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Goenka Diamond & Jewels Ltd.

BSE: 533189 Sector: Consumer
NSE: GOENKA ISIN Code: INE516K01024
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OPEN 0.27
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VOLUME 91250
52-Week high 0.85
52-Week low 0.24
P/E 8.67
Mkt Cap.(Rs cr) 8
Buy Price 0.50
Buy Qty 1904.00
Sell Price 0.52
Sell Qty 5500.00
OPEN 0.27
CLOSE 0.26
VOLUME 91250
52-Week high 0.85
52-Week low 0.24
P/E 8.67
Mkt Cap.(Rs cr) 8
Buy Price 0.50
Buy Qty 1904.00
Sell Price 0.52
Sell Qty 5500.00

Goenka Diamond & Jewels Ltd. (GOENKA) - Director Report

Company director report

Dear Shareholders

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

Financial Highlights

(Rs. In lacs)

31.03.2015 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 March312015 the sales and other income of the Company were Rs. 11467.13 lacs and during theprevious year it was Rs. 38331.97 lacs. The Net Profit before tax stood at Rs. 108.28lacs 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 performancewas partially due to promoters’ dispute and partially due to volatile economicalenvironment. However the management expects that the performance will improve form thecurrent financial year onwards.

Dividend

Due to reduced profits and in order to conserve the financial resources for futuregrowth 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 thecorrect opportunity and favorable market conditions were available. However insignificantportion of the proceeds allocated for the expansion is left unutilized and the managementof your Company has infused those funds in to financial instruments for the investmentpurpose. The management has taken this step considering the fact that as and when theCompany will require funds for expansion the requisite funds will be transferred frominvestment to expansion and till the time the shareholders money will fetch good returnswhich 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 in Lacs (as on 31.3.2015)
1. For expansion and establishment of new retails stores either by way of lease or outright purchase and increase in production capacity of Diamond and Jewellery manufacturing facilities & other general capex required for expansion. 1143.84
2. Funding to subsidiaries and such entities by way of equity capital loans and advances or in any other manner 1845.02
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 Agreementwith Stock Exchanges and Section 149(6) of the Companies Act 2013. Based on theconfirmation/disclosures received from the Directors under section 149(7) of the CompaniesAct 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 IndependentDirectors who are not liable to retire by rotation.

APPOINTMENT

Mr. Anant Upadhyay was appointed as an Additional Director of the Company on August 212014 and appointed as an Independent Director in the Annual General Meeting held onDecember 30 2014.

Ms. Neetam Singh was appointed as an Additional Director of the Company on September19 2014 and appointed as an Independent Director in the Annual General Meeting held onDecember 30 2014.

Mr. Kevin Shah was appointed as an Additional Director of the Company on November 252014 and appointed as an Independent Director in the Annual General Meeting held onDecember 30 2014.

The above referred appointments as Independent Directors made in the Annual GeneralMeeting held on December 30 2014 was for a specific tenure in accordance with Section 149of 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 theCompany w.e.f. October 27 2014.

CESSATION

Mr. Naresh Manchanda Independent Director was appointed on September 19 2014 and hadresigned from the Company w.e.f. November 15 2014. The Board placed on record its deepappreciation for the valuable guidance and advice given by Mr. Naresh Manchanda duringhis tenure as an Independent Director of the Company.

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

Mr. Navneet Goenka is Chief Financial Officer of the Company. As per provisions of theCompanies 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. NitinGoenka Managing Director and Mr. Kundan Tanawade Company Secretary & ComplianceOfficer 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 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed along with proper explanation relating to material departures;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2015 and of the profit ofthe Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof 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 detailsincluding performance and financial position of each of the subsidiary company is annexedto this report.

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

Board Evaluation

Pursuant to the provisions of companies Act 2013 and clause 49 of the ListingAgreement the Board has carried out annual performance evaluation of its own performancethe 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 CorporateGovernance Report.

Remuneration Policy

The Nomination & Remuneration Committee framed a policy for selection andappointment of Directors including determining qualifications and independence of aDirector Key Managerial Personnel Senior Management Personnel and their remuneration aspart of its charter and other matters provided under Section 178(3) of the Companies Act2013.

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

Deposits and Unclaimed Dividend

During the year under review your company has not accepted any public deposit underChapter V of the Companies Act 2013. There were no funds required to be transferred toInvestor 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 212014 September 19 2014 October 31 2014 November 14 2014 November 25 2014 November29 2014 and February 13 2015. The maximum interval between any two meetings did notexceed 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. AnantUpadhyay 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. AnantUpadhyay 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 committeesof the Board are provided in the Corporate Governance report.

Statutory Auditors

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

Auditors’ Report

In respect of the observations made by Auditors in their report your Directors wish tostate that the replies in that respect have been given in the Directors Report in aseparate section.

Secretarial Auditor

The Board has appointed Mr. Vishal N. Manseta Practising Company Secretary to conductSecretarial Audit for the financial year 2014-15. The Secretarial Audit Report for thefinancial year ended March 312015 is annexed to this Report.

Secretarial Audit Report

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

Contracts and Arrangements with Related Parties

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm’slength basis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered material.

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

Extract of Annual Return

The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Actread with Companies (Management & Administration) Rules 2014 is annexed to thisreport as on March 312015.

Sexual Harassment

Your Directors further state that during the year under review there were no casesfiled 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 positionof the Company which occurred between the end of the financial year to which the financialstatements relate and the date of this report.

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

There are no significant material orders passed by the Regulators/ Courts/ Tribunalswhich 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 arenot applicable to the company.

Risk Management Policy

The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company’s managementsystems organisational structures processes standards code of conduct and behaviorsgovern how the company conducts the business and manages associated risks. The Company hasintroduced several improvements to Integrated Enterprise Risk Management InternalControls Management and Assurance Frameworks and processes to drive a common integratedview of risks optimal risk mitigation responses and efficient management of internalcontrol and assurance activities.

Internal Financial Controls

The Company has in place adequate internal financial controls and internal auditprocedures with regard to financial statements to commensurate with the size of thebusiness. During the year no reportable material weakness or cases of fraud wereobserved.

Share Capital

The paid up equity share capital of the Company as on March 312015 was Rs.317000000/- During the year under review the Company has not issued shares withdifferential voting rights and sweat equity shares.

Vigil Mechanism

The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes intimation to the senior executives of theCompany in case any threat or misconduct or unethical behavior or violation ofcompany’s code of conduct or ethics policy is observed. Protected disclosures can bemade by a whistle blower through an e-mail or dedicated telephone line or a letter to thesenior 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 sectionon corporate governance practices followed by your Company together with a certificatefrom Mr. Vishal N. Manseta Practising Company Secretary on compliance with Clause 49 ofthe 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 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areattached and form part of this report.

Green Initiatives

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

STATUTORY AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

1) Regarding Auditors Observation on recoverability of long outstanding TradeReceivables

There have been defaults in payment obligations by the trade receivables on due dateand recoveries from them are not significant due to economic slowdown especially indiamond sector and also on account of dispute amongst promoters. However a settlementagreement was executed between the promoters with help of court mediation on 18th March2014 post which the management has started taking all the initiatives to reviveCompany’s operations. Nonetheless the Trade receivables amounting toRs.3616647379/- have confirmed the balances by way of confirmations directly sent toauditors and/or Company. Looking at the past record regarding recovery from Tradereceivables the management is of the opinion that trade receivables outstanding for morethan 6 months from the date they are due for payments are good and recoverable andtherefore no provision is required to be made against these Trade Receivables

2) Regarding auditors observation on Inventory valuation wherein the determination ofestimated net realizable value and specification identification which involves technicaljudgment 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) ofnotes on Financial statements wherein the management has confirmed that no financialadjustment is required to be made in the financial statements for the terms &conditions of the settlement agreement executed and on account of various disputesallegations and legal actions.

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

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

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

5) Regarding auditors’ observation wherein they have referred to Note No. 37(C) ofnotes on Financial statements wherein the management has confirmed that it has providedinterest wherever banks have not applied or have reversed the interest on loan. Anydifference on account of interest and penal interest shall be accounted for as and whenthe interest is charged or settled by the banks. In case of one bank interest to the tuneof Rs. 14961987 has been charged in excess against which company has maderepresentation to the bank. The management is very much confident that the same will bedecided in the favour of the Company and therefore no provision for the same has been madein the financial statements for the year ended March 312015.

The above note is self explanatory; and the management is of the view that it has inits best judgment accounted for all probable interest liability; and difference if anywill 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 toAuditors Report:

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

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

Certain factors such as promoters dispute slow debtors realization inadequateinventory levels global economic slow down highly volatile foreign exchange rates andsignificant weakening of rupee against the dollar had material impact on the liquidityposition of the Company due to which there was default in payment of a few bank debtsobligations. Some of the overdue outstanding debts had already been repaid during FY2014-15 and in case of continuing defaults; some of the debts have been repaid during theFY 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 thecompany is committed to pay all its outstanding statutory dues.

2) Regarding auditors observation that the composition of the Board of the company wasnot in compliance with the provisions of listing agreement and the Companies Act 2013till September 19 2014.

The Board states that the non-compliance was for a particular period of time owing tocertain external factors. Since September 19 2014 the Board and its Committees are dulyconstituted.

3) Regarding auditors’ observation made on non-compliance of clause 41 of theListing 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 stockexchanges financial results for the quarters ended March 31 2014 and June 30 2014 intime. The non-compliances were regularized subsequently on appointment of statutoryauditors and constitution of audit committee in the month of September 2014. As on datethe company is complaint with the respective provisions of the Listing Agreement.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and OutgoConservation of Energy:

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

Technology Absorption Adoption and Innovation

Since the company’s products are designed and not mechanically developedtechnology 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 largesize diamonds and high end jewellery wherein research and development expense are more inthe 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 thefollowing 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 receivedany remuneration or commission from any of its subsidiaries.

3. There were no companies which have become or ceased to be Subsidiaries JointVentures 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 ofthe Act.

Acknowledgement

Your Directors place on record their gratitude to Central Government StateGovernments Financial Institutions and Company’s Bankers for assistanceco-operation and encouragement they extended to the Company. The Directors are alsograteful to the valued customers esteemed shareholders dedicated employees and public atlarge 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

Particulars of Employees pursuant to section 197 of the Companies Act 2013 read withRules 5 (1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules2014

Requirement of Rule 5(1) Details
(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year. Directors
1. Mr. Nandlal Goenka : 2.96
2. Mr. Navneet Goenka : 2.37
3. Mr. Nitin Goenka : 2.37
4. Mr. Anant Upadhyay : #
5. Mr. Kevin Shah : $
6. Ms. Neetam Singh : @
# Details not given as Mr. Anant Upadhyay was a director only for a part of the F.Y. 2014-15 i.e. w.e.f. August 212014
$ Details not given as Mr. Kevin Shah was a director only for a part of the F.Y. 2014-15 i.e. w.e.f. November 25 2014
@ Details not given as Ms. Neetam Singh was a director only for a part of the F.Y. 2014-15 i.e. w.e.f. September 19 2014
(ii) the percentage increase/(decrease) in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; Directors
1. Mr. Nandlal Goenka : N.A.
2. Mr. Navneet Goenka : N.A.
3. Mr. Nitin Goenka : (90%)
4. Mr. Anant Upadhyay : N.A.
5. Mr. Kevin Shah : N.A.
6. Ms. Neetam Singh : N.A.
Company Secretary
7. Mr. Kundan Tanawade CS : N.A.
(iii) the percentage increase in the median remuneration of employees in the financial year; 0.34%
(iv) the number of permanent employees on the rolls of company; 65 Employees as on 31.03.2015
(v) the explanation on the relationship between average increase in remuneration and company performance; Average increase in remuneration of all employee was 0.34% for the year 2014-15 whereas the Profit before Tax increased by 82.97%. The increase in remuneration is nominal which is based partly on the result of the company for the year ended 2014 and partly on the individuals employee’s performance.
(vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the company; There is decrease in remuneration of key managerial personnel by 68.87% whereas the Profit before Tax increased by 82.97%.
(vii) variations in the market capitalisation of the company and previous financial year; Market capitalization (Rs./Crore):
As on As on % 31.03.2014 31.03.2015 Increase/ decrease 73.86 45.65 (38.19%)
(Viii) Price earnings ratio as at the closing date of the current financial year and previous financial year As on As on 31.03.2014 31.03.2015
116.50 48.00
(ix) Percentage increase over/decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer 89.33% decline in the market quotation of the company’s share in comparison to the last public offer.
(x) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration Average increase of Non Managerial Remuneration : 2.26%
Average decrease in Managerial Remuneration : (52.38%)
(xi) the key parameters for any variable component of remuneration availed by the directors; Not applicable since there is no variable component forming part of remuneration availed by directors.
(xii) the ratio of remuneration of the highest paid director to average remuneration of the employees who are not directors but receive remuneration in excess of the highest paid director The ratio is 0.80.
(xiii) affirmation that the remuneration is as per the remuneration policy of the company. It is hereby affirmed that the remuneration paid during the year ended March 312015 is as per the Remuneration Policy of the Company.

Particulars of Employees pursuant to section 197 of the Companies Act 2013 read withRules 5 (2) and (3)of the Companies (Appointment and Remuneration of Managerial personnel)Rules 2014 : Not Applicable.

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED March 312015

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]

To

The Members

Goenka Diamond and Jewels Limited

I have conducted the secretarial audit of the compliances of the applicable statutoryprovisions and the adherence to good corporate practices by Goenka Diamond and JewelsLimited (hereinafter called the company). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.

Based on my verification of the books papers minute books forms and returns filedand other records maintained by the company and also the information provided by thecompany its officers agents and authorized representatives during the conduct ofsecretarial audit I hereby report that in my opinion the company has during the auditperiod covering the financial year ended on March 312015 complied with the statutoryprovisions listed hereunder and if not complied remarks or disclosure in that regard hasbeen provided by me and also that the company has proper Board-processes andcompliance-mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords maintained by "the Company" for the financial year ended on March312015 according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder;

As per information and explanation given to me and documents provided for inspectionthe company has maintained minutes book statutory registers as required by the Act. TheCompany has filed various E-Forms during the year.

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

As per information provided the Company has complied with the stated rules.

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

As the shares of the Company are listed on BSE and NSE as per compliance requirementmajority of the shares of the company are in demat form and the company complies with theDepositories Act. The RTA of the Company is M/s. Karvy Computershare Private Limited.

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

The Company is involved in export of diamond and diamond studded Jewellery outsideIndia and as per information and explanations given the company is compliant with theFEMA provisions subject to procedural delays at some occasions.

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011: Requisite disclosures were given to exchanges wheneverrequired.

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

The said regulations are complied with as the insider trading intimation is given tothe persons identified to be possessing price sensitive information before every Board orMembers meeting and in case of any Corporate Action or announcements made to StockExchanges as the case may be.

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 : Not Applicable

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 : Not Applicable

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 : Not Applicable

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

M/s. Karvy Computershare Private Limited is Registrar and Transfer Agent (RTA) of theCompany and is compliant with the said regulations.

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 : Not Applicable and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 : Not Applicable

(vi) The list of other acts applicable is as under:

• Provident Fund and other Employee Benefit related Statutes

The Company has EPF Account and also ESIC wherein remittance was made for the Month ofApril 2014 and May 2014 post which no remittance has been made. In certain cases EPF ispending for the entire Financial Year.

• TDS and Service Tax related statutes

The Company is not regular in depositing TDS and Service Tax to the respectivedepartments and payments in respect of these dues are still not made.

• The Maharashtra Shops and Establishment Act 1948.

• Prevention of Money Laundering Act.

• The Information Technology Act 2000.

• The Indian Stamp Act 1899/Bombay Stamp Act.

• Negotiable Instruments Act 1881.

• Registration of any property purchase/sale/long lease.

• Wealth Tax Act 1957

• Factories Act 1948

• Indian Contract Act 1872

• Maharashtra Profession Tax and other state level legislations.

a) Professional tax has been remitted for the month of April and May 2014 post whichno remittance has been made.

b) The company is not regular in depositing MVAT and payment in respect of this isstill not made.

As per the information and explanation given the company has obtained various licensesas required for the purpose of factories and offices as stipulated under various acts.

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

The Secretarial Standards were not applicable for the period under review as the samewere not notified.

I further report that

The Annual General Meeting of the company for the year ended March 312014 was held onDecember 30 2014 in respect of which ROC approval was obtained by the company.

The composition of the Board of the company was not in compliance with the provisionsof listing agreement and the Companies Act 2013 till September 19 2014. There was noindependent director on the Board of the company since April 1 2014 till August 212014.

Mr. Anant Upadhyay was appointed as an Additional Director (Independent Director) onAugust 212014. Ms. Neetam Singh was appointed as an Additional Director (IndependentDirector) on September 19 2014 and Mr. Kevin Shah was appointed as an Additional Director(Independent Director) on November 25 2014. The appointment of these directors was thenregularised in the Annual General Meeting of the company held on December 30 2014.

Mr. Naresh Manchanda was appointed as an additional Director (Independent Director) onSeptember 19 2014. Subsequently he resigned on November 15 2014.

Due to non-compliance of clause 41 of the Listing Agreement the stock exchanges hadlevied penalty. The company paid a part of the penalty and the part is still unpaid. Asper information and explanation given by the company officials the company is processingfor the waiver of remaining portion of the penalty.

As per information given adequate notices were given to all directors for the Boardand Committee Meetings held from time to time.

There were dissenting views by the Managing Director Mr. Nitin Goenka at certainoccasions which were recorded in the Minutes.

I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

I further report that there is persisting promoters dispute in the Company which ispending with the regulatory authorities. However the management is of the opinion thatthe dispute will be settled in the due course as settlement agreement has already beenexecuted with the help of court mediation in March 2014.

Place : Mumbai Vishal N. Manseta
Date : August 14 2015 Practising Company Secretary
ACS/FCS No. A25183
C P No.: 8981

CORPORATE GOVERNANCE

A Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreementis annexed to this Report.

The company has been practicing the principles of good corporate governance over theyears. The Company does not view Corporate Governance principles as a set of bindingobligations but believes in using it as a framework to be followed in spirit. The companyis committed to maintaining a high standard of corporate governance in order to maintainthe trust of the company shareholders customers business partners suppliers employeesand the society at large. In order to sustain this trust the company has placed corporategovernance on a high priority.

FORM NO. MGT 9

EXTRACT OF ANNUAL RETURN

As on financial year ended on March 31 2015

Pursuant to Section 92 (3) of the Companies Act 2013 and rule 12(1) of the Company(Management & Administration) Rules 2014.

I. REGISTRATION & OTHER DETAILS:

1 CIN L36911RJ1990PLC005651
2 Registration Date November 05 1990
3 Name of the Company Goenka Diamond And Jewels Limited
4 Category/Sub-category of the Company Company Limited by Shares/Indian Non-Government Company
5 Address of the Registered office & contact details 401 Panchratana M.S.B. Ka Rasta Johari Bazar Jaipur - 302003
6 Whether listed company Yes
7 Name Address & contact details of the Registrar & Transfer Agent if any. Karvy Computershare Pvt. Ltd.
Karvy Selenium Tower B
Plot No. 31 & 32 Gachibowli
Financial District
Hyderabad- 500 032
Tel.: 040 67161700
Fax: 040 67161680
Website: www.karvy.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

(All the business activities contributing 10 % or more of the total turnover of thecompany shall be stated).

S. No. Name and Description of main products/services NIC Code of the Product/service % to total turnover of the company
1 Cutting and polishing of diamonds and manufacturing and retailing of diamond/ jewellery 321 100%

III. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES -

All the business activities contributing 10 % or more of the total turnover of thecompany shall be stated./

Sl. No. Name and Description of main products/services NIC Code of the Product/ service % to total turnover of the company Applicable sections
A Holding Company NA NA NA
B Subsidiary Companies - Indian NA NA NA
C Subsidiary Companies - Abroad
1 M.B. Diamond LLC - Russia 321 100% Section 2(87)
2 Goenka Diamond & Jewels DMCC - Dubai 321 100% Section 2(87)