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Goenka Diamond & Jewels Ltd.

BSE: 533189 Sector: Consumer
NSE: GOENKA ISIN Code: INE516K01024
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VOLUME 48605
52-Week high 0.76
52-Week low 0.24
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company auditors report

To the Members of Goenka Diamond and Jewels Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Goenka Diamond andJewels Limited ("the Company") which comprise the Balance Sheet as at March 312017 the Statement Profitand Loss the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementationandmaintenanceofadequateinternalfinancial controls and ensuring their operatingeffectiveness and the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. In making those riskassessments the relevant to the Company's preparation of the standalone auditor considersinternal financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the standalone financial statements.

Because of the matter described in the Basis for Disclaimer of Opinion paragraphhowever we were not able to obtain sufficient appropriate audit evidence to provide abasis for an audit opinion.

Basis of Qualified Conclusion

a. Refer Note No. 7(b)16 (b) and 18 (a) regarding following monetary itemsdenominated in foreign currency has not been reported using the closing rate as at yearend and has been carried forward at the rate as at 31st March 2015 and / or 31stMarch 2016 which is not in accordance with Accounting Standard 11 "Effects ofchanges in foreign exchange rates"

i) Trade Receivables outstanding amounting to Rs. 6980698626/-.

ii) Advance given to a subsidiary amounting to Rs. 5978485/- .

iii) Trade Payables outstanding amounting to Rs. 2971278902/-.

Accordingly the Trade Receivables and Advances are understated by Rs. 73359120/-and Rs.144155/- respectively and Trade Payables are overstated by Rs.32829113/-resulting in understatement of exchange loss for the year by Rs. 167631547/- andunderstatement of cumulative gain due to exchange differences by Rs.106332388/-.

b. Refer Note No. 37 (c) regarding non-provision of interest on borrowings amounting to308200689/- as the banks have classified the Company's account as Non-performingAsset and the management has submitted one-time settlement proposal which is stillpending with banks. Accordingly finance cost and current liabilities is under stated by Rs.308200689/-.

Had these exchange differences been provided for the year and the Interest beenaccounted for the loss after tax for the year would have been increased by Rs.475832236/-and Reserves and Surplus is cumulatively overstated by Rs.201868301/- as at theyear end.

Basis for Disclaimer of Opinion

a. Refer Note No. 16(a) & (b) regarding Trade Receivables amounting to Rs.6988190359/-includes Rs.6985543180/- outstanding of more than six months from due date.There have been defaults on payment obligations by the debtors on due date and recoveriesfrom these debtors are not significant. Further no confirmations have been received /obtained from the Trade Receivables. In view of the above we are unable to comment on thetime-frame of the realisability of these debts and any provision to be made forun-realisability in the carrying amount of these balances and the consequent impact on thefinancial statements.

b. The Company's operating results have been materially affected due to variousfactors including non-realization of debtors erstwhile dispute amongst promotersnon-availability of finance due to recall of loans by initiated by Banks overallsubstantial decrease in volume of business and sales non-payment of statutory dues andtaxes non-payment to creditors defaults in repayment of loans and interest nonrealization of interest on loans from subsidiaries. These events cause significant doubtson the ability of the company to continue as a going concern. The appropriateness of thegoing concern assumption is dependent on the company's ability to raise adequate financefrom alternative means and / or recoveries from overseas debtors to meet its short termand long term obligations as well as to establish consistent business operations.

In absence of any convincing audit evidence non recovery of trade receivable on duedate non-payment of liabilities including trade payables and statutory dues financialdifficulty faced by the company due to recalling of the bank finance facilities and inview of multiple uncertainties as stated above we are unable to determine the possibleeffect on the financial statements. We are also unable to conclude on ability of thecompany to carry on as a going concern.

Disclaimer of Opinion

Because of the significance of the matters described in the basis of disclaimer ofopinion paragraph specifically relating to multiple uncertainties created due to factorssuch as non recovery of trade receivables on due dates non-payment of liabilitiesincluding trade payable and statutory dues financial difficulties faced by company due torecalling of bank finance and initiation of legal actions by bank it is not possible toform an opinion on the financialstatements due to the potential interaction of theseuncertainties and their possible cumulative effect on the financial statements.Accordingly we do not express an opinion on the financial statements.

Emphasis of Matter

We draw attention to

i. ?Significant accounting policy No. 1(F) regarding valuation of inventoryis value and specific identification involving technical judgment of management and whichhas been relied upon by us.

ii. Refer Note 8 (A) regarding two banks having outstanding dues of Rs.216171267/- have neither issued bank statements nor confirmed balance outstanding as atyear-end. However the management has confirmed that all transactions have been recordedin the books of accounts. Further balances of Trade Receivables Trade Payables andCurrent Assets and Liabilities are subject to confirmations and consequential adjustmentthereof.

iii. As mentioned in Note no. 37(d) the company has made investment of Rs.203190/- and has given advance of Rs.5978485/- to its subsidiary namely M.B.Diamonds LLC whose net-worth is negative and has invested in Optionally ConvertibleDebentures (OCD) of Rs. 49000000/- in an entity whose net worth has beenconsiderably eroded. No provision against these investments and advance has been made asthe management is of the view that the investment in subsidiary is long term in nature andthe entity wherein the company has made investment in the OCD has substantial businessvalue

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

As required by Section 143(3) of the Act we report that:

a. As described in Basis of Disclaimer of Opinion paragraph we are unable to obtainall the information and explanations which to the best of our knowledge and belief werenecessary for the purposes of our audit;

b. Due to possible effects of the matters as described in the Basis of Disclaimer ofOpinion paragraph and effects of the matters as mentioned in Basis of Qualified Conclusionparagraph we are unable to state whether proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d. Due to effects/ possible effects of the matters described in Basis for QualifiedConclusion/ Disclaimer of Opinion paragraph we are unable to state whether the aforesaidstandalone financial statements comply with the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014;

e. The matters described in Basis of qualified Conclusion paragraph Basis ofDisclaimer of opinion paragraph and Emphasis of Matter paragraph and other observationsmade in statement on the matters specified in paragraph 3 and 4 of the Order above mayhave an adverse effect on the functioning of the Company.

f. On the basis of written representations received from the directors as on March31 2016 and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2017 from being appointed as a director in terms of Section164 (2) of the Act.

g. The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis of qualified Conclusion paragraph Basis ofDisclaimer of opinion paragraph and Emphasis of Matter paragraph above;

h. With respect to the adequacy of Internal Financial Control over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in Annexure B;

i. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements Refer Note 35 to the standalone financialstatements;

ii. The Company did not have any long-term contracts including derivative contractshence the question of any material foreseeable losses does not arise;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its financial statements as toholdings as well as dealing in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and the same are in accordance with the books of accountsmaintained by the company.

For RSVA & Co For B. Khosla & Co.
Chartered Accountants Chartered Accountants
ICAI Firm Reg. No. 110504W ICAI Firm Reg. No.000205C
B.N. Rao Sandeep Mundra
Partner Partner
Membership No. 039555 Membership No.075482
Place : Mumbai Place : Mumbai
Date : May 30 2017 Date : May 30 2017

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our Report of even date)

(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) During the year the fixed assets of the Company have been physically verified bythe management. In our opinion the frequency of verification is reasonable having regardto the size of the Company and nature of its assets. No material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except building at Jaipur having value of Rs.1024830/-(Net block as at year-end Rs. 390463) is yet to be registered in the name of Company.

(ii) The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen properly dealt with in the books of account; (iii) The Company has granted unsecuredloans to one of its subsidiary company covered in the register maintained under section189 of the Companies Act 2013 (‘the Act').

(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to subsidiary listed in the register maintained under Section 189of the Act are not prima facie prejudicial to the interest of the Company.

(b) In the case of the loans granted to the subsidiary listed in the registermaintained under section 189 of the Act the company has not stipulated schedule ofrepayment of principal and payment of interest and therefore we are not in position tomake specific comment as regard to repayment of the principal or receipts are regular.

(c) Since there is no stipulation regarding repayment of principal and payment ofinterest we are unable to comments on the overdue amount for more than ninety days.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under.

(vi) As explained to us the maintenance of cost records under sub section (i) ofSection 148 of the Companies Act 2013 has not been prescribed by the Central Governmentfor the Company.

(vii) (a) The Company is not regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax value added tax customs duty excise duty cess and anyother material statutory dues applicable to it.

(b) According to the information and explanations given to us undisputed amountspayable in respect of provident fund employees' state insurance income tax service taxand any other material statutory dues applicable to it were outstanding at the year endfor a period of more than six months are as under: -

Nature of Statute Nature of Dues Amount (Rs.) Period to which the amount relates Due Date Date of Payment
Income Tax Act 1961 TDS 215142 01/04/2016 to 31/08/2016 07th of Next Month Not Yet paid
Employee Provident Fund Organization Provident Fund 228986 01/04/2016 to 31/08/2016 21st day of next month Not Yet paid
Maharashtra/ Surat Labour welfare Fund MLWF/ GLWF 285 01/04/2016 to 31/08/2016 05th of Next Month Not Yet paid
Employee State Insurance Corporation E.S.I.C. 62123 01/04/2016 to 31/08/2016 15th day of next month Not Yet paid
Department of Sales Tax Maharashtra Profession Tax 29545 01/04/2016 to 31/08/2016 21st day of next month Not Yet paid
Maharashtra Value Added Tax Act 2002 VAT 180644 01/04/2016 to 31/08/2016 21st day of next month Not Yet paid
Income Tax Act 1961 Income Tax 20307000 (excluding Interest) Financial Year 2012-13 March 31 2013 Not Yet paid
Income Tax Act 1961 Tax on Dividend 5387415/- (excluding Interest) Financial Year 2012-2013 14th Oct 2013 Not Yet paid

(c) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax wealth tax service tax value added tax customs dutyexcise duty cess and any other material statutory dues applicable to it on account ofany dispute are as follows:

Nature of Statute Nature of Dues Amount (Rs.) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 98046 AY 2004-2005 CIT Appeal - Mumbai
108514844 AY 2008-2009 CIT Appeal Mumbai
208612480 AY 2009-2010 CIT Appeal - Mumbai
4092384 AY 2010-2011 CIT Appeal - Mumbai
4065043 AY 2011-2012 ITAT Mumbai
185693840 AY 2012-2013 CIT Appeal - Mumbai
109920190 AY 2013-2014 CIT Appeal Mumbai
8683930 AY 2014-2015 CIT Appeal - Mumbai
Central Excise and Customs Act Service Tax 622540 FY 2008-2009 Commissioner of Central Excise
FY 2011-2012 (Appeal)
Punjab Value Added Tax VAT 3182500 FY 2012-13 In the office of Dy. Excise & Taxation
Commissioner (Admn). Ludhiana
Division Ludhiana

(viii) The Company has defaulted to various banks in re-payment of working capital -export credit facilities and Corporate Loan which have been crystallized and/or becameoverdue or recalled at various dates the summarized position of such defaults at thebalance sheet date is as under: -

Details of continuing defaults

Name of Bank Amount of defaults Date of Default # Date of default ended
Central Bank of India (Since recalled) 103278246 Jan 2014 Continuing
Corporation Bank (Since recalled) 203547726 June 2015 Continuing
Punjab National Bank (Since recalled) 403531214 March 2016 Continuing
Punjab & Sind Bank (Since recalled) 314125108 June 2014 Continuing
State Bank of India (Since recalled) 88484635 March 2016 Continuing
UCO Bank (Since recalled) 99866052 Sept 2015 Continuing
Punjab National Bank (Since recalled) 45800000 March 2016 Continuing
Corporation Bank (Since recalled) 24932494 March 2016 Continuing
AXIS Bank (Since recalled) 40437701 July 2016 Continuing
AXIS Bank (Since recalled) 168548248 July 2016 Continuing
Karnataka Bank (Since recalled) 75881648 June 2016 Continuing

Date of default shown is the date of first default which is still continuing even wherethe company may have defaulted in repayment at further dates or the loan have beenrecalled subsequently.

The amount of default shown includes total outstanding of loans of respective banks.The above defaults are the amounts as on the date of the defaults and do not include anylevies of interest and penal interest charged by the banks / provided by the company afterthe date of the defaults or its subsequent reversals by some banks.. Consequently we areunable to quantify and give period wise details of the defaults in interest. Howeverunder the head "Other Current Liabilities" (Note No. 8) amounts of Rs.53079101/- and Rs..247957049/- being the "Interest Accrued and due" and"Overdrawn Current Account Bank Balances" respectively are the amounts ofinterest charged or provided for the period of which is unascertainable. Further theamount of defaults does not include interest (as calculated by the management on bestjudgment basis) amounting to Rs. 308200689/- (including Rs.116948000/- beinginterest charged by banks but not accounted for) being interest for the financialyear2016-17 which has been not provided by the management in the financial statement.

We have not received balance confirmation/ account statements from two banks havingoutstanding of Rs. 216171267/- .

(ix) The Company during the year did not raise any money by way of initial public offeror further public offer (including debt instruments). In our opinion and according toinformation and explanations given to us the term loans raised during the year wereapplied for the purpose for which those are raised.

(x) According to the information and explanations given to us no fraud by the Companyor ontheCompanybyitsofficersor employees has been noticed or reported during the course ofour audit.

(xi) In our opinion the managerial remuneration paid or provided for is in accordancewith the requisite approvals by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards (xiv) According to the information and explanations given tous and based on our examination of the records of the Company the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For RSVA & Co For B. Khosla & Co.
Chartered Accountants Chartered Accountants
ICAI Firm Reg. No. 110504W ICAI Firm Reg. No.000205C
B.N. Rao Sandeep Mundra
Partner Partner
Membership No. 039555 Membership No.075482
Place : Mumbai Place : Mumbai
Date : May 30 2017 Date : May 30 2017

Annexure - B to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GOENKADIAMOND AND JEWELS LIMITED ("Company") as of March 31 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extent financialcontrols both applicable to an audit of internal of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified opinion on the Company's internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary statements in to permitpreparation of financial accordance with generally accepted accounting principles andthat receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of un-authorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis of Qualified Opinion

According to information and explanations given to us and based on our audit thefollowing significant deficiency/material weakness has been identified as at March 312017: -a. The company did not have an appropriate internal control system for customeracceptance customer credit evaluation and establishing customer credit limits based onthe economic industry and customer's financial considerations. This has resulted in hugeold outstanding dues from customers and insignificant recoveries there-against owing towhich the Company has defaulted in its obligations for repayment of its dues to banks andcreditors. Further internal control procedures are not operating for periodic review ofage-wise analysis of trade receivables procedure and manner for timely action againstdefaulting debtors and establishing methodology underlying assumptions and policies forprovision for doubtful debts and its appropriateness on periodic basis. These materialweakness/ significant deficiency could potentially result in Company recognizing revenuewithout establishing reasonable certainty of ultimate collection and could lead toaccounting of uncollectible trade receivables. b. The Company's internal financial controlis not operating effectively with regard to legal and regulatory compliances mainly onaccount of payment of statutory dues/ taxes and also in timely payment of interest andrepayment of its loan from banks. Certain defaults/ non-compliances could be result of theliquidity crunch faced by the Company due to material weakness as mentioned in para (a)above. This ineffective internal control over legal and regulatory compliance and timelypayments of interest and repayment of loans could have material effect on the financialstatements of the Company and its ability to continue as going concern.

A ‘material weakness' is a deficiency or a combination of deficiencies financialcontrol over financial reporting suchinternal that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

Opinion

In our opinion except for the effects/possible effects of the material weaknessesdescribed above on the achievement of the objectives of the control criteria the Companyhas maintained in all material respects adequate internal financial controls overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2017 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the ICAI.

We also have audited in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India as specified under Section 143(10) of theAct the financial statements of Goenka Diamond and Jewels Limited which comprise theBalance Sheet as at March 31 2017 and the related Statement of Profit and Loss and CashFlow Statement for the year then ended and a summary of significant accounting policiesand other explanatory information. These significant deficiencies/ material weaknesses wasconsidered in determining the nature timing and extent of audit tests applied in ouraudit of the financial statements of the Company for the year ended March 31 2017 andthis report affect our report on financial statements which expressed disclaimer ofopinion on those financial statements.

For RSVA & Co For B. Khosla & Co.
Chartered Accountants Chartered Accountants
ICAI Firm Reg. No. 110504W ICAI Firm Reg. No.000205C
B.N. Rao Sandeep Mundra
Partner Partner
Membership No. 039555 Membership No.075482
Place : Mumbai Place : Mumbai
Date : May 30 2017 Date : May 30 2017