacs as against Rs. 4118.27 lacs in the previous year thus showing an increase of 4.31% over the Previous years net Profit.

Dividend

The Board, for the year ended 31st March 2011 has recommended a dividend of 10%. The payment of dividend is subject to the approval of shareholders at the Annual General Meeting and will be paid on 3,17,00,000 Equity Shares @ Rs. 1 per share.

IPO fund utilization

The details of IPO proceeds which has been utilized by the Company is as given under. The Company has utilized a major portion of IPO proceeds for expansion as and when the correct opportunity and favorable market conditions were available. A minor portion of the proceeds allocated for the expansion still remains unutilized and the management of your Company has temporarily infused those funds in to various liquid financial instruments for investment purposes. The management has taken this step considering the fact that as and when the Company will require funds for expansion the requisite funds will be transferred from investment to expansion and till that time the shareholders money will fetch good returns which will be further helpful in future expansion and new projects of the Company.

Amount received from IPO 12650.85 Sr. No. Particulars of proposed reallocated expenditure amount Amount

Rs. in Lakhs)

1. For expansion and establishment of new retails stores either by way of lease or 251.65 outright purchase and increase in production capacity of Diamond and Jewellery manufacturing facilities & other general capex required for expansion.

2. Funding to subsidiaries and such entities by way of equity, capital, loans and 315.19 advances or in any other manner

3. Working Capital Requirement for business 8459.96

4. General Corporate Purposes 218.37

5. Issue Expenses 828.68

Total 10073.85

Unutilised Amount Represented by

Investment in Mutual Funds 2477.00

Fixed Deposits 100.00

Subsidiary Company and Consolidated Financials

The Board of Directors of your Company has passed a resolution in its meeting dated May 24, 2011 that in line with the circular issued by MCA in terms of Section 212(8) of the Companies Act, 1956, the Annual Accounts of M. B. Diamonds, a Limited Liability Company, Russia, which is its Subsidiary, as at 31st March 2011 will be attached with the Annual Report of your Company. However, the consolidated Balance Sheet and Profit and Loss Account are given in the Annual Report. The statement as required under Section 212 of the Companies Act, 1956 is also attached as a part of Annual Report.

Fixed Deposits

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public or its employees within the meaning of Section 58A of the Companies Act, 1956 and Rules made thereunder.

Related Party Transactions

Related party transactions have been disclosed in the notes to accounts attached with this Annual Report.

Directors

During the year, there were no changes in the Board of directors of your company.

Mr. S. N. Sharma and Dr. A. C. Shah, Directors of the Company retires by rotation at the ensuing Annual General Meeting and being eligible have agreed to offer themselves for re-appointment.

Brief resume of the directors to be re-appointed is given in the annexure to the notice convening the 21st Annual General Meeting of the Company.

Directors' Responsibilities Statement

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

a) In the preparation of the annual accounts for the financial year ended 31st March 2011, the applicable Accounting Standards had been followed along with proper explanations relating to material departures;

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

c) 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 assets of the company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the accounts for the financial year ended 31st March, 2011 on a 'going concern' basis.

Auditors

M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants, Joint Auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The company has received a letter from M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants to the effect that their reappointment as Joint Auditors, if made, would be within the limits under Section 224(1-B) of the Companies Act, 1956.

Auditors' Report

In respect of the observations made by Auditors in their report, your Directors wish to state that the respective notes to the Accounts are self-explanatory and do not call for further comments.

Particulars of Employees

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, is available at the registered office of your Company. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent to all shareholders of the Company and others entitled thereto excluding the aforesaid information. Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary/Compliance Officer at the Corporate Office or Registered Office address of the Company.

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

A. Conservation of Energy:

The Disclosure of particulars with respect of conservation of energy pursuant to 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 are not applicable to the Company. However, the Company makes its best effort for conservation of energy.

B. Technology Absorption, Adaptations & Innovation:

The Company has not carried out any specific research and development activities.

The Company uses indigenous technology for its operations. Accordingly, the information related to technology absorption, adaptation and innovation is reported to be NIL.

C. Foreign Exchange Earnings and Outgo:

The information regarding Foreign exchange earnings and outgo is contained in the point no. 9 of the Schedule XXI of the accounts.

Acknowledgement

The Board would like to place on record its gratitude for the faith reposed and the co-operation extended by Banks, Financial Institutions, Government Authorities, Customers, and Shareholders of the Company and looks forward to continued support and co-operation from them.

On behalf of the Board of Directors

For Goenka Diamond and Jewels Limited

NANDLAL GOENKA

Chairman Place: Mumbai

Date: 24th May, 2011

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Mar 31, 2010

The Directors take pleasure in presenting before the members the Twentieth Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March 2010.

Financial Highlights

(Rs. In lacs)

31.03.2010 31.03.2009

Sales and Other Income 53719.60 45121.98

Less: Expenses 49270.71 42200.32

Profit before tax and depreciation 4448.88 2921.66

Less: Depreciation 105.41 56.37

Net Profit/(Loss) before Tax 4343.47 2865.30

Less: Income tax and provision 222.03 125.00

Less: Deferred Tax 5.17 (3.25)

Less: Excess Provision of Income Tax W/back - (1.11)

Less: Reversal of Fringe Benefit Tax (2.01) 6.85

Profit/(Loss) after tax 4118.27 2737.81

Balance brought forward from previous year 5743.26 3087.42

Profit available for appropriation 9861.53 5825.23

Appropriation

Issue of Bonus shares 1042.02 -

General Reserve - 68.04

Proposed Dividend on Equity shares 317.00 11.91

Tax on Proposed Dividend 53.87 2.02

Profit carried over to Balance Sheet 8448.64 5743.26

Earning per share 18.44 12.26

Turnover & Profits

The Directors wish to inform you that during the financial year ended 31st March 2010, the sales and operating income increased from Rs. 45,121.98 lacs to Rs. 53,719.60 lacs showing a substantial increase of 16% over previous year. The Net Profit before tax stood at Rs.4,343.47 lacs as against Rs. 2,865.30 lacs in the previous year. The Net Profit after tax stood at Rs. 4,118.27 lacs as against Rs. 2,737.81 lacs in the previous year which shows an increase of 50.58% in the net profit which is on the higher side then increase in the turn over.

Dividend

The Board, for the year ended 31st March 2010 has recommended a dividend of 10%. The payment of dividend is subject to the approval of shareholders at the Annual General Meeting and will be paid on 3,17,00,000 Equity Shares @ Re.1/- per share.

Increase in Authorised Share Capital

The Authorised share capital of the company increased from Rs. 12,00,00,000 divided into 1,20,00,000 equity shares of Rs. 10/- each to Rs. 33,00,00,000 divided into 3,30,00,000 Equity Shares of Rs. 10 each by Shareholders Resolution dated July 31, 2009.

Increase in Paid up Capital

Companys Paid-Up Share Capital as on the date of last AGM i.e. on July 30, 2009 was 1,19,08,800 Equity Shares of Rs. 10/- each amounting to Rs. 11,90,88,000/-.

During the period since last AGM till this AGM the paid-up share capital of the Company has been increased as follows:

a) On September 6, 2009, the Company allotted 1,04,20,200 Equity Shares of Rs.10/- each through Bonus issue during the year and thereby increased the paid up capital to Rs. 22,32,90,000/- b) On April 8, 2010, the Company allotted 9,371,000 Equity Shares of Rs.10/- each under the IPO and thereby increased the paid up capital to Rs.317,000,000/-

Initial Public Offer of Equity Shares (IPO)

The Company made an IPO of 9,371,000 Equity Shares of Rs.10/- each at an issue price of Rs.135/- per share through book building process. The issue opened for subscription on March 23, 2010 and closed on March 26, 2010. The shares were allotted to the successful applicants on the basis of allotment as approved by the Stock Exchange. The shares of the Company got listed with the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited on April 16, 2010.

IPO fund utilization

Gross proceeds from the IPO was aggregating to Rs. 12651 lacs. After adjusting issue related expenses IPO proceeds has been planned to be utilized as follows:

S. No.Particulars of expenditure Amount (Rs. in lakhs) 1. Establishment of G WILD Stores 516.72

2. Establishment of CERES Stores 213.02

3. Working capital requirement for jewellery business 8,459.96

4. Establishment of jewellery manufacturing facility 384.36

5. Establishment of diamond processing facility 329.23

6. Investment in our Subsidiary Company 2,500.00

7. General corporate purposes 218.37

8. Issue expenses 878.34 Total 13,500.00

Subsidiary Company and Consolidated Financials

In terms of Section 212 of the Companies Act, 1956, the Annual Accounts of M. B. Diamonds, a Limited Liability Company, Russia, which is its Subsidiary, as at 31st March 2010 are furnished as attachment to the Annual Report of your Company. Information on operations of these Companies has been incorporated in the respective Companys Charter. The statement as required under Section 212 of the Companies Act, 1956 is also attached as a part of the Annual Report.

Fixed Deposits

During the year under review, your Company has neither invited nor accepted any fixed deposits from the public or its employees within the meaning of Section 58A of the Companies Act, 1956 and Rules made thereunder.

Related Party Transactions

Related party transactions have been disclosed in the notes to the accounts.

Directors

During the year, there were no changes in the Board of Directors of your company.

Dr. A. C. Shah and Mr. Vijay Kalantri, Directors of the Company retires by rotation at the ensuing Annual General Meeting and being eligible have agreed to offer themselves for re-appointment.

Brief resume of the Directors to be re-appointed is given in the annexure to the notice convening the 20th Annual General Meeting of the Company.

Directors Responsibilities Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibilities Statement, your Directors hereby confirmed that:

a) In the preparation of the annual accounts for the financial year ended 31st March 2010, the applicable Accounting Standards had been followed along with proper explanations relating to material departures;

b) The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

c) 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 assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the accounts for the financial year ended 31st March, 2010 on a ‘going concern basis.

Auditors

M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants, Joint Auditors of the Company hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. Haribhakti & Co., and M/s. B. Khosla & Co., Chartered Accountants to the effect that their reappointment as Joint Auditors, if made, would be within the limits under Section 224(1-B) of the Companies Act, 1956.

Auditors Report

In respect of the observations made by Auditors in their report, your Directors wish to state that the respective notes to the Accounts are self-explanatory and do not call for further comments.

Particulars of Employees

There are no employees in the Company whose particulars are required to be given under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

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

A. Conservation of Energy

The Disclosure of particulars with respect of conservation of energy pursuant to 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 are not applicable to the Company. However, the Company makes its best effort for conservation of energy.

B. Technology Absorption, Adaptations & Innovation

The Company has not carried out any specific research and development activities.

The Company uses indigenous technology for its operations. Accordingly, the information related to technology absorption, adaptation and innovation is reported to be NIL.

C. Foreign Exchange Earnings and Outgo

The Information regarding Foreign exchange earnings and outgo is contained in the point nos. 9 and 10 of the Schedule XXI of the accounts.

Acknowledgement

The Board would like to place on record its gratitude for the faith reposed and the co-operation extended by Banks, Financial Institutions, Government Authorities, Customers, and Shareholders of the Company and looks forward to continued support and co-operation from them.

On behalf of the Board of Directors For Goenka Diamond and Jewels Limited

NANDLAL GOENKA

Chairman

Place: Mumbai Date: 26th May 2010