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ANNUAL REPORT 2016-17 WINSOME DIAMONDS AND JEWELLERY LIMITED(Formerly Su-Raj Diamonds and Jewellery Limited)

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WINSOME DIAMONDSAND JEWELLERY LIMITED

(CIN: L36910GJ1985PLC015915)

31st Annual Report2016-2017

(01/04/2016 to 31/03/2017)


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BOARD OF DIRECTORS Mr. Harshad Udani Whole Time Director Mr. S. P. Tanwar Nominee Director Mr. Harish Mehta Independent Director Mr. Harimohan Namdev Independent Director (Resigned w.e.f. 1st February, 2017) Ms. Ami Kothari Independent Director Mr. Kalpesh Sanghani Independent Director (w.e.f. 24th April, 2017)

COMPANY SECRETARY Mr. Asish Narayan (w.e.f. 4th February, 2017)

AUDITORS NAUTAM R. VAKIL & CO. Chartered Accountants

BANKERS Standard Chartered Bank Punjab National Bank Export-Import Bank of India Canara Bank State Bank of Hyderabad Bank of Maharashtra Oriental Bank of Commerce Union Bank of India Central Bank of India AXIS Bank Limited Vijaya Bank Bank of India State Bank of Mauritius Limited IDBI Bank Limited

ADMINISTRATIVE OFFICE 906/907/908, 9th Floor, The Plaza Near Dharam Palace, 55 Gamdevi Grant Road, Mumbai – 400 007, India

REGISTERED OFFICE Kesharba Market – 2 Gotalawadi, Katargam Surat – 395 004, India

REGISTRAR & TRANSFER AGENT Link Intime India Pvt. Limited C101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai – 400083, India


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NOTICENOTICE is hereby given that the 31st Annual General Meeting of the Members of Winsome Diamonds and Jewellery Limited will be held on Thursday, the 28th day of September, 2017 at Mahida Bhawan, Icchanath, Opp. S.V.R. Engineering College, Dumas Road, Surat 395 007 at 12.30 p.m. to transact the following business:ORDINARY BUSINESS1) To receive, consider and adopt the Audited Standalone and

Consolidated Financial Statement for the period ended 31st March, 2017, the Statement of Profit and Loss and Cash Flow Statement along with the Schedules and the Reports of the Directors and Auditors thereon.

2) To note and approve that Mr. Harish Mehta (DIN : 05316274), who retires by rotation and due to his medical and health reasons does not offer himself for re-appointment.

3) Ratification of auditors appointment: To appoint Auditors and to fix remuneration and in this regard to consider and if thought fit to pass with or without modification(s) the following resolution as an Ordinary Resolution :

RESOLVED THAT pursuant to provisions of section 139 and other applicable provisions, if any, of the Companies Act, 2013 read with rules made thereunder, as amended from time to time, the company hereby ratifies the appointment of M/s. Nautam R. Vakil & Co., Chartered Accountants (Firm Regn. No. 106980W), as Statutory Auditors of the Company, to hold office from the conclusion of this Annual General Meeting till the conclusion of next Annual General Meeting of the Company on such remuneration and reimbursement of out of pocket expenses incurred by them for the purpose of audit and service tax at applicable rate as may be fixed by Board of Directors on recommendation of Audit Committee.

SPECIAL BUSINESS4. APPOINTMENT OF MR. KALPESH SANGHANI AS AN

ADDITIONAL DIRECTOR Appointment of Mr. Kalpesh Sanghani as an Independent

Director To consider and if thought fit, to pass the following Resolution

as an Ordinary Resolution: “RESOLVED THAT Mr. Kalpesh Sanghani (DIN: 07743036),

who was appointed as an Additional Director of the Company with effect from 24th April, 2017 by the Board of Directors and who holds office upto the date of this Annual General Meeting of the Company under Section 161(1) of the Companies Act, 2013 (‘the Act’) and the Articles of Association of the Company but who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 160(1) of the Act from a Member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company.”

“RESOLVED FURTHER THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 (the Act) and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification (s) or re-

enactment thereof for the time being in force), Mr. Kalpesh Sanghani (DIN: 07743036),), who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company to hold office for 5 (five) consecutive years for a term up to 36th Annual General Meeting in the calendar year 2022.”

By Order of the Board of DirectorsFor Winsome Diamonds and Jewellery Limited

Place : MumbaiDate : 14th August , 2017 Company Secretary

NOTES:1) The relative Explanatory Statement pursuant to Section 102 of

the Companies Act, 2013 (‘the Act’), in respect of the business as set out in Item No. 4 above of the Directors seeking re-appointment as required by Regulation 26 (4) and 36 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) and as required under Secretarial Standards – 2 on General Meetings issued by The Institute of Company Secretaries of India are annexed hereto.

2) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF /HERSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE INSTRUMENT APPOINTING PROXY SHOULD BE LODGED WITH THE COMPANY AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN 48 HOURS BEFORE COMMENCEMENT OF THE MEETING.

3) A person can act as a proxy on behalf of members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.

4) Members are requested to bring their attendance slip duly completed and signed mentioning their DP ID and Client ID/Folio No, and also requested to bring their valid ID Proof at the meeting.

5) The profile of the Director seeking reappointment under Item No.2 of accompanying Notice as required under SEBI (Listing Obligation and Disclosure Requirement) Regulations,2015 is annexed herewith.

6) The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 23rd September, 2017 to Thursday, 28th September, 2017 (both days inclusive) for the purpose of Annual General Meeting.

7) Corporate Members intending to send their authorized representatives to attend the meeting pursuant to section 113 of the Companies Act, 2013 are requested to send to the


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Company a certified copy of the Board Resolution together with specimen signature authorizing their representatives to attend and vote on their behalf at the Annual General Meeting.

8) The Equity Shares of the Company are compulsorily traded in electronic form. The shareholders who have not yet dematerialized their shares are requested to dematerialize their shares by opening Demat Account with nearest Depository Participant at the earliest to avail the benefits of dematerialization.

9) Members are requested to bring a copy of their Annual Report at the meeting. Members desirous of obtaining any information with respect to the accounts of the Company are requested to send their queries in writing to the company at its administrative office so as to reach atleast seven days before the date of Annual General Meeting.

10) In terms of section 101 and 136 of the Companies Act, 2013 read with rules made thereunder the copy of Annual Report is being sent through electronic mode to those members who have registered their email ids with their respective depository participants or with the share transfer agent of the Company, unless any member has requested for a physical copy of the same. In case you wish to get physical copy of the same you may request to [email protected] mentioning your Folio No/ DP ID/Client ID. Members may also note that Annual Report is also available on the website of the company www.winsomejewellery.com for their download.

11) Pursuant to the provisions of the Companies Act, 2013, dividends which remain unclaimed in the unpaid dividend account for a period of seven years from the date of transfer of the same, will be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government

12. (a) In order to provide protection against fraudulent encashment of the dividend warrants, members who hold shares in physical form are requested to notify to the Company’s Registrar and Transfer Agent, Link Intime India Private Limited, Unit: Winsome Diamonds and Jewellery Limited, C-13 101, 1st Floor, 247 Park, L.B.S. Road, Vikhroli(West), Mumbai - 400 083. Phone: (91-22) 25946970. Fax: (91-22) 25946969 / 25962691. E-Mail: [email protected], Website: www.linkintime.co.in under the signature of the Sole/First Joint holder, the following information to be incorporated on dividend warrants1. Name and Folio No of Sole/First Joint Holder and2. Particulars of Bank Account Viz.

(i) Name of Bank and Branch(ii) Complete address of the bank along with pin

code.(iii) Account No and Type of Account.

(b) Members who hold shares in dematerialized form may kindly note that their bank account details as furnished by their depositories to the company will be printed on their dividend warrants as per the regulation of the depository and the company will not entertain any direct request from

such members for change in such bank accounts details. Members who wish to change such bank accounts details are therefore requested to advise their depository participants about such change with complete details of bank accounts.

13) Members are requested to send all communication relating to transfer of shares, non-receipt of dividend, annual report, change of address, bank mandate, issue of duplicate, split and consolidated share certificate, dematerialization of shares, rematerialization of shares, transmission, transposition, deletion and other grievances etc., to the Company’s Registrar and Transfer Agent, Link Intime India Private Limited and a copy to the Company at 906/907/908, 9th Floor, The Plaza, Near Dharam Palace, 55, Gamdevi, Grant Road, Mumbai- 400007 to resolve the Shareholders’ grievances smoothly and speedily.

14) All the relevant documents referred to in the accompanying notice are open for inspection by the members of the company at Administrative Office during normal business hours on all working days except Sunday and public holidays upto the date of Annual General Meeting.

15. Voting through electronic means In terms of the provisions of section 108 of the Companies

Act, 2013 (the Act) read with Companies (Management and Administration) Rules, 2014 as amended from time to time and Regulation 44 of SEBI (Listing Obligation and Disclosure Requirement) Regulations,2015 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) the Company is pleased to provide its members the facility of ‘remote e-voting’ (e-voting from a place other than venue of AGM) to exercise their right to vote at the 31st Annual General Meeting of the Company. The Company has provided remote e-voting facilities to its members using CDSL platform.

The facility for voting through ballot/polling paper shall also be made available at the venue of 31st Annual General Meeting. The members attending the meeting who have not caste their vote through remote e-voting shall be able to exercise their voting right at the meeting. The members who have caste their vote using remote e-voting facility may attend the meeting but shall not be entitled to caste their vote again at the Annual General Meeting.

The Board of Directors of the Company has appointed Alwyn Dsouza, Practising Company Secretary as the Scrutinizer for conducting the remote e-voting in a fair and transparent manner.

The instructions for shareholders voting electronically are as under:(i) The voting period begins on 25th September, 2017 at

10.00 a.m and ends on 27th September, 2017 at 5.00 p.m. During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of 22nd September, 2017 may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) The shareholders should log on to the e-voting website www.evotingindia.com.


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(iii) Click on Shareholders.(iv) Now Enter your User ID

a. For CDSL: 16 digits beneficiary ID,b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID,c. Members holding shares in Physical Form should enter

Folio Number registered with the Company.(v) Next enter the Image Verification as displayed and Click on

Login.(vi) If you are holding shares in demat form and had logged on to

www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.

(vii) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)• Members who have not updated their PAN

with the Company/Depository Participant are requested to use the sequence number which is printed on Postal Ballot / Attendance Slip indicated in the PAN field.

Dividend Bank DetailsOR Date of Birth (DOB)

Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in the company records in order to login.• If both the details are not recorded with the

depository or company please enter the member id / folio number in the Dividend Bank details field as mentioned in instruction (iv).

(viii) After entering these details appropriately, click on “SUBMIT” tab.

(ix) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(x) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(xi) Click on the EVSN for the relevant <Company Name> on which you choose to vote.

(xii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xiii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xiv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvi) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting page.

(xvii) If a demat account holder has forgotten the login password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

(xviii) Shareholders can also cast their vote using CDSL’s mobile app m-Voting available for android based mobiles. The m-Voting app can be downloaded from Google Play Store. Apple and Windows phone users can download the app from the App Store and the Windows Phone Store respectively. Please follow the instructions as prompted by the mobile app while voting on your mobile.

To Download m-Voting Mobile App

SCAN THIS QR CODE

How do you use the barcode scanner app?Installing Barcode Scanner1. Open the Play Store on your device. You can find the Play

Store in your list of apps. ...2. Tap the Search bar. This can be found at the top of the Play

Store screen.3. Type barcode scanner.4. Tap QR & Barcode Scanner from Gamma Play. ...5. Tap Install.6. Tap Accept.7. Tap Open.How do I find the QR code on my phone?To scan a QR code:1. Open the QR code reader app installed on your device.2. Scan the QR code by lining it up inside the window on your

screen.3. The barcode is decoded on your device and specific

instructions are sent to the app for appropriate action (e.g. open a specific website).


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(xix) Note for Non – Individual Shareholders and Custodians• Non-Individual shareholders (i.e. other than Individuals,

HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves.

• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].

• After receiving the login details by custodian a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on. In case of Non-Individual Shareholders, admin user also would be able to link the accounts(S).

• The list of accounts linked in the login should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.

• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xx) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [email protected] or call 18002005533.

All grievances connected with the facility for voting by electronic means may be addressed to Mr. Rakesh Dalvi, Deputy Manager, (CDSL,) Central Depository Services (India) Limited, 16th Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai-400001, or send an email to [email protected] or call 18002005533.

ANNEXURE TO THE NOTICE CALLING ANNUAL GENERAL MEETINGEXPLANATORY STATEMENT PURSUANT TO SECTION 102(1)(a) OF THE COMPANIES ACT, 2013.Item No. 4Mr. Kalpesh Sanghani was inducted on Board as an Additional Director of the Company by the Board of Directors at its meeting held on 24th April, 2017. Mr. Sanghani will hold office as an Additional Director upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member proposing the candidature Mr. Kalpesh Sanghani for the office of the Director of the Company under the provisions of Section 160 of the Companies Act, 2013.Mr. Kalpesh Sanghani is a Non-Executive Director of the Company. He is a Graduate and has experience of around 20 years in sales.In compliance with the provisions of Sec149 of the Companies Act, 2013 read with Schedule IV of the act, the appointment of Mr. Kalpesh Sanghani are now being place before the members for their approval.The Directors recommend the resolution set out in item No. 4 of the accompanying notice.

None of the Directors of the Company other than Mr. Kalpesh Sanghani is in any way, concerned or interested in the said resolution.All the documents referred to in the accompanying notice shall be available for inspection at the Registered Office of the Company on any working day between 11.00 a.m. and 1.00 p.m. upto the date of the Annual General Meeting and will also be available for inspection at the meeting.Information pursuant to SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 regarding appointment /re-appointment of Directors.

Name of Director Mr. kalpesh SanghaniDate of Birth 16.04.1967Date of Appointment on Board

24.04.2017

Brief profile of the Director

Mr. Kalpesh Sanghani is a Graduate (B.COM) and He has worked as Sales Representative at M/s P. Bhogilal & Co., (pharma Dist), Kolkata for Six Years.Last 15 years he has been Working with M/s. Imperial Motor Stores, sarkhej, Ahmedabad. (Automobile Distributors of TATA Motors Ltd)

Qualifications B.COM.Directorships in other Companies as on 31.03.2016

Flucid jewellery Private limited

Chairman/Member of other Committees of the Board

Winsome Diamonds and Jewellery LtdNomination and Remuneration Committee - Member .Audit Committee - Member.

Shareholding of Director as on 31.03.2016

Nil

Relationship between Directors inter-se

Nil


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DIRECTORS’ REPORTTo,The MembersThe Directors present the 31st Annual Report together with the Audited Accounts for the year ended 31st March, 2017.FINANCIAL RESULTS

(` in crore)Particulars For the year

Ended 31st March, 2017

For the year Ended 31st

March, 2016Total Income 63.94 325.58Profit before Interest and Depreciation

(113.51) 323.69

Less: Finance Charges (Net) 717.74 645.88Depreciation 4.36 5.62Profit before Tax (835.61) (327.81)Provision for Tax (0.41) 0.94Profit after Tax (836.02) (326.87)Add : Balance in Statement of Profit and LossBrought Forward (525.97) (199.10)Profit Available for Appropriation

(1361.98) (525.97)

Proposed Dividend - -Corporate Tax on Proposed Dividend

- -

Short fall of Depreciation as per Companies Act

- -

Transfer to General Reserve - - -Foreign Exchange/Metal Price Fluctuation

- -

Balance Carried Forward (1361.98) (525.97)Total (525.97)

OPERATIONAL REVIEWThe total income of the Company during the current year was ` 63.94 lacs as against Rs. 325.58 Crore in the previous year. The Company continued to incur loss mainly due to higher depreciation as a result of new Company law provisions and legal expenses incurred.During the preceding four years the Company witnessed unprecedented turn of events. The failure of overseas customers, from the UAE, in making payments for Company’s exports resulted in the Company defaulting in meeting its obligations. This had resulted in the Company defaulting in meeting its obligations. The bankers appointed independent audit firms for forensic and investigative audit for which the Company offered explanations.The Company sent notices to the defaulting overseas customers in October 2013. As no positive actions were received from the defaulting overseas customers the Company had initiated legal proceedings before the Sharjah Federal Court, the step preceding to filing of commercial cases before the Sharjah Court in May 2014. The Reports of the Accounting Experts/Banking Experts appointed by the Sharjah Federal Court of First Instance, First

Plenary Commercial Department and the Sharjah Federal Court of First Instance, Second Plenary Commercial Department in various suits filed by the Company against 13 UAE companies that had defaulted in payment of dues amounting to USD 1.2 billion. These reports had been made available on the Company’s website i.e. www.winsomejewellery.com and the summary of these reports have been made available on the website of the Bombay Stock Exchange i.e. www.bseindia.com.The banks had lodged complaints with the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) to carry out investigations against the Company and its management. The management and the directors have fully cooperated with the agencies during their investigations and have submitted all the information available with them.ONE TIME SETTLEMENTThe Company has entered into a Tripartite One Time Settlement (OTS) with the defaulting UAE based customers viz., M/s Al Alam Jewellery FZE, Al Mufied Jewellery FZE, Italian Gold FZE and State Bank of Mauritius on 23rd December, 2016.DIVIDENDThe Board of Directors do not recommend any dividend for the period under consideration due to loss incurred by the Company.SHARE CAPITALThe Paid up Equity Capital of the Company as at March 31, 2017 Was ` 106.47 crores comprising of 10,66,07,894 shares of ` 10 each. The Company has not issued any shares during the year.FINANCEThe Cash and Cash Equivalent as at March 31, 2017 stood at 15.79 crores. The Company’s working capital facilities have been withheld by the consortium due to non-payment of dues of the banks, as its overseas customers failed to make payment towards exports made by the Company during the year 2012-13.NOTICESThe Company has received E-Auction Sale Notice for sale of the property situated at Kolkata, Goa, Bangalore, Jodhpur, Surat and Mumbai from Debt Recovery Tribunal, Ahmedabad.The banks have lodged complaints with the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) to carry out investigations against the Company and its management. The Company is also under investigation by Serious Fraud Investigation Office (SFIO) The management and the directors have fully cooperated with the agencies during their investigations and have submitted all the information available with them.LEGAL SUITThe company initiated legal proceedings against its 13 defaulting overseas customers before the Sharjah Federal Court of first instant in Sharjah, UAE to recover its outstandings. The judgment of the Sharjah Federal Court of First Instance in Sharjah, UAE have been in favour of the company. The Court has directed the defaulting overseas customers to repay the outstanding amount alongwith interest @ 5% per annum.


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The overseas customers have gone in further Appeal against the orders of Sharjah Federal Court of First Instance. The following are the status of the appeals pending before the Appellate Court/ Supreme Court.

Name of the defaulting UAE customers

Status of the appeal

Name of the Appellate authority

Dana Jewellery FZE Appeal No.1191/2015

Pending for expert Report

Appellate Court

Al Subhi Jewellery FZE Case No. 14/2016

Pending for Judgement

Supreme Court

Al Minhaj Jewellery FZE Case No. 16/2016


Supreme Court

FIXED DEPOSITSThe Company has not accepted any deposit, within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 made thereunder.PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTSThe Company has not given any loans or guarantees covered under the provision of section 186 of the Companies Act, 2013.The details of investments made by the Company is given in the notes to financial statements.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACYThe Company has no formal internal control system in place after the devolvement. All the locations have stopped its activities as at March 31, 2015. The Company, however, has in house internal controls of administrative and statutory outgoings commensurate with its size and volume.CORPORATE SOCIAL RESPONSIBILITY (CSR)The Company has formed a CSR committee. In light of continuing losses in the preceding two years and with no activities the Company has not made any contribution towards the same. The Company is committed to give its due contribution as soon as the situation improves.CONSERVATION OF ENERGYThe particulars regarding conservation of energy are not applicable to the Company as the Company has stopped all its manufacturing activities.TECHNOLOGY ABSORPTIONIn the absence of any production activity there is no need for any technology absorption.FOREIGN EXCHANGE EARNINGS AND OUTGODuring the year under review there was no foreign exchange earnings or outflow.INDUSTRIAL RELATIONSThere are no activities in any of the units of the Company. However, in Goa Unit of the Company which was in operation till December, 2014, the relations with the workmen were cordial.DIRECTORSMr. Kalpesh Sanghani (DIN: 07743036) was appointed as an Additional Director of the Company with effect from 24th April, 2017 under Section 161 of the Companies Act, 2013 and holds office upto the date of ensuing Annual General Meeting. Mr. Harimohan Namdev resigned w.e.f. 1st February, 2017.

Declaration by Independent DirectorThe Company has received necessary declarations from each independent Director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.Board EvaluationThe Companies Act, 2013 and SEBI (LODR) Regulations mandates that formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Schedule IV of the Companies Act, 2013 states that performance valuation of independent Directors shall be done by the entire Board, excluding the Director being evaluated. A separate meeting of the Independent Directors (Annual ID meeting) was convened which reviewed the performance of the Board (as a whole) and the non-independent Directors without the presence of any member of the management. Some of the key criteria for the performance evaluation are as follows:Performance evaluation of Directors :- Attendance at Board or Committee meetings- Contribution at the Board and committee meetings- Guidance/support to management outside Board /committee

meetings.Performance evaluation of Board and Committees:- Degree of fulfillment of key responsibilities- Board structure and composition- Establishment and delineation of responsibilities to committees- Quality of relationship between Board and Management- Effectiveness of Board processes, information and functioning.Major Event ( Role and Performance of nominee Director):- The Board has sought resignation of Mr. S. P Tanwar, Nominee

Director vide letter dated 2nd March, 2016 for consistently working against the interest of the company and non fulfilling the fiduciary duty as a Director of the Company. Further the Company has also sent a letter to the Bank for replacement of Nominee Director dated 28th March, 2016. The Company has not received any feedback or comments from the Nominee Director or Banks.

- The Board of Directors at its meeting held on 29th May,2017 had decided to sent the letter reminding Consortium of Banks to send the reply to the Company.

Policy on Directors appointment and remunerationThe current policy is to have an appropriate mix of executive and independent Directors to maintain the independence of the Board, and separate its functions of governance and management. The Board periodically evaluates the need for change in its composition and size.The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.


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The policy of the Company on Director’s appointment and remuneration, including criteria for determining qualification, positive attributes, independence of a Director and other matters provided under section 178(3) of the Companies Act, 2013, adopted by the Board is appended to Corporate Governance Report affirming part of the Directors Report. We affirm that the remuneration paid to the Directors is as per the terms laid out in the nomination and remuneration policy of the Company.MeetingsA calendar of meetings is prepared and circulated in advance to the Directors.During the year Six Board Meetings (including adjourned meetings) and Five Audit Committee Meetings (including adjourned meetings) and Four stakeholders’ relationship committee Meeting were convened and held. The details of the same are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to Section 134(5) of the Companies Act, 2013, the Directors state that -• in the preparation of the Annual Accounts, the applicable

accounting standards have been followed;• the Directors have selected such accounting policies and

applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review;

• that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

• the Directors have prepared the Annual Accounts on a going concern basis;

• The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

• The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively

RELATED PARTY TRANSACTIONSAll related party transactions, if any, that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There were no related party transactions requiring disclosures in the Directors’ Report in Form AOC-1.SUBSIDIARY COMPANIESThe Company does not have any subsidiary during the year under review.CODE OF CONDUCTThe Board has approved code of conduct in place which is applicable to all the members of the Board and its employees in the course of day to day operations of the Company.

All the Board Members and Senior Management personnel have confirmed compliance with the Code.VIGIL MECHANISM/ WHISTLE BLOWER POLICYThe Company has vigil mechanism / whistle blower policy in place to deal with instances of fraud or mismanagement, if any.A whistle blower may report any violation or any instances of fraud or mismanagement to the Chairman of the Audit Committee. The policy ensures that strict confidentiality is maintained whilst dealing with concerns also that no discrimination will be meted out to any person for a genuinely raised concern.PREVENTION OF INSIDER TRADINGThe Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code required pre-clearance for dealing the Company’s shares and prohibits the purchase or sale of Company’s shares by the Directors and designated employees while in possession of unpublished sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for the implementation of the Code.All Board Directors and designated employees have complied with the Code.AUDITOR’S REPORTThe qualifications in the Auditors Report (In Italics) are followed by appropriate Board’s reply and explanations (in bold) as under:1. Basis for Qualified OpinionA. The Company has made long term investments in Forever

Precious Diamonds and Jewellery Ltd. (Forever) amounting to Rs. 1,411,710,802, thereby resulting in it holding a 49 % stake in the equity of that company. The said investments continue to be valued at cost. As stated in Note No. 8, in the view of the management, provision for diminution in value of investments as per the requirements of Ind-AS 28 - Investments in Associates and Joint Ventures is not considered necessary and hence not made. We have been provided with the financial statements of Forever for the year ended 31stMarch 2016. We have observed that there are no significant business operations in Forever. Further the auditors of Forever have qualified the financial statements and termed the company as a non-going concern. In view of the above the Company should have provided the diminution in value of investments amounting to Rs. 1,411,710,801. Accordingly the loss for the year have been understated and investments overstated by Rs. 1,411,710,801.

B. The company has also made long term investment in Peakok Jewellery Limited amounting Rs.5012750/- at the average rate of Rs.286.44/- per share. As per the balance sheet as at 31ST March, 2016 the book value of the shares of the company is Rs.110.78/- per share. In the view of the management, provision for diminution in value of investments as per the requirements of Ind-AS 28 - Investments in Associates and Joint Ventures is not considered necessary and hence not made. In view of the above the Company should have provided the diminution in value of investments amounting to Rs.30,75,100/-. Accordingly the loss for the year have been understated and investments overstated by Rs.3,075,100/-.


8 9

A. Forever Precious Jewellery and Diamonds Limited has also initiated legal action against its defaulting overseas customers and is hopeful of recovering its dues and therefore no diminution in the value of investments is considered. As informed by the management of Forever Precious Jewellery and Diamonds Limited, the Sharjah Federal Court has directed six out of thirteen overseas defaulters to pay to the company, its outstanding dues with interest. The company is hopeful of getting a favourable decision in the case of remaining overseas defaulters.

B. The management is of the opinion that Peakok Jewellery Limited is a going concern and there is no permanent diminution in the value of investments.

2. Basis for Disclaimer of opinionA. In respect of Trade Receivables amounting to

Rs. 5608,09,30,760/- (Valued at exchange rate as on 31/03/2017 under IndAS) the auditors have not received any confirmations from the overseas parties. The company has filed legal suit against its defaulting overseas customers for non-payment of its export bills at Sharjah Federal Court, Sharjah. The court has appointed an expert to look into the affairs of the companies based in Dubai/ Sharjah. The Court has confirmed the debts payable to the Company and ordered the overseas customer to pay along with interest @5% p.a. However, the copies of the orders are not provided for verification. The overseas customers had filed an appeal against the judgment of the Sharjah Federal Court and the Sharjah Federal Appellate Court has passed order in favour of the Company and now the matter is pending for 1 case with the Sharjah Federal Appellate Court and 2 case with Sharjah Supreme court and their judgments are awaited. . During the year under review, state bank of Mauritius has entered in the One Time Settlement agreement with the company and overseas Customers of the company for settlement of its loan. Accordingly the Overseas customers agreed to pay US$ 1,050,833/- against the total outstanding bill of USD 8,241,831.11/- . The balance amount receivable (Rs. 48,83,52,906/-) from overseas customers has been considered as impaired charged to profit and loss in FY 2016-2017. As per Ind-As – 109 (Financial Instruments) provides practical expedient to use a provision matrix to estimate Expected Credit Loss for trade receivables.

In view of these court orders pending legal proceedings, we are unable to comment on time frame of the realisability of the debts through provision matrix where all significant trade receivables past due by more than a year and any provision to be made for unrealisability in the remaining carrying amounts of these balances and the consequential impact, on the financial statements. (Refer Note 9, 11 and Note 34 to the financial statements)

B. As per Ind-AS -16(Property, Plant and Equipment), the depreciable amount of a tangible fixed asset should be allocated on a systematic basis over its useful life. The depreciation method should reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Further, standard requires the depreciation method applied to an asset, residual value and useful life shall be reviewed at least at each financial year-end. Based on technical evaluation, the management believes that written

down method of depreciation method and the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013 are best representative future economic benefits associated with tangible fixed assets. In absence of the technical report, we are unable to comment on reasonability of useful and method of depreciation and the consequential impact, on the financial statements. (Refer note 6 & 7)

C. As mentioned in Note No 1 regarding preparation of accounts on a Going Concern basis and the reasons stated therein and Note No.34 of the financial statements detailing the developments that have happened in the last 4 years, the Company’s operating results have been materially affected due to various factors including non availability of finance in view of the consortium of bankers recalling the financial facilities granted. These events cast significant doubts on the ability of the Company to continue as a going concern since the business has stopped. The appropriateness of the going concern assumption is dependent on the Company’s ability to raise adequate finance from alternate means and/or recoveries from overseas debtors to meet its short term and long term obligations as well as to establish consistent business operations.

In absence of any convincing audit evidences, non recovery of trade receivables on due date, non-payment of liabilities including statutory dues, financial difficulties faced by the company due to recalling of bank finance facilities and in view of multiple uncertainties as stated above, we are unable to determine the possible effects on the financial statements. We are also unable to conclude on the ability of the company to carry on as a going concern.

A. The Company had initiated legal proceedings against its 13 defaulting overseas customers before the Sharjah Federal Court and had received orders which confirmed the debts payable by the overseas customers. The Overseas Customers were ordered to pay to the company all the outstanding dues along with interest @ 5% per annum.

The Overseas Customers filed appeal against the order of Sharjah Federal Court. Of the 13 overseas customer’s cases, the company has received favourable judgment in 12 cases and one case is pending in appeal before the Federal Appellate. There are 2 cases pending before the Supreme Court, UAE Viz., AlSubhi Jewllery FZE, and Al Minhaj Jewellery FZE .

B. As there are no business activities and the Company has no technical person to evaluate, the company continue to follow written down metod of depreciation and the useful lives as prescribed under Part C of Schedule II of Companies Act, 2013

C. The management assumes that the Company will have adequate cash flows from the proceeds of export receivables to defray its entire debt obligation in a phased manner. In view of the aforesaid para A , the Company is hopeful of resuming its normal operations once the cash flow improves. Hence the accounts of the Company are prepared on a going concern basis.


8 9

3. Emphasis of MatterA. The Company has not carried out any valuation of the stocks

which are lying with them / in the joint custody with the banks. To that extent the increase or decrease in the value of inventories as at year end, as required to be done as per the requirements of Ind-AS -2 (Inventories), has not been done. The impact on the profit/loss of the company due the said non valuation has not been determined. Refer note no. 10.

B. There is difference of Rs. 3,46,88,692/- in the outstanding balance of advances obtained from the bankers. In absence of details made available by the bankers, the company is not in a position to reconcile the difference. Which may lead to understatement of liability and its consequential effect in the book result if any.

C. Due to the defaults of the Company to the banks, the Company’s accounts have been classified as NPAs by the banks. Most of the banks have not charged interest on the Company’s borrowings / loans, while some banks have been charging interest at higher rates. The board of directors of the Company in its meeting held on 30th May 2015 had decided not to provide Interest. Now the directors in its meeting dated 29th May 2017 have decided to provide for Interest to comply with Ind-AS. The Company has provided Interest @ 12.5 % of the outstanding amount being the average rate of rupee export finance as worked out by the Directors. Moreover, The Debt recovery tribunal has passed order dated 09.12.2016 determining the total amount payable Rs.4,687,0404,315/- along with the simple interest @ 14% p.a. from the date of filing of original application with DRT till the date of realization of dues. However, the company has not passed any effect relating to the above mention order as the detailed calculation of Bank wise liability is not available and in that concern liability of the company cannot be determined.

A. A Inventory of diamonds and pearls lying at Surat and Mumbai has been placed in the lockers in PNB and is in the joint custody with PNB since 18.06.2013. The stock at Chennai SEZ and Cochin SEZ are also in the joint custody with PNB since November 2013 at company’s premises. Inventory at Bangalore and Goa are also in the joint custody with PNB at their local branches at Bangalore and Goa.

The majority of the inventory is in the joint custody with Bank and therefore the same has not been valued by the Management.

B. The details of differences debited by the Banka are not available and the banks are not providing any details under the circumstances as a result of which the Company is not in the possession to reconcile the difference.

C. The Board of Directors of the Company in its meeting held on 30th May, 2015 had decided not to provide interest. Now the Directors in its meeting dated 29th May, 2017 have decided to provide for interest to comply with ind AS. The Company has provided compounding interest @ 12.5% of the outstanding amount being the average rate of rupee export finance . As the detailed break up of liabilities determined by DRT is not available and therefore the Company has provided interest as decided by the Board of Directors.

SECRETARIAL AUDITOR AND HIS REPORTThe Board has appointed kamlesh M. Shah & Co, Practising Company Secretaries to conduct the Secretarial Audit of FY 2016-17. The Secretarial Audit Report for the year ended 31st March, 2017 ia attached herewith as Annexure……The management would like to state that Cossortium Banks are not inviting the Company to attend the meeting. Mr. S.P Tanwar, Nominee Director was attending the meeting of consortium Banks, however he never gives any information pertaining to proceeding of the meeting.AUDITORSIn the AGM held on 30th September, 2016, M/s Manan Vakil & Co., Chartered Accountants, Ahmedabad were appointed as Statutory auditors of the Company for as period of five years. Ratification of the appointment of statutory auditors is being sought from the members of the Company at the ensuing AGM.EXTRACT OF ANNUAL RETURNThe details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “ANNEXURE …. ”.RISK MANAGEMENTThough the Company’s operations has come to a grinding halt post devolvement of Letter of Credits issued in favour of bullion banks, the probability of any operational risks has come to a naught Since March 2014, the operations have come to a halt and company does not have any underlying transactions requiring hedging. Apart from above, the company does not have elaborate risk management policy in relation to other commercial and operational risks. Further pursuant to SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 the requirement to constitute Risk Management Committee is now applicable to top 100 Listed companies and therefore the said committee has been dissolved by the Board on 10th May, 2016.PARTICULARS OF REMUNERATIONThe Information required under section 197 of the Companies Act, 2013 and the rules made there-under in respect of the employees of the Company is as under:(a) the ratio of the remuneration of each director to the

median remuneration of the employees of the Company for the financial year

Nil(b) the percentage increase in remuneration of each Director,

Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year;

Nil(c) the percentage increase in the median remuneration of

employees in the financial year Nil(d) the number of permanent employees on the rolls of

Company: Five


10 11

(e) the explanation on the relationship between average increase in remuneration and Company performance;

There are no increase in remuneration during the last 4 years.(f) comparison of the remuneration of the Key Managerial

Personnel against the performance of the company;

Particulars ` In lacsRemuneration of Key Managerial Personnel (KMP) during the financial year 2014-15 (aggregated)

11.22

Revenue from operationsRemuneration (as % of revenue)Profit before tax (PBT)Remuneration (as % of PBT)

(g) variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and 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 in case of listed companies, and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year;

Not Applicable(h) 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 and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration.

Not Applicable(i) the key parameters for any variable component of

remuneration availed by the directors; Not Applicable(j) the ratio of the remuneration of the highest paid director

to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year;

Nil None of the employees receive remuneration in excess of the

limits as prescribed in the information required pursuant to Section 197 read with sub rule (2) of rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company.

PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORSDuring the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company except the payment of sitting fees.CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORTSReport on Corporate Governance, Management Discussion and Analysis and Auditor’s Report on compliance with the Corporate Governance requirements have been included in this Annual Report in separate sections.ACKNOWLEDGEMENTSYour Company and Board wish to thank the members of the Company and staff for their continued patience and co-operation.


10 11

FormAOC-1(Pursuant to first proviso to sub-section(3) of section129 read with rule 5of Companies( Accounts) Rules, 2014)Statement containing salient features of the financial statement of subsidiaries or associate companies or joint venturesPart A Subsidiaries(Information in respect of each subsidiary to be presented with amounts in Rs.)1. Sl. No. NA2. Name of the subsidiary NA3. Reporting period for the subsidiary concerned ,if different from the holding company’s reporting period. NA4. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. NA5. Share capital NA6. Reserves and surplus NA7. Total assets NA8. Total Liabilities NA9. Investments NA10. Turnover NA11. Profit before taxation NA12. Provision for taxation NA13. Profit after taxation NA14. Proposed Dividend NA

15. Extent of shareholding (in percentage) NA

Part B Associates and Joint VenturesStatement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Name of Associates Revah corporation ltd

Forever precious jewellery & diamonds ltd

1. Latest audited Balance Sheet Date 31.03.2017 31.03.20172. Date on which the Associate or Joint Venture was associated or acquired3. Shares of Associate or Joint Ventures held by the company on the year end No. 24,34,700 3,92,00,000 Amount of Investment in Associates or Joint Venture 2,43,47,000/- 141,17,10,802/- Extent of Holding (in percentage) 48.69 49.004. Description of how the reissignificant influence NA NA5. Reason why the associate/joint venture is not consolidated NA NA6. Net worth attributable to shareholding as per latest audited Balance Sheet - 65,96,68,9977. Profit or Loss for the year - -i. Considered in Consolidation - 8,12,953ii. Not Considered in Consolidation 2,051 -

For and behalf of Board of Directors

Date : 14th August, 2017 Harshad Udani Harish MehtaPlace : Ahmedabad Director Director (DIN: 07014853) (DIN:05316274)


12 13

Form No. MGT-9EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31st March, 2014[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the

Companies (Management and Administration) Rules, 2014]I. REGISTRATION AND OTHER DETAILS:

i) CIN:- L36910GJ1985PLC015915ii) Registration Date 10/09/1985iii) Name of the Company WINSOME DIAMONDS AND JEWELLERY LIMITEDiv) Category / Sub-Category of the Company COMPANY LIMITED BY SHARESv) Address of the Registered office and contact details ASHOKA TOWER, KESHARBA MARKET-2, GOTALAWADI

KATARAGAM, SURAT – 395004vi) Whether listed company Yesvii) Name, Address and Contact details of Registrar and Transfer

Agent, if anyLINK INTIME INDIA PVT. LTD.C-101,247 park, LBS Marg, Vikhroli (West),Mumbai - 400083

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sl. No. Name and Description of main products /services

NIC Code of the Product/service

% to total turnover of thecompany

1 GOLD, DIAMONDS & JEWELLERYIII. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –

S. No.

NAME AND ADDRESS OFTHE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY/ASSOCIATE

% of sharesheld

Applicable Section

1 FOREVER PRECIOUS JEWELLERY & DIAMONDS LTD

U36911GJ1996PLC028701 ASSOCIATE 49.00 2(6)

2 REVAH CORPORATION LTD U74999GJ2007PLC049850 ASSOCIATE 48.69 2(6)IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding

Category ofShareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Changeduring

the yearDemat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

A. Promoters(1) Indian 0 0 0 0 0 0 0 0 0a) Individual/HUF 213210 0 213210 0.20 213210 0 213210 0.20 0b) Central Govt 0 0 0 0 0 0 0 0 0c) State Govt (s) 0 0 0 0 0 0 0 0 0d) Bodies Corp. 26658385 0 26658385 25.01 26658385 0 26658385 25.01 0e) Banks / FI 0 0 0 0 0 0 0 0 0f) Any Other…. 0 0 0 0 0 0 0 0 0Sub-total (A) (1):- 26871595 0 26871595 25.21 26871595 0 26871595 25.21 0(2) Foreign 0 0 0 0 0 0 0 0 0a) NRIs -Individuals

0 0 0 0 0 0 0 0 0

b) Other –Individuals

0 0 0 0 0 0 0 0 0

c) Bodies Corp. 0 0 0 0 0 0 0 0 0


12 13

Category ofShareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Changeduring

the yearDemat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

d) Banks / FI 0 0 0 0 0 0 0 0 0e) Any Other…. 0 0 0 0 0 0 0 0 0Sub-total (A) (2):- 0 0 0 0 0 0 0 0 0Total shareholding of Promoter(A) = (A)(1)+(A)(2)

26871595 0 26871595 25.21 0 0 0 0 0

B. Public Shareholding1. Institutions 0 0 0 0 0 0 0 0 0a) Mutual Funds 13700 18400 32100 0.03 13700 18400 32100 0.03 0b) Banks / FI 3425 6868 10293 0.01 1200 6868 8068 0.01 0c) Central Govt 0 0 0 0 0 0 0 0 0d) State Govt(s) 0 0 0 0 0 0 0 0 0e) Venture Capital Funds 0 0 0 0 0 0 0 0 0f) InsuranceCompanies

0 0 0 0 0 0 0 0 0

g) FIIs / Foreign Portfolio Investor 14850814 0 14850814 13.93 2456772 0 2456772 2.30 11.63h) Foreign Venture Capital Funds 0 0 0 0 0 0 0 0 0i) Others (specify) 0 0 0 0 0 0 0 0 0Foreign Financial Institution 0 12700 12700 0.01 0 12700 12700 0.01 00Foreign Bank 100 0 100 0.00 500 0 500 0.00 0.00UTI 0 4400 4400 0.00 0 4400 4400 0.00 00Sub-total (B)(1):- 0 0 0 0 0 0 0 0 02. Non-Institutions 0 0 0 0 0 0 0 0 0a) Bodies Corp. 0 0 0 0 0 0 0 0 0i) Indian 0 0 0 0 0 0 0 0 0ii) Overseas 0 0 0 0 0 0 0 0 0b) Individuals 0 0 0 0 0 0 0 0 0i) Individual shareholders holding nominal share capital upto Rs. 1 lakh

17485563 2898412 20383975 19.12 17937604 2889145 20826749 19.54 0.42

ii) Individual shareholders holdingnominal share capital in excess of Rs 1 lakh

34244039 0 34244039 32.12 42838529 0 42838529 40.18 8.06

c) Others (specify) 0 0 0 0 0 0 0 0 0(i) Trusts 1000 0 1000 0.00 1100 0 1100 0.00 0.00(ii) Hindu Undivided Family 963338 0 96338 0.90 1205845 0 1205845 1.13 0.23(iii) Foreign Companies 0 15000 15000 0.01 0 15000 15000 0.01 00(iv) Non Resident Indians (Non -Repat)

215422 1050 216472 0.20 209093 1050 210143 0.20 0.00

(v) Non Resident Indians (Repat) 2699487 190786 2890273 2.71 2359708 189286 2548994 2.39 0.32(vi) Clearing Member 424261 424261 0.40 738804 738804 0.69 0.30(vii) Bodies Corporate 5661220 26314 5687534 5.34 35681876 26314 35708190 33.50 28.16Sub-total (B)(2):- 61694330 3131562 64825892 60.81 100972559 3120795 104093354 97.64 36.83Total Public Shareholding (B)=(B)(1)+ (B)(2)

76562369 3173930 79736299 74.79 103444731 3163163 106607894 100.00 25.21

C. Shares held by Custodian forGDRs & ADRsGrand Total (A+B+C) 103433964 3173930 106607894 100.00 103444731 3163163 106607894 100.00 0


14 15

(ii) Shareholding of Promoters

SlNo.

Shareholder’sName

Shareholding at the beginningof the year

Share holding at the end of theyear

No. ofShares

% of totalShares of the

company

%of Shares Pledged /

encumberedto total shares

No. ofShares

% of totalShares of

thecompany

%of SharesPledged /

encumberedto totalshares

% changein shareholdingduring

the year1 JATIN RAJNIKANT MEHTA 145630 0.14 0 145630 0.14 0 02 JATIN RAJNIKANT MEHTA 67580 0.06 0 67580 0.06 0 03 KOHINOOR DIAMONDS PRIVATE LIMITED 14138996 13.26 0 14138996 13.26 0 04 J R DIAMONDS PRIVATE LIMITED 3876797 3.64 0 3876797 3.64 0 05 DIADEM INVESTMENT & FINANCE PVT LTD 3867094 3.62 0 3867094 3.62 0 06 BOMBAY DIAMONDS COMPANY PRIVATE LIMITED 3422232 3.21 0 3422232 3.21 0 07 FOREVER DIAMONDS PRIVATE LIMITED 930016 0.87 0 930016 0.87 0 08 FIRSTRATE DIAMONDS PRIVATE LIMITED 423250 0.40 0 423250 0.40 0 0

Total 26871595 25.21 0 26871595 25.21 0 0 (iii) Change in Promoters’ Shareholding (please specify, if there is no change) : NA

Sl.No.

Shareholding at the beginning ofthe year

Cumulative Shareholding during the year

No. of shares % of total shares of the company

No. of shares

% of total shares of the company

At the beginning of the year NA NA NA NADate wise Increase / Decrease in Promoters Share holding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc):

NA NA NA NA

At the End of the year NA NA NA NA(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sr No.

Name & Type of Transaction Shareholding at the beginning of the year - 2016

Transactions during the year Cumulative Shareholding at the end of the year - 2017

NO.OF SHARES

HELD

% OF TOTAL SHARES OF THE

COMPANY

DATE OF TRANSACTION

NO. OF SHARES

NO OF SHARES HELD

% OF TOTAL SHARES OF

THE COMPANY1 JHAVERI TRADING AND INVESTMENT

PVT LTD0 0.0000 0 0.0000

Transfer 08 Jul 2016 3722425 3722425 3.4917AT THE END OF THE YEAR 3722425 3.4917

2 SPARROW ASIA DIVERSIFIED OPPORTUNITIES FUND

2786199 2.6135 2786199 2.6135

Transfer 08 Jul 2016 (279427) 2506772 2.3514Transfer 03 Feb 2017 (50000) 2456772 2.3045AT THE END OF THE YEAR 2456772 2.3045

3 SARASWATHI PALANISAMY 937000 0.8789 937000 0.8789Transfer 01 Jul 2016 373000 1310000 1.2288AT THE END OF THE YEAR 1310000 1.2288

4 BISWAMBHAR LAL AGARWAL 47056 0.0441 47056 0.0441Transfer 03 Feb 2017 534035 581091 0.5451Transfer 31 Mar 2017 592247 1173338 1.1006AT THE END OF THE YEAR 1173338 1.1006


14 15

Sr No.



NO.OF SHARES

HELD


COMPANY

DATE OF TRANSACTION

NO. OF SHARES

NO OF SHARES HELD


THE COMPANY5 LSC SECURITIES LIMITED 1776034 1.6659 1776034 1.6659

Transfer 08 Jul 2016 (54806) 1721228 1.6145Transfer 15 Jul 2016 884 1722112 1.6154Transfer 26 Aug 2016 (2000) 1720112 1.6135Transfer 02 Sep 2016 (60) 1720052 1.6134Transfer 16 Sep 2016 (139500) 1580552 1.4826Transfer 23 Sep 2016 (24300) 1556252 1.4598Transfer 30 Sep 2016 (21100) 1535152 1.4400Transfer 07 Oct 2016 (6613) 1528539 1.4338Transfer 14 Oct 2016 5000 1533539 1.4385Transfer 21 Oct 2016 52574 1586113 1.4878Transfer 09 Dec 2016 3000 1589113 1.4906Transfer 16 Dec 2016 (1000) 1588113 1.4897Transfer 23 Dec 2016 (2200) 1585913 1.4876Transfer 17 Feb 2017 500 1586413 1.4881Transfer 24 Feb 2017 (500) 1585913 1.4876Transfer 24 Mar 2017 (12000) 1573913 1.4764Transfer 31 Mar 2017 (413651) 1160262 1.0883AT THE END OF THE YEAR 1160262 1.0883

6 JIGAR DESAI 1000000 0.9380 1000000 0.9380AT THE END OF THE YEAR 1000000 0.9380

7 PASSAGE TO INDIA MASTER FUND LIMITED

6364615 5.9701 6364615 5.9701

Transfer 07 Apr 2017 (6364615) 0 0.0000AT THE END OF THE YEAR 0 0.0000

8 PRIME INDIA INVESTMENT FUND LTD 5700000 5.3467 5700000 5.3467Transfer 25 Nov 2016 (455999) 5244001 4.9190Transfer 02 Dec 2016 (312280) 4931721 4.6260Transfer 09 Dec 2016 (1128979) 3802742 3.5670Transfer 16 Dec 2016 (2641219) 1161523 1.0895Transfer 23 Dec 2016 (1161523) 0 0.0000AT THE END OF THE YEAR 0 0.0000

9 NEELAM CHANDNANI 777777 0.7296 777777 0.729630 June 2016 1001 778778 0.730504 Nov 2016 10000 788778 0.739911 Nov 2016 444 789222 0.740323 Dec 2016 30000 819222 0.7684

11555 830777 0.7793AT THE END OF THE YEAR 830777 0.7793

10 KRISHNA AVTAR 380000 0.3564 380000 0.356417 June 2016 15000 395000 0.370530 Sep 2016 585000 980000 0.919320 Oct 2016 15111 995111 0.9334

AT THE END OF THE YEAR 995111 0.9334


16 17

Sr No.



NO.OF SHARES

HELD


COMPANY

DATE OF TRANSACTION

NO. OF SHARES

NO OF SHARES HELD


THE COMPANY11 RITU CHANGIA 312223 0.2929 312223 0.2929

AT THE END OF THE YEAR 312223 0.292912 HANSABEN DHANJI VARSANI 304408 0.2855 304408 0.2855

AT THE END OF THE YEAR 304408 0.285513 VARSANI PURBAI MURJI 288668 0.2708 288668 0.2708

AT THE END OF THE YEAR 288668 0.270814 VIKAS KUMAR AGRAWAL 268549 0.2519 268549 0.2519

AT THE END OF THE YEAR 268549 0.251915 SURENDRA JAYKUMAR JAIN 226519 0.2125 226519 0.2125

AT THE END OF THE YEAR 226519 0.212516 SACHIN PRABHAKAR SATOSKAR 225606 0.2116 225606 0.2116

AT THE END OF THE YEAR 29 April 2016 20000 245606 0.230431 March 2017 245606 0.2304

AT THE END OF THE YEAR 245606 0.230417 DASHARAJ BHIMADEO KOLHE 218500 0.2050 218500 0.2050

30 June 2016 6000 224500 0.210608 Jul 2016 10502 235002 0.220429 July 2016 10000 245002 0.229802 Sep 2016 49998 295000 0.276730 Sep 2016 5000 300000 0.281430 Dec 2016 (4000) 304000 0.285206 Jan 2016 18000 322000 0.302024 Feb 2017 (18000) 340000 0.3189

AT THE END OF THE YEAR 340000 0.3189 (v) Shareholding of Directors and Key Managerial Personnel : NILV. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans / Unsecured loanexcluding deposits

Deposits TotalIndebtedness

Indebtedness at the beginning ofthe financial yeari) Principal Amount 41,748,181,853 41,748,181,853ii) Interest due but not paid 13,644,124,154 13,644,124,154iii) Interest accrued but not due - -Total (i+ii+iii) 55,392,306,007 55,392,306,007Change in Indebtedness during the financial year• Addition (Interest) 6,945,336,259 6,945,336,259• Reduction (Principle) 479,182,236 479,182,236Net ChangeIndebtedness at the end of the financial yeari) Principal Amount 41,268,999,617 41,268,999,617ii) Interest due but not paid 20,589,460,413 20,589,460,413iii) Interest accrued but not due - -Total (i+ii+iii) 61,858,460,030 61,858,460,030


16 17

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sl.No.

Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

---- ---- ----1 Gross salary HARSHAD UDANI

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

600,000* 600,000*

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

2 Stock Option3 Sweat Equity4 Commission

- as % of profit- others, specify…

5 Others, please specifyTotal (A) 600,000* 600,000*Ceiling as per the Act

*Provision made subject to approval of banksB. Remuneration to other directors:

SR.no.

Particulars of Remuneration Name of Directors TotalAmount

HARISH MEHTA

S.P. TANWAR HARIMOHAN NAAMDEV

AMI KOTHARI

1. Independent Directors• Fee for attending board /

committee meetings23000 NIL 16000 22000 61000

• Commission NIL NIL NIL NIL NIL• Others, please specify NIL NIL NIL NIL NILTotal (1) 23000 16000 22000 61000

2. Other Non-Executive Directors

• Fee for attending board / committee meetings

NIL 6000 NIL NIL 6000

• Commission NIL NIL NIL NIL NIL• Others, please specify NIL NIL NIL NIL NILTotal (2) NIL NIL NIL NIL NILTotal (B)=(1+2) 6000 6000Total Managerial Remuneration 67000Overall Ceiling as per the Act


18 19

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

Sl.No.

Particulars of Remuneration Key Managerial Personnel

CEO Company Secretary CFO Total1 Gross salary 522,181

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) Incometax Act, 1961

2 Stock Option3 Sweat Equity4 Commission

- as % of profit- others, specify…

5 Others, please specifyTotal 522,181

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NIL


18 19

FORM NO. MR-3SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2017[Pursuant to section 204(1) of the Companies Act, 2013 and rule

No. 9 of the Companies(Appointment and Remuneration of Key Managerial Personnel)

Rules, 2014]To,The Members,WINSOME DIAMONDS AND JEWELLERY LIMITEDCIN: L36910GJ1985PLC015915I/we have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by WINSOME DIAMONDS AND JEWELLERY LIMITED.(Hereinafter called the Company).Secretarial Audit was conducted in a manner that provided me/us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon.Based on my/our verification of the records of WINSOME DIAMONDS AND JEWELLERY LIMITED books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the company, its officers, agents and authorized representatives during the conduct of secretarial audit, I/We hereby report that in my/our opinion, the company has, during the audit period covering the financial year ended on 31st March 2017 complied with the statutory provisions listed hereunder and also that the company has proper Board-processes and compliances mechanism in place to the extent , in the manner and subject to the reporting made hereinafter:(1) I/We have examined the books, papers, minute books,

forms and returns filed and record maintained by WINSOME DIAMONDS AND JEWELLERY LIMITED (CIN: L36910GJ1985PLC015915) for the financial year ended on 31.03.2017 according to the provisions of:

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

(ii) The Securities Contracts (Regulations) Act,1956 (‘SCRA’) and the rules made thereunder;

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

(iv) Foreign Exchange Management Act,1999 and the rules and regulation made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings:

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

(a) The Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeover) Regulations, 2011;

(b) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

(c) The Securities and Exchange Board of India (Prohibition of Insider Training)Regulations,1992;

(d) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

(e) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

(f) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(g) The Securities and Exchange Board of India(Registrar to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client.

(h) The Securities and Exchange Board of India(Delisting of Equity Shares)Regulations, 2009 and

(i) The Securities and Exchange Board of India (Buyback of Securities)Regulations, 1998;

(vi) As stated in the Annexure – A – all the laws, rules, regulations are applicable specifically to the company.

(2) I/We have also examined compliance with the applicable clauses of the following:

(j) Secretarial Standards issued by The Institute of Company Secretaries of India are complied. However the company does not have copies of minutes/ abstracts of various meetings with its bankers.

(k) The Uniform Listing Agreements Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into by the Company with Bombay Stock Exchange and National Stock Exchange.

During the period under review the Company has complied with the provision of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above, Except the observations which are been observed Independent Auditor in their report are mentioned in the ANNEXURE-B and forms part of this report.

(3) I/We further report that The Board of Directors of the Company is duly constituted

with proper balance of Executive Directors, Non- Executives Directors, Independent Directors and Woman Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provision of the Act. However, the Company has yet not appointed Chief Financial Officer and Internal Auditor.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and wherever applicable and to the Extent possible a system exists for seeking and obtaining further information and clarification on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members’ views are captured and recorded as part of the minutes. However we have been informed by management that during the year no meetings were conducted with the Consortium bankers/lenders.

(4) I/We further report that there are adequate systems and processes in the company commensurate with the size and


20 21

operations of the company to monitor and ensure compliances with applicable laws, rules, regulations and guidelines.

(5) I/We further report that during the audit period the company has not made any

(I) Public/ Right/Preferential issue of shares/ debentures/sweat equity, etc.

(II) Redemption/ buy-back of securities(III) Major decisions taken by the members in pursuance to section

180 of the Companies Act, 2013(IV) Merger/ amalgamation/reconstruction etc.(V) Foreign technical collaborations

FOR KAMLESH M. SHAH & CO.,PRACTICING COMPANY SECRETARIES

(KAMLESH M. SHAHPLACE: AHMEDABAD PROPRIETORDATE: 14TH August, 2017 ACS: 8356, COP: 2072

ANNEXURE-ASecurities Laws1. All Price Sensitive Information was informed to the stock

exchanges form time to time whenever they occur, however the Company has not sent copy of order of Debt Recovery Tribunal (DRT) Ahmedabad to stock Exchange.

2. All investors complain directly received by the RTA & Company is recorded on receipts and all are resolved within reasonable time.

Labour Laws1. All the premises and establishments have been registered

with the appropriate authorities.2. The Company has not employed any child labour/ Bonded

labour in any of its establishments.3. Provisions with relate to compliances of PF/ESI/Gratuity Act

are applicable to Company but not Complied with fully.Environmental LawsAs the company is not engaged in the manufacturing activities so

the Environmental laws are not applicable to the company.1. The company is not discharging the contaminated water at the

public drains/rivers.2. The company has been disposing the hazardous waste as per

applicable rules. (Not Applicable)Taxation Laws1. The company follows all the provisions of the taxation and

Income Tax Act, 1961 and filing the returns at proper time with Income tax department and all other necessary departments.



ANNEXURE-BOBSERVATIONS OF THE SECRETARIAL AUDIT REPORT

(Please Refer Para 2(i) of Our Report of Even date)1. The Company has not Complied with Accounting Standard -11

(Standard on The Effects of Changes in Foreign Exchange Rates), the Company is required to report the monetary items using the closing rate. Accordingly the Company is required to value the monetary assets and liabilities viz. foreign currency trade receivables, trade payables and foreign currency loan at the foreign exchange rate prevailing as on the date of the balance sheet. The Company has not carried out such valuations as at the year end.

2. The Company has not Complied with Accounting Standard- 2 (Valuation of Inventories) has not been done The impact on the profit/loss of the company due the said non valuation has not been determined.

3. During the year under review, no provisions have been made for such interest on borrowing of loans from secured Creditors.

4. The Company has not made provision for diminishing value of Investment as required necessary to Complied with Accounting Standard- 13 (Accounting for Investments) for investments made by the company in its Group Company i.e. FOREVER PRECIOUS JEWELLERY AND DIAMONDS LIMITED.

5. The Bankers have taken over all the fixed assets of the company under SARFAESI ACT, company’s all manufacturing units are not in its possession at present. The company’s assets cover its liability only up to the extent of 2%. Further during the year, the management has yet not taken any effective steps for Company’s Financial Revival, except waiting for recovery amount migrated from overseas parties.

EFFECT OF ABOVE OBSERVATIONS FINANCIAL OR OTHER OPERATIONS OF THE COMPANY AND ITS LIABILITIESRegarding Para 1 :- The Profit/loss for the year as stated in Profit & Loss A/c and Balance Sheet does not Reflect true Figures.Regarding Para 2:- Profit or loss for the year may be overstated or understated as observed by independent auditors in their report. We are unable to quantify the FiguresRegarding Para 3:- Accordingly Interest for the year is understated resulting in total loss of the Company being understated.Regarding Para 4:- In the Light of absence of any current Valuation report of Value of Investments made in shares of FOREVER PRECIOUS JEWELLERY AND DIAMONDS LIMITED (Group Company), the provision required to be made in Profit & Loss A/c and balance sheet for diminishing value of Investment cannot be ascertained and accordingly we are unable to Comment upon the Financial impact.Regarding Para 5:- The company owes huge amount to its bankers. In the circumstances, we are doubtful for the company’s Existence as going concern and its ability to repay debts and has mere possibilities of its revival




20 21

MANAGEMENT DISCUSSION AND ANALYSIS REPORTCURRENT SCENARIOThe company witnessed unprecedented turn of events during last four years. The company has not carried out any activity since the last three years post its devolvement saga. The company could not meet the commitment to the banks due to non-realisation of its export bills from its defaulting overseas customers.The bankers appointed independent audit firms i.e. Kroll and E & Y to carry out the forensic and investigative audit for which the company offered explanations. Despite our repeated request Bankers has not obliged us by providing a copy of Kroll and E & Y Report. We have however requested them to confirm whatever report we have received from unconfirmed sources is genuine one or not, but they have not replied to us.The company initiated legal proceedings against its 13 defaulting overseas customers before the Sharjah Federal Court of first instant in Sharjah, UAE to recover its outstandings. The judgment of the Sharjah Federal Court of First Instance in Sharjah, UAE have been in favour of the company. The Court has directed the defaulting overseas customers to repay the outstanding amount alongwith interest @ 5% per annum.The overseas customers have gone in further Appeal against the orders of Sharjah Federal Court of First Instance. The following are the status of the appeals pending before the Appellate Court/ Supreme Court.

Name of the defaulting UAE customers

Status of the appeal

Name of the Appellate authority

Dana Jewellery FZE Appeal No.1191/2015

Pending for expert Report

Appellate Court

Al Subhi Jewellery FZE Case No. 14/2016


Supreme Court

Al Minhaj Jewellery FZE Case No. 16/2016


Supreme Court

The bankers to the company have declared the company and its directors as willful defaulters which the company has vehemently objected . The Punjab National Bank has even declared independent directors as willful defaulter, contrary to RBI Circular on Willful defaulter, Independent Directors has also objected to it in writing but PNB has not replied to it. The company has reiterated that they are victim of circumstances beyond their control and are taking all possible steps to recover the amounts due.The company has also received notice from Debt Recovery Tribunal and the matter is in progress. The Company also received notice under the SARFAESI Act, for attachment of its assets at all locations.The bankers have lodged complaints with the agencies like the Central Bureau of Investigation and Enforcement Directorate. The company officials and its directors have fully co-operated with the agencies during the investigation. The Bankers has not provided us the copies of the complaint filed with these agencies despite our several requests.The Directorate of Enforcement vide the letter F.No. ECIR/20/MZO/2014/1202 dated 31st May, 2016 issued provisional attachment order 08/2016 by attaching our properties situated at

Bangalore, Jodhpur-Rajasthan. Surat, Goa, Kolkatta and Mumbai, under Sub - Section (1) of section 5 of the Prevention of Money Laundering Act, 2002 (15 of 2003).Registrar/Administrative Officer, Adjudicating Authority (PMLA), New Delhi has issued notice to show Cause under section 8 of PML Act, 2002 vide OC. NO. 609/2016 dated 01.07.2016.COMPANY’S PERFORMANCEThe unexpected development forced the company to shut all its activities. There have been no significant performance during the current year under consideration. Salient figures of the Company are as under.

(Rs. In Crores)

Particulars 2016-17(12 months )

2015-16(12 months )

Total Revenue 63.94 325.58PBT (835.61) (327.81)PAT (836.02) (326.87)EPS (78.52) (30.70)

OUTLOOKWith little realization of about 1.5 lacs US $ export proceeds during the year under review, the company is hoping for an early favourable outcome of its legal suit filed against the defaulting overseas customers in the court in U.A.E. The Company has entered into a tripartite One time settlement (OTS) Agreement with State Bank of Mauritius and UAE based defaulting party.OPPORTUNITIES, THREAT, RISKS AND CONCERNSWith unforeseen developments over the last three years the relevancy of opportunities, threats, risks and concerns are not applicable at the moment.INTERNAL CONTROL SYSTEMThe Company has internal control system commensurate with its size and current activities to ensure efficiency of operation, compliance and applicable laws and other statutory regulations as well as with internal controls, protection of resources and assets.HUMAN RESOURCESDuring the year under review, there were no significant activities in the company as all its locations have stopped normal operations due to unforeseen development as mentioned above. The Company has only administrative personnel and relation with them is cordial.CAUTIONARY STATEMENTThe company has not made any projections, estimate nor any expectations for the future. The company is looking forward to the outcome of the legal suit filed in the UAE against its defaulting overseas customers.


22 23

CORPORATE GOVERNANCE REPORTCORPORATE GOVERNANCE PHILOSPHYThe Company firmly believes and has consistently practiced good corporate governance. Company constantly strives towards betterment of these aspects and thereby perpetuate it into generating long term economic value for its shareholders, customers, employees, other associated persons and the society as a whole.BOARD OF DIRECTORSThe Board of the Company at the year end on 31st March,2017 consists of Five Directors out of which Three are Non-Executive Independent Directors, One Nominee Director and One Whole Time Director. The composition of the Board is in conformity with Regulation 17 of the SEBI Listing Regulations read with Section 149 of the Act. None of the Directors on the Board hold directorships in more than ten public companies. Further none of them is a member of more than ten committees or chairman of more than five committees across all the public companies in which he is a Director.Nine Board Meetings (including adjourned meetings) were held during the financial year ended on following dates 09th April, 2016, 10th May, 2016 , 19th May, 2016, 27th August, 2016, 14th November, 2016, 4th February, 2017. The gap between two meetings did not exceed one hundred and twenty days. The information as mentioned in Schedule II Part A of the SEBI Listing Regulations, has been placed before the Board for its consideration. The details of the familiarisation programme of the Independent Directors are available on the website of the Company (http://www.winsomejewellery.com).The names and categories of the Directors on the Board, their attendance at Board Meetings held during the year and the number of Directorships and Committee Chairmanships / Memberships held by them in other public companies as on March 31, 2017 are given herein below. Other directorships do not include directorships of private limited companies, foreign companies and companies under Section 8 of the Act. Chairmanships / Memberships of Board Committees shall only include Audit Committee and Stakeholders’ Relationship Committee.Name of Director

Category No. of Board Meeting

Whether attended Last

Annual General Meeting held on

Number of Directorship

in other public companies

Number of Committee Position held in other Public

CompaniesHeld Attended Chairman Member

Mr. Harshad Udani (DIN 07014853)

Executive Director 6 6 Yes 1 Nil 1

Mr. Harish Mehta (DIN 05316274)

Non-Executive & Independent Director

6 6 Yes 3 Nil 2

Mr. Harimohan Namdev(DIN 02658937)


6 2 Yes 2 - 1

Mr. Satya Prakash Tanwar (DIN 06701468)

Nominee Director representing Consortium Banks

6 2 No 1 Nil Nil

Ms. Ami Kothari (DIN 07104331)


6 6 No 1 Nil Nil

Mr. Kalpesh Sanghani (DIN 07743036)


6 1 No 1 NIL 1

The Board has sought resignation of Mr. Satya Prakash Tanwar, Nominee Director vide letter dated 2nd March, 2016 for consistently working against the interest of the company and non fulfilling the fiduciary duty as a Director of the Company. Further the Company has also sent a letter to the Bank for replacement of Nominee Director dated 28th March, 2016. The Company has not received any feedback or comments from the Nominee Director or Banks.The Board of Directors at its meeting held on 29th May,2017 had decided to sent the letter reminding Consortium of Banks to send the reply to the Company.COMMITTEES OF THE BOARDA) Audit Committee The audit committee of the Company is constituted in line with

the provisions of Regulation 18 of SEBI Listing Regulations, read with Section 177 of the Companies Act, 2013.

The terms of reference of the Audit Committee cover all such matters specified under SEBI ( Listing Obligation and Disclosure Requirement) Regulation,2015, under Section 177 of the Companies Act, 2013 and includes all other matters as may be directed by Board from time to time.

The statutory auditors, internal auditors are invited to the audit committee. The Company Secretary acts as secretary of the committee. All members of the Audit Committee have accounting and financial management expertise.

Five Audit Committee Meetings (including adjourned meetings) were held during the Financial Year ended on 31st March, 2017 on 10th May, 2016, 19th May, 2016, 27th August, 2016, 14th November, 2016, and 25th January, 2017. The Composition of the Audit Committee and details of attendance of the members at the Audit Committee Meetings during the year are given below

Name of Directors Designation No. of Meetings Attended

Ms. Ami Kothari^ Chairperson 4Mr. Harshad Udani Member 5Mr. Harimohan Namdev* Member 1Mr. Harish Mehta Member 5Mr. Kalpesh Sanghani** Member Nil

^ Appointed as Chairperson w.e.f 4th February, 2017 *Resigned w.e.f 1st February, 2017. **Appointed as member of Committee w.e.f 24th April, 2017.B) Stakeholders’ Relationship Committee The stakeholders’ relationship committee is constituted in

line with the provisions of Regulation 20 of SEBI Listing Regulations read with section 178 of the Act.

The Shareholders Relationship Committee resolves redressal of investors pertaining to transfer, transmission, dematerialization of shares, non-receipt of dividends, non-receipt of annual report.

During the year the committee met four times on 29th August, 2016, 09th November, 2016, 12th November, 2016,


22 23

06th February, 2017. The composition of the stakeholders’ relationship committee and the details of meetings attended by its members are given below:

Name of Directors Designation No. of Meetings attended

Ms. Ami Kothari^ Chairperson 3Mr. Harimohan Namdev* Member 4Mr. Harish Mehta Member 4Mr. Kalpesh Sanghani** Member 0

^ Appointed as Chairperson w.e.f 4th February, 2017 *Resigned w.e.f 1st February, 2017. ** Appointed as member of Committee w.e.f 24th April, 2017. During the year 22 complaints were received from

shareholders. All the complaints have generally been resolved to the satisfaction of the complainants.

Mr. Asish Narayan was Company Secretary and Compliance Officer of the Company w.e.f 4th February, 2017.

C) Nomination and Remuneration Committee The nomination and remuneration committee of the Company

is constituted in line with the provisions of Regulation 19 of SEBI Listing Regulations, read with Section 178 of the Act.

The terms of reference of the Nomination and Remuneration Committee cover all such matters specified under SEBI( Listing Obligation and Disclosure Requirement) Regulation,2015, under Section 178 of the Companies Act, 2013 and includes all other matters as may be directed by Board from time to time.

No meeting of the said committee were held during the year under review. The composition of the Nomination and Remuneration Committee and the details of meetings attended by its members are given below:

Name of Directors DesignationMs. Ami Kothari ^ ChairpersonMr. Harimohan Namdev* MemberMr. Harshad Udani MemberMr. Harish Mehta MemberMr. Kalpesh Sanghani** Member

^ Appointed as Chairperson w.e.f 4th February, 2017 *Resigned w.e.f 1st February, 2017. ** Appointed as member of Committee w.e.f 24th April, 2017. Remuneration Policy for Executive and Non Executive

and Independent Directors are as follows The Non-Executive Directors shall be entitled to receive

remuneration by way of sitting fees for each meeting of the Board attended by him of such sum as may be approved by the Board of Directors within the overall limits prescribe under the Companies Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Whereas Executive and Whole Time Director Mr. Harshad Udani remuneration is subject to the approval of the Banks and Central Government.

Remuneration paid to Directors for the year ended are as follows

Sr. No.

Name of Directors

SittingFees

SalaryPerquisites/Commission

No. of shares

held1. Mr. Harish Mehta 23,000 Nil Nil2. Mr. Harimohan

Namdev16,000 Nil Nil

3. Mr. Satyaprakash Tanwar

6,000 Nil Nil

4. Mr. Harshad Udani Nil 600,000* Nil5. Ms. Ami Kothari 22,000 Nil Nil

Total 67,000 6,00,000 * Subject to approval of Banks.D) Risk Management Committee The aforesaid committee was constituted for identifying the

elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. As almost entire turnover of the company comprised exports and most of its procurement of raw materials were through imports, the company had Risk Management Policy primarily relating to Forward / Derivative Contracts and Hedging operations. These transactions and policy were reviewed periodically. Since March 2014, the operations have come to a halt and company does not have any underlying transactions requiring hedging. Apart from above, the company does not have elaborate risk management policy in relation to other commercial and operational risks. Further pursuant to SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 the requirement to constitute Risk Management Committee is now applicable to top 100 Listed companies and therefore the said committee has been dissolved by the board on 10th May, 2016.

E) Corporate Social Responsibility Committee CSR Committee of the Company is constituted in line with

the provisions of Section 135 of the Act. However in light of continuing losses in the preceding two years and with no activities the company has not made any contribution towards the same. The company is committed to give its due contribution as soon as the situation improves.

The composition of the CSR Committee are given below :

Name of Directors Designation No. of MeetingsHeld Attended

Mr. Harish Mehta Chairman 0 0Mr. Harshad Udani Member 0 0Ms. Ami Kothari Member 0 0

FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS

The Company has familiarized its Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates etc. The details of the said familiarization programme is provided on the website of the Company and the web link is www.winsomejewellery.com


24 25

MEETING INDEPENDENT DIRECTORS During the year one meeting of the Independent Directors were

held on 28th March, 2017. The Independent Directors, inter-alia, reviewed the performance of non-independent directors, Chairman of the Company and the Board as a whole.

GENERAL BODY MEETINGS

Year Location Date Time Special Resolution

Passed2013-14

Mahida BhavanIcchanath

Opp. S. V. R. Engineering

College, Dumas Road, Surat

395007

30th September, 2014

12.30 p.m.

1

2014-2015


12.30 p.m.

1

2015-2016


12.30 p.m.

0

The Company has not passed any resolution through postal ballot during the year under review, none of the resolutions proposed for the ensuing Annual General Meeting need to be passed through Postal Ballot.

DISCLOSURESa) The particulars of transactions between the Company and its

related parties as required by Accounting Standard (AS)-18 issued by the Institute of Chartered Accountants of India are set out in point 32 of Notes to financial statements as at and for the 12 months period ended 31st March, 2017 of the Annual Report.

b) In preparation of financial statement, the Company has followed the applicable Accounting Standards referred to in Section 2 Clause (2) of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the annexure to the Notes to the Accounts.

c) The Company has not made any fresh capital issue during the period under review.

d) During the last three years, there were no strictures or penalties imposed on the Company either by SEBI or Stock Exchanges or any statutory authority for non-compliance of any matter related to capital market.

e) The Company has instituted a code of conduct for prevention of Insider Trading meant for Director(s) and Senior Management people. The code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of Winsome Diamonds and Jewellery Limited, and cautioning them of the consequences of violations.

A code of conduct for all Board members and senior management of the Company has been prepared. The code of conduct is available on the website of the Company www.winsomejewellery.com All Board members and senior management personnel have affirmed compliance with the Code of Conduct. A signed declaration to this effect is enclosed at the end of this report.

f) A qualified practicing Company Secretary carried out Reconciliation of Share Capital Audit to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid-up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held in electronic mode with NSDL and CDSL.

g) The certification of the financial statements and the cash flow statement for the period is enclosed at the end of the report.

h) The Company has policy on Whistle Blower/Vigil Mechanism which is also posted on the website of the company and no personnel has been denied access to the Audit Committee.

MEANS OF COMMUNICATIONThe Quarterly/ Annual Financial Results are sent to the Stock Exchanges after they are approved by the Board. The said results are then published in the prescribed proforma within 48 hours of the conclusion of the meeting of the Board in which they are considered in Free Press Gujarat, Financial Express/ Business Standard and Western Times. The Quarterly and Annual Financial Results are posted on the website. The Company electronically files data such as Shareholding Pattern, Corporate Governance Report, Reconciliation of Share Capital Audit Report and other Corporate Announcements on BSE Corporate Compliance & Listing Centre Online Portal of BSE. Management Discussion and Analysis Report forms part of the Annual Report.GENERAL SHAREHOLDERS INFORMATION1) Annual General Meeting Day, Date, time and venue Thursday, 28th September, 2017, 12.30 p.m. Mahida Bhavan, Icchanath, Opp. S.V.R. Engineering College,

Dumas Road, Surat - 395 007.2) Date of Book Closure Period 23rd September, 2017 to 28th September, 2017.3) Financial Year : 1st April to 31st March4) Financial Calendar (tentative) Results for the quarter ending 30th June, 2017 Second week of August, 2017 Results for the quarter ending 30th September, 2017 Second week of November, 2017 Results for the quarter ending 31st December, 2017 Second week of February, 2018 Results for year ending 31st March, 2018 Last week of May, 20185) Listing of Equity Shares on Stock Exchanges and

Payment of Listing Fees BSE Limited Phiroze Jeejeebhoy Towers


24 25

Dalal Street, Mumbai 400 023 Scrip Code: 507892 ISIN : INE664A01015 The Annual Listing Fees for the financial year 2017-2018 has

been paid to BSE Limited.6) Stock Market Price Data The price of the Company’s Equity Shares-High, Low during

each month in the last financial year

MONTH BSE Indices : SensexHigh Low High Low

April, 2016 0.75 0.57 26100.54 24523.20May, 2016 0.78 0.51 26837.20

25057.93June, 2016 0.51 0.36 27105.41 25911.33July, 2016 0.54 0.38 28240.20 27034.14August, 2016 0.52 0.39 28532.25 27627.97September,2016 0.63 0.47 29077.28 27716.78October, 2016 0.76 0.57 28477.65 27488.30November, 2016 0.73 0.49 28029.80 25717.93December, 2016 0.48 0.3 26803.76 25753.74January, 2017 0.46 0.36 27980.39 26447.06February, 2017 0.48 0.35 29065.31 27590.10March, 2017 0.53 0.38 29824.62 28716.21

7) Registrar and Transfer Agent Link Intime India Pvt. Limited Unit: Winsome Diamonds and Jewellery Limited C-101, 247 Park , L.B.S. Marg Vikhroli (West), Mumbai 400 083. Tel no: 022-49186000 Fax : (91-22) 2594 6969 / 2596 2691. E-Mail: [email protected] Website: www.linkintime.co.in8) Share Transfer System Shareholders/Investors are requested to send the share

transfer related documents directly to the Company’s Registrar & Transfer Agent, Link Intime India Pvt. Limited whose address is given above. All share transfer is completed within statutory time limit from the date of receipt, provided documents meet the stipulated requirement of statutory provisions in all respects. The Company obtains from a Company Secretary in Practice half-yearly certificate to the effect that all certificates have been issued within thirty days of the date of lodgment of the transfer, sub division, consolidation and renewal as required under Regulation 40(9) of the Listing Regulations and files a copy of the said certificate with stock exchanges.

9) Investor’s Service Cell Winsome Diamonds and Jewellery Limited 906/907/908, 9th Floor, The Plaza Near Dharam Palace, 55, Gamdevi Grant Road, Mumbai-400007

Phone: (022) 43470944; Fax (022) 49200333 E-mail: [email protected]) Shareholding by Category

Category Code

Category of Shareholder

No. of Shareholder

No. of Shares

% of (A+B+C)

(A) Shareholding of Promoter and Promoter Group

(1) Indian 8 26871595 25.21(2) Foreign 0 0 0

Total Shareholding of Promoter and Promoter Group

8 26871595 25.21

(B) Public Shareholding(1) Institutions 64 2514431 2.36(2) Non-Institutions 47594 76949037 72.44

Total Public Shareholding

47658 79463468 74.79

(C) Shares held by Custodians and against which Depository Receipts have been issued

(1) Promoter and Promoter Group

0 0 0

(2) Public 0 0 0Total (A)+(B)+(C) 47666 106335063 100

11) Distribution of Shareholding as on 31st March, 2017

Shareholding of nominal value of

No. of Shareholders

% to Total

Total Amount `

% to Total

Up to 5,00 39419 82.69 5943568 5.58501 to 1000 3398 7.13 2743116 2.571001 to 2000 1710 3.59 2678337 2.512001 to 3000 641 1.34 1667624 1.563001 to 4000 336 0.70 1218055 1.144001 to 5000 458 0.96 2216859 2.085001 to 10,000 749 1.56 5884472 5.5210,001 and above 960 2.01 84255863 79.03 Total 47668 100.00 106607894 100.00

12) Dematerlisation of Shares and Liquidity The equity shares of the company are compulsorily traded

in electronic form . The shareholders who have not yet dematerialized their shares are requested to dematerialize the same by opening DP Account with nearest Depository Participants at the earliest to avail the benefits of dematerialisation. 97.03 % of Company’s paid-up Equity Share Capital has been dematerialized up to March 31, 2017.

13) Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity

NIL14) Plant Location in India

• 143-D Bommasandra Industrial Area, Hosur Road, Hebbagodi, Bangalore – 562 158.


26 27

• Plot No.1 and 1A, Tivim Industrial Estate, Karaswada, Mapusa, Goa – 403 526.

• Kesharba Market-2, Gotalawadi, Katargam, Surat – 395 004.

• Plot No. 17/SDF, 4th Floor, Cochin Special Economic Zone, Kakkanad, Kochi – 682 037, Kerala.

• Unit No.46, 2nd Floor, SDF-III, MEPZ-SEZ, Tambaram, Chennai – 600045.

15) Transfer of Unpaid /Unclaimed Amounts to Investor Education and Protection Fund

Unpaid/Unclaimed dividend of F.Y 2007-08 of Rs. 22,67,754 has been credited to the Investor Education and Protection Fund (IEPF) pursuant to Section 124(5) of the Companies Act,2013 during the year under review.

16) Compliance of Corporate Governance Requirement specified in Regulation 17 to 27 and Regulation 46(2)(b) to (i) of Listing Regulations

Sr. No

Particulars Regulation Compliance StatusYes/No/N.A

1. Board of Directors 17 Yes2. Audit Committee 18 Yes3. Nomination and

Remuneration Committee

19 Yes

4. Stakeholders’ Relationship Committee

20 Yes

5. Risk Management Committee

21 NA

6. Vigil Mechanism 22 Yes7. Related Party

Transaction23 Yes

8. Subsidiaries of the Company

24 NA

9. Obligation with respect to Independent Directors

25 Yes

10. Obligation with respect to Independent Directors

26 Yes

11. Other CorporateGovernance requirements

27 Yes

12. Website 46(2)(b) to (i) yes17) Adoption of Mandatory and Non-Mandatory Requirements The company has complied with all mandatory requirements

of Listing Regulations. The company adopts non-mandatory requirements on need basis.

DECLARATIONI, Harshad Udani, Whole Time Director of the Company hereby confirm that all Board Members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the financial year ended March 31, 2017.

For Winsome Diamonds and Jewellery Limited

Harshad UdaniDate :- 14th August, 2017 Whole Time DirectorPlace :- Ahmedabad (DIN : 07014853)


26 27

Certificate by Executive Director of CompanyTo,The Board of DirectorsWinsome Diamonds and Jewellery Limiteda. I / We have reviewed financial statements and the cash flow

statement for the year ended on 31st March,2017 and that to the best of our knowledge and belief :

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

b. To the best of our knowledge and belief, no transactions entered into by the company during the year, which are fraudulent, illegal or violative of the Company’s Code of Conduct.

c. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

d. We further certify that we have indicated to the auditors and the Audit committee :

i) There have been no significant changes in internal control system during the year;

ii) There have been no significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii) There have been no instances of significant fraud of which we have become aware involving management or an employee having a significant role in the company’s internal control system over financial reporting.

For Winsome Diamonds and Jewellery Limited

Harshad UdaniDate :- 14th August, 2017 Whole Time DirectorPlace :- Ahmedabad (DIN : 07014853)

Certificate from Practicing Company Secretary on Corporate Governance

ToThe Members ofWinsome Diamonds and Jewellery LimitedWe have examined the compliance of conditions of Corporate Governance by Winsome Diamonds and Jewellery Limited , for the year ended on March 31, 2017, as stipulated in Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,2015 pursuant to the Listing Agreement of the said Company with stock exchange(s). The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us , we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Chapter IV of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,2015 pursuant to Listing Agreement of the said Company with stock exchange(s). We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Kamlesh M. Shah & Co. Practicing Company Secretaries

Kamlesh M. ShahDate :- 14th August, 2017 PropreitorPlace:- Ahmedabad ACS: 8356 COP : 2072

ANNUAL REPORT 2016-17

28

INDEPENDENT AUDITOR’S REPORTTo the Members of WINSOME DIAMONDS AND JEWELLERY LIMITED1. Report on the Standalone Ind AS Financial Statements We have audited the accompanying standalone Ind AS financial statements of WINSOME DIAMONDS AND JEWELLERY LIMITED

(“the Company”), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS financial statements”).

2. Management’s Responsibility for the Financial Statements The Company’s Board of directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013(“the Act”)

with respect to the preparation and presentation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules issued there under.

This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor’s Responsibility Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be

included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate except as mentioned in disclaimer of opinion para to provide a basis for our audit opinion on the standalone Ind AS financial statements.

4. Basis for Qualified OpinionA. The Company has made long term investments in Forever Precious Diamonds and Jewellery Ltd. (Forever) amounting to Rs.

141,17,10,802, thereby resulting in it holding a 49 % stake in the equity of that company. The said investments continue to be valued at cost. As stated in Note No. 8, in the view of the management, provision for diminution in value of investments as per the requirements of Ind-AS 28 - Investments in Associates and Joint Ventures is not considered necessary and hence not made. We have been provided with the financial statements of Forever for the year ended 31stMarch 2017. We have observed that there are no significant business operations in Forever. Further the auditors of Forever have qualified the financial statements and termed the company as a non-going concern. In view of the above the Company should have provided the diminution in value of investments amounting to Rs. 141,17,10,801. Accordingly the loss for the year have been understated and investments overstated by Rs. 141,17,10,801.

B. The company has also made long term investment in Peakok Jewellery Limited amounting Rs.5012750/- at the average rate of Rs.286.44/- per share. As per the balance sheet as at 31ST March, 2016 the book value of the shares of the company is Rs.110.78/- per share. In the view of the management, provision for diminution in value of investments as per the requirements of Ind-AS 28 - Investments in Associates and Joint Ventures is not considered necessary and hence not made. In view of the above the Company should have provided the diminution in value of investments amounting to Rs.30,75,100/-. Accordingly the loss for the year have been understated and investments overstated by Rs.30,75,100/-.

5. Basis for Disclaimer of OpinionA. In respect of Trade Receivables amounting to Rs. 5608,09,30,760/- (Valued at exchange rate as on 31/03/2017 under IndAS) the

auditors have not received any confirmations from the overseas parties. The company has filed legal suit against its defaulting overseas customers for non-payment of its export bills at Sharjah Federal Court, Sharjah. The court has appointed an expert to look into the affairs of the companies based in Dubai/ Sharjah. The Court has confirmed the debts payable to the Company

WINSOME DIAMONDS AND JEWELLERY LIMITED(Formerly Su-Raj Diamonds and Jewellery Limited)

29

and ordered the overseas customer to pay along with interest @5% p.a. However, the copies of the orders are not provided for verification. The overseas customers had filed an appeal against the judgment of the Sharjah Federal Court and the Sharjah Federal Appellate Court has passed order in favour of the Company and now the matter is pending for 1 case with the Sharjah Federal Appellate Court and 2 case with Sharjah Supreme court and their judgments are awaited. . During the year under review, state bank of Mauritius has entered in the One Time Settlement agreement with the company and overseas Customers of the company for settlement of its loan. Accordingly the Overseas customers agreed to pay US$ 1,050,833/- against the total outstanding bill of US$ 8,241,831.11/-. The balance amount receivable (Rs. 48,83,52,906/-) from overseas customers has been considered as impaired charged to profit and loss in FY 2016-2017. As per Ind-As – 109 (Financial Instruments) provides practical expedient to use a provision matrix to estimate Expected Credit Loss for trade receivables.


B. As per Ind-AS -16(Property, Plant and Equipment), the depreciable amount of a tangible fixed asset should be allocated on a systematic basis over its useful life. The depreciation method should reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. Further, standard requires the depreciation method applied to an asset, residual value and useful life shall be reviewed at least at each financial year-end. Based on technical evaluation, the management believes that written down method of depreciation method and the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013 are best representative future economic benefits associated with tangible fixed assets. In absence of the technical report, we are unable to comment on reasonability of useful and method of depreciation and the consequential impact, on the financial statements. (Refer note 6 & 7)



D. The Reserve Bank of India issued notice to the Company under FEMA for non-realization of foreign exchange from exports made during 2012-13 to overseas customers of Rs.636.14 crore. The Company has already informed time to time Reserve Bank of India about default made by overseas customers and the status of legal cases.

E. Some of the lending banks have declared the Company as Willful Defaulters, and have filed complaints with investigating agencies and the same are in progress. The Company is extending its full co-operation to the Investigating agencies. The Enforcement director has passed order against the Company under PMLA and all the properties are under provisional attachment by ED. The matter is now with the Enforcement Director, New Delhi and the order is awaited.

F. The company has not worked out the interest provision @ 12.5% on the following current accounts having credit balances. Hence, effect of interest on financial statement cannot be determined:Bank Name Outstanding amount in Rs.CBI 11,116,796PNB 1,801,490PNB C/A 1937 73,220VIJAYA BANK 6,636,350

TOTAL 19,627,8566. Disclaimer of Opinion Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, specifically relating to the

multiple uncertainties created due to factors such as non recovery of trade receivables on due dates, non payments of liabilities including statutory dues, financial difficulties faced by the Company due to recalling of bank finance, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements.

7. Emphasis of MatterA. The Company has not carried out any valuation of the stocks which are lying with them / in the joint custody with the banks. To

that extent the increase or decrease in the value of inventories as at year end, as required to be done as per the requirements of Ind-AS -2 (Inventories), has not been done. The impact on the profit/loss of the company due the said non valuation has not been determined. Refer note no. 10.


30

B. There is difference of Rs. 3,46,88,692/- in the outstanding balance of advances obtained from the bankers. In absence of details made available by the bankers, the company is not in a position to reconcile the difference. Which may lead to understatement of liability and its consequential effect in the book result if any.

C. Due to thedefaults of theCompany to thebanks, theCompany’s accountshavebeen classified asNPAsby thebanks. Most of the banks have not charged interest on the Company’s borrowings / loans, while some banks have been charging interest at higher rates. The board of directors of the Company in its meeting held on 30th May 2015 haddecidednottoprovideInterest.Nowthedirectorsinitsmeetingdated29th May 2017 have decided to provide for [email protected]%oftheoutstandingamountbeingtheaveragerateofrupeeexportfinanceasworkedoutbytheDirectors.Moreover,TheDebtrecoverytribunalhaspassedorderdated09.12.2016determiningthetotalamountpayableRs.4,687,0404,315/-alongwiththesimpleinterest@14%p.a.fromthedateoffilingoforiginalapplicationwithDRTtillthedateofrealizationofdues.However,thecompanyhas not passed any effect relating to the above mention order as the detailed calculation of Bank wise liability is not available and in that concern liability of the company cannot be determined.

D. The company has received summons from Serious Fraud Investigation Office of Ministry of Corporate Affairs dated 05.07.2016 u/s 217 of The Co. Act, 2013 and investigation under section 212 of The Companies Act, 2013 dated 01.08.2016. The company has complied for the same. However, no quantification of any financial liability arises out of the same in the opinion of the Board.

8. Report on Other Legal and Regulatory Requirements1) As required by The Companies (Auditors Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms

of subsection(11) of section 143 of the Act, we give in the Annexure 1, a statement on the matters specified in paragraphs 3 and 4 of the said order to the extent applicable.

2) As required by section 143(3) of the Companies Act 2013, we report that:(a) As described in the Basis for Disclaimer of Opinion Paragraph, we were unable to obtain all the information and explanations

which to the best of our knowledge and belief were necessary for the purpose of our audit;(b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our

examination of those books;(c) the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement

with the books of account(d) Except for the effects of the matter described in the Basis for Qualified / Disclaimer Opinion / Emphasis of Matter paragraphs

in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with relevant rule issued there under.

(e) On the basis of written representations received from the directors as on 31st March, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017, from being appointed as a director in terms of Section 164(2) of the Act.

(f) The matter described in Basis of Disclaimer of opinion in Paragraph 5 above, in our opinion may have an adverse effect on the functioning of the company.

(g) With respect to the adequacy of internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure 2.

(h) With respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :(i) Total pending litigations which would impact the standalone Ind AS financial position of the company are enclosed

herewith in Annexure A. The management is unable to ascertain the amount of liabilities to the company on the said litigations.

(ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) During the year under consideration there is no pending amount which is required to be transferred to the Investor Education and Protection fund.

(iv) The Company has provided requisite disclosure in its Standalone INDAS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 40 to the standalone INDAS financial statements.

For NAUTAM R. VAKIL & CO. CHARTERED ACCOUNTANTS FRN: 106980W

MANAN VAKILPARTNER

Ahmedabad: 29th May, 2017 MEMB. NO. : 102443


31

Annexure – A

Sr. No. Details of Litigation

1 Debt Recovery Tribunal, Mumbai Axis Bank has filed Original Application No. 89 of 2015 against the Company, with regard to recovery of outstanding dues for Term loan granted for Windmill installed at Gujarat.

2 Sharjah Federal Court, SharjahThe company has filed legal suit against its defaulting overseas customers for non-payment of its export bills at Sharjah Federal Court, Sharjah. The court has appointed an expert to look into the affairs of the companies based in Dubai/ Sharjah. The Court has confirmed the debts payable to the Company and ordered the overseas customer to pay along with interest @5% p.a. The overseas customers had filed an appeal against the judgment of the Sharjah Federal Court and the the Sharjah Federal Appellate Court has passed order in favour of the Company and now the matter is pending for 1 case with the Sharjah Federal Appellate Court and 2 case with Sharjah Supreme court.

3 Bombay High CourtCompany has filed Defamation Suit Case No . S/512/2014 against Chaim even Zoharc, Tacy Limited, Mr. Eli Chen, Mr. Rachel Segal for carrying the Article ‘Unraveling Jatin Mehta’s Hidden Synthetics Empire in the magazine ‘Diamond Intelligence Briefs edition 5th February, 2014 Vol. 29 No 797 published by Tacy Limited.

4 Bombay High CourtWrit Petition No. 1432 of 2007 filed by the trade union challenging the order of the Industrial Court dated 23-04-2007 passed in Complaint (ULP) No. 1411 of 1999 in respect of the closure of the Goregaon factory of the Company, pending before the Division bench of the Original Side, High Court, Bombay.

5 Bombay High CourtWrit Petition No. 2594 of 2008 (Civil side) filed by the trade union challenging Award dated 6-2-2008 passed by Industrial Tribunal, Mumbai in respect of the closure of the contract companies viz. M/s. fine Gems Company M/s. Blue New Gems Company M/s. Blue Diamond Company, pending before the Hon’ble Court, of the Appellate Side.Case was filed so that Workmen of these contract Companies can be absorbed in the Company.

6 Bombay High CourtWrit Petition No. 3080 of 3080 of 2005 filed by the trade union, pending before Hon’ble Court.Case was filed in High Court (Original Side) against the closure of SEEPZ Unit of the Company. High Court has restored the Complaint after closing of the application due to non appearance of the applicant.

7 Labour CourtReference (IDA) No. 597 of 2010 filed by one of the employees seeking reinstatement with full back wages and continuation of service w.e.f. 20/06/1998 now pending before the 11th Labour Court at Mumbai.

8 Borivali CourtCriminal Case No. 77/SW/2008 filed by one of the employee under the various Provisions of The CRPC and The IPC, now pending before the 67th Metropolitan Magistrate Court at Borivali.The case was filed charging that the company, Managing Director and Labour Commissioner had hand in glove with each other to forge documents to obtain license to employ contract labours and hence cheated labourers.

9 Additional Commissioner of Customs (Bonds), BangaloreThe Additional Commissioner of Customs (Bonds), Bangalore has passed order against the Company and raised demand of Rs.171,18,759/- including penalties/fines. The Company had filed appeal to the Commissioner of Customs (Appeal), Bangalore against the above order and the Commissioner of Customs (Appeal) has passed order against the Company. The Company has filed further appeal with Custom Tribunal.


32

Annexure 1 referred to in paragraph 8-1 titled as “Report on Other Legal and Regulatory Requirements” of the Auditors report to the members of Winsome Diamonds and Jewellery Limited for the year ended 31st March, 2017.(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) As explained to us, the fixed assets were being physically verified by the management at each branch in accordance with a

phased programme of verification. The said procedure were being followed in the past and was reasonable considering the size and nature of its business and no material discrepancies were noticed in the past years. However during the previous year in case of some branches where the operations have ceased / suspended, no verification was done. Similarly as the assets are under SARFAESI Notice, and under symbolic possession of the banks, a physical verification of the assets has not been carried out during the year at any of the branches. Material discrepancies, if any will be highlighted once the physical verification would be completed. (Refer to note Nos. 6 & 7) Hence the question of any discrepancies being dealt with in the books of accounts does not arise.

(c) According to the information and explanation given to us and on the basis of our examination of records of the Company, the title deeds of immovable properties classified as fixed assets are held in the name of the Company

(ii) In June 2013, the banks had placed the stock of diamonds and pearls belonging to the Head Office and the Mumbai Branch office of the Company valued at Rs. 39,35,00,031 in the joint custody of the Company and the banks. The banks had done a test check valuation of the said stock as on 30th September, 2013 where officers of the Company were also present. The said valuation has been then forwarded to the company. Since November 2013 the stocks of Chennai SEZ & Cochin SEZ were also valued and put in the joint custody of the banks. Confirmation of the stocks lying with the bank has been confirmed by the management on the basis of the letter obtained from the bank as on that date. For the current year under consideration, the stock lying in joint custody of the banks at HO, Mumbai, Cochin & Chennai, the management has not carried out any physical verification of such inventory. During the year at Goa and Bangalore factory, the physical verification were carried out by consortiums of banks in presence of Company representative and the stocks of Goa were kept under joint custody at local PNB branch at Goa. The stock at Bangalore is under joint custody with banks at factory premises.

Since majority of the inventory is held in the joint custody of the consortium of banks and as physical verification was not carried out the question of any material discrepancies and they being dealt with in the books of accounts does not arise. Hence we are unable to comment on the stock of inventory as at the year ended 31st March, 2017.

(iii) The Company has not granted loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Hence, the question of reporting under sub clauses (a), (b) & (c) of the clause 3(iii) of the Order does not arise.

(iv) The Company has not granted any loans or advances under section 185 except to Forever Precious Jewellery and Diamonds Ltd, made any investment, provide any guarantee or security under section 186. Hence, the question of reporting under clause 3(iv) of the Order does not arise.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits and hence the question of compliance with the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under, is not apply. We are informed by the Management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal in this regard.

(vi) The Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, in respect of Company’s products. Accordingly, clause 3 (vi) of the Order is not applicable to the Company.

(vii) (a) According to the records of the company, undisputed statutory dues including provident fund, employees state insurance, income-tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable have generally been paid though delayed. In some cases specially towards the end of the year there have been delay in the same being deposited with the appropriate authorities. The details of arrears of outstanding statutory dues as on the last date of the financial year outstanding for a period of more than 6 months are as below :

Service Tax at Surat Rs. 107,567/-Value Added Tax at Surat Rs. 231,878/-VAT at Bangalore Rs. 250,145/- (Assessment Order for FY2007-08)CST at Bangalore Rs. 262,963/- (Assessment Order for FY2009-10)


33

(b) According to the information and explanations given to us, the particulars of statutory dues that have not been deposited on account of disputes are as under:

Name of the Statute Nature of dues Amount(Rs.) Period to which the amount relates

Forum where dispute is pending

Income Tax Act,1961 Income Tax 1,14,704/- A.Y 2005-06Income Tax Act,1961 Income Tax 5,31,411/- A.Y 2009-10Income Tax Act,1961 Income Tax 40,31,050/- A.Y 2010-11Income Tax Act,1961 Income Tax 44,13,120/- A.Y 2011-12 CIT(A)Income Tax Act,1961 Income Tax 1,52,10,152/- A.Y 2012-13 Rectification filed and case

is pending at CIT(A)Income Tax Act,1961 Income Tax - TDS 2,06,903/- A.Y 2013-14 CIT(A)Total demand 2,45,07,340/-Tax payable NilCentral Sales Tax, Bangalore

CST 57,68,542/- F Y 2008-09 Rectification request filed with A.O.

(viii) The Company has defaulted in payment of loans to banks during the preceding years and the defaults have continued in this financial year. The details of such defaults are as under:

Bank Name Total Amount Defaulted Date Default startedAxis Bank - Term Loan 7,918,400 08/04/2013Axis Bank 474,155,520 02/04/2013Bank of India 906,139,200 06/04/2013Bank of Maharashtra 2,937,920,826 02/04/2013Canara Bank 6,722,236,193 18/03/2013Central Bank of India 7,465,886,346 28/03/2013EXIM Bank 714,743,985 05/04/2013I D B I Bank 1,147,875,362 06/04/2013Oriental Bank of Commerce 1,636,021,974 08/04/2013Punjab National Bank 10,521,187,766 26/03/2013Standard Chartered Bank 4,061,589,537 25/03/2013State Bank of Hyderabad 1,277,706,509 08/04/2013State Bank of Mauritius* 463,330,128 18/04/2013Union Bank of India 2,803,341,974 21/03/2013Vijaya Bank 1,448,174,130 02/04/2013 TOTAL 42,588,227,850

The above defaults are the primary amounts as on the date of the defaults continuing from the previous years. The said defaults do not consider any levies of interest and penal interest charged by the banks / provided by the company after the date of the defaults or its subsequent reversals by some banks. The payments made by the company to the banks after the above dates are also not considered as we are not in a position to ascertain whether the repayments are against interest / penalty or primary defaults. Some of the Banks have not confirmed the balances outstanding to them even after writing to them and in some cases the banks have stopped issuing physical bank statements and the company and the auditors have relied on e-statements generated from the web portals of the banks.

The Company does not have any outstanding dues by way of debentures. *During the year, State Bank of Mauritius (one member bank of consortium of banks) has entered into one time settlement agreement

with Overseas Customer of the Company for their outstanding dues from the Company. The bank is agreed to settle the total dues by accepting 1050833 US$ against the total due of 8241831.11 US$ receivable from the overseas customer by the company. The Overseas Customer have agreed to pay settlement amount directly to State Bank of Mauritius.

(ix) The Company has not raised any monies by way of initial public offer or further public offer (including debt instruments) during the year. The term loans raised in the past years by the Company were applied for the purpose for which they have been raised

(x) We have been informed by the management, that the Banks who have lent funds to the Company, outstanding as at the balance sheet date amounting to Rs. 41,26,89,99,617, have lodged complaints against the Company and some of its ex directors, with the Central Bureau of Investigation (CBI), Mumbai Police and Enforcement Directorate (ED). On the basis of the said complaints and


34

subsequent F.I.R.s, the CBI, Mumbai Police and ED have been carrying out investigations, which are in progress. The Company has been subjected to searches by the CBI. The Company is yet to be served with a copy of the F.I.R.

(xi) The managerial remuneration has been paid in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a chit fund or a Nidhi company. Hence, the question of reporting under clause 3(xii) of the Order does not arise.(xiii) The Company has complied with the provisions of sections 177 and 188 of the Act in respect of transactions with the related parties

and the details have been disclosed in the standalone Ind AS Financial Statements etc., as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) The Company has not entered into any non-cash transactions with directors or persons connected with him covered under the provisions of section 192 of the Act.

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


MANAN VAKILPARTNER


Annexure 2 referred to in Paragraph 8 (2)(f) titled as “Report on Other Legal and Regulatory Requirements” of the Auditors report to the members of Winsome Diamonds and Jewellery Limited for the year ended 31st March, 2017.We have audited the internal financial controls over financial reporting of WINSOME DIAMONDS AND JEWELLERY LIMITED (“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.Auditors’ ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.


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Meaning of Internal Financial Controls Over Financial ReportingA Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.OpinionThe system of internal financial controls over financial reporting with regards to the company except to the extent mentioned on Note No 1 to 5 of the financial statements, were not made available to us to enable us to determine if the company has established adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as at March 31, 2017.We have considered the disclaimer reported above in determining the nature timing and extent of audit test applied in our audit of the standalone financial statement of the company and the disclaimer has affected our opinion on the financial statements of the standalone company and we have issued a qualified and disclaimer of opinion on the financial statements.


MANAN VAKILPARTNER



36

AUDITED BALANCE SHEET AS AT 31st MARCH, 2017Note As at

31.03.2017`

As at31.03.2016

`

As at01.04.2015

`ASSETSI. Non-current assets (a) Property, Plant and Equipment 6 282,116,627 325,663,010 381,781,127 (b) Intangibles 7 2,011 2,011 4,705 (c) Financial Assets (i) Non-current investments 8 1,416,729,554 1,416,729,554 1,416,729,554 (ii) Other Financial Assets 9 56,083,943,106 57,933,910,591 54,671,237,305 (d) Other Non-Current Assets 10 429,154,966 429,188,397 429,221,828

58,211,946,264 60,105,493,563 56,898,974,519II. Current assets (a) Inventories - - - (b) Financial assets (i) Current Investments - - - (ii) Trade Receivables 11 61,548,564 1,088,941 4,022,509 (iii) Cash and Cash Equivalents 12 157,861,856 163,192,834 163,984,304 (iv) Loans 13 233,086,818 233,875,155 235,199,926 (c) Other Current Assets 14 54,261,279 46,359,741 37,386,288

506,758,517 444,516,671 440,593,027Total Assets 58,718,704,781 60,550,010,234 57,339,567,546

EQUITY AND LIABILITIESI. Equity (a) Share capital 15 1,064,709,820 1,064,709,820 1,064,709,820 (b) Other Equity (5,450,665,054) 2,909,468,987 6,178,157,158

(4,385,955,234) 3,974,178,807 7,242,866,978II. Non-current liabilities (a) Financial liabilities (i) Long term Borrowings - - - (b) Deferred tax liabilities (Net) 16 52,290,791 52,290,791 52,290,791 (c) Other Non-Current liabilities - - -

52,290,791 52,290,791 52,290,791III. Current liabilities (a) Financial liabilities (i) Short term Borrowings 17 61,858,460,030 55,392,306,007 48,939,411,131 (ii) Trade and Other Payables 18 786,619,400 795,164,314 772,417,153 (iii) Other Financial Liabilities 19 403,730,681 332,462,161 326,365,427 (b) Other Current Liabilities 20 3,521,763 3,570,804 6,216,066 (c) Short term Provisions 21 37,350 37,350 -

63,052,369,224 56,523,540,636 50,044,409,777Total Equity and Liabilities 58,718,704,781 60,550,010,234 57,339,567,546Summary of Significant Accounting Policies 5Notes on Financial Statements 1-4, 6 to 41 As per our attached report of even date For and on behalf of the BoardFOR NAUTAM R. VAKIL & CO.Chartered Accountants Harish R. Mehta DirectorFRN 106980W DIN-05316274

Manan Vakil Harshad R. Udani DirectorPartner DIN-07014853Membership No. 102443

Asish NarayanCompany Secretary

Place : Ahmedabad Place : AhmedabadDate : 29th May, 2017 Date : 29th May, 2017


37

AUDITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2017Particulars Note For the year ended

on 31.03.2017 For the year ended

on 31.03.2016 ` `

REVENUE

I. Revenue from Operations - -

II. Other Non-Operating Income 22 639,414,747 3,255,801,919

III. Total Revenue (I+II) 639,414,747 3,255,801,919

IV. EXPENSES

Cost of Materials Consumed 23 - -

Changes in Inventories of Finished goods, Stock-in-trade 23 - -

Employee Benefits Expenses 24 3,264,445 4,403,018

Finance Costs 25 7,177,353,607 6,458,835,321

Depreciation and Amortization Expense 6 43,579,814 56,154,242

Other Expenses 26 1,771,280,478 14,467,879

Total Expenses 8,995,478,344 6,533,860,460

V. Profit before Tax (III-IV) (8,356,063,597) (3,278,058,541)

VI Tax expense:

Current tax - -

Deferred tax - -

Tax expenses releated to Prior Years 4,070,443 (9,370,370)

4,070,443 (9,370,370)

VII Total comprehensive income for the year (V-VI) (8,360,134,040) (3,268,688,171)

VIII Earnings per Equity Share 27

Basic & Diluted in Rupees (78.52) (30.70)

As per our attached report of even date For and on behalf of the Board

FOR NAUTAM R. VAKIL & CO.Chartered Accountants Harish R. Mehta DirectorFRN 106980W DIN-05316274





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CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2017 As at

31.03.2017`

As at31.03.2016

`A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before Tax (8,356,063,597) (3,278,058,541)Adjustments for :Depreciation 43,579,814 56,154,242Interest Income (1,208,597) (1,179,989)Finance Cost 7,177,353,607 6,458,835,321Operating Profit before working capital changes (1,136,338,773) 3,235,751,033Adjustments for :Trade and Other Receivables 1,791,147,717 (3,257,888,310)Inventories - 0Trade Payable including Bank Loan recalled 6,528,828,588 6,479,130,859

7,183,637,532 6,456,993,581Taxes paid (12,823,500) (129,719)Cash generated from operating activities 7,170,814,032 6,456,863,862

B. CASH FLOW FROM INVESTING ACTIVITIESSale of Fixed Assets - -Interest Received 1,208,597 1,179,989Net cash from investing activities 1,208,597 1,179,989

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Long Term borrowings - -Interest and Bank charges Paid (7,177,353,607) (6,458,835,321)Net cash from financing activities (7,177,353,607) (6,458,835,321)Net increase/(decrease) in cash and cash equivalent (A+B+C) (5,330,978) (791,470)Cash and Cash equivalent as at 1st April, 2016 (Opening Balance) 163,192,834 163,984,304Cash and Cash equivalent as at 31st March, 2017 (Closing Balance) 157,861,856 163,192,834







39

Statements of changes in equity for the year ended 31st March, 2017(A) Share capital

No. of Shares As at31.03.2017



` ` `AUTHORISED SHARE CAPITALEquity Shares of Rs.10/- each 150,000,000 1,500,000,000 150,000,000 1,500,000,000 15,000,000 1,500,000,000ISSUED SHARE CAPITALEquity Shares of Rs.10/- each 106,607,894 1,066,078,940 106,607,894 1,066,078,940 106,607,894 1,066,078,940SUBSCRIBED & PAID-UP SHARE CAPITALEquity Shares of Rs.10/- each 106,607,894 1,066,078,940 106,607,894 1,066,078,940 106,607,894 1,066,078,940Less : Calls unpaid by Shareholders other than directors 1,369,120 1,369,120 1,369,120TOTAL 1,064,709,820 1,064,709,820 1,064,709,820

Part B : Other equity

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`CAPITAL RESERVEAs per Balance Sheet 50,341,338 50,341,338 50,341,338SECURITIES PREMIUM ACCOUNTAs per last Balance Sheet 4,724,538,450 4,724,538,450 4,724,538,450Less : Allotment / Call Money in Arrears other than Directors- As per Last Balance Sheet 5,712,831 5,712,831 5,712,831

4,718,825,619 4,718,825,619 4,718,825,619GENERAL RESERVEAs per Balance Sheet 2,850,000,000 2,850,000,000 2,850,000,000GENERAL RESERVE - FOREIGN EXCHANGE / METALPRICE FLUCTUATIONAs per Balance Sheet 550,000,000 550,000,000 550,000,000SURPLUS/(DEFICIT) IN THE STATEMENT OF PROFIT & LOSS- As per last Balance Sheet (5,259,697,970) (1,991,009,799) (3,354,255,469)- Less : Impact of IND-AS - Cumulative Foreign Exchange Fluctuation recognised

- - 1,491,561,449

- Add : Net Profit after Tax transferred fromStatement of Profit & Loss (8,360,134,040) (3,268,688,171) (128,315,779)- Balance as at the close of the Year (13,619,832,011) (5,259,697,970) (1,991,009,799) TOTAL (5,450,665,054) 2,909,468,987 6,178,157,158


40

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2017.1 Corporate information These financial statements comprise financial statements of Winsome Diamonds and Jewellery Limited (the “Company, Winsome”)

for the period ended March 31, 2017. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on one recognized stock exchanges in India.

During the year the Company has had no business activities. The Income for the company was from refunds of taxes/statutory dues, bank interest and sale of electricity generated from Windmill which has also stopped during the year. Therefore there is no source of Income. The fund received thru refunds of statutory payments and or small local receivables are utilized to continue the administrative expenses and legal expenses. The company has very few employees and few consultants who assist in the day to day working of the company. The major expenditure of the Company is salaries, professional and legal fees and statutory dues. All the expenses and payments are under control of the Board of Directors.

The management assumes that the company will have adequate cash flows from proceeds of export realizations to defray its entire debt obligations in a phased manner. The company has provided all the required details evidencing receipt of its export consignment by defaulting overseas customers to the Honourable Court in Sharjah, UAE. The company is hopeful of a favourable outcome of the legal suit filed against defaulting overseas customers, which is in progress, in UAE and is hopeful of resuming its normal operations once the cash flow improves. Hence the accounts of the company are prepared on Going Concern basis.

The interim financial statements are approved for issue by the Company's Board of Directors on May 29, 2017.2 Entities Subsidiaries are all entities (including structured entity) over which the Company has control. The Company does not have subsidiary.

An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies. This is generally the case where the Company holds between 20% and 50% of the voting rights. In these financial statements, investments in associates are accounted using cost method of accounting. (refer note 8). The company has two associates: 1) Forever Precious Jewellery & Diamonds Limited, 2) Revah Corporation Limited.

3 Basis of preparation The financial statements of the company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified

under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules,2016.

For all periods up to and including the year ended March 31, 2016, the company prepared its financial statements in accordance with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2017 are the first the company has prepared in accordance with Ind AS.(Refer Note 31 for information on how the company has adopted Ind AS.)

The company has adopted all Ind AS and the adoption was carried out in accordance with Ind AS 101 "First time adoption of Indian Accounting Standards". The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP. Reconciliations and descriptions of the effect of the transition has been summarized in Note 31.

The financial statements have been prepared on the historical cost basis, except for certain financial instruments which are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

4 Use of estimates The preparation of financial statements in conformity with Ind AS requires management to make estimates, judgements and

assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in these financial statements have been disclosed in note 4.1. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to financial statements.

4.1 The significant estimates and judgements are listed below:(i) Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the

asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.


41

(ii) The impairment provision for financial assets are based on the assumptions about risk of default and expected loss rates. The company uses judgements in making the assumptions and selecting the inputs to the impairment calculations, based on the company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(iii) Judgements by actuaries in respect of discount rates, future salary increments, mortality rates and inflation rate used for computation of defined benefit liability.

(iv) Significant judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

(v) Significant judgement is required to classify the balance with government authorities including tax assets into current and non-current assets.

(vi) Significant judgement is required in assessing at each reporting date whether there is indication that an asset may be impaired.5 Summary of significant accounting policies

(a) Current and non-current classification The company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is

treated as current when it is:- expected to be realised or intended to be sold or consumed in normal operating cycle- held primarily for the purpose of trading- expected to be realised within twelve months after the reporting period, or- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after

the reporting periodAll other assets are classified as non-current.A liability is current when:- it is expected to be settled in normal operating cycle- it is held primarily for the purpose of trading- it is due to be settled within twelve months after the reporting period, or- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The company has identified twelve months as its operating cycle.

(b) Foreign currency transactions : These financial statements are presented in INR, which is also the company’s functional currency. For each associates, the

company determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions and balances Transactions in foreign currency are translated into the respective functional currencies using the exchange rates prevailing at

the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation, at the exchange rates prevailing at reporting date, of monetary assets and liabilities denominated in foreign currencies, are recognised in net profit in the statement of profit and loss and presented within Other Non-Operating Income. Foreign exchange gains and losses resulting to borrowing costs are presented in the statement of profit and loss, within finance costs.

(c ) Fair value measurement The company measures financial instruments at fair value at each balance sheet date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

> In the principal market for the asset or liability, or > In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the

asset or liability, assuming that market participants act in their economic best interest.


42

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participants that would use the asset in its highest and best use.

The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

> Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities. > Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or

indirectly observable. > Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognized in the financial statements on a recurring basis, the company determines whether

transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The company's management determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value.

External valuers are involved for valuation of unquoted financial assets and financial liabilities, such as contingent consideration. Involvement of external valuers is decided upon annually by the management. Selection criteria includes market knowledge, reputation, independence and whether professional standards are maintained. The management decides, after discussions with the company’s external valuers, which valuation techniques and inputs to use for each case.

At each reporting date, the company analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the company’s accounting policies. For this analysis, the company verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The company, in conjunction with the company’s external valuers, also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable on a yearly basis.

For the purpose of fair value disclosures, the company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

(d) Financial instruments A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument

of another entity. It is broadly classified in Financial Assets, Financial Liabilities, Derivatives & Equity. Financial asset: Trade receivable, loans & advances given, security deposits given, other investments are covered under Financial Assets. Initial recognition: Above financial assets are initially recognised at 'Fair Value' (i.e. Fair Value of consideration to be received). Subsequent measurement: Above financial assets are subsequently measured at 'amortised cost' using Effective Interest Rate (EIR) method because these

assets are held with a business model whose objective is to hold assets for collecting contractual cash flows and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

Derecognition A financial asset is derecognized only when

- The company has transferred the rights to receive cash flows from the financial asset or- The company retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual

obligation to pay the cash flows to one or more recipients. Where the company has transferred substantially all risks and reward of ownership the financial asset, the financial asset is

derecognized. Where the company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized.

Where the company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the company has not retained control of the financial asset. Where the


43

company retains control of the financial asset, the asset is continued to be recognized to the extent of continuing involvement in the financial asset.

Impairment of financial asset The company assesses impairment based on expected credit losses(ECL) model to the following:

- Financial assets measured at amortised cost;- Financial assets measured at fair value through other comprehensive income (FVTOCI);

Expected credit losses are measured through a loss allowance at an amount equal to:- The 12-months expected credit losses (expected credit losses that result from those default events on the financial

instrument that are possible within 12 months after the reporting date); or- Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the

financial instrument). For recognition of impairment loss on financial assets and risk exposure, the company determines that whether there has been

a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-months ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12-moths ECL.

For assessing increase in credit risk and impairment loss, the company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enabled significant increases in credit risk to be identified on a timely basis.

Financial liability Trade payable, long term & short term borrowings, loans/advances taken, security deposits taken & any other contractual

liability are covered under financial liability. Initial recognition: Above financial liabilities are initially recognised at 'fair value' ( i.e. fair value of consideration to be paid). Subsequent measurement: Above financial liabilities are subsequently measured at 'amortised cost' using effective interest rate (EIR) method at each

reporting date. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition of debt instrument and fees or incidental charges that are an integral part of borrowing transaction. The EIR amortisation is included as 'finance costs' in the statement of profit and loss.

Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing

financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.

(e) Inventories Raw Materials are valued “At Cost” or “Net Realisable Value”, whichever is lower. Costs means cost of Raw materials as

determined on average, weighted average or FIFO basis as applicable, with proportionate value of freight and clearing charges. Stock on hand as on the last date which is under processing and not yet converted to finished goods is considered to be a part

of stock of raw materials and hence is valued as raw materials as in above. Finished Goods of Polished Diamonds are valued “At Cost” or “Net Realisable Value”, whichever is lower. Cost includes cost of

raw materials on weighted average cost basis, labour cost and proportionately allocated other costs related to converting them into finished goods which are technically evaluated keeping in view the wide variety and grades of diamonds.

Finished Goods of Jewellery are valued “At Cost” or “Net Realisable Value”, whichever is lower. Cost includes cost of raw materials, labour cost and proportionately allocated other costs related to converting them into finished goods.

Stores and Spares are valued “At Cost”. Closing stock of Goods at Bullion Trading Division are valued “At Cost” or “Net Realisable Value”, whichever is lower.(f) Property, plant and equipment and Intangibles Property, plant and equipment consists of Buildings, Plant and equipment, vehicles, furniture and fittings, Wind Mill and

Electric installations. All such assets are valued at cost of acquisition, construction or manufacturing as the case may be, less depreciation.


44

Depreciation on all assets is calculated so as to write-down the cost of property, plant and equipment to its residual value systematically over its estimated useful life. Estimated useful lives, residual values and depreciation methods are reviewed annually, taking into account commercial and technological obsolescence as well as normal wear and tear. Depreciation is recorded on a Written Down Value basis over the estimated useful lives of the property, plant and equipment as prescribed under part C of Schedule II of the Companies Act, 2013.

Gains and losses on disposals (including by Banks's custody) are determined by comparing proceeds with carrying amount. These are included in profit and loss within Other Non-Operating Income.

Intangible asset represents computer software, which is amortised over their estimated useful lives.(g) Borrowing costs Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial

period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(h) Revenue recognition During the year the Company has had no business activities. The Income for the company was from refunds of taxes/statutory

dues, bank interest and sale of electricity generated from Windmill which has also stopped during the year. Therefore there is no source of Income.

(i) Employee benefits All employee benefits payable within 12 months of rendering services are classified as short term employee benefits. Benefits

such as salaries, wages, short term compensated absences, performance incentives, etc. and the expected cost of bonus, ex-gratia are recognised during the period in which the employee renders related service. Presently, the company is not liabile for any long term defined benefits.

(j) Segment reporting The Chief Operational Decision Maker monitors the operating results of its business segments separately for the purpose of

making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements.

In accordance with the Ind-As 108 -" Operating Segments" , the company has determined that it has not carried out any business activities during the year and, there are no reportable segments. Therefore, the segment revenue, results, segment assets, segment liabilities, total cost incurred to acquire segment assets, depreciation charge are all as is reflected in the financial statement to the extend necessary.

(k) Taxes Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the

tax authorities in accordance with the Income-tax Act, 1961 enacted in India. The tax rates and tax laws used to compute the tax are those that are enacted or substantially enacted, at the reporting date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Current and deferred income tax relating to items recognized outside the statement of profit and loss is recognized outside the statement of profit and loss (either in other comprehensive income or in equity). Current and deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

(l) Earnings per share Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by

the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have


45

been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

(m) Cash and cash equivalent Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, demand deposit and short-term, highly

liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

(n) Provision, contingent liabilities and contingent assets General Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the company expects some or all of the provisions to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities Contingent liabilities is disclosed in the case of :

> A present obligation arising from past events, when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

> A present obligation arising from past events, when no reliable estimate can be made.> A possible obligation arising from past events, unless the probability of outflow of resources is remote.

Commitments includes the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.(o) Impairment of non-financial assets As at each balance sheet date, the company assesses whether there is an indication that an asset may be impaired and also

whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, if any, the company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined :> In the case of an individual asset, at the higher of the fair value less cost to sell and the value in use; and> In the case of cash generating unit(a group of assets that generates identified, independent cash flows), at the higher of the

cash generating units' fair value less cost to sell and the value in use.In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

(p) Share capital - Ordinary Shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share

options are recognized as a deduction from equity, net of any tax effects.


46

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2017Note 6.Property, Plant and EquipmentReconciliation of the gross carrying amounts and net carrying amounts at the beginning and at the end of the Year 31st March, 2017

Description Gross carrying Amount Accumulated Depreciation Net carrying AmountAs at

1st April 2016

As at 31st March

2017

As at 1st April

2016

Provided during the

year

As at31st March

2017

As at 31st March

2017

As at 31st March

2016` ` ` ` ` ` `

01. Buildings Factory Premises 171,117,290 171,117,290 112,446,491 5,348,251 117,794,742 53,322,548 58,670,799 Office Premises 147,931,028 147,931,028 65,510,388 3,997,418 69,507,806 78,423,222 82,420,64002. Plant & Equipment Owned 555,405,225 555,405,225 419,774,613 24,965,941 444,740,554 110,664,671 135,630,61203. Furniture & Fixtures Owned 45,483,006 45,483,006 40,917,893 1,448,401 42,366,294 3,116,712 4,565,11304. Electrifcla Intallation Owned 57,763,362 57,763,362 50,245,497 2,304,515 52,550,012 5,213,350 7,517,86505. Equipments Owned 23,820,976 23,820,976 22,353,455 262,291 22,615,746 1,205,230 1,467,52106. Air Conditioners Owned 24,500,974 24,500,974 20,303,974 1,294,495 21,598,469 2,902,505 4,197,00007. Vehicles Owned 7,860,724 7,860,724 6,709,357 358,762 7,068,119 792,605 1,151,36708. Office Equipments Owned 20,668,593 20,668,593 19,963,609 70,450 20,034,059 634,534 704,9849. Mould and Dies Owned 2,755,813 2,755,813 2,073,627 103,116 2,176,743 579,070 682,18610. Wind Mill Owned 92,583,137 92,583,137 63,928,214 3,392,743 67,320,957 25,262,180 28,654,923Total 1,149,890,128 1,149,890,128 824,227,118 43,546,383 867,773,501 282,116,627 325,663,010Previous Year 1,149,890,128 1,149,890,128 768,109,001 56,118,117 824,227,118 325,663,010 381,781,127

Note 7. Intangibles


1st April 2016

As at 31st March

2017

As at 1st April

2016

Provided during the

year

As at31st March

2017

As at 31st March

2017

As at 31st March

2016` ` ` ` ` ` `

1. Computer Software Acquired 40,237 40,237 38,226 38,226 2,011 2,011Total 40,237 40,237 38,226 - 38,226 2,011 2,011Previous Year 40,237 40,237 35,532 2,694 38,226 2,011 4,705GRAND TOTAL 1,149,930,365 1,149,930,365 824,265,344 43,546,383 867,811,727 282,118,638 325,665,021Previous Year 1,149,930,365 1,149,930,365 768,144,533 56,120,811 824,265,344 325,665,021 381,785,832

Notes :1) The amortisation of Lease Hold -upfront payment is Rs. 33431/- . The Lease hold-upfront payment has been classifed as Other Non

Current Assets.


47

2) Impairment of Fixed Assets : Please refere note no. 5 (o) in Accounting Policy. The Company does not have any assets, which would require impairment and provisions.

3) Of the total WDV of Fixed Assets, Rs.9,999,629 represent WDV of Fixed Assets of Engineering division at Jodhpur which had discontinued operations since FY 2005-06.

The Company had provided for impairment of these assets during FY 2007-08 & 2008-09. No further provision for impairment is considered necessary.

The Company has not been providing depreciation in respect of these assets.4) The Company has considered depreciation as per Schedule II of the Companies Act, 2013.Thus assets which have exceeded their

estimated useful life have not been charged depreciation and are reflected at their realizable residual/scrap value.The other assets have been depreciated over their useful life as per Schedule II provisions.

5) The Debt recovery tribunal has passed order for auction of the Properties and assets of the Company towards recovery against bank default. We have been verbally informed after the end of the year that the movable properties of Bangalore and Goa were sold in auction and Immovable property of Jodhpur is sold in auction. The D.R.T order dated 07/04/2017 confirmed the sales of assets, accordingly the sales is being considered in FY 2017-18.

FIXED ASSETS - TANGIBLEReconciliation of the gross carrying amounts and net carrying amounts at the beginning and at the end of the Year 31st March, 2016


1st April 2015

As at 31st March

2016

As at 1st April

2015

Provided during the

year

As at31st March

2016

As at 31st March

2016

As at 31st March

2015` ` ` ` ` ` `

01. Buildings Factory Premises 171,117,290 171,117,290 106,734,768 5,711,723 112,446,491 58,670,799 64,382,522 Office Premises 147,931,028 147,931,028 61,309,213 4,201,175 65,510,388 82,420,640 86,621,81502. Plant & Equipment Owned 555,405,225 555,405,225 387,691,990 32,082,623 419,774,613 135,630,612 167,713,23503. Furniture & Fixtures Owned 45,483,006 45,483,006 38,409,048 2,508,845 40,917,893 4,565,113 7,073,95804. Electrifcla Intallation Owned 57,763,362 57,763,362 46,261,711 3,983,786 50,245,497 7,517,865 11,501,65105. Equipments Owned 23,820,976 23,820,976 21,499,452 854,003 22,353,455 1,467,521 2,321,52406. Air Conditioners Owned 24,500,974 24,500,974 18,194,442 2,109,532 20,303,974 4,197,000 6,306,53207. Vehicles Owned 7,860,724 7,860,724 6,113,938 595,419 6,709,357 1,151,367 1,746,78608. Office Equipments Owned 20,668,593 20,668,593 19,863,438 100,171 19,963,609 704,984 805,1559. Mould and Dies Owned 2,755,813 2,755,813 1,951,180 122,447 2,073,627 682,186 804,63310. Wind Mill Owned 92,583,137 92,583,137 60,079,821 3,848,393 63,928,214 28,654,923 32,503,316Total 1,149,890,128 1,149,890,128 768,109,001 56,118,117 824,227,118 325,663,010 381,781,127


48

FIXED ASSETS - INTANGIBLE


1st April 2015

As at 31st March

2016

As at 1st April

2015

Provided during the

year

As at31st March

2016

As at 31st March

2016

As at 31st March

2015` ` ` ` ` ` `

1. Computer Software Acquired 40,237 40,237 35,532 2,694 38,226 2,011 4,705Total 40,237 40,237 35,532 2,694 38,226 2,011 4,705GRAND TOTAL 1,149,930,365 1,149,930,365 768,144,533 56,120,811 824,265,344 325,665,021 381,785,832

Note 8. NON-CURRENT INVESTMENTS

As at31.03.2017

As at31.03.2016

As at01.04.2015

` ` `(A) Other Investments (i) In Equity of Associate Companies Unquoted, fully paid up (at Cost)

39,200,000 (Previous Period : 39,200,000) Equity Shares of Rs. 10 each of Forever Precious Jewellery & Diamonds Ltd., fully paid-up

1,411,710,802 1,411,710,802 1,411,710,802

2,434,700 ( Previous Period : 2,434,700) Equity Shares of Rs. 10 each of Revah Corporation Ltd., fully paid-up

1 1 1

(ii) In Equity of Other Companies Unquoted, fully paid up (at Cost)

17,500 (Previous Period : 17,500) Equity Shares of Rs. 100 each of Peakok Jewellery Ltd., fully paid-up

5,012,750 5,012,750 5,012,750

576,250 (Previous Period : 576,250) Equity Shares of Rs. 10 each of Carbon Accessories Ltd., fully paid-up

1 1 1

(iii) Investments in Government or Trust Securities2 (Previous Period : 2) Indira Vikas Patra of Rs. 500 each 1,000 1,000 1,0001 (Previous Period :1) National Savings Certificates of Rs.5000 5,000 5,000 5,000

TOTAL 1,416,729,554 1,416,729,554 1,416,729,554Aggregate amount of qouted investment and market value thereof - - -Aggregate amount of unqouted investment 1,416,729,554 1,416,729,554 1,416,729,554Aggregate amount of impairment in value of investments - - -

A1 The company holds 49% of total paid-up equity share capital of Forever Precious Jewellery and Diamonds Limited (FPJDL). FPJDL’s operations including its retail Jewellery /Gold business is totally suspended. The auditors, for the year ended 31st March, 2016 have qualified FPJDL as a non-going concern for Indian GAAP.

A2 FPJDL has also initiated legal action against its defaulting overseas customers.B1 The Company has accounted for permanent diminution in the value of long term investments in group concern as above.C On the basis of the details available from MCA, the book value of Peakok Jwellery Limited is calculated @ 110.78 per share. However, the same is continued to be shown at the historical cost.Note 9. Other Financial Assets

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Long Term Trade Receivables 56,079,841,816 57,927,813,822 54,665,817,793Security Deposits 4,090,290 6,085,769 5,408,512Loans and Advances Others 11,000 11,000 11,000TOTAL 56,083,943,106 57,933,910,591 54,671,237,305


49

As at31.03.2017

As at31.03.2016

As at01.04.2015

` ` `Breakup of security detailsLong Term Trade ReceivablesSecured, Considered good - - -Unsecured, Considered good 56,079,841,816 57,927,813,822 54,665,817,793Doubtful - - -TOTAL 56,079,841,816 57,927,813,822 54,665,817,793Allowance for doubtful debts Long Term Trade Receivables (net) 56,079,841,816 57,927,813,822 54,665,817,793Out of which: Receivable from related parties - - -

Note on impairment of receivable done during this year (2017)The Statebank of Mauritius (one of the member Consortium banks) has entered in an agreement with Overseas Customer of the Company and the Company for one time settlement of dues to the bank.As per the agreement the Overseas Customer agreed to pay directly to State Bank of Mauritius US$ 1,050,833/- as against the Bills for collection thru State Bank of Mauritius outstanding for US$ 8,241,831.11. Accordingly Company has done impairment of receivables for balance of outstanding bills.Note 10. OTHER NON-CURRENT ASSETS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Lease hold land - upfront Payment 6,668,465 6,701,896 6,735,327Inventory (as certified by Management)(a) Raw Materials 26,084,565 26,084,565 26,084,565(b) Finished Goods 392,679,844 392,679,844 392,679,844(c) Stores and spares 3,722,092 3,722,092 3,722,092TOTAL 429,154,966 429,188,397 429,221,828

a) As stated by the Management, entire inventory of diamonds and pearls at Surat & Mumbai which, though hypothecated in favour of consortium, was in the company’s possession has been placed in the lockers in PNB and is in the joint custody with PNB since 18.06.2013. The banks had got inventory valued on 30.09.2013 and the total value of inventory, as per valuation report, was Rs.393,500,031.

b) The Stock at Chennai SEZ, Cochin SEZ unit are also in joint custody with PNB since November 2013 at Company’s premises. And Stock at Goa and Bangalore unit in joint custody with PNB since March 2017.

c) The Company has not carried out any valuation of Inventory during the year or as at 31st March, 2017 as per accounting standard requirement. The Valuation of Diamonds as carried out as on 30th September, 2013 to ascertain the market value has been adopted by the Company. For the small value of other inventories including the stock in joint custody with banks, the valuation as done on 31st March, 2015 has been adopted for 31st March, 2017.

d) Due to restriction on usage, the management has reclassifed all inventories as part of non-current assets.Note 11. TRADE RECEIVABLES

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Outstanding for more than six months from the datethey became due for payment(Unsecured, considered good) 61,548,564 1,088,941 4,022,509Others(Unsecured, considered good) - - -TOTAL 61,548,564 1,088,941 4,022,509


50

During the year under review, State Bank of Mauritius has entered in the One Time Settlement agreement with the overseas Customers of the company and the company for settlement of its loan. Accordingly the Overseas customers agreed to pay directly to State Bank of Mauritius US$ 1,050,833/- against the total outstanding bill of US$ 8,241,831.11.The balance amount as on 31st March 2017 of US$ 949,258.07 receivable from overseas customers has been shown under trade receivable at closing exchange rate of Rs 64.8386.Note 12. CASH AND CASH EQUIVALENTS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`(A) Cash and cash equivalents (i) Balance with Banks (a) In Current Account 13,58,83,321 14,21,50,769 14,36,61,581 (b) In EEFC account 7,60,858 7,60,858 7,60,858 (ii) Cash on Hand 51,808 59,891 1,54,129

13,66,95,987 14,29,71,518 14,45,76,568(B) Other Bank Balance (EARMARKED) (i) Earmarked Bank balances Unpaid dividend bank account 34,12,279 34,12,280 56,49,669 (ii) Bank Fixed Deposits held as margin money or as security against: Bank Guarantees 1,77,53,590 1,68,09,036 1,37,58,067

2,11,65,869 2,02,21,316 1,94,07,736TOTAL 15,78,61,856 16,31,92,834 16,39,84,304

Cash and cash equivalents as of March 31, 2017, March 31, 2016 and April 1, 2015 include restricted cash and bank balances of Rs. 21,165,869, Rs. 20,221,613 and Rs. 19,407,736 respectively. The restrictions are primarily on account of bank balances held as custody, margin money deposits against guarantees and balances held in unpaid dividends bank accounts.Many banks have not provided bank statements during the year and/or confirmation of balances as on 31st March 2017. The Company has continued its balances in the books.

Note 13. Loans

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Unsecured, considered goodLoans to Others 233,086,818 233,875,155 235,199,926TOTAL 233,086,818 233,875,155 235,199,926

Above loans are demand loans which are provided for metting with the expenses and hence carring value is equal to amortized cost as per opinion of management.Note 14. Other Current Assets

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`VAT Refund Receivables 147,400 746,125 1,243,743IT/ FBT Refund Receivables 53,710,217 41,874,176 1,729,948Advance Income Tax /TDS (Net of Provision for Taxation) 259,928 3,342,912 33,987,051Advances - 311,890 311,890Prepaid expenses 28,154 12,875 87,537Other current assets 115,580 71,763 26,119TOTAL 54,261,279 46,359,741 37,386,288


51

In the opinion of the Directors :The Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business.Note 15. SHARE CAPITAL(A) Reconciliation of number of Equity Shares outstanding at the beginning and at the end of the year

As at31.03.2017

As at31.03.2016

As at01.04.2015

No. of Shares No. of Shares No. of Shares No. of Shares outstanding as at the beginning of the Year 106,607,894 106,607,894 106,607,894 Add : - Shares allotted during the year as fully paid-up - - -

106,607,894 106,607,894 106,607,894

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees.The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Payment of dividend is also made in foreign currencies to shareholders outside India.In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the no. of equity shares held by the shareholders.(B) Shares in the Company held by each shareholder holding more than 5 % shares

As at31.03.2017

As at31.03.2016

As at01.04.2015

No. of % of No. of % of No. of % ofSHAREHOLDERS Shares Holding Shares Holding Shares Holding

Passage To India Master Fund Limited - 0.00% 6,469,615 6.06% 10,181,818 9.55% Prime India Investment Fund Limited - 0.00% 5,700,000 5.35% 5,700,000 5.35% Kohinoor Diamonds Private Limited 14,138,996 13.26% 14,138,996 13.26% 14,138,996 13.26%TOTAL 14,138,996 13.26% 26,308,611 24.67% 30,020,814 28.16%

Note 16 : DEFERRED TAX LIABILITIES (NET)

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Deferred Tax Liabilities - On account of Depreciation difference 52,290,791 52,290,791 52,290,791Deferred Tax Liabilities (Net) 52,290,791 52,290,791 52,290,791

NOTES : There is Deferred Tax Assets for the year ended 31st March 2017 and 2016. The Company has not recognised Deferred Tax Assets as there has been substantial losses for the year and the past few years. There is no certainity that the said losses would be adjusted against future profit. Thus as a matter of prudence Deferred Tax Assets has not been considered.


52

Note 17. SHORT TERM BORROWINGS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

` A AMOUNTS PAYABLE TO BANKS

(Overdue and in respect of which Notice under section 13(2) and 13 (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 has since been issued)

I IN RESPECT OF CRYSTALISEDEXPORT PACKING CREDIT & POST SHIPMENT CREDIT- Outstanding against Regular and Ad-hoc Fund Based limits 4,144,519,386 4,386,815,224 4,344,968,656- Outstanding in respect of Fund Based credits availed of upon inter-changeability from Non Fund Based limits 1,844,657,912 1,844,657,912 1,844,657,912

5,989,177,298 6,231,473,136 6,189,626,568II DEVOLVED LETTER OF CREDITS

Devolved Letters of Credit 19,486,778,800 19,723,665,198 19,723,665,198 Overdrawn Current Accounts 15,784,481,795 15,784,481,795 15,784,481,795

35,271,260,595 35,508,146,993 35,508,146,993III Overdue instalments of long term debt 8,561,724 8,561,724 8,561,724IV Net Interest Provided 20,589,460,413 13,644,124,154 7,233,075,846

The Company had been sanctioned Regular Fund Based Working Capital Credit Limits (Export Packing Credit and Post Shipment Credit) of Rs. 375,00,00,000 (Previous Year Rs. 375,00,00,000) and Non-Fund Based Working Capital Credit Limits (Stand-By Letters of Credit and Bank Guarantees) of Rs. 3470,00,00,000 (Previous Year Rs. 3470,00,00,000).The Company had also been granted, in principle, approval for additional, need based, Ad-hoc limits to the extent of 20% of the Regular FB and NFB limits.The Company had also been granted partial Inter-changeability between FB and NFB limits.The above amounts payable to Consortium of banks are secured by

(A) Hypothecation of(1) Inventory and Book Debts (both present and future) of

the Company(2) Plant and Machinery and Fixtures and Fittings

(fastened to earth or otherwise) of the Company at factory units of Bangalore, Cochin, Goa, Jodhpur, Kolkata (Manikanchan SEZ) and Surat of the Company

(3) Plant and Machinery and Fixtures and Fittings (fastened to earth or otherwise) of the Company installed at Valsad unit of the company in the property owned by Bombay Diamonds Co. P. Ltd.

(4) Plant and Machinery and Fixtures and Fittings (fastened to earth or otherwise) of Forever Diamonds P. Ltd. at its Jodhpur unit.


53

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`(B) Equitable Mortgage by way of deposit of title deeds of

Immovable Properties comprising Land (or leasehold rights in respect thereof) and other structures thereon at

(1) Bangalore, Goa, Jodhpur, Kolkata and Surat factory units of the Company

(2) Office Premises at Gamdevi in Mumbai of the Company(3) Valsad unit of Bombay Diamonds Co. P. Ltd.(4) Jodhpur factory unit of Forever Diamonds P. Ltd.(5) Surat factory unit of Kohinoor Diamonds P. Ltd.(C) Corporate Guarantees of(1) Bombay Diamonds Co. P. Ltd.(2) Forever Diamonds P. Ltd.(3) Kohinoor Diamonds P. Ltd.(D) Personal Guarantee of Mr. Jatin Mehta, Promoter(E) Term Deposits earlier held under lien as Cash Collateral

by the lead bank have since been shared by member banks and adjusted against outstanding amounts TOTAL 61,858,460,030 55,392,306,007 48,939,411,131

NOTES :A1 The Fund Based (EPC/PSC) limits were generally availed for Diamond division whereas Non fund Based (SBLC/BG) limits were

utilised for facilitating procurement of gold for manufacture of jewellery. The company procured gold on loan basis. As per extant FTP & RBI Guidelines, the maximum tenor for which gold loan can be availed of is 270 days. Accordingly, SBLCs had validity of 270 days. This was adequate to cover manufacturing cycle of around 90 days and credit of 180 days that the company extended to its overseas customers.

A2 Owing to delay in receipt of inward remittances from overseas customers against export bills, the company could not arrange for payments for liquidating gold loans which were due in March 2013. In view of these events of default, the bullion banks initially invoked SBLCs which had fallen due but later, as defaults persisted, invoked all SBLCs including even those in respect of which gold loans were not due (save and except State Bank of India which invoked SBLCs only when gold loans fell due for payments), as the Gold Loan Agreements executed by the company with Bullion Banks provided cross default clause entitling them to recall all outstanding gold loans even in case of single event of default. All invoked SBLCs were paid by the Consortium Banks.

A3 Further owing to continuing defaults by overseas customers and overdrawn accounts, the Company could not repay Export Packing Credits and Post Shipment Advances on due dates.

A4 As a result of invocation and devolvement of SBLCs and defaults in clearance of EPC/PSC, the liabilities have got crystallized in rupee terms and the accounts are overdrawn. With no gold lines from bullion banks and no fresh SBLCs or FB credits from consortium banks, the operations have been materially affected after March 2013.

A6 Few Banks have classified the company and its directors as willful defaulters. However, the Company has vehemently denied the same and reiterated that they were victim of circumstances beyond their control and are taking all possible steps to recover the same. The company, which had received from Standard Chartered Bank, Lead Bank of the Consortium, notice under the SARFAESI Act, has denied all the allegations made therein. Some of the banks have sent notices to the promoter/ guarantor and also to the companies who have provided corporate guarantees.

A7 Refer note no. 34 for legal cases filed by the Company against its defaulting overseas customers.B As the Company had not declared any dividend for the FY 2016-2017 and FY 2015-2016, the question of appropriating any amounts

out of the same towards arrears of call or allotment monies in respect of shares which were not fully paid-up does not arise.C There are no amounts of unclaimed dividend due and outstanding to be credited to Investor Education and Protection Fund. During

the year, no amount was due for transfer of unclaimed dividend to Investor Education and Protection Fund. (During the previous Year Rs.2,267,754/- for FY 2007-2008 were transferred to Investor Education and Protection Fund.)


54

D The Overdue instalments of long term debt comprise principal outstanding amount and interest levied by bank till 30th September 2013, in respect of Axis Bank Term Loan for WindMill which was payable and the Company has defaulted in making payments to Axis Bank in respect of Principal Rs.7,918,400/- . The default is continuing as on the date of balance sheet.

E Many banks have not issued bank statements during the year and/or confirmation of balances as on 31st March 2017. The Company has continued its balances in the books.

Note 18. TRADE & OTHER PAYABLES

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

` UNSECURED Trade Payables 786,619,400 795,164,314 772,417,153TOTAL 786,619,400 795,164,314 772,417,153Trade payable to related parties - - -

Note 19. Other Financial Liabilities

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`AMOUNTS PAYABLE TO RELATED PARTIESUnsecured - Short term Loan 342,182,117 332,462,161 326,365,427Payable to State Bank of Mauritius -under One time Settlement 61,548,564 - -TOTAL 403,730,681 332,462,161 326,365,427

NOTES: During the year under review, State Bank of Mauritius has entered in the One Time Settlement agreement with the Overseas Customer of the Company and the Company for settlement of their loan. Of the total settlement agreed for US$ 1050833/- the Outstanding at the year end US$ 949258.07 valued at year end exchange rate is shown under Other financial liabilities.Note 20. Other Current Liabilities

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Current Maturities on Long Term debts - - 566,915Unpaid/Unclaimed dividends 2,663,219 2,663,219 4,900,610Sales Tax / VAT payable / Service Tax/TDS Payable 781,281 669,931 655,028Other payables 77,263 237,654 93,513TOTAL 3,521,763 3,570,804 6,216,066

Note 21 SHORT TERM PROVISIONS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Provision for Employee Benefits 37,350 37,350 -

37,350 37,350 -Note 22. OTHER NON OPERATING INCOME

As At 31.03.2017

`

As At 31.03.2016

` Rentals from property - 31,116 Interest Received from Banks 1,208,597 1,179,989 Interest Received from Others 8,798,665 158,831 Service Tax Refund - 18,896,856


55

As At 31.03.2017

`

As At 31.03.2016

` Sale of Electricity of Windmill - 2,475,961 Miscellaneous Income 273,674 1,262,048 Net Gain/Loss on Foreign Currency Transaction/Translation - 3,231,797,118 Extinguishment Gain 629,133,811 - TOTAL 639,414,747 3,255,801,919

During the year under review, State Bank of Mauritius has entered in the One Time Settlement agreement with the Overseas Customer of the Company and the Company for settlemnt of their loan. The Overseas Customers have agreed to pay directly to State Bank of Mauritius US$ 1,050,833/- against the total outstanding of Rs. 700,497,667/- including interest provided @ 12.5 %. Therefore the Company has recognised extinguishment gain of Rs.629,133,811/- towards reduction in liability. Note 23. COST OF MATERIAL CONSUMED

As At 31.03.2017

`

As At 31.03.2016

`Opening Stock 26,084,565 26,084,565Add : Purchases - -

26,084,565 26,084,565Less : Closing Stock 26,084,565 26,084,565Cost of Material Consumed - -Material Consumed Comprises ofGold - -TOTAL - -

CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK IN TRADEInventories at the beginning of the YearFinished Goods 392,679,844 392,679,844

392,679,844 392,679,844Inventories at the end of the YearFinished Goods 392,679,844 392,679,844

392,679,844 392,679,844Net (increase) / decrease - -

Due to restriction on usage, the management has reclassifed all inventories as part of non-current assets. Note 24 . EMPLOYEE BENEFITS EXPENSES

As At 31.03.2017

`

As At 31.03.2016

`Salaries and Wages, Bonus, Gratuity and Allowances 2,583,884 3,697,452Contribution to PF, ESIC and Gratuity Fund 6,957 2,421Remuneration to whole time Directors 600,000 612,900Staff Welfare Expenses 73,604 90,245Total 3,264,445 4,403,018

The Accounting Standard – AS 15 (revised 2005) on Employee Benefits issued by theInstitute of Chartered Accountants of India has been adopted by the Company.


56

The details as provided by the Insurance Company for the Year ended 31st March, 2017 are reproduced here below.a) Defined Contribution Plan: The Company has recognized Rs. Nil (Rs. nil) towards contribution made to Employees Provident and family Pension Fund.b) Defined Benefit Plan:

Sr. Particulars As on31st March, 2017

As on31st March, 2016

1 Assumption(a) Discount Rate 8% 8%(b) Salary Escalation 4% 4%

2 Change in the Present Value of Obligation(a) Present Value of Obligation as at beginning of Year - 52,082(b) Interest Cost - 4,167(c) Current Service Cost - 17,298(d) Benefits Paid - -(e) Actuarial (Gain)/Loss on obligation - (825)(f) Present Value of Obligation as at 31st March, 2017 - 72,722

3 Change in the Fair Value of Plan Assets(a) Fair Value of Plan Assets as at 1st April, 2016 - 165,818(b) Expected Return on Plan Assets - 13,846(c) Employer’s Contributions - -(d) Benefits Paid - -(e) Actuarial Gain/(Loss) on Plan Assets - Nil(f) Fair Value of Plan Assets as at 31st March, 2017 - 179,664

4 Table showing Fair Value of Plan Assets(a) Fair value of Plan Assets at beginning of Year(b) Actual return on Plan Assets - 165,818(c) Contributions - 13,846(d) Benefits Paid - -(e) Fair Value of Plan assets at the end of the Year - 179,664(f) Funded Status - 106,942

5 Actuarial Gain/Loss recognized(a) Actuarial (Gain) / Loss for the Year-Obligation - 825(b) Actuarial (Gain) / Loss for the Year-Plan Assets - Nil(c) Total (Gain) / Loss for the Year – Obligation - (825)(d) Actuarial (Gain) / Loss recognized in the Year - (825)

6 The amounts to be recognized in the Balance Sheet and Statement of Profit and Loss(a) Present Value of Obligations as at the end of Year - 72,722(b) Fair value of Plan Assets as at the end of the Year - 179,664(c) Funded Status - 106,942(d) Net Assets/(Liability ) recognized in Balance Sheet - 106,942

7 Expenses recognized in Statement of Profit and Loss :(a) Current Service cost - 17,298(b) Interest Cost - 4,167(c) Expected Return on Plan Assets - (13,846)(d) Net Actuarial (Gain)/Loss recognized in the Year - (825)(e) Expenses recognized in Statement of Profit & Loss - 6,794

Note : The estimate of future salary increases considered in actuarial valuation taking into account inflation, seniority, promotion and other relevant factors.


57

Prior Period ExpensesThe expenses includes Expenses for the prior period

Remuneration to whole time Directors 12,900Salaries and Wages, Bonus, Gratuity and Allowances - -

- 12,900

Presently none of the employees are covered under PF as their salaries are above limits. All employees who were eligible for Gratuity left the Companies. Present employees have not completed 5 years of continuous service and therefore no new Gratuity policy was taken earlier and no acturial valuation were carried out. Presently employees are not entitle for any leave benefitNote 25. FINANCE COSTS

As At 31.03.2017

`

As At 31.03.2016

`Interest Expenses 7,184,162,296 6,411,974,669Bank Charges and other Borrowing costs 5,639,383 2,406,067 Net Gain/Loss on Foreign Currency Transaction/ Translation (12,448,072) 44,454,585 TOTAL 7,177,353,607 6,458,835,321

During the year Punjab National Bank has paid various expenses towards valuers/advocates/advertisement etc. out of escrow account. The Company has accounted all these expenses as Bank charges paid.

Note 26. OTHER EXPENSES As at 31.03.2017

`As at 31.03.2016

`MANUFACTURING EXPENSESPower and Fuel consumed 1,276,402 1,132,523Repairs - Factory Buildings - 18,485Repairs - Others 262,967 425,133Lease Rent 214,000 213,707

1,753,369 1,789,848Directors' Sitting fees 67,000 75,000Insurance 26,355 25,726Rates and Taxes (including wealth tax) 695,490 603,243Freight & Forwarding Charges - 1,200Payments to statutory auditors as auditors 93,750 85,875 for tax audit - 50,000 for certification 50,000 155,762 reimbursement of expenses (out of pocket expenses) - 13,443

143,750 305,080Legal, Professional and Consultancy charges 4,826,709 7,168,105Advertisement, Publicity and Sale Promotion 47,087 437,764 Net Gain/Loss on Foreign Currency Transaction/Translation 1,270,004,148 -Impairment of Receivables 489,753,737 -Miscellaneous Expenses 3,962,833 4,061,913TOTAL 1,771,280,478 14,467,879


58

Notes : 1 The Company has various operating leases for factory premises and office facilities that are renewable on a periodic basis and can

be terminated at the option of either party. Rental expenses for operational leases recognized in the statement of Profit and Loss for the Year are Rs.214,000/- (Rs. 213.707).

Minimum future lease rentals payable are :(a) Payable within one Year - 664,203(b) Payable within one Year and five Years - 2,080,812(c) Payable after five Years - -Minimum future lease rentals receivable in respect of assetsgiven on operating lease in the form of Plant and Machineryafter 01/10/2002 and Building after 01/08/2001 are :(a) Receivable within one Year Nil Nil(b) Receivable within one Period and five Years Nil Nil(c) Receivable after five Years Nil Nil

2 Miscellaneous expenses includes:

Security Charges 1,343,026 1,309,957Sundry Balance W/off 61,135 464,538Housekeeping Expenses 302,163 249,588Travelling Expenses 83,372 294,383Printing & Stationary 592,366 483,615Postage & Courier Charges 290,188 166,234Office Expenses 316,376 118,727Accounting Charges 626,016 657,187Others 348,191 317,684Total Miscellaneous Expenses 3,962,833 4,061,913

3 During the year under review, State Bank of Mauritius has entered in the One Time Settlement agreement with the Overseas Customer of the Company and the Company for settlement of their loan. Accordingly the Overseas customers agreed to pay US$ 1,050,833/- against the total outstanding bill of US$ 8,241,831.11/-. Therefore the Company has recognised Impairment of US$ 7,190,998/- amounting to Rs. 488,352,906/- in the books.

4 Prior Period Expenses

` `Professional Fees 905,428 131,972Rates & Taxes - 22,977Miscemmaenous Expenses 160,176 4,392Repairs & Maintenance - 88,863Payment to Statutory auditors - 180,000Insurance 3,333 -

1,068,937 428,204

Note 27. Earnings per share:

As At 31.03.2017`

As At 31.03.2016`

Profit computation for both Basic and Diluted earnings per share of Rs.10 eachNet profit as per Statement of Profit and Loss (8,360,134,040) (3,268,688,171)Weighted Average No. of Equity SharesShares at the beginning of the year A 106,607,894 106,607,894Shares allotted during the year B - -Date of allotment - -Effective No. of shares (allotted during the year)


59

As At 31.03.2017`

As At 31.03.2016`

For calculation of EPS on the basis of No. of days C - -Total Shares for calculation of EPS (A+C) D 106,607,894 106,607,894Less: Shares which are partly paid – to the extent of 50% E 273,824 273,824 50% thereof F 136,912 136,912Weighted Average No. of Equity Shares for EPS (D-F) 106,470,982 106,470,982Total Shares as at the close of the Year (A+B) 106,607,894 106,607,894Earning per Share (in Rs.) (78.52) (30.70)

Note 28. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

As At 31.03.2017`

As At 31.03.2016`

Contingent Liabilities (a) EPCG Benefits(Custom Duties payable if Export obligation not met) 35,414,184 35,414,184TOTAL 35,414,184 35,414,184

29 The carrying value of financial instruments by categories as on 31st March, 2017:

Particulars Fair value through other comprehensive income

Fair value through profit or loss

Amortised cost Total

` ` ` `Financial assetsCash and cash equivalents - - 157,861,856 157,861,856Non current investments - - 1,416,729,554 1,416,729,554Trade receivables - - 56,141,390,380 56,141,390,380Loans - - 233,086,818 233,086,818Other financial assets - - 4,101,290 4,101,290Total - - 57,953,169,898 57,953,169,898Financial liabilitiesBorrowings - - 61,858,460,030 61,858,460,030Trade payables - - 786,619,400 786,619,400Other financial liabilities - - 403,730,681 403,730,681

Total - - 63,048,810,111 63,048,810,111Theabovefinancialassetsareapproximatelyoftheamotizedvaluestated,ifrealizedintheordinarycourseofbusiness.The carrying value of financial instruments by categories as of 31st March, 2016 is as follows :

Particulars Fair value through other comprehensive

income



` ` ` `

Financial assetsCash and cash equivalents - - 163,192,834 163,192,834Non current investments - - 1,416,729,554 1,416,729,554Trade receivables - - 57,928,902,763 57,928,902,763Loans 233,875,155 233,875,155Other financial assets - - 6,096,769 6,096,769Total - - 59,748,797,075 59,748,797,075


60


income



` ` ` `

Financial liabilitiesBorrowings - - 55,392,306,007 55,392,306,007Trade payables - - 795,164,314 795,164,314Other financial liabilities - - 332,462,161 332,462,161Total - - 56,519,932,482 56,519,932,482

Theabovefinancialassetsareapproximatelyoftheamotizedvaluestated,ifrealizedintheordinarycourseofbusiness.The carrying value of financial instruments by categories as of 01st April, 2015 is as follows :


income



` ` ` `

Financial assetsCash and cash equivalents - - 163,984,304 163,984,304.00SCA receivable - - 1,416,729,554 1,416,729,554.00Trade receivables - - 54,669,840,302 54,669,840,302.00Loans - - 235,199,926 235,199,926.18Other financial assets - - 5,419,512 5,419,512.00Total - - 56,491,173,598.18 56,491,173,598.18Financial liabilitiesBorrowings - - 48,939,411,131 48,939,411,131.10Trade payables - - 772,417,153 772,417,153.00Other financial liabilities - - 326,365,427 326,365,427.00Total - - 50,038,193,711.10 50,038,193,711.10

30 Financial risk objective and policiesThe company’s principal financial liabilities comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the company’s operations/projects. The Company’s principal financial assets include loans, trade and other receivables, cash and cash equivalents that derive directly from its operations.In the ordinary course of business, the company is mainly exposed to risks resulting from foreign exchange movements and other price risks such as business risk.a Foreign exchange risk The company is exposed to changes in Foreign exchange rates due to financing, investing and cash management activities. The

company’s exposure to the risk of changes in Foreign exchange rates relates primarily to the company’s trade payable, trade receivables and foreign debt obligations with floating interest rates. The company manages its Foreign exchange risk by regularly reviewing the exchange market. However, as the Company does not have business operation recent years, the exposure is limited to accoount balances at balance sheet dates.

b Credit risk Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a

financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables and other financial assets) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Credit risk from balances with banks and financial institutions is managed by the company’s treasury department in accordance with the company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the company’s board of directors on an annual basis, and may be updated throughout the year subject to approval of the group’s finance committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.


61

The management assumes that the company will have adequate cash flows from proceeds of export realizations to defray its entire debt obligations in a phased manner. The company has provided all the required details evidencing receipt of its export consignment by defaulting overseas customers to the Honourable Court in Sharjah, UAE. The company is hopeful of a favourable outcome of the legal suit filed against defaulting overseas customers, which is in progress, in UAE and is hopeful of resuming its normal operations once the cash flow improves.

For recognition of impairment loss on financial assets and risk exposure, the company determines that whether there has been a significant increase in the credit risk since intial recognition. If credit risk has not increased significantly, 12-months ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

Based on internal evaluation, the credit risk of all Financial Assets has not increased significantly after initial recognition. Therfore, allowance is measured using 12 months Expected Credit Loss (ECL) and full life time expected credit loss model is not used to measure the allowance for any Financial Asset.

Financial Assets for which loss allowance is measured using 12 months expected credit loss ( ECL) is as follows:

Particulars 31.03.2017`

31.03.2016`

01.04.2015`

Trade and other receivables 56,141,390,380 57,928,902,763 54,669,840,30256,141,390,380 57,928,902,763 54,669,840,302

The company has not recognised any loss allowance under 12 months expected credit loss (ECL) model.c Liquidity risk Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at a reasonable price.

The company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the company’s net liquidity position through rolling forecasts on the basis of expected cash flows. As major of borrowing and payable is under dispute and repayment of these totally depends on recovery of trade receivables. As of now, the company has considered all its significant debts as part of current assets presuming it is callable debt by banks and counter parties.

d Capital management For the purposes of the company’s capital management, capital includes issued capital and all other equity reserves. The primary

objective of the company’s capital management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.The company monitors capital using gearing ratio, which is net debt (total debt less cash and cash equivalents) divided by total capital plus net debt.


31.03.2016`

01.04.2015`

Net debt (total debt less cash and cash equivalents) 62,894,507,368.00 56,360,347,802.10 49,880,425,473.10Total capital (4,385,955,234.00) 3,974,178,807.30 7,242,866,978.00Total capital and net debt 58,508,552,134.00 60,334,526,609.40 57,123,292,451.10Gearing ratio 107.50% 93.41% 87.32%

31 Explanatory notes on first time adoption of Ind ASa. First time adoption of Ind AS These standalone financial statements, for the year ended on 31st March, 2017, are the first financials of Winsome Diamonds

and Jewellery Limited being prepared in accordance with Ind AS. For periods up to and including the year ended 31st March, 2016, the company has prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Therefore comparative information is reclassified / remeasured so as to comply with Ind AS.

The company’s date of transition to Ind AS is 1st April, 2015. Therefore, the ‘Opening Balance Sheet’ as on 1st April, 2015, Statement of Profit and Loss for year ended on 31st March, 2016 and Balance Sheet as at 31st March, 2016 has been restated as per Ind AS. This note explains the principal adjustments made by the company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April, 2015 and the financial statements as at and for the year ended 31st March, 2016.


62

b Reconciliation of equity and profit and loss as previously reported under IGAAP to IND AS1 Reconciliation of equity

Particulars As at31.03.2016

`

As at01.04.2015

`

Total Equity as per previous GAAP 5,707,572,398 5,751,305,529Adjustments:

Recognition of Trade Payable - Foreign Currency Translation at balance sheet date (Loss on exchange)

(116,279,134) (79,676,830)

Recognition of Trade receivable - Foreign Currency Translation at balance sheet date (Gain on exchange)

10,504,534,719 7,237,384,562

Recognition of foreign currency loan - Foreign Currency Translation at balance sheet date (Loss on exchange)

(51,922,364) (7,467,778)

Interest expenses recognised for borrowings (12,069,726,813) (5,658,678,505)Total net impact (1,733,393,592) 1,491,561,449Total Equity as per Ind AS 3,974,178,807 7,242,866,978

2 Reconciliation of total comprehensive income

Particulars FY 2016-17 FY 2015-16Profit after tax as per IGAAP (5,340,186) (43,733,130)

Income / Expense to be recognised under Ind AS1 Exchange gain recognised for remeasurement of trade payable,

trade receivable and foreign currency loans (1,370,316,688) 3,186,093,267

2 Interest expenses recognised for borrowings (7,182,741,550) (6,411,048,308)3 Increase in Extinguishment Gain due to Interest provision 199,665,215 -

Total comprehensive income as per Ind AS (8,360,134,040) (3,268,688,171)

3 Impact of Ind-AS on cash flows statement for the year ended 31 March 2016

Particulars Indian GAAP Adjustments Ind ASNet Cash flow from operating actitivities 1,360,968 6,455,502,893 6,456,863,861Net Cash flow from investing actitivities 1,179,989 - 1,179,989Net Cash flow from financing actitivities (3,332,428) (6,455,502,894) (6,458,835,321)

Net Increase/(Decrease) in cash and cash equivalents

(791,470) - (791,470)

Cash and Cash equivalents as at 1 April 2015 163,984,304 - 163,984,304Cash and Cash equivalents as at 31 March 2016 163,192,834 - 163,192,834

c Options availed on the first time adoption of Ind AS 101 Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS.

The Group has applied the following Ind AS 101 exemptions from the transition date i.e. April 01, 2015:a) Ind AS 103 Business Combinations has not been applied to acquisitions of entites which are considered businesses under Ind

AS that occurred before transition date i.e., April 01, 2015. Use of this exemption means that the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with respective Ind AS. Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS balance sheet. The Company did not recognise or derecognised any previously recognised amounts as a result of Ind AS recognition requirements.

b) The Company has elected to avail exemption under Ind AS 101 to use India GAAP carrying value as deemed cost at the date of transition for all items of property, plant and equipment and intangible assets as per the statement of financial position prepared in accordance with previous GAAP.32


63

Related party disclosures

Associate company Forever Precious Jewellery and Diamonds LimitedRevah Corporation Limited

Fellow subsidiary company NAKey Management personnel Mr Harshad Udani- Executive Director

Mr. Asish Narayan - Company secretary WEF 01/02/2017Mr. Romin Shah - Company secretary - upto 02/11/2016

Transaction during the year ` `Associates 2016-17 2015-16Loan Received 8,700,000 5,397,074Interest on Loan 1,133,285 777,400

Key Management PersonnelRemuneration to Directors 600,000 612,900Remuneration to Company Secretary 522,181 991,669

Outstanding at the end of the yearAssociatesLoan Outstanding 342,182,117 332,462,161

** Remuneration to director Mr. Harshad Udani Rs. 600,000/- (Rs. 612,900/-) is provided in the book and the payment is subject to approval of Consortium of Bank and Central Government.33 Standard issued but not effective:The management is in process of assessing impact of following standards which are significant to operation of the Company.In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’. The amendments are applicable to the company from April 1, 2017. The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The company will incorporate the disclosure in Financial statements for the year ended 31st March 2018.Ind-AS 115 (revenue recognition) - The core principle of this standard is that an entity will recognize revenue when it transfers control over goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for underlying performance obligations arising from the transaction.Note 34.(i) The Company has witnessed unprecedented turn of events during last four years. The Company enjoyed credit facilities of Rs. 375

crores as Fund Based limits and Rs. 3470 crores as Non Fund Based limits, along with adhoc limits to the extent of 20% of the above limits for peak period, from 14 banks. The Non Fund Based limits were mainly used for purchase/ import of gold from overseas bullion banks as well as from nominated agencies in India against Standby Letters of Credit of the consortium banks.

During the end of March 2013, the overseas customers from the UAE defaulted in making payments for the Company’s exports which resulted in the Company defaulting in meeting its obligations. The consortium banks were, however, obliged to pay to the bullion suppliers due to the enabling provision in the gold loan agreement, wherein a single default enables bullion suppliers to recall all the gold loan.

The bankers appointed independent audit firms for forensic and investigative audit for which the Company offered explanations. The Company has received small realizations from its defaulting overseas customers during the year and after the Balance sheet

date. The Company had initiated legal proceedings against its defaulting overseas customers before the Sharjah Federal Court and had

received orders from Sharjah Federal Court in case of 13 overseas defaulters. The Court has confirmed the debts payable by the parties to the Company and ordered the overseas customer to pay the outstanding dues along with interest @5% p.a.


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The overseas customers have filed an appeal against the judgment of the Sharjah Federal Court and the Sharjah Federal Appellate court has passed orders in favour of the Company and now the matter is pending only in one case with the Sharjah Federal Appellate Court. Thereafter in two cases, they have moved to Sharjah Federal Supreme court and its judgment is awaited.

Few bankers have classified the Company and its directors as willful defaulters. However, the Company has vehemently denied the same and reiterated that they were victim of circumstances beyond their control and are taking all possible steps to recover the same.

The Debt recovery tribunal, Ahmedabad has passed order against the Company and announced auction of assets of the Company. After the Balance Sheet date, the DRT has confirmed the Auction sales of Immovable property at Jodhpur for Rs. 711,00,000/- and movable property at Goa for Rs.160,00,000/-..

The matter with Debt Recovery Tribunal, Mumbai is in progress. Meanwhile, the Axis Bank has issued notice under SARFAESI Act for auction sales of Windmill of the Company.

The banks had lodged complaints with the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) to carry out investigations against the Company and its promoter. The management and the directors have fully cooperated with the agencies during their investigations.

The Company has received Summons from SFIO (Serious Fraud Investigation Office) for submitting various details of the Company. The Company is extending its full co-operation.

The Reserve Bank of India issued notice to the Company under FEMA for non-realisation of foreign exchange from exports made during 2012-13 to overseas customers of Rs.636.14 crore. The Company has already informed time to time Reserve Bank of India about default made by overseas customers and the status of legal cases. The Reserve bank of India has included the name of the Company in list of willful defaulters to Supreme Court of India. The matter is yet pending with the court.

(ii) ONE TIME SETTLEMENT During the year, the State Bank of Mauritius (one bank of the member Consortium banks) has entered in agreement with the overseas

customers of the Company and the Company for settlement of the outstanding loan of the Company. The overseas customers have agreed to pay directly to State bank of Mauritius US$ 1,050,833/- against outstanding collection bills of US$ 8,241,431.11 thru State Bank of Mauritius.

(iii) INVENTORY Entire inventory of diamonds and pearls lying at Surat and Mumbai has been placed in the lockers in PNB and is in the joint custody

with PNB since 18.06.2013. The banks arranged for valuation of inventory by Customs approved valuers as on 30.09.2013 and as per their report, the total value of inventory was Rs.39,35,00,031. The stock at Chennai SEZ and Cochin SEZ are in the joint custody with PNB since November 2013 at Company’s premises respectively. The stock at Goa is in joint custody with PNB and the stock has been shifted to PNB branch at Goa in March 2017. The Stock at Bangalore is also in joint custody at factory premises at the year end and shifted to PNB bank Bangalore in May 2017.

The Inventory has not been verified by the management. The Company has not carried out any fresh valuation of Inventory as on the balance sheet date.

(iv) APPOINTMENT OF KEY MANAGEMENT PERSONNEL The Company has not appointed a whole time Chief Financial Officer (CFO), after the resignation of the previous CFO effective 5th

January 2015, as per the provisions of Section 203 of the Companies Act, 2013 read alongwith rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, due to cost constraints.

The Company Secretary resigned from the Company effective 14th November 2016 and the new Company Secretary was appointed w.e.f. 4th February 2017.

Note 35. The Company has not carried out any business activities during the year and hence the question of reporting as per the provisions of Accounting Standard 17-“Segment Reporting” issued by the Institute of Chartered Accountants of India does not arise.


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Note 36. Additional information as required under the Companies Act, 2013 as certified by a Director is as follows :

a) i) Break-up of the value of Raw Materials Consumed :

Rs. in lacs Percentage

Imported - (-)

- (-)

Indigenous -(-)

-(-)

-(-)

-(-)

ii) Break-up of Stores and Spares Consumed : Imported -

(-)-

(-) Indigenous (-) -

(-)-

(-)-

(-)

Note 37. The Company had received Confirmations as on 31st March 2013 from those overseas customers who have defaulted in payments. Creditors and other debtor’s confirmation are yet to be received.The Company has received orders from Sharjah Federal Court in case of 13 overseas defaulters. The Court has confirmed the debts payable to the Company.Note 38. The provision for depreciation is adequate and not in excess of the amounts reasonably necessary.Note 39. As per the information available with the Company and certified by them, total outstanding due to Micro, Small and Medium Enterprises as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 at the end of the year is Rs. Nil (Nil).The Company has not received any intimation from any of the creditors confirming that they fall within the provisions of Micro, Small and Medium Enterprises Development Act, 2006Note 40. Details of the Cash transactions done by the Company in Specified Bank Notes and other notes during 08/11/2016 to 30/12/2016.

SBNs Other Denomination notes TotalClosing cash in hand as on 08.11.2016 - 2,016 2,016(+) Permitted Receipts - 18,324 18,324(-) Permitted Payments - 18,324 18,324(-) Amount Deposited in Banks - - -Closing cash in hand as on 30.12.2016 - 2,016 2,016

Note 41. Previous Year’s figures have been re-arranged, re-grouped or re-classified wherever necessary.







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INDEPENDENT AUDITOR’S REPORTTo the Members of WINSOME DIAMONDS AND JEWELLERY LIMITED

1. Report on the Consolidated Financial Statements

WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofWINSOME DIAMONDS AND JEWELLERY LIMITED (“the HoldingCompany”)anditsAssociateswhichcompriseoftheConsolidatedBalanceSheetasat 31st March 2017, the Consolidated StatementofProfitandLoss,andtheConsolidatedCashFlowStatementfortheyearthenendedandasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation(hereinafterreferredtoas“consolidatedfinancialstatements”).

2. Management’s Responsibility for the Financial Statements

TheHoldingCompany’sBoardofDirectorsisresponsibleforthepreparationoftheseconsolidatedfinancialstatementsintermsoftherequirementsoftheCompaniesAct,2013(“theAct”)thatgiveatrueandfairviewoftheconsolidatedfinancialposition,consolidatedInd-ASfinancialperformanceandconsolidatedcashflowsoftheHoldingCompanyincludingitsassociatesinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheIndianAccountingStandards(IndAS)specifiedunderSection133oftheAct,readwithrelevantrulesissuedthereunder.

TherespectiveBoardofDirectorsoftheHoldingCompanyanditsassociatesareresponsibleformaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingtheassetsoftheHoldingCompanyandforpreventinganddetectingfraudsandother irregularities; theselectionandapplicationofappropriateaccountingpolicies;making judgmentsandestimatesthatarereasonableandprudent;anddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationoftheConsolidatedInd-ASfinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror,whichhavebeenusedforthepurposeofpreparationoftheconsolidatedfinancialstatementsbytheDirectorsoftheHoldingCompany,asaforesaid.

3. Auditor’s Responsibility

OurresponsibilityistoexpressanopinionontheseconsolidatedInd-ASfinancialstatementsbasedonouraudit.

Whileconductingtheaudit,wehavetakenintoaccounttheprovisionsoftheAct,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.

WeconductedourauditinaccordancewiththeStandardsonAuditingspecifiedunderSection143(10)oftheAct.ThoseStandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhethertheconsolidatedInd-ASfinancialstatementsarefreefrommaterialmisstatement.

AnauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsandthedisclosuresintheconsolidatedInd-ASfinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementof theconsolidatedInd-ASfinancialstatements,whetherduetofraudorerror. Inmakingthoseriskassessments,theauditorconsidersinternalfinancialcontrolrelevanttotheHoldingCompany’spreparationoftheconsolidatedInd-ASfinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluating theappropriatenessofaccountingpoliciesusedand thereasonablenessof theaccountingestimatesmadebytheHoldingCompany’sBoardofDirectors,aswellasevaluatingtheoverallpresentationoftheconsolidatedInd-ASfinancialstatements.

Webelievethattheauditevidencewehaveobtainedandtheauditevidenceobtainedbytheotherauditorintermsoftheirreportreferredtoinsubparagraph(b)of4belowissufficientandappropriateexceptasdescribedindisclaimerofopinionparatoprovideabasisforourauditopinionontheconsolidatedInd-ASfinancialstatements.

4. Basis for Qualified Opinion

A. In the consolidated Ind-AS financial statements, the Company has long term investments in Forever Precious Diamonds and Jewellery Ltd. (Forever) amounting to Rs.133,988,712 thereby resulting in it holding a 49 % stake in the equity of that company. The said investments continue to be valued at cost. As stated in Note No. 8, in the view of the management, provision for diminution in value of investments as per the requirements of Ind-AS 28 - Investments in Associates and Joint Ventures is not considered necessary and hence not made. We have been provided with the financial statements of Forever for the year ended 31st March 2017. We have observed that there are no significant business operations in Forever. Further the auditors of Forever have given disclaimer of opinion in-respect of realisability of trade receivables of Rs. 24,863,757,077/- and non valuation of the closing stock as on the year end. The auditors have further termed the Company as non going concern. In view of the above the Company should have provided the diminution in value of investments amounting to Rs .133,988,712. Accordingly the loss for the year have been understated and investments overstated by Rs.,133,988,712.


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Further the Auditors has qualified the consolidated Audit report stating that the Consolidated financial statements does not give the information required by the Act in the manner so required and does not give a true and fair view in conformity with the accounting principles generally accepted in India, of the Consolidated states of affair of the group and its associate entities as at 31st March 2017 and their consolidated cash flows for the year ended on that date, as we neither Audited not received the audited financial statement of wholly own subsidiary Forever Jewellery FZE, in UAE.

B. The Holding company has also made long term investment in Peakok Jewellery Limited amounting Rs. 5,012,750/- at the average rate of Rs. 286.44/- per share. As per the balance sheet as at 31ST March, 2016 the book value of the shares of the company is Rs. 110.78/- per share. In the view of the management, provision for diminution in value of investments as per the requirements of Ind-AS 28 - Investments in Associates and Joint Ventures is not considered necessary and hence not made. In view of the above the Company should have provided the diminution in value of investments amounting to Rs. 3,075,100/-. Accordingly the loss for the year have been understated and investments overstated by Rs. 3,075,100/-.

5. Basis for Disclaimer of Opinion

A. In respect of Trade Receivables amounting to Rs. 56,080,930,760/- (Valued at exchange rate as on 31/03/2017 under Ind-AS) the auditors have not received any confirmations from the overseas parties. The company has filed legal suit against its defaulting overseas customers for non-payment of its export bills at Sharjah Federal Court, Sharjah. The court has appointed an expert to look into the affairs of the companies based in Dubai/ Sharjah. The Court has confirmed the debts payable to the Company and ordered the overseas customer to pay along with interest @5% p.a. However, the copies of the orders are not provided for verification. The overseas customers had filed an appeal against the judgment of the Sharjah Federal Court and the the Sharjah Federal Appellate Court has passed order in favour of the Company and now the matter is pending for 1 case with the Sharjah Federal Appellate Court and 2 case with Sharjah Supreme court and their judgments are awaited. . During the year under review, state bank of Mauritius has entered in the One Time Settlement agreement with the company and overseas Customers of the company for settlement of its loan. Accordingly the Overseas customers agreed to pay US$ 1,050,833/- against the total outstanding bill of US$ 8,241,831.11/- . The balance amount receivable (Rs. 488,352,906/-) from overseas customers has been considered as impaired charged to profit and loss in FY 2016-2017. As per Ind-As – 109 (Financial Instruments) provides practical expedient to use a provision matrix to estimate Expected Credit Loss for trade receivables.


B. As per Ind-AS -16(Property, Plant and Equipment), the depreciable amount of a tangible fixed asset should be allocated on a systematic basis over its useful life. The depreciation method should reflect the pattern in which the asset's future economic benefits are expected to be consumed by the entity. Further, standard requires the depreciation method applied to an asset, residual value and useful life shall be reviewed at least at each financial year-end. Based on technical evaluation, the management believes that written down method of depreciation method and the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013 are best representative future economic benefits associated with tangible fixed assets. In absence of the technical report, we are unable to comment on reasonability of useful and method of depreciation and the consequential impact, on the financial statements. (Refer note 6 & 7)



D. The Reserve Bank of India issued notice to the Company under FEMA for non-realization of foreign exchange from exports made during 2012-13 to overseas customers of Rs.636.14 crore. The Company has already informed time to time Reserve Bank of India about default made by overseas customers and the status of legal cases.


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E. Some of the lending banks have declared the Company as Willful Defaulters, and have filed complaints with investigating agencies and the same are in progress. The Company is extending its full co-operation to the Investigating agencies. The Enforcement director has passed order against the Company under PMLA and all the properties are under provisional attachment by ED. The matter is now with the Enforcement Director, New Delhi and the order is awaited.

F. [email protected]%onthefollowingcurrentaccountshavingcreditbalances.Hence,effectofinterestonfinancialstatementcannotbedetermined:

Bank Name Outstanding amountCBI 11,116,796PNB 1,801,490PNBC/A1937 73,220VIJAYABANK 6,636,350

TOTAL 19,627,8566. Disclaimer of Opinion

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, specifically relating to the multiple uncertainties created due to factors such as non recovery of trade receivables on due dates, non payments of liabilities including statutory dues, financial difficulties faced by the Company due to recalling of bank finance, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the consolidated financial statements.

7. Emphasis of Matter

A. The Company has not carried out any valuation of the stocks which are lying with them / in the joint custody with the banks. To that extent the increase or decrease in the value of inventories as at year end, as required to be done as per the requirements of Ind-AS -2 (Inventories), has not been done. The impact on the profit/loss of the company due the said non valuation has not been determined. Refer note no. 10.

B. There is difference of Rs. 34,688,692/- in the outstanding balance of advances obtained from the bankers. In absence of details made available by the bankers, the company is not in a position to reconcile the difference. Which may lead to understatement of liability and its consequential effect in the book result if any.

C. Due to thedefaults of theCompany to thebanks, theCompany’s accountshavebeen classified asNPAsby thebanks. Most of the banks have not charged interest on the Company’s borrowings / loans, while some banks have been charging interest at higher rates. The board of directors of the Company in its meeting held on 30th May 2015 haddecidednottoprovideInterest.Nowthedirectorsinitsmeetingdated29th May 2017 have decided to provide for [email protected]%oftheoutstandingamountbeingtheaveragerateofrupeeexportfinanceasworkedoutbytheDirectors.Moreover,TheDebtrecoverytribunalhaspassedorderdated09.12.2016determiningthetotalamountpayableRs.46,870,404,315/-alongwiththesimpleinterest@14%p.a.fromthedateoffilingoforiginalapplicationwithDRTtillthedateofrealizationofdues.However,thecompanyhas not passed any effect relating to the above mention order as the detailed calculation of Bank wise liability is not available and in that concern liability of the company cannot be determined.

D. ThecompanyhasreceivedsummonsfromSeriousFraudInvestigationOfficeofMinistryofCorporateAffairsdated05.07.2016u/s217ofTheCo.Act,2013andinvestigationundersection212ofTheCompaniesAct,2013dated01.08.2016.Thecompanyhascompliedforthesame.However,noquantificationofanyfinancialliabilityarisesoutofthesameintheopinionoftheBoard.

8. Other Matters

TheConsolidatedFinancialStatementalsoincludetheAssociateCompanies’shareofnetlossofRs.1,452,875,753/-fortheyearended31stMarch,2017andtheAssociateCompanies’accumulatedlossofRs.1,277,722,090/-till31stMarch,2017areconsideredintheConsolidatedFinancialStatementinrespectofForeverPreciousJewellery&DiamondsLtd.IncaseofRevahCorporationLtd.,theassociatecompany,theaccumulatedlossbeinginexcessoftheInvestmentinthesaidassociate,theinvestmentthereinhasbecomenil.TheauditofRevahCorporationLtd.hasnotbeencarriedonbyus.Theauditedstatementhasbeenauditedbyotherauditor,reportofwhichhasbeenfurnishedtousbytheManagementandouropinionontheconsolidatedfinancialstatement,insofarasitrelatestotheamountsanddisclosuresincludedinrespectoftheseassociatesandourreportintermofsub-section(3)&(11)ofSection143oftheAct,insofarasitrelatestotheaforesaidassociates,isbasedsolelyonthereportoftheotherauditor.TheotherauditorhasqualifiedhisreportstatingthattheConsolidatedFinancialStatementsdonotgivetheinformationrequiredbytheActanddoesnotgiveatrueandfairviewinconformitywiththeaccountingprinciplesastheauditorhaveneitherauditednorreceivedtheauditedfinancialstatementofthewhollyownedsubsidiaryofForeverviz.ForeverJewelleryFZE,inUAE.


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OuropinionontheConsolidatedFinancialStatementsandourReportonOtherLegalandRegulatoryRequirementsbelowisnotmodifiedinrespectoftheabovematterswithrespecttoourrelianceontheworkdoneandthereportsoftheotherauditorsandthefinancialstatementscertifiedbytheManagement.

9. Report on Other Legal and Regulatory Requirements

Asrequiredbysection143(3)oftheCompaniesAct2013,wereportthat:

(a) As described in the Basis for Disclaimer of Opinion Paragraph, we were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) InouropinionproperbooksofaccountasrequiredbylawhavebeenkeptbytheGroupsofarasappearsfromourexaminationofthosebooksandthereportsoftheotherauditors;

(c) TheConsolidatedBalanceSheet,ConsolidatedStatementofProfitandLoss,andtheConsolidatedCashFlowStatementdealtwithbythisReportareinagreementwiththebooksofaccountmaintainedforthepurposeofpreparationoftheconsolidatedfinancialstatements.

(d) ExceptfortheeffectsofthematterdescribedintheBasisforQualified/DisclaimerOpinion/EmphasisofMatterparagraphsinouropinion,theaforesaidfinancialstatementscomplywiththeAccountingStandardsspecifiedundersection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014.

(e) Onthebasisofwrittenrepresentationsreceivedfromthedirectorsason31stMarch,2017,andtakenonrecordbytheBoardofDirectorsoftheHoldingCompanyanditsassociates,noneofthedirectorsisdisqualifiedason31stMarch,2017,frombeingappointedasadirectorintermsofSection164(2)oftheAct.

(f) The matter described in Basis of Disclaimer of Opinion in Paragraph 5 above, in our opinion may have an adverse effect on the functioning of the company.

(g) Withrespecttotheadequacyofinternalfinancialcontrolsoverfinancialreportingofthecompanyandtheoperatingeffectivenessofsuchcontrols,refertoourseparatereportinAnnexure1.

(h) WithrespecttoothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:

(i) TotalpendinglitigationswhichwouldimpactthefinancialpositionofthecompanyareenclosedherewithinAnnexureA.Themanagementisunabletoascertaintheamountofliabilitiestothecompanyonthesaidlitigations.

(ii) TheCompanydidnothaveanylongtermcontractsincludingderivativecontractsforwhichtherewereanymaterialforeseeablelosses.

(iii) AmountswhichwererequiredtobetransferredtotheInvestorEducationandProtectionfundweredulytransferredtothefundbytheCompanywithintheduedates.

(iv) TheCompany has provided requisite disclosure in itsConsolidated Ind-AS financial statements as to holdings aswell asdealingsinSpecifiedBankNotesduringtheperiodfrom8November2016to30December2016andtheseareinaccordancewiththebooksofaccountsmaintainedbytheCompany.ReferNote40totheConsolidatedINDASfinancialstatements.

For, NAUTAM R. VAKIL & CO. CHARTERED ACCOUNTANTS FRN: 106980W

MANAN VAKILPlace:Ahmedabad PARTNERDate:29thMay,2017 MEMB. NO. : 102443


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WINSOME DIAMONDS & JEWELLERY LTD. (CONSOLIDATED)

Annexure – ASr. No. Details of Litigations

1 Debt Recovery Tribunal, MumbaiAxisBankhasfiledOriginalApplicationNo.89of2015againsttheCompany,withregardtorecoveryofoutstandingduesforTermloangrantedforWindmillinstalledatGujarat.

2. Sharjah Federal Court, SharjahThecompanyhasfiledlegalsuitagainstitsdefaultingoverseascustomersfornon-paymentofitsexportbillsatSharjahFederalCourt,Sharjah.ThecourthasappointedanexperttolookintotheaffairsofthecompaniesbasedinDubai/Sharjah.TheCourthasconfirmedthedebtspayabletotheCompanyandorderedtheoverseascustomertopayalongwithinterest@5%p.a.TheoverseascustomershadfiledanappealagainstthejudgmentoftheSharjahFederalCourtandthetheSharjahFederalAppellateCourthaspassedorderinfavouroftheCompanyandnowthematterispendingfor1casewiththeSharjahFederalAppellateCourtand2casewithSharjahSupremecourt.

3 Bombay High CourtCompanyhasfiledDefamationSuitCaseNo.S/512/2014againstMr.ChaimEvanZoharc,TacyLimited,Mr.EliChen,Mr.RachelSegalforcarryingtheArticle‘UnravelingJatinMehta’sHiddenSyntheticsEmpire’inthemagazine‘DiamondIntelligenceBriefs’edition5thFebruary,2014Vol.29No797publishedbyTacyLimited.

4 Bombay High CourtWritPetitionNo.1432of2007filedbythetradeunionchallengingtheorderoftheIndustrialCourtdated23-04-2007passedinComplaint(ULP)No.1411of1999inrespectoftheclosureoftheGoregaonfactoryoftheCompany,pendingbeforetheDivisionbenchoftheOriginalSide,HighCourt,Bombay.

5 Bombay High CourtWritPetitionNo.2594of2008(Civilside)filedbythetradeunionchallengingAwarddated6-2-2008passedbyIndustrialTribunal,Mumbaiinrespectoftheclosureofthecontractcompaniesviz.M/s.FineGemsCompany,M/s.BlueNewGemsCompany,M/s.BlueDiamondCompany,pendingbeforetheHon’bleCourt,oftheAppellateSide.CasewasfiledsothatWorkmenofthesecontractCompaniescanbeabsorbedintheCompany(Winsome).

6 Bombay High CourtWritPetitionNo.3080of2005filedbythetradeunion,pendingbeforeHon’bleCourt.Casewas filed inHighCourt (Original Side) against the closure of SEEPZUnit of theCompany.HighCourt hasrestoredtheComplaintafterclosingoftheapplicationduetononappearanceoftheapplicant.

7 Labour Court - MumbaiReference (IDA)No. 597 of 2010 filed by one of the employees seeking reinstatement with full backwages andcontinuationofservicew.e.f.20/06/1998nowpendingbeforethe11thLabourCourtatMumbai.

8 Borivali CourtCriminalCaseNo.77/SW/2008filedbyoneoftheemployeeunderthevariousProvisionsofTheCRPCandTheIPC,nowpendingbeforethe67thMetropolitanMagistrateCourtMumbai–Borivali.Thecasewasfiledchargingthatthecompany,ManagingDirectorandLabourCommissionerbeinghandinglovewitheachothertoforgedocumentstoobtainlicensetoemploycontractlaboursandhencecheatedthecontractlabourers.

9 Additional Commissioner of Customs (Bonds), BangaloreTheAdditionalCommissioner ofCustoms (Bonds), Bangalore has passed order against theCompany and raiseddemandofRs.17,118,759/-includingpenalties/fines.TheCompanyhasfiledappealtotheCommissionerofCustoms(Appeal),Bangaloreagainsttheaboveorder.


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Details of Pending Litigations in Associate Companies:Forever Precious Diamonds and Jewellery Ltd.:Sr. No. Details of Litigations

1 Debt Recovery Tribunal, AhmedabadPunjabNationalBankhasfiledOriginalApplicationNo.304of2014againsttheHoldingCompanyundersection19(1)oftheRecoveryofDebtsduetoBanksandFinancialInstitutionsAct,1993forrecoveryofoutstandingduesfromtheHoldingCompanyand theguarantee companies praying for anOrder directing to discloseallmovable, immovable propertiesotherthanmortgagedpropertiesandrestrainingtheholdingCompanyfrompartingwithpossessionofanymovableandimmovablepropertiesandappointmentofReceiver.IntheproceedingsagainsttheholdingCompany,GarnisheeNoticehasalsobeenfiledseekinganOrderagainstthe13entitiestodirectlypaytheirduestotheconsortiumbanks.DRThasalreadypassedorderagainsttheCompanyandnowSinglecaseispendinginDRT-1withrecoveryofficer.

2 Sharjah Federal Court, SharjahTheholdingcompanyhasfiledlegalsuitagainstitsdefaultingoverseascustomersfornon-paymentofitsexportbillsatSharjahFederalCourt,Sharjah.TheholdingCompanyhasreceivedorderinallthe13cases.Thecourthasconfirmedthedebtspayabletotheholdingcompanyandorderedtheoverseascustomertopayalongwithinterest@5%p.a.Theoverseas customershad filedanappeal against the judgment of theSharjahFederalCourt and the theSharjahFederalAppellateCourthaspassedorderinfavouroftheCompanyandnowthematterispendingfor1casewiththeSharjahFederalAppellateCourtand4casewithSharjahSupremecourt.


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Annexure 1 referred to in Paragraph 9(g) titled as "Report on Other Legal and Regulatory Requirements" of the Independent Auditor’s Report to the members of Winsome Diamonds and Jewellery Limited on the Consolidated Financial Statements for the year ended 31st March, 2017.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013.

1. InconjunctionwithourauditoftheconsolidatedfinancialstatementsoftheCompanyasofandfortheyearendedMarch31,2017,wehaveaudited the internal financial controls over financial reportingofWINSOME DIAMONDS AND JEWELLERY LIMITED (“theCompany”)anditsAssociateCompanies,whicharecompaniesincorporatedinIndia,asofthatdate.

Management’s Responsibility for Internal Financial Controls

The respectiveBoard ofDirectors ofHolding company andAssociateCompanies,which are companies incorporated in India, areresponsible for establishingandmaintaining internal financial controls basedon the ‘internal control over financial reporting criteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting issuedby the InstituteofCharteredAccountantsof India (ICAI)’.These responsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficient conductof itsbusiness, includingadherence to thecompany’spolicies, thesafeguardingof itsassets, thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation,asrequiredundertheCompaniesAct,2013.

Auditors’ Responsibility

Our responsibility is toexpressanopinionon theCompany's internal financial controlsoverfinancial reportingbasedonouraudit.Weconductedouraudit inaccordancewiththeGuidanceNoteonAuditof InternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing,issuedbyICAIanddeemedtobeprescribedundersection143(10)oftheCompaniesAct,2013,totheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofInternalFinancialControlsand,bothissuedbytheInstituteofCharteredAccountantsofIndia.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.

Ouraudit involvesperformingprocedurestoobtainauditevidenceabout theadequacyof the internalfinancialcontrolssystemoverfinancialreportingandtheiroperatingeffectiveness.Ourauditofinternalfinancialcontrolsoverfinancialreportingincludedobtaininganunderstandingofinternalfinancialcontrolsoverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.

Webelievethattheauditevidencewehaveobtainedandtheauditevidenceobtainedbytheotherauditorsoftheassociatecompany,which is company incorporated in India, in termsof their reports referred to in theOtherMatter paragraphbelow, is sufficient andappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.

Meaning of Internal Financial Controls Over Financial Reporting

ACompany's internalfinancialcontroloverfinancial reporting isaprocessdesigned toprovidereasonableassuranceregarding thereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany's internal financial control over financial reporting includes thosepoliciesandprocedures that (1)pertain to themaintenanceof records that, in reasonabledetail,accuratelyand fairly reflect the transactionsanddispositionsof theassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonly inaccordancewithauthorisationsofmanagementanddirectorsof thecompany;and (3)provide reasonableassuranceregardingpreventionor timely detectionof unauthorisedacquisition, use, or dispositionof the company's assets that couldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Becauseoftheinherentlimitationsofinternalfinancialcontrolsoverfinancialreporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubjecttotheriskthattheinternalfinancialcontroloverfinancialreportingmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorprocedures may deteriorate


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Opinion

ThesystemofinternalfinancialcontrolsoverfinancialreportingwithregardstothecompanyexcepttotheextentmentionedinNoteNo.1to5ofthefinancialstatements,werenotmadeavailabletoustoenableustodetermineifthecompanyhasestablishedadequateinternalfinancialcontrolsoverfinancialreportingandwhethersuchinternalfinancialcontrolswereoperatingeffectivelyasatMarch31,2017.

Wehaveconsidered thedisclaimer reportedabove indetermining thenature timingandextentofaudit testapplied inourauditoftheconsolidatedfinancial statementof thecompanyand thedisclaimerhasaffectedouropinionon thefinancial statementsof theconsolidatedcompanyandwehaveissuedaqualifiedanddisclaimerofopinionontheconsolidatedfinancialstatements.

Other Matters

Ouraforesaidreportundersection143(3)(i)oftheActontheadequacyandoperatingeffectivenessoftheinternalfinancialcontrolsoverfinancialreportinginsoasitrelatestoanassociatecompany,whichisacompanyincorporatedonIndia,isbasedonthecorrespondingreportoftheauditorsofsuchcompanyincorporatedinIndia.

For, NAUTAM R. VAKIL & CO. CHARTERED ACCOUNTANTS FRN: 106980W

MANAN VAKILPlace:Ahmedabad PARTNERDate:29thMay,2017 MEMB. NO. : 102443


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AUDITED BALANCE SHEET AS AT 31st MARCH, 2017Note As at

31.03.2017 As at

31.03.2016 As at

01.04.2015` ` `

ASSETSI. Non-current assets (a) Property,PlantandEquipment 6 282,116,627 325,663,010 381,781,127 (b) Intangibles 7 2,011 2,011 4,705 (c) FinancialAssets (i) Non-currentinvestments 8 139,007,463 1,591,883,216 2,045,648,897 (ii) OtherFinancialAssets 9 56,083,943,106 57,933,910,591 54,671,237,305 (d) OtherNon-CurrentAssets 10 429,154,966 429,188,397 429,221,828

56,934,224,173 60,280,647,225 57,527,893,862II. Current assets (a) Inventories - - - (b) Financialassets (i) Current Investments - - - (ii) TradeReceivables 11 61,548,564 1,088,941 4,022,509 (iii)CashandCashEquivalents 12 157,861,856 163,192,834 163,984,304 (iv)Loans 13 233,086,818 233,875,155 235,199,926 (c) Other Current Assets 14 54,261,279 4,63,59,741 37,386,288

506,758,517 444,516,671 440,593,027Total Assets 57,440,982,690 60,725,163,896 57,968,486,889

EQUITY AND LIABILITIESI. Equity (a) Sharecapital 15 1,064,709,820 1,064,709,820 1,064,709,820 (b) OtherEquity (6,728,387,145) 3,084,622,649 6,807,076,501

(5,663,677,325) 4,149,332,469 7,871,786,321II. Non-current liabilities (a) Financialliabilities (i) LongtermBorrowings - - - (b) Deferredtaxliabilities(Net) 16 52,290,791 52,290,791 52,290,791 (c) OtherNon-Currentliabilities - - -

52,290,791 52,290,791 52,290,791III. Current liabilities (a) Financialliabilities (i) ShorttermBorrowings 17 61,858,460,030 55,392,306,007 48,939,411,131 (ii) TradeandOtherPayables 18 786,619,400 795,164,314 772,417,153 (iii)OtherFinancialLiabilities 19 403,730,681 332,462,161 326,365,427 (b) OtherCurrentLiabilities 20 3,521,763 3,570,804 6,216,066 (c) ShorttermProvisions 21 37,350 37,350 -

63,052,369,224 56,523,540,636 50,044,409,777Total Equity and Liabilities 57,440,982,690 60,725,163,896 57,968,486,889Summary of Significant Accounting Policies 5Notes on Financial Statements 1-4,6to42 As per our attached report of even date For and on behalf of the BoardFOR NAUTAM R. VAKIL & CO.Chartered Accountants Harish R. Mehta DirectorFRN106980W DIN-05316274

Manan Vakil Harshad R. Udani DirectorPartner DIN-07014853MembershipNo.102443

Asish NarayanCompanySecretary

Place:Ahmedabad Place:AhmedabadDate:29thMay,2017 Date:29thMay,2017


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AUDITED CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2017Particulars Note For the year ended

on 31.03.2017 For the year ended

on 31.03.2016 ` `

REVENUEI. RevenuefromOperations - -II. OtherNon-OperatingIncome 22 639,414,747 3,255,801,919III. Total Revenue (I+II) 639,414,747 3,255,801,919IV. EXPENSES

CostofMaterialsConsumed 23 - -ChangesinInventoriesofFinishedgoods,Stock-in-trade 23 - -EmployeeBenefitsExpenses 24 3,264,445 4,403,018FinanceCosts 25 7,177,353,607 6,458,835,321DepreciationandAmortizationExpense 43,579,814 56,154,242OtherExpenses 26 1,771,280,478 14,467,879Total Expenses 8,995,478,344 6,533,860,460

V. Profit before Tax (III-IV) (8,356,063,597) (3,278,058,541)VI Tax expense:

Current tax - -Deferredtax - -TaxexpensesreleatedtoPriorYears 4,070,443 (9,370,370)

4,070,443 (9,370,370)VII Total comprehensive income for the year (V-VI) (8,360,134,040) (3,268,688,171) VIII Share of Profit/(Loss) of Associates (1,452,875,753) (453,765,681) IX Profit/(Loss) for the year for the Group (9,813,009,793) (3,722,453,852)VIII Earnings per Equity Share 27

Basic&DilutedinRupees (92.17) (34.96)


FOR NAUTAM R. VAKIL & CO.Chartered Accountants Harish R. Mehta DirectorFRN106980W DIN-05316274





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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2017 As at

31.03.2017`

As at31.03.2016

`A. CASH FLOW FROM OPERATING ACTIVITIES

NetProfitbeforeTax (8,356,063,597) (3,278,058,541)Adjustments for :Depreciation 43,579,814 56,154,242Interest Income (1,208,597) (1,179,989)FinanceCost 7,177,353,607 6,458,835,321OperatingProfitbeforeworkingcapitalchanges (1,136,338,773) 3,235,751,033Adjustments for :TradeandOtherReceivables 1,791,147,717 (3,257,888,310)Inventories - -TradePayableincludingBankLoanrecalled 6,528,828,588 6,479,130,859

7,183,637,532 6,456,993,581Taxes paid (12,823,500) (129,719)Cashgeneratedfromoperatingactivities 7,170,814,032 6,456,863,862

B. CASH FLOW FROM INVESTING ACTIVITIESSaleofFixedAssets - -InterestReceived 1,208,597 1,179,989Netcashfrominvestingactivities 1,208,597 1,179,989

C. CASH FLOW FROM FINANCING ACTIVITIESProceedsfromLongTermborrowings - -InterestandBankchargesPaid (7,177,353,607) (6,458,835,321)Netcashfromfinancingactivities (7,177,353,607) (6,458,835,321)Netincrease/(decrease)incashandcashequivalent(A+B+C) (5,330,978) (791,470)CashandCashequivalentasat1stApril,2016(OpeningBalance) 163,192,834 163,984,304CashandCashequivalentasat31stMarch,2017(ClosingBalance) 157,861,856 163,192,834







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Statements of changes in equity for the year ended 31st March, 2017(A) Share capital

No.ofShares

As at31.03.2017

`

No.ofShares

As at31.03.2016

`

No.ofShares

As at01.04.2015

`AUTHORISEDSHARECAPITALEquitySharesofRs.10/-each 15,00,00,000 1,500,000,000 150,000,000 1,500,000,000 15,000,000 1,500,000,000ISSUEDSHARECAPITALEquitySharesofRs.10/-each 10,66,07,894 1,066,078,940 106,607,894 1,066,078,940 106,607,894 1,066,078,940SUBSCRIBED&PAID-UPSHARECAPITALEquitySharesofRs.10/-each 10,66,07,894 1,066,078,940 106,607,894 1,066,078,940 106,607,894 1,066,078,940Less:CallsunpaidbyShareholdersother than directors 1,369,120 1,369,120 1,369,120TOTAL 1,064,709,820 1,064,709,820 1,064,709,820

Part B : Other equity As at

31.03.2017`

As at31.03.2016

`

As at01.04.2015

`

CAPITAL RESERVEAsperBalanceSheet 50,341,338 50,341,338 50,341,338SECURITIES PREMIUM ACCOUNTAsperlastBalanceSheet 4,724,538,450 4,724,538,450 4,724,538,450Less:Allotment/CallMoneyinArrearsotherthanDirectors-AsperLastBalanceSheet 5,712,831 5,712,831 5,712,831

4,718,825,619 4,718,825,619 4,718,825,619GENERAL RESERVEAsperBalanceSheet 2,850,000,000 2,850,000,000 2,850,000,000GENERAL RESERVE - FOREIGN EXCHANGE / METALPRICE FLUCTUATIONAsperBalanceSheet 550,000,000 550,000,000 550,000,000SURPLUS/(DEFICIT) IN THE STATEMENT OF PROFIT & LOSS-AsperlastBalanceSheet (5,084,544,308) (1,362,090,456) (3,354,255,469)-Add:ShareofProfit/(Loss)ofAssociatesofearlieryears

- 628,919,343

-Less:ImpactofIND-AS-CumulativeForeignExchangeFluctuationrecognised

- 1,491,561,449

-Add:NetProfitafterTaxtransferredfromStatementofProfit&Loss

(9,813,009,793) (3,722,453,852) (128,315,779)

-BalanceasatthecloseoftheYear (14,897,554,102) (5,084,544,308) (1,362,090,456) TOTAL (6,728,387,145) 3,084,622,649 6,807,076,501


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2017.1 Corporate information ThesefinancialstatementscomprisefinancialstatementsofWinsomeDiamondsandJewelleryLimited(the“Company,Winsome”

anditsassociates,collectively,the"Group")fortheperiodendedMarch31,2017.TheCompanyisapubliccompanydomiciledinIndiaandisincorporatedundertheprovisionsoftheCompaniesActapplicableinIndia.Itssharesarelisted ononerecognizedstockexchangesinIndia.

During theyear theCompanyhashadnobusinessactivities.The Incomefor thecompanywas fromrefundsof taxes/statutorydues,bankinterestandsaleofelectricitygeneratedfromWindmillwhichhasalsostoppedduringtheyear.ThereforethereisnosourceofIncome.Thefundreceivedthrurefundsofstatutorypaymentsandorsmalllocalreceivablesareutilizedtocontinuetheadministrativeexpensesandlegalexpenses.Thecompanyhasveryfewemployeesandfewconsultantswhoassistinthedaytodayworkingofthecompany.ThemajorexpenditureoftheCompanyissalaries,professionalandlegalfeesandstatutorydues.AlltheexpensesandpaymentsareundercontroloftheBoardofDirectors.

Themanagementassumesthatthecompanywillhaveadequatecashflowsfromproceedsofexportrealizationstodefrayitsentiredebtobligationsinaphasedmanner.ThecompanyhasprovidedalltherequireddetailsevidencingreceiptofitsexportconsignmentbydefaultingoverseascustomerstotheHonourableCourtinSharjah,UAE.Thecompanyishopefulofafavourableoutcomeofthelegalsuitfiledagainstdefaultingoverseascustomers,whichisinprogress,inUAEandishopefulofresumingitsnormaloperationsoncethecashflowimproves.HencetheaccountsofthecompanyarepreparedonGoingConcernbasis.

TheinterimfinancialstatementsareapprovedforissuebytheCompany'sBoardofDirectorsonMay29,2017.2 Principles of consolidation and equity accounting Subsidiariesareallentities(includingstructuredentity)overwhichtheCompanyhascontrol.TheCompanydoesnothavesubsidiary. Anassociate isanentityoverwhich theGrouphassignificant influence.Significant influence is thepower toparticipate in the

financialandoperatingpolicydecisionsoftheinvestee,butisnotcontrolorjointcontroloverthosepolicies.ThisisgenerallythecasewheretheCompanyholdsbetween20%and50%ofthevotingrights.Investmentsinassociatesareaccountedusingequitymethodofaccounting. (refernote8).Thecompanyhas twoassociates:1)ForeverPreciousJewellery&DiamondsLimited,2)RevahCorporationLimited.

Undertheequitymethod,theinvestmentinanassociateorajointventureisinitiallyrecognisedatcost.ThecarryingamountoftheinvestmentisadjustedtorecognisechangesintheCompany’sshareofnetassetsofthejointventuresincetheacquisitiondate.

3 Basis of preparation Thefinancialstatementsof thecompanyhavebeenpreparedinaccordancewithIndianAccountingStandards(IndAS)notified

undertheCompanies(IndianAccountingStandards)Rules,2015asamendedbytheCompanies(IndianAccountingStandards)(Amendment)Rules,2016.

ForallperiodsuptoandincludingtheyearendedMarch31,2016,thecompanyprepareditsfinancialstatementsinaccordancewiththeaccountingstandardsnotifiedundersection133oftheCompaniesAct2013,readtogetherwithparagraph7oftheCompanies(Accounts)Rules,2014(IndianGAAP).ThesefinancialstatementsfortheyearendedMarch31,2017arethefirstthecompanyhaspreparedinaccordancewithIndAS.(ReferNote 31 forinformationonhowthecompanyhasadoptedIndAS.)

ThecompanyhasadoptedallIndASandtheadoptionwascarriedoutinaccordancewithIndAS101"FirsttimeadoptionofIndianAccountingStandards".ThetransitionwascarriedoutfromIndianAccountingPrinciplesgenerallyacceptedinIndiaasprescribedundersection133oftheAct,readwithRule7oftheCompanies(Accounts)Rules,2014(IGAAP),whichwasthepreviousGAAP.Reconciliationsanddescriptionsoftheeffectofthetransitionhasbeensummarizedin Note 31.

Thefinancialstatementshavebeenpreparedonthehistoricalcostbasis,exceptforcertainfinancialinstrumentswhicharemeasuredatfairvaluesattheendofeachreportingperiod,asexplainedintheaccountingpoliciesbelow.

4 Use of estimates The preparation of financial statements in conformity with IndAS requires management to make estimates, judgements and

assumptions.Theseestimates,judgementsandassumptionsaffecttheapplicationofaccountingpoliciesandthereportedamountsofassetsand liabilities, thedisclosuresof contingentassetsand liabilitiesat thedateof thefinancial statementsand reportedamountsofrevenuesandexpensesduringtheperiod.Applicationofaccountingpoliciesthatrequirecriticalaccountingestimatesinvolvingcomplexandsubjective judgementsand theuseofassumptions in thesefinancialstatementshavebeendisclosed innote4.1.Accountingestimatescouldchangefromperiodtoperiod.Actualresultscoulddifferfromthoseestimates.Appropriatechangesinestimatesaremadeasmanagementbecomesawareofchangesincircumstancessurroundingtheestimates.Changesinestimatesarereflected in thefinancialstatements in theperiod inwhichchangesaremadeand, ifmaterial, theireffectsaredisclosedinthenotestofinancialstatements.


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4.1 The significant estimates and judgements are listed below:(i) Changesintheexpectedusefullifeortheexpectedpatternofconsumptionoffutureeconomicbenefitsembodiedinthe

assetareconsideredtomodifytheamortisationperiodormethod,asappropriate,andaretreatedaschangesinaccountingestimates.

(ii) Theimpairmentprovisionforfinancialassetsarebasedontheassumptionsaboutriskofdefaultandexpectedlossrates.Thecompanyusesjudgementsinmakingtheassumptionsandselectingtheinputstotheimpairmentcalculations,basedonthecompany'spasthistory,existingmarketconditionsaswellasforwardlookingestimatesattheendofeachreportingperiod.

(iii) Judgementsbyactuariesinrespectofdiscountrates,futuresalaryincrements,mortalityratesandinflationrateusedforcomputationofdefinedbenefitliability.

(iv) Significantjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.

(v) Significantjudgementisrequiredtoclassifythebalancewithgovernmentauthoritiesincludingtaxassetsintocurrentandnon-currentassets.

(vi) Significant judgement is required inassessingateachreportingdatewhether there is indication thatanassetmaybeimpaired.

5 Summary of significant accounting policies(a) Current and non-current classification The companypresentsassetsand liabilities in thebalance sheet basedon current/ non-current classification.Anasset is

treatedascurrentwhenitis: -expectedtoberealisedorintendedtobesoldorconsumedinnormaloperatingcycle -heldprimarilyforthepurposeoftrading -expectedtoberealisedwithintwelvemonthsafterthereportingperiod,or -cashorcashequivalentunlessrestrictedfrombeingexchangedorusedtosettlealiabilityforatleasttwelvemonthsafterthe

reporting period Allotherassetsareclassifiedasnon-current. Aliabilityiscurrentwhen: -itisexpectedtobesettledinnormaloperatingcycle -itisheldprimarilyforthepurposeoftrading -itisduetobesettledwithintwelvemonthsafterthereportingperiod,or -thereisnounconditionalrighttodeferthesettlementoftheliabilityforatleasttwelvemonthsafterthereportingperiod Thecompanyclassifiesallotherliabilitiesasnon-current.Deferredtaxassetsandliabilitiesareclassifiedasnon-currentassets

andliabilities.Theoperatingcycleisthetimebetweentheacquisitionofassetsforprocessingandtheirrealisationincashandcashequivalents.Thecompanyhasidentifiedtwelvemonthsasitsoperatingcycle.

(b) Foreign currency transactions : ThesefinancialstatementsarepresentedinINR,whichisalsothecompany’sfunctionalcurrency.Foreachassociates,the

companydeterminesthefunctionalcurrencyanditemsincludedinthefinancialstatementsofeachentityaremeasuredusingthatfunctionalcurrency.

Transactions and balances Transactionsinforeigncurrencyaretranslatedintotherespectivefunctionalcurrenciesusingtheexchangeratesprevailingat

thedatesofthetransactions.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromthetranslation,at theexchangeratesprevailingatreportingdate,ofmonetaryassetsand liabilitiesdenominated in foreigncurrencies,arerecognisedinnetprofitinthestatementofprofitandlossandpresentedwithinOtherNon-OperatingIncome.Foreignexchangegainsandlossesresultingtoborrowingcostsarepresentedinthestatementofprofitandloss,withinfinancecosts.

(c) Fair value measurement Thecompanymeasuresfinancialinstrumentsatfairvalueateachbalancesheetdate. Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetween

marketparticipantsatthemeasurementdate.Thefairvaluemeasurementisbasedonthepresumptionthatthetransactiontoselltheassetortransfertheliabilitytakesplaceeither:


80

>Intheprincipalmarketfortheassetorliability,or >Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability TheprincipalorthemostadvantageousmarketmustbeaccessiblebytheCompany. Thefairvalueofanassetoraliabilityismeasuredusingtheassumptionsthatmarketparticipantswouldusewhenpricingthe

assetorliability,assumingthatmarketparticipantsactintheireconomicbestinterest. Afairvaluemeasurementofanon-financialassettakesintoaccountamarketparticipant'sabilitytogenerateeconomicbenefits

byusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantsthatwouldusetheassetinitshighestandbestuse.

Thecompanyusesvaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximizingtheuseofrelevantobservableinputsandminimizingtheuseofunobservableinputs.

Allassetsandliabilitiesforwhichfairvalueismeasuredordisclosedinthefinancialstatementsarecategorizedwithinthefairvaluehierarchy,describedasfollows,basedonthe lowest level input that issignificant tothefairvaluemeasurementasawhole:

>Level1—Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities. >Level2—Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurementisdirectlyor

indirectlyobservable. >Level3—Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurementisunobservable. Forassetsandliabilitiesthatarerecognizedinthefinancialstatementsonarecurringbasis,thecompanydetermineswhether

transfershaveoccurredbetweenlevelsinthehierarchybyre-assessingcategorization(basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole)attheendofeachreportingperiod.

The company'smanagement determines the policies and procedures for both recurring fair valuemeasurement, such asderivativeinstrumentsandunquotedfinancialassetsmeasuredatfairvalue.

Externalvaluersareinvolvedforvaluationofunquotedfinancialassetsandfinancialliabilities,suchascontingentconsideration.Involvementofexternalvaluersisdecideduponannuallybythemanagement.Selectioncriteriaincludesmarketknowledge,reputation, independenceandwhetherprofessionalstandardsaremaintained.Themanagementdecides,afterdiscussionswiththecompany’sexternalvaluers,whichvaluationtechniquesandinputstouseforeachcase.

Ateach reportingdate, thecompanyanalyses themovements in thevaluesofassetsand liabilitieswhichare required toberemeasuredorre-assessedasper thecompany’saccountingpolicies.For thisanalysis, thecompanyverifiesthemajorinputsappliedinthelatestvaluationbyagreeingtheinformationinthevaluationcomputationtocontractsandotherrelevantdocuments.

Thecompany,inconjunctionwiththecompany’sexternalvaluers,alsocomparesthechangeinthefairvalueofeachassetandliabilitywithrelevantexternalsourcestodeterminewhetherthechangeisreasonableonayearlybasis.

For thepurposeof fairvaluedisclosures, thecompanyhasdeterminedclassesofassetsand liabilitieson thebasisof thenature,characteristicsandrisksoftheassetorliabilityandthelevelofthefairvaluehierarchyasexplainedabove.

(d) Financial instruments Afinancialinstrumentisanycontractthatgivesrisetoafinancialassetofoneentityandafinancialliabilityorequityinstrument

ofanotherentity.ItisbroadlyclassifiedinFinancialAssets,FinancialLiabilities,Derivatives&Equity. Financial asset: Tradereceivable,loans&advancesgiven,securitydepositsgiven,otherinvestmentsarecoveredunderFinancialAssets. Initial recognition: Abovefinancialassetsareinitiallyrecognisedat'FairValue'(i.e.FairValueofconsiderationtobereceived). Subsequent measurement: Abovefinancialassetsaresubsequentlymeasuredat'amortisedcost'usingEffectiveInterestRate(EIR)methodbecausethese

assetsareheldwithabusinessmodelwhoseobjectiveistoholdassetsforcollectingcontractualcashflowsandcontractualtermsoftheassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterest(SPPI)ontheprincipalamountoutstanding.

Derecognition Afinancialassetisderecognizedonlywhen -Thecompanyhastransferredtherightstoreceivecashflowsfromthefinancialassetor


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-Thecompanyretainsthecontractualrightstoreceivethecashflowsofthefinancialasset,butassumesacontractualobligationtopaythecashflowstooneormorerecipients.

Wherethecompanyhastransferredsubstantiallyallrisksandrewardofownershipthefinancialasset,thefinancialassetisderecognized.Wherethecompanyhasnottransferredsubstantiallyallrisksandrewardsofownershipofthefinancialasset,thefinancialassetisnotderecognized.

Wherethecompanyhasneithertransferredafinancialassetnorretainssubstantiallyallrisksandrewardsofownershipofthefinancialasset,thefinancialassetisderecognizedifthecompanyhasnotretainedcontrolofthefinancialasset.Wherethecompanyretainscontrolofthefinancialasset,theassetiscontinuedtoberecognizedtotheextentofcontinuinginvolvementinthefinancialasset.

Impairment of financial asset Thecompanyassessesimpairmentbasedonexpectedcreditlosses(ECL)modeltothefollowing: -Financialassetsmeasuredatamortisedcost; -Financialassetsmeasuredatfairvaluethroughothercomprehensiveincome(FVTOCI); Expectedcreditlossesaremeasuredthroughalossallowanceatanamountequalto: -The12-monthsexpectedcreditlosses(expectedcreditlossesthatresultfromthosedefaulteventsonthefinancialinstrument

thatarepossiblewithin12monthsafterthereportingdate);or -Full lifetimeexpectedcredit losses (expectedcredit losses that result fromallpossibledefaulteventsover the lifeof the

financialinstrument). Forrecognitionofimpairmentlossonfinancialassetsandriskexposure,thecompanydeterminesthatwhethertherehasbeen

asignificantincreaseinthecreditrisksinceinitialrecognition.Ifcreditriskhasnotincreasedsignificantly,12-monthsECLisusedtoprovideforimpairmentloss.However,ifcreditriskhasincreasedsignificantly,lifetimeECLisused.If,inasubsequentperiod,creditqualityof the instrument improvessuchthat there isno longerasignificant increase incredit risksince initialrecognition,thentheCompanyrevertstorecognizingimpairmentlossallowancebasedon12-mothsECL.

Forassessingincreaseincreditriskandimpairmentloss,thecompanycombinesfinancialinstrumentsonthebasisofsharedcreditriskcharacteristicswiththeobjectiveoffacilitatingananalysisthatisdesignedtoenabledsignificantincreasesincreditrisktobeidentifiedonatimelybasis.

Financial liability Tradepayable, long term& short termborrowings, loans/advances taken, security deposits taken&anyother contractual

liabilityarecoveredunderfinancialliability. Initial recognition: Abovefinancialliabilitiesareinitiallyrecognisedat'fairvalue'(i.e.fairvalueofconsiderationtobepaid). Subsequent measurement: Abovefinancial liabilitiesaresubsequentlymeasuredat 'amortisedcost'usingeffective interest rate (EIR)methodateach

reportingdate.GainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognisedaswellasthroughtheEIRamortisationprocess.Amortisedcostiscalculatedbytakingintoaccountanydiscountorpremiumonacquisitionofdebtinstrumentandfeesorincidentalchargesthatareanintegralpartofborrowingtransaction.TheEIRamortisationisincludedas'financecosts'inthestatementofprofitandloss.

Derecognition Afinancialliabilityisderecognizedwhentheobligationundertheliabilityisdischargedorcancelledorexpires.Whenanexisting

financialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodification is treatedas thederecognitionof theoriginal liabilityand therecognitionofanewliability.Thedifferenceintherespectivecarryingamountsisrecognizedinthestatementofprofitandloss.

(e) Inventories RawMaterialsarevalued“AtCost”or“NetRealisableValue”,whicheverislower.CostsmeanscostofRawmaterialsasdetermined

onaverage,weightedaverageorFIFObasisasapplicable,withproportionatevalueoffreightandclearingcharges. Stockonhandasonthelastdatewhichisunderprocessingandnotyetconvertedtofinishedgoodsisconsideredtobeapartof

stockofrawmaterialsandhenceisvaluedasrawmaterialsasinabove. FinishedGoodsofPolishedDiamondsarevalued“AtCost”or“NetRealisableValue”,whichever is lower.Cost includescostof

rawmaterialsonweightedaveragecostbasis,labourcostandproportionatelyallocatedothercostsrelatedtoconvertingthemintofinishedgoodswhicharetechnicallyevaluatedkeepinginviewthewidevarietyandgradesofdiamonds.


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FinishedGoodsofJewelleryarevalued“AtCost”or“NetRealisableValue”,whicheverislower.Costincludescostofrawmaterials,labourcostandproportionatelyallocatedothercostsrelatedtoconvertingthemintofinishedgoods.

StoresandSparesarevalued“AtCost”. ClosingstockofGoodsatBullionTradingDivisionarevalued“AtCost”or“NetRealisableValue”,whicheverislower.(f) Property, plant and equipment and Intangibles Property,plantandequipmentconsistsofBuildings,Plantandequipment,vehicles, furnitureandfittings,WindMillandElectric

installations.Allsuchassetsarevaluedatcostofacquisition,constructionormanufacturingasthecasemaybe,lessdepreciation. Depreciationonallassetsiscalculatedsoastowrite-downthecostofproperty,plantandequipmenttoitsresidualvaluesystematically

overitsestimatedusefullife.Estimatedusefullives,residualvaluesanddepreciationmethodsarereviewedannually,takingintoaccountcommercialandtechnologicalobsolescenceaswellasnormalwearandtear.DepreciationisrecordedonaWrittenDownValuebasisovertheestimatedusefullivesoftheproperty,plantandequipmentasprescribedunderpartCofScheduleIIoftheCompaniesAct,2013.

Gainsandlossesondisposals(includingbyBanks'scustody)aredeterminedbycomparingproceedswithcarryingamount.TheseareincludedinprofitandlosswithinOtherNon-OperatingIncome.

Intangibleassetrepresentscomputersoftware,whichisamortisedovertheirestimatedusefullives.(g) Borrowing costs Borrowingcostincludesinterestandamortizationofancillarycostsincurredinconnectionwiththearrangementofborrowings. Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofanassetthatnecessarilytakesasubstantial

periodoftimetogetreadyforitsintendeduseorsalearecapitalizedaspartofthecostoftherespectiveasset.Allotherborrowingcostsareexpensedintheperiodtheyoccur.

(h) Revenue recognition DuringtheyeartheCompanyhashadnobusinessactivities.TheIncomeforthecompanywasfromrefundsoftaxes/statutorydues,

bankinterestandsaleofelectricitygeneratedfromWindmillwhichhasalsostoppedduringtheyear.ThereforethereisnosourceofIncome.

(i) Employee benefits Allemployeebenefitspayablewithin12monthsofrenderingservicesareclassifiedasshorttermemployeebenefits.Benefitssuch

assalaries,wages,shorttermcompensatedabsences,performanceincentives,etc.andtheexpectedcostofbonus,ex-gratiaarerecognisedduringtheperiodinwhichtheemployeerendersrelatedservice.Presently,thecompanyisnotliabileforanylongtermdefinedbenefits.

(j) Segment reporting TheChiefOperationalDecisionMakermonitorstheoperatingresultsofitsbusinesssegmentsseparatelyforthepurposeofmaking

decisionsaboutresourceallocationandperformanceassessment.Segmentperformanceisevaluatedbasedonprofitorlossandismeasuredconsistentlywithprofitorlossinthefinancialstatements.

InaccordancewiththeInd-As108-"OperatingSegments",thecompanyhasdeterminedthatithasnotcarriedoutanybusinessactivitiesduringtheyearand,therearenoreportablesegments.Therefore,thesegmentrevenue,results,segmentassets,segmentliabilities,totalcostincurredtoacquiresegmentassets,depreciationchargeareallasisreflectedinthefinancialstatementtotheextendnecessary.

(k) Taxes Taxexpensecomprisesofcurrentanddeferredtax.Currentincometaxismeasuredattheamountexpectedtobepaidtothetax

authoritiesinaccordancewiththeIncome-taxAct,1961enactedinIndia.Thetaxratesandtaxlawsusedtocomputethetaxarethosethatareenactedorsubstantiallyenacted,atthereportingdate.Deferredincometaxassetsandliabilitiesarerecognizedforalltemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsinthefinancialstatements.Deferredtaxassetsarereviewedateachreportingdateandarereducedtotheextentthatitisnolongerprobablethattherelatedtaxbenefitwillberealized.

Currentanddeferred incometaxrelating to itemsrecognizedoutside thestatementofprofitand loss is recognizedoutside thestatementofprofitandloss(eitherinothercomprehensiveincomeorinequity).CurrentanddeferredtaxitemsarerecognizedincorrelationtotheunderlyingtransactioneitherinOCIordirectlyinequity.

Deferred income taxassetsand liabilitiesaremeasuredusing tax ratesand tax laws thathavebeenenactedor substantivelyenactedbythebalancesheetdateandareexpectedtoapplytotaxableincomeintheyearsinwhichthosetemporarydifferencesareexpectedtoberecoveredorsettled.Theeffectofchangesintaxratesondeferredincometaxassetsandliabilitiesisrecognizedasincomeorexpenseintheperiodthatincludestheenactmentorthesubstantiveenactmentdate.Adeferredincometaxassetis recognized to theextent that it isprobable that future taxableprofitwillbeavailableagainstwhich thedeductible temporary


83

differencesandtaxlossescanbeutilized.Thecompanyoffsetscurrenttaxassetsandcurrenttaxliabilities,whereithasalegallyenforceablerighttosetofftherecognizedamountsandwhereitintendseithertosettleonanetbasis,ortorealizetheassetandsettletheliabilitysimultaneously.

(l) Earnings per share Basicearningsperequityshare iscomputedbydividing thenetprofitattributable to theequityholdersof thecompanyby the

weightedaveragenumberofequitysharesoutstandingduringtheperiod.Dilutedearningsperequityshareiscomputedbydividingthenetprofitattributabletotheequityholdersofthecompanybytheweightedaveragenumberofequitysharesconsideredforderivingbasicearningsperequityshareandalsotheweightedaveragenumberofequitysharesthatcouldhavebeenissueduponconversionofalldilutivepotentialequityshares.Thedilutivepotentialequitysharesareadjustedfortheproceedsreceivablehadtheequitysharesbeenactuallyissuedatfairvalue(i.e.theaveragemarketvalueoftheoutstandingequityshares).Dilutivepotentialequitysharesaredeemedconvertedasofthebeginningoftheperiod,unlessissuedatalaterdate.Dilutivepotentialequitysharesaredeterminedindependentlyforeachperiodpresented.

(m) Cash and cash equivalent Cashandcashequivalentsinthebalancesheetcomprisecashatbanksandonhand,demanddepositandshort-term,highlyliquid

investmentsthatarereadilyconvertibleintoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.

(n) Provision, contingent liabilities and contingent assets General Provisionsare recognisedwhen theCompanyhasapresentobligation (legal or constructive)asa result of apastevent, it is

probablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandareliableestimatecanbemadeoftheamountoftheobligation.Whenthecompanyexpectssomeoralloftheprovisionstobereimbursed,forexample,underan insurancecontract, the reimbursement is recognisedasseparateasset,butonlywhen the reimbursement isvirtuallycertain.Theexpenserelatingtoaprovisionispresentedinthestatementofprofitandlossnetofanyreimbursement.

If the effect of the time value ofmoney ismaterial, provisions are discounted using a current pre-tax rate that reflects, whenappropriate,therisksspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasafinancecost.

Contingent liabilities Contingentliabilitiesisdisclosedinthecaseof: >Apresentobligationarisingfrompastevents,whenitisnotprobablethatanoutflowofresourcesembodyingeconomicbenefits

willberequiredtosettletheobligation. >Apresentobligationarisingfrompastevents,whennoreliableestimatecanbemade. >Apossibleobligationarisingfrompastevents,unlesstheprobabilityofoutflowofresourcesisremote. Commitmentsincludestheamountofpurchaseorder(netofadvances)issuedtopartiesforcompletionofassets. Provisions,contingentliabilities,contingentassetsandcommitmentsarereviewedateachbalancesheetdate.(o) Impairment of non-financial assets Asateachbalancesheetdate, thecompanyassesseswhether there isan indication thatanassetmaybe impairedandalso

whetherthereisanindicationofreversalofimpairmentlossrecognisedinthepreviousperiods.Ifanyindicationexists,orwhenannualimpairmenttestingforanassetisrequired,ifany,thecompanydeterminestherecoverableamountandimpairmentlossisrecognisedwhenthecarryingamountofanassetexceedsitsrecoverableamount.

Recoverableamountisdetermined: >Inthecaseofanindividualasset,atthehigherofthefairvaluelesscosttosellandthevalueinuse;and >Inthecaseofcashgeneratingunit(agroupofassetsthatgeneratesidentified,independentcashflows),atthehigherofthecash

generatingunits'fairvaluelesscosttosellandthevalueinuse. Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethat

reflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Indeterminingfairvaluelesscosts of disposal, recentmarket transactions are taken into account. If no such transactions can be identified, an appropriatevaluationmodelisused.

(p) Share capital - Ordinary Shares Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissuanceofnewordinarysharesandshare

optionsarerecognizedasadeductionfromequity,netofanytaxeffects.


84

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2017Note 6. Property, Plant and Equipment

Reconciliation of the gross carrying amounts and net carrying amounts at the beginning and at the end of the Year 31st March, 2017


1st April 2016

As at 31st March

2017

As at 1st April

2016

Provided during the

year

As at31st March

2017

As at 31st March

2017

As at 31st March

2016` ` ` ` ` ` `

01. Buildings Factory Premises 171,117,290 171,117,290 112,446,491 5,348,251 117,794,742 53,322,548 58,670,799 Office Premises 147,931,028 147,931,028 65,510,388 3,997,418 69,507,806 78,423,222 82,420,640 02. Plant & Equipment Owned 555,405,225 555,405,225 419,774,613 24,965,941 444,740,554 110,664,671 135,630,612 03. Furniture & Fixtures Owned 45,483,006 45,483,006 40,917,893 1,448,401 42,366,294 3,116,712 4,565,113 04. Electrifcla Intallation Owned 57,763,362 57,763,362 50,245,497 2,304,515 52,550,012 5,213,350 7,517,865 05. Equipments Owned 23,820,976 23,820,976 22,353,455 262,291 22,615,746 1,205,230 1,467,521 06. Air Conditioners Owned 24,500,974 24,500,974 20,303,974 1,294,495 21,598,469 2,902,505 4,197,000 07. Vehicles Owned 7,860,724 7,860,724 6,709,357 358,762 7,068,119 792,605 1,151,367 08. Office Equipments Owned 20,668,593 20,668,593 19,963,609 70,450 20,034,059 634,534 704,984 9. Mould and Dies Owned 2,755,813 2,755,813 2,073,627 103,116 2,176,743 579,070 682,186 10. Wind Mill Owned 92,583,137 92,583,137 63,928,214 3,392,743 67,320,957 25,262,180 28,654,923 Total 1,149,890,128 1,149,890,128 824,227,118 43,546,383 867,773,501 282,116,627 325,663,010 Previous Year 1,149,890,128 1,149,890,128 768,109,001 56,118,117 824,227,118 325,663,010 381,781,127

Note 7. Intangibles


1st April 2016

As at 31st March

2017

As at 1st April

2016

Provided during the

year

As at31st March

2017

As at 31st March

2017

As at 31st March

2016` ` ` ` ` ` `

1. Computer Software Acquired 40,237 40,237 38,226 38,226 2,011 2,011 Total 40,237 40,237 38,226 - 38,226 2,011 2,011Previous Year 40,237 40,237 35,532 2,694 38,226 2,011 4,705 GRAND TOTAL 1,149,930,365 1,149,930,365 824,265,344 43,546,383 867,811,727 282,118,638 325,665,021 Previous Year 1,149,930,365 1,149,930,365 768,144,533 56,120,811 824,265,344 325,665,021 381,785,832 Notes:1) TheamortisationofLeaseHold-upfrontpaymentisRs.33431/-.TheLeasehold-upfrontpaymenthasbeenclassifiedasOtherNon

CurrentAssets.2) ImpairmentofFixedAssets:Pleasereferenoteno.5(o)inAccountingPolicy.TheCompanydoesnothaveanyassets,whichwould

requireimpairmentandprovisions.


85

3) Of the totalWDVofFixedAssets,Rs.9,999,629 representWDVofFixedAssetsofEngineeringdivisionatJodhpurwhichhaddiscontinuedoperationssinceFY2005-06.

TheCompanyhadprovidedforimpairmentoftheseassetsduringFY2007-08&2008-09.Nofurtherprovisionforimpairmentisconsiderednecessary.

TheCompanyhasnotbeenprovidingdepreciationinrespectoftheseassets.4) TheCompanyhasconsidereddepreciationasperScheduleIIoftheCompaniesAct,2013.Thusassetswhichhaveexceededtheir

estimatedusefullifehavenotbeenchargeddepreciationandarereflectedattheirrealizableresidual/scrapvalue.TheotherassetshavebeendepreciatedovertheirusefullifeasperScheduleIIprovisions.

5) TheDebtrecoverytribunalhaspassedorderforauctionofthePropertiesandassetsoftheCompanytowardsrecoveryagainstbankdefault.WehavebeenverballyinformedaftertheendoftheyearthatthemovablepropertiesofBangaloreandGoaweresoldinauctionandImmovablepropertyofJodhpurissoldinauction.TheD.R.Torderdated07/04/2017confirmedthesalesofassets,accordinglythesalesisbeingconsideredinFY2017-18.

FIXED ASSETS - TANGIBLE

Reconciliation of the gross carrying amounts and net carrying amounts at the beginning and at the end of the Year 31st March, 2016


1st April 2015

As at 31st March

2016

As at 1st April

2015

Provided during the

year

As at31st March

2016

As at 31st March

2016

As at 31st March

2015` ` ` ` ` ` `

01. Buildings Factory Premises 171,117,290 171,117,290 106,734,768 5,711,723 112,446,491 58,670,799 64,382,522 Office Premises 147,931,028 147,931,028 61,309,213 4,201,175 65,510,388 82,420,640 86,621,815 02. Plant & Equipment Owned 555,405,225 555,405,225 387,691,990 32,082,623 419,774,613 135,630,612 167,713,235 03. Furniture & Fixtures Owned 45,483,006 45,483,006 38,409,048 2,508,845 40,917,893 4,565,113 7,073,958 04. Electrifcla Intallation Owned 57,763,362 57,763,362 46,261,711 3,983,786 50,245,497 7,517,865 11,501,651 05. Equipments Owned 23,820,976 23,820,976 21,499,452 854,003 22,353,455 1,467,521 2,321,524 06. Air Conditioners Owned 24,500,974 24,500,974 18,194,442 2,109,532 20,303,974 4,197,000 6,306,532 07. Vehicles Owned 7,860,724 7,860,724 6,113,938 595,419 6,709,357 1,151,367 1,746,786 08. Office Equipments Owned 20,668,593 20,668,593 19,863,438 100,171 19,963,609 704,984 805,155 9. Mould and Dies Owned 2,755,813 2,755,813 1,951,180 122,447 2,073,627 682,186 804,633 10. Wind Mill Owned 92,583,137 92,583,137 60,079,821 3,848,393 63,928,214 28,654,923 32,503,316 Total 1,149,890,128 1,149,890,128 768,109,001 56,118,117 824,227,118 325,663,010 381,781,127


86

FIXED ASSETS - INTANGIBLE


1st April 2015

As at 31st March

2016

As at 1st April

2015

Provided during the

year

As at31st March

2016

As at 31st March

2016

As at 31st March

2015` ` ` ` ` ` `

1. Computer Software Acquired 40,237 40,237 35,532 2,694 38,226 2,011 4,705 Total 40,237 40,237 35,532 2,694 38,226 2,011 4,705 GRAND TOTAL 1,149,930,365 1,149,930,365 768,144,533 56,120,811 824,265,344 325,665,021 381,785,832

Note 8. NON-CURRENT INVESTMENTS

As at31.03.2017

As at31.03.2016

As at01.04.2015

` ` `(A) Other Investments (i) In Equity of Associate Companies Unquoted, fully paid up (at Cost)

39,200,000 (PreviousPeriod:39,200,000)EquitySharesofRs.10eachofForeverPreciousJewellery&DiamondsLtd.,fullypaid-up

1,586,864,465 2,040,630,146 1,411,710,802

(CapitalReserveonaquitionsRs.5,197,543) - - 27,32,55,131Add:ShareofProfit-Earlieryears (1,452,875,753) (453,765,681) 355,664,213Less:ShareofProfit/(Loss) 133,988,712 1,586,864,465 2,040,630,146

24,34,700 (PreviousPeriod:2,434,700)EquitySharesofRs.10eachofRevahCorporationLtd.,fullypaid-up

- - 1

Add: Share of Loss of Earlier years - - (1) - - -

(ii) In Equity of Other Companies Unquoted, fully paid up (at Cost)

17,500 (PreviousPeriod:17,500)EquitySharesofRs.100eachofPeakokJewelleryLtd.,fullypaid-up

5,012,750 5,012,750 5,012,750

576,250 (PreviousPeriod:576,250)EquitySharesofRs.10eachofCarbonAccessoriesLtd.,fullypaid-up

1 1 1

(iii) Investments in Government or Trust Securities2 (PreviousPeriod:2)IndiraVikasPatraofRs.500each 1,000 1,000 1,0001 (PreviousPeriod:1)NationalSavingsCertificatesofRs.5000 5,000 5,000 5,000

TOTAL 139,007,463 1,591,883,216 2,045,648,897 Aggregateamountofqoutedinvestmentandmarketvaluethereof - - -Aggregateamountofunqoutedinvestment 139,007,463 1,591,883,216 2,045,648,897 Aggregateamountofimpairmentinvalueofinvestments - - -

A1 Thecompanyholds49%oftotalpaid-upequitysharecapitalofForeverPreciousJewelleryandDiamondsLimited(FPJDL).FPJDL’soperationsincludingitsretailJewellery/Goldbusinessistotallysuspended.Theauditors,fortheyearended31stMarch,2016havequalifiedFPJDLasanon-goingconcernforIndianGAAP.

A2 FPJDLhasalsoinitiatedlegalactionagainstitsdefaultingoverseascustomers.

B1 TheCompanyhasaccountedforpermanentdiminutioninthevalueoflongterminvestmentsingroupconcernasabove.

C OnthebasisofthedetailsavailablefromMCA,thebookvalueofPeakokJwelleryLimitediscalculated@110.78pershare.However,thesameiscontinuedtobeshownatthehistoricalcost.


87

Note 9. Other Financial Assets

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`LongTermTradeReceivables 56,079,841,816 57,927,813,822 54,665,817,793SecurityDeposits 4,090,290 6,085,769 5,408,512LoansandAdvancesOthers 11,000 11,000 11,000TOTAL 56,083,943,106 57,933,910,591 54,671,237,305

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Breakup of security detailsLong Term Trade ReceivablesSecured,Consideredgood - - -Unsecured,Consideredgood 56,079,841,819 57,927,813,822 54,665,817,793Doubtful - - -TOTAL 56,079,841,819 57,927,813,822 54,665,817,793Allowancefordoubtfuldebts Long Term Trade Receivables (net) 56,079,841,819 57,927,813,822 54,665,817,793Out of which: Receivable from related parties - - -

Note on impairment of receivable done during this year (2017)

TheStatebank ofMauritius (one of thememberConsortium banks) has entered in an agreementwithOverseasCustomer of theCompanyandtheCompanyforonetimesettlementofduestothebank.AspertheagreementtheOverseasCustomeragreedtopaydirectlytoStateBankofMauritiusUS$1,050,833/-asagainsttheBillsforcollectionthruStateBankofMauritiusoutstandingforUS$8,241,831.11.AccordinglyCompanyhasdoneimpairmentofreceivablesforbalanceofoutstandingbills.

Note 10. OTHER NON-CURRENT ASSETS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Leaseholdland-upfrontPayment 6,668,465 6,701,896 6,735,327Inventory(ascertifiedbyManagement)(a)RawMaterials 26,084,565 26,084,565 26,084,565(b)FinishedGoods 392,679,844 392,679,844 392,679,844(c)Storesandspares 3,722,092 3,722,092 3,722,092TOTAL 429,154,966 429,188,397 429,221,828a) AsstatedbytheManagement,entireinventoryofdiamondsandpearlsatSurat&Mumbaiwhich,thoughhypothecatedinfavour

ofconsortium,wasinthecompany’spossessionhasbeenplacedinthelockersinPNBandisinthejointcustodywithPNBsince18.06.2013.The banks had got inventory valued on 30.09.2013 and the total value of inventory, as per valuation report, was Rs.393,500,031.

b) TheStockatChennaiSEZ,CochinSEZunitarealsoinjointcustodywithPNBsinceNovember2013atCompany’spremises.AndStockatGoaandBangaloreunitinjointcustodywithPNBsinceMarch2017.

c) TheCompanyhasnotcarriedoutanyvaluationofInventoryduringtheyearorasat31stMarch,2017asperaccountingstandardrequirement.TheValuationofDiamondsascarriedoutason30thSeptember,2013toascertainthemarketvaluehasbeenadoptedbytheCompany.Forthesmallvalueofotherinventoriesincludingthestockinjointcustodywithbanks,thevaluationasdoneon31stMarch,2015hasbeenadoptedfor31stMarch,2017.

d) Duetorestrictiononusage,themanagementhasreclassifiedallinventoriesaspartofnon-currentassets.


88

Note 11. TRADE RECEIVABLES

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Outstanding for more than six months from the datethey became due for payment(Unsecured,consideredgood) 61,548,564 1,088,941 4,022,509Others(Unsecured,consideredgood) - - -TOTAL 61,548,564 1,088,941 4,022,509Duringtheyearunderreview,StateBankofMauritiushasenteredintheOneTimeSettlementagreementwiththeoverseasCustomersofthecompanyandthecompanyforsettlementofitsloan.AccordinglytheOverseascustomershaveagreedtopaydirectlytoStateBankofMauritiusUS$1,050,833/-againstthetotaloutstandingbillofUS$8,241,831.11/-.Thebalanceamountason31stMarch2017ofUS$949,258.07receivablefromoverseascustomershasbeenshownundertradereceivableatclosingexchangerateofRs64.8386.

Note 12. CASH AND CASH EQUIVALENTS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`(A) Cash and cash equivalents(i)BalancewithBanks (a) In Current Account 135,883,321 142,150,769 143,661,581(b)InEEFCaccount 760,858 760,858 760,858 (ii) Cash on Hand 51,808 59,891 154,129

136,695,987 142,971,518 144,576,568(B) Other Bank Balance (EARMARKED)(i)EarmarkedBankbalancesUnpaiddividendbankaccount 3,412,279 3,412,280 5,649,669(ii)BankFixedDepositsheldasmarginmoneyorassecurityagainst:BankGuarantees 17,753,590 16,809,036 13,758,067

21,165,869 20,221,316 19,407,736TOTAL 157,861,856 163,192,834 163,984,304CashandcashequivalentsasofMarch31,2017,March31,2016andApril1,2015 include restrictedcashandbankbalancesof Rs.21,165,869,Rs.20,221,613andRs.19,407,736respectively.Therestrictionsareprimarilyonaccountofbankbalancesheldascustody,marginmoney deposits against guarantees and balances held in unpaid dividends bank accounts.Many banks have notprovidedbankstatementsduring theyearand/orconfirmationofbalancesason31stMarch2017.TheCompanyhascontinued itsbalancesinthebooks.

Note 13. Loans

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`Unsecured, considered goodLoanstoOthers 233,086,818 233,875,155 235,199,926TOTAL 233,086,818 233,875,155 235,199,926Aboveloansaredemandloanswhichareprovidedformeetingwiththeexpensesandhencecarringvalueisequaltoamortizedcostasperopinionofmanagement.


89

Note 14. Other Current Assets

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`VATRefundReceivables 147,400 746,125 1,243,743IT/FBTRefundReceivables 53,710,217 41,874,176 1,729,948AdvanceIncomeTax/TDS(NetofProvisionforTaxation) 259,928 3,342,912 33,987,051Advances - 311,890 311,890Prepaidexpenses 28,154 12,875 87,537Other current assets 115,580 71,763 26,119TOTAL 54,261,279 46,359,741 37,386,288

In the opinion of the Directors :

TheCurrentAssets,LoansandAdvancesareapproximatelyofthevaluestated,ifrealizedintheordinarycourseofbusiness.

Note 15. SHARE CAPITAL

(A) Reconciliation of number of Equity Shares outstanding at the beginning and at the end of the year

As at31.03.2017

As at31.03.2016

As at01.04.2015

No. of Shares No.ofShares No.ofSharesNo.ofSharesoutstandingasatthebeginningoftheYear 106,607,894 106,607,894 106,607,894Add:-Sharesallottedduringtheyearasfullypaid-up - - -

106,607,894 106,607,894 106,607,894

TheCompanyhasonlyoneclassofequityshareshavingaparvalueofRs.10pershare.Eachholderofequitysharesisentitledtoonevotepershare.TheCompanydeclaresandpaysdividendsinIndianRupees.

Thedividendproposed,ifany,bytheBoardofDirectorsissubjecttotheapprovaloftheshareholdersintheensuingAnnualGeneralMeeting.PaymentofdividendisalsomadeinforeigncurrenciestoshareholdersoutsideIndia.

IntheeventofliquidationoftheCompany,theholdersoftheequityshareswillbeentitledtoreceiveremainingassetsoftheCompany,afterdistributionofallpreferentialamounts.Thedistributionwillbeinproportionto

(B) Shares in the Company held by each shareholder holding more than 5 % shares

As at31.03.2017

As at31.03.2016

As at01.04.2015

No. of Shares

% of Holding

No.ofShares

%ofHolding No.ofShares

%ofHolding

SHAREHOLDERS1) PassageToIndiaMasterFundLimited - 0.00% 6,469,615 6.06% 10,181,818 9.55%2) PrimeIndiaInvestmentFundLimited - 0.00% 5,700,000 5.35% 5,700,000 5.35%3) KohinoorDiamondsPrivateLimited 14,138,996 13.26% 14,138,996 13.26% 14,138,996 13.26%

TOTAL 141,38,996 13.26% 26,308,611 24.67% 30,020,814 28.16%


90

Note 16 : DEFERRED TAX LIABILITIES (NET)

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`DeferredTaxLiabilities-OnaccountofDepreciationdifference 52,290,791 52,290,791 52,290,791DeferredTaxLiabilities(Net) 52,290,791 52,290,791 52,290,791NOTES:

ThereisDeferredTaxAssetsfortheyearended31stMarch2017and2016.TheCompanyhasnotrecognisedDeferredTaxAssetsastherehasbeensubstantiallossesfortheyearandthepastfewyears.Thereisnocertainitythatthesaidlosseswouldbeadjustedagainstfutureprofit.ThusasamatterofprudenceDeferredTaxAssetshasnotbeenconsidered.

Note 17. SHORT TERM BORROWINGS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

` A AMOUNTS PAYABLE TO BANKS

(Overdue and in respect of which Notice undersection 13(2) and 13 (4) of the Securitisation andReconstructionofFinancialAssetsandEnforcementofSecurityInterestAct2002hassincebeenissued)

I IN RESPECT OF CRYSTALISEDEXPORT PACKING CREDIT & POST SHIPMENT CREDIT-OutstandingagainstRegularandAd-hocFundBasedlimits 4,144,519,386 4,386,815,224 4,344,968,656-OutstandinginrespectofFundBasedcreditsavailedofuponinter-changeabilityfromNonFundBasedlimits 1,844,657,912 1,844,657,912 1,844,657,912

5,989,177,298 6,231,473,136 6,189,626,568II DEVOLVED LETTER OF CREDITS

DevolvedLettersofCredit 19,486,778,800 19,723,665,198 19,723,665,198 Overdrawn Current Accounts 15,784,481,795 15,784,481,795 15,784,481,795

35,271,260,595 35,508,146,993 35,508,146,993III Overdueinstallmentsoflongtermdebt 8,561,724 8,561,724 8,561,724IV NetInterestProvided 20,589,460,413 13,644,124,154 7,233,075,846

The Company had been sanctioned Regular FundBasedWorkingCapitalCreditLimits(ExportPackingCreditandPostShipmentCredit)ofRs.375,00,00,000(Previous Year Rs. 375,00,00,000) and Non-FundBased Working Capital Credit Limits (Stand-ByLetters of Credit and Bank Guarantees) of Rs.3470,00,00,000(PreviousYearRs.3470,00,00,000).TheCompanyhadalsobeengranted,inprinciple,approvalforadditional,needbased,Ad-hoclimitstotheextentof20%oftheRegularFBandNFBlimits.TheCompanyhadalsobeengrantedpartialInter-changeabilitybetweenFBandNFBlimits.TheaboveamountspayabletoConsortiumofbanksaresecuredby


91

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`(A) Hypothecationof(1) InventoryandBookDebts(bothpresentandfuture)

oftheCompany(2) PlantandMachineryandFixturesandFittings

(fastenedtoearthorotherwise)oftheCompanyatfactoryunitsofBangalore,Cochin,Goa,Jodhpur,Kolkata(ManikanchanSEZ)andSuratoftheCompany

(3) PlantandMachineryandFixturesandFittings(fastenedtoearthorotherwise)oftheCompanyinstalledatValsadunitofthecompanyinthepropertyownedbyBombayDiamondsCo.P.Ltd.

(4) PlantandMachineryandFixturesandFittings(fastenedtoearthorotherwise)ofForeverDiamondsP.Ltd.atitsJodhpurunit.

(B) EquitableMortgagebywayofdepositoftitledeedsofImmovablePropertiescomprisingLand(orleaseholdrightsinrespectthereof)andotherstructuresthereonat

(1) Bangalore,Goa,Jodhpur,KolkataandSuratfactoryunitsoftheCompany

(2) OfficePremisesatGamdeviinMumbaioftheCompany

(3) ValsadunitofBombayDiamondsCo.P.Ltd.(4) JodhpurfactoryunitofForeverDiamondsP.Ltd.(5) SuratfactoryunitofKohinoorDiamondsP.Ltd.(C) CorporateGuaranteesof(1) BombayDiamondsCo.P.Ltd.(2) ForeverDiamondsP.Ltd.(3) KohinoorDiamondsP.Ltd.(D) PersonalGuaranteeofMr.JatinMehta,Promoter(E) Term Deposits earlier held under lien as Cash

Collateralbythe leadbankhavesincebeensharedbymemberbanksandadjustedagainstoutstandingamounts TOTAL 61,858,460,030 55,392,306,007 48,939,411,131

NOTES:

A1 TheFundBased(EPC/PSC)limitsweregenerallyavailedforDiamonddivisionwhereasNonfundBased(SBLC/BG)limitswereutilisedforfacilitatingprocurementofgoldformanufactureofjewellery.Thecompanyprocuredgoldonloanbasis.AsperextantFTP&RBIGuidelines,themaximumtenorforwhichgoldloancanbeavailedofis270days.Accordingly,SBLCshadvalidityof270days.Thiswasadequatetocovermanufacturingcycleofaround90daysandcreditof180daysthatthecompanyextendedtoitsoverseascustomers.

A2 Owingtodelayinreceiptofinwardremittancesfromoverseascustomersagainstexportbills,thecompanycouldnotarrangeforpaymentsfor liquidatinggold loanswhichweredue inMarch2013. Inviewof theseeventsofdefault, thebullionbanks initiallyinvokedSBLCswhichhadfallenduebutlater,asdefaultspersisted,invokedallSBLCsincludingeventhoseinrespectofwhichgoldloanswerenotdue(saveandexceptStateBankofIndiawhichinvokedSBLCsonlywhengoldloansfelldueforpayments),astheGoldLoanAgreementsexecutedbythecompanywithBullionBanksprovidedcrossdefaultclauseentitlingthemtorecallalloutstandinggoldloansevenincaseofsingleeventofdefault.AllinvokedSBLCswerepaidbytheConsortiumBanks.

A3 Furtherowingtocontinuingdefaultsbyoverseascustomersandoverdrawnaccounts,theCompanycouldnotrepayExportPackingCreditsandPostShipmentAdvancesonduedates.


92

A4 Asa resultof invocationanddevolvementofSBLCsanddefaults inclearanceofEPC/PSC, the liabilitieshavegotcrystallizedin rupee termsand theaccountsareoverdrawn.Withnogold lines frombullionbanksandno freshSBLCsorFBcredits fromconsortiumbanks,theoperationshavebeenmateriallyaffectedafterMarch2013.

A6 FewBankshaveclassifiedthecompanyanditsdirectorsaswillfuldefaulters.However,theCompanyhasvehementlydeniedthesameandreiteratedthattheywerevictimofcircumstancesbeyondtheircontrolandaretakingallpossiblestepstorecoverthesame.Thecompany,whichhadreceivedfromStandardCharteredBank,LeadBankoftheConsortium,noticeundertheSARFAESIAct,hasdeniedalltheallegationsmadetherein.Someofthebankshavesentnoticestothepromoter/guarantorandalsotothecompanieswhohaveprovidedcorporateguarantees.

A7 Refernoteno.34forlegalcasesfiledbytheCompanyagainstitsdefaultingoverseascustomers.B AstheCompanyhadnotdeclaredanydividendfortheFY2016-2017andFY2015-2016,thequestionofappropriatinganyamounts

outofthesametowardsarrearsofcallorallotmentmoniesinrespectofshareswhichwerenotfullypaid-updoesnotarise.C TherearenoamountsofunclaimeddividenddueandoutstandingtobecreditedtoInvestorEducationandProtectionFund.During

theyear,noamountwasduefortransferofunclaimeddividendtoInvestorEducationandProtectionFund.(DuringthepreviousYearRs.2,267,754/-forFY2007-2008weretransferredtoInvestorEducationandProtectionFund.)

D TheOverdueinstalmentsoflongtermdebtcompriseprincipaloutstandingamountandinterestleviedbybanktill30thSeptember2013,inrespectofAxisBankTermLoanforWindMillwhichwaspayableandtheCompanyhasdefaultedinmakingpaymentstoAxisBankinrespectofPrincipalRs.7,918,400/-.Thedefaultiscontinuingasonthedateofbalancesheet.

E Manybankshavenotissuedbankstatementsduringtheyearand/orconfirmationofbalancesason31stMarch2017.TheCompanyhascontinueditsbalancesinthebooks.

Note 18. TRADE AND OTHER PAYABLES

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`UNSECUREDTradePayables 786,619,400 795,164,314 772,417,153TOTAL 786,619,400 795,164,314 772,417,153Tradepayabletorelatedparties - - -

Note 19. Other Financial Liabilities

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`AMOUNTSPAYABLETORELATEDPARTIESUnsecured-ShorttermLoan 342,182,117 332,462,161 326,365,427AMOUNTSPAYABLETOOTHERSPayabletoStateBankofMauritius-underOnetimeSettlement 61,548,564 - - TOTAL 403,730,681 332,462,161 326,365,427NOTES:

Duringtheyearunderreview,StateBankofMauritiushasenteredintheOneTimeSettlementagreementwiththeOverseasCustomeroftheCompanyandtheCompanyforsettlementoftheirloan.OfthetotalsettlementagreedforUS$1,050,833/-theOutstandingattheyearendUS$949,258.07valuedatyearendexchangerateisshownunderOtherfinancialliabilities

Note 20. Other Current Liabilities

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`CurrentMaturitiesonLongTermdebts - - 566,915Unpaid/Unclaimeddividends 2,663,219 2,663,219 4,900,610SalesTax/VATpayable/ServiceTax/TDSPayable 781,281 669,931 655,028Otherpayables 77,263 237,654 93,513 TOTAL 3,521,763 3,570,804 6,216,066


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Note 21 SHORT TERM PROVISIONS

As at31.03.2017

`

As at31.03.2016

`

As at01.04.2015

`ProvisionforEmployeeBenefits 37,350 37,350 -

37,350 37,350 -Note 22. OTHER NON OPERATING INCOME

As at31.03.2017

`

As at31.03.2016

`Rentalsfromproperty - 31,116InterestReceivedfromBanks 1,208,597 1,179,989InterestReceivedfromOthers 8,798,665 158,831ServiceTaxRefund 18,896,856SaleofElectricityofWindmill 2,475,961MiscellaneousIncome 273,674 1,262,048NetGain/LossonForeignCurrencyTransaction/Translation - 3,231,797,118ExtinguishmentGain 629,133,811 - TOTAL 639,414,747 3,255,801,919Duringtheyearunderreview,StateBankofMauritiushasenteredintheOneTimeSettlementagreementwiththeOverseasCustomerof theCompanyand theCompany forsettlement.TheoverseasCustomershaveagreed topaydirectly toStateBankofMauritiusUS$1,050,833/-againstthetotaloutstandingofRs.700,497,667/[email protected]%.ThereforetheCompanyhasrecognisedextinguishmentgainofRs.629,133,811/-towardsreductioninliability.

Note 23. COST OF MATERIAL CONSUMED

As at31.03.2017

`

As at31.03.2016

`OpeningStock 26,084,565 26,084,565Add:Purchases - -

26,084,565 26,084,565Less:ClosingStock 26,084,565 26,084,565CostofMaterialConsumed - -Material Consumed Comprises ofGold - -TOTAL - -CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK IN TRADEInventories at the beginning of the YearFinishedGoods 392,679,844 392,679,844

392,679,844 392,679,844Inventories at the end of the YearFinishedGoods 392,679,844 392,679,844

392,679,844 392,679,844Net (increase) / decrease - -Duetorestrictiononusage,themanagementhasreclassifiedallinventoriesaspartofnon-currentassets.


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Note 24 EMPLOYEE BENEFITS EXPENSES

As at31.03.2017

`

As at31.03.2016

`SalariesandWages,Bonus,GratuityandAllowances 2,583,884 3,697,452ContributiontoPF,ESICandGratuityFund 6,957 2,421RemunerationtowholetimeDirectors 600,000 612,900StaffWelfareExpenses 73,604 90,245Total 3,264,445 4,403,018TheAccountingStandard–AS15(revised2005)onEmployeeBenefitsissuedbytheInstituteofCharteredAccountantsofIndiahasbeenadoptedbytheCompany.

ThedetailsasprovidedbytheInsuranceCompanyfortheYearended31stMarch,2017arereproducedherebelow.

a) DefinedContributionPlan:

TheCompanyhasrecognizedRs.Nil(Rs.Nil)towardscontributionmadetoEmployees

ProvidentandfamilyPensionFund.

b) DefinedBenefitPlan:



1 Assumption(a) DiscountRate 8% 8%(b) SalaryEscalation 4% 4%

2 ChangeinthePresentValueofObligation(a) PresentValueofObligationasatbeginningofYear - 52,082(b) Interest Cost - 4,167(c) CurrentServiceCost - 17,298(d) BenefitsPaid - -(e) Actuarial(Gain)/Lossonobligation - (825)(f) PresentValueofObligationasat31stMarch,2017 - 72,722

3 ChangeintheFairValueofPlanAssets(a) FairValueofPlanAssetsasat1stApril,2016 - 165,818(b) ExpectedReturnonPlanAssets - 13,846(c) Employer’sContributions - -(d) BenefitsPaid - -(e) ActuarialGain/(Loss)onPlanAssets - Nil(f) FairValueofPlanAssetsasat31stMarch,2017 - 179,664

4 TableshowingFairValueofPlanAssets(a) FairvalueofPlanAssetsatbeginningofYear(b) ActualreturnonPlanAssets - 165,818(c) Contributions - 13,846(d) BenefitsPaid - -(e) FairValueofPlanassetsattheendoftheYear - 179,664(f) FundedStatus - 106,942

5 ActuarialGain/Lossrecognized(a) Actuarial(Gain)/LossfortheYear-Obligation - 825(b) Actuarial(Gain)/LossfortheYear-PlanAssets - Nil(c) Total(Gain)/LossfortheYear–Obligation - (825)(d) Actuarial(Gain)/LossrecognizedintheYear - (825)


95



6 TheamountstoberecognizedintheBalanceSheetandStatementofProfitandLoss(a) PresentValueofObligationsasattheendofYear - 72,722(b) FairvalueofPlanAssetsasattheendoftheYear - 179,664(c) FundedStatus - 106,942(d) NetAssets/(Liability)recognizedinBalanceSheet - 106,942

7 ExpensesrecognizedinStatementofProfitandLoss:(a) CurrentServicecost - 17,298(b) Interest Cost - 4,167(c) ExpectedReturnonPlanAssets - (13,846)(d) NetActuarial(Gain)/LossrecognizedintheYear - (825)(e) ExpensesrecognizedinStatementofProfit&Loss - 6,794

Note:Theestimateoffuturesalaryincreasesconsideredinactuarialvaluationtakingintoaccountinflation,seniority,promotionandotherrelevantfactors.

PriorPeriodExpensesTheexpensesincludesExpensesforthepriorperiod

RemunerationtowholetimeDirectors 12,900SalariesandWages,Bonus,GratuityandAllowances - -

- 12,900

PresentlynoneoftheemployeesarecoveredunderPFastheirsalariesareabovelimits.AllemployeeswhowereeligibleforGratuitylefttheCompanies.Presentemployeeshavenotcompleted5yearsofcontinuousserviceandthereforenonewGratuitypolicywastakenandnoacturialvaluationwerecarriedout.Presentlyemployeesarenotentitleforanyleavebenefits.

Note 25. FINANCE COSTS

As At 31.03.2017

`

As At 31.03.2016

`InterestExpenses 7,184,162,296 6,411,974,669BankChargesandotherBorrowingcosts 5,639,383 2,406,067NetGain/LossonForeignCurrencyTransaction/Translation (12,448,072) 44,454,585TOTAL 7,177,353,607 6,458,835,321DuringtheyearPunjabNationalBankhaspaidvariousexpensestowardsvaluers/advocates/advertisementetc.outofescrowaccount.TheCompanyhasaccountedalltheseexpensesasBankchargespaid.


96

Note 26 OTHER EXPENSES

As At 31.03.2017

`

As At 31.03.2016

`MANUFACTURINGEXPENSESPowerandFuelconsumed 1,276,402 1,132,523Repairs-FactoryBuildings - 18,485Repairs-Others 262,967 425,133LeaseRent 214,000 213,707

1,753,369 1,789,848Directors'Sittingfees 67,000 75,000Insurance 26,355 25,726RatesandTaxes(includingwealthtax) 695,490 603,243Freight&ForwardingCharges - 1,200Paymentstostatutoryauditors as auditors 93,750 85,875fortaxaudit - 50,000forcertification 50,000 155,762reimbursementofexpenses(outofpocketexpenses) - 13,443

143,750 305,080Legal,ProfessionalandConsultancycharges 4,826,709 7,168,105Advertisement,PublicityandSalePromotion 47,087 437,764NetGain/LossonForeignCurrencyTransaction/Translation 1,270,004,148 -ImpairmentofReceivables 489,753,737 -MiscellaneousExpenses 3,962,833 4,061,913TOTAL 1,771,280,478 14,467,8791 TheCompanyhasvariousoperatingleasesforfactorypremisesandofficefacilitiesthatarerenewableonaperiodicbasisandcan

beterminatedattheoptionofeitherparty.RentalexpensesforoperationalleasesrecognizedinthestatementofProfitandLossfortheYearareRs.214,000/-(Rs.213.707).

As At 31.03.2017

`

As At 31.03.2016

`Minimumfutureleaserentalspayableare:(a)PayablewithinoneYear - 664,203(b)PayablewithinoneYearandfiveYears - 2,080,812(c)PayableafterfiveYears - -

MinimumfutureleaserentalsreceivableinrespectofassetsgivenonoperatingleaseintheformofPlantandMachineryafter01/10/2002andBuildingafter01/08/2001are:(a)ReceivablewithinoneYear Nil Nil(b)ReceivablewithinonePeriodandfiveYears Nil Nil(c)ReceivableafterfiveYears Nil Nil


97

2 Miscellaneousexpensesincludes:

As At 31.03.2017

`

As At 31.03.2016

`SecurityCharges 1,343,026 1,309,957SundryBalanceW/off 61,135 464,538HousekeepingExpenses 302,163 249,588TravellingExpenses 83,372 294,383Printing&Stationary 592,366 483,615Postage&CourierCharges 290,188 166,234OfficeExpenses 316,376 118,727Accounting Charges 626,016 657,187Others 348,191 317,684Total Miscellaneous Expenses 3,962,833 4,061,913

3 During the year under review,StateBank ofMauritius has entered in theOneTimeSettlement agreementwith theOverseasCustomeroftheCompanyandtheCompanyforsettlemntoftheirloan.AccordinglytheOverseascustomersagreedtopaydirectlytoStateBankofMauritiusUS$1,050,833/-againstthetotaloutstandingbillofUS$8,241,831.11/-.ThereforetheCompanyhasrecognisedImpairmentofUS$7,190,998/-amountingtoRs.488,352,906/-inthebooks.

4 Prior Period Expenses

As At 31.03.2017

`

As At 31.03.2016

`TheExpensesincludesExpensesforthepriorperiodProfessionalFees 905,428 131,972Rates&Taxes - 22,977MiscemmaenousExpenses 160,176 4,392Repairs&Maintenance - 88,863PaymenttoStatutoryauditors - 180,000Insurance 3,333 -

1,068,937 428,204Note 27. Earnings per share:

As At 31.03.2017

`

As At 31.03.2016

`Profit computation for both Basic and Diluted earnings per share of Rs.10 eachNetprofitasperStatementofProfitandLoss (9,813,009,793) (3,722,453,852)Weighted Average No. of Equity SharesSharesatthebeginningoftheyear A 106,607,894 106,607,894Sharesallottedduringtheyear B - -Dateofallotment - -EffectiveNo.ofshares(allottedduringtheyear)ForcalculationofEPSonthebasisofNo.ofdays C - -TotalSharesforcalculationofEPS(A+C) D 106,607,894 106,607,894Less:Shareswhicharepartlypaid–totheextentof50% E 273,824 273,82450%thereof F 136,912 136,912WeightedAverageNo.ofEquitySharesforEPS(D-F) 106,470,982 106,470,982TotalSharesasatthecloseoftheYear(A+B) 106,607,894 106,607,894EarningperShare(inRs.) (92.17) (34.96)


98

Note 28 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

As At 31.03.2017

`

As At 31.03.2016

`ContingentLiabilities(a)EPCGBenefits(CustomDutiespayableifExportobligationnotmet) 35,414,184 35,414,184TOTAL 35,414,184 35,414,184

29 The carrying value of financial instruments by categories as on 31st March, 2017:




` ` ` `Financial assetsCash and cash equivalents - - 157,861,856 157,861,856Noncurrentinvestments - - 144,887,462 144,887,462Tradereceivables - - 56,141,390,380 56,141,390,380Loans - - 233,086,818 233,086,818Otherfinancialassets - - 4,101,290 4,101,290Total - - 56,681,327,806 56,681,327,806Financial liabilitiesBorrowings - - 61,858,460,030 61,858,460,030Tradepayables - - 786,619,400 786,619,400Otherfinancialliabilities - - 403,730,681 403,730,681

Total - - 63,048,810,111 63,048,810,111

Theabovefinancialassetsareapproximatelyoftheamotizedvaluestated,ifrealizedintheordinarycourseofbusiness.

The carrying value of financial instruments by categories as of 31st March, 2016 is as follows :




` ` ` `Cash and cash equivalents - - 163,192,834 163,192,834Noncurrentinvestments - - 1,591,883,216 1,591,883,216Tradereceivables - - 57,928,902,763 57,928,902,763Loans 233,875,155 233,875,155Otherfinancialassets - - 6,096,769 6,096,769Total - - 59,923,950,737 59,923,950,737Financial liabilitiesBorrowings - - 55,392,306,007 55,392,306,007Tradepayables - - 795,164,314 795,164,314Otherfinancialliabilities - - 332,462,161 332,462,161Total - - 56,519,932,482 56,519,932,482

Theabovefinancialassetsareapproximatelyoftheamotizedvaluestated,ifrealizedintheordinarycourseofbusiness.


99

The carrying value of financial instruments by categories as of 01st April, 2015 is as follows :




` ` ` `Cash and cash equivalents - - 163,984,304 163,984,304.00SCAreceivable - - 2,045,648,897 2,045,648,897.00Tradereceivables - - 54,669,840,302 54,669,840,302.00Loans - - 2,351,99926 235,199,926.18Otherfinancialassets - - 5,419,512 5,419,512.00Total - - 57,120,092,941.18 57,120,092,941.18Financial liabilitiesBorrowings - - 48,939,411,131 48,939,411,131.10Tradepayables - - 772,417,153 772,417,153.00Otherfinancialliabilities - - 326,365,427 326,365,427.00Total - - 50,038,193,711.10 50,038,193,711.10

30 Financial risk objective and policies Thecompany’sprincipalfinancial liabilitiescompriseborrowings,tradeandotherpayables.Themainpurposeofthesefinancial

liabilitiesistofinancethecompany’soperations/projects.TheCompany’sprincipalfinancialassetsincludeloans,tradeandotherreceivables,cashandcashequivalentsthatderivedirectlyfromitsoperations.

Intheordinarycourseofbusiness,thecompanyismainlyexposedtorisksresultingfromforeignexchangemovementsandotherpriceriskssuchasbusinessrisk.

a Foreign exchange risk ThecompanyisexposedtochangesinForeignexchangeratesduetofinancing,investingandcashmanagementactivities.The

company’s exposure to the risk of changes inForeign exchange rates relates primarily to the company’s trade payable, tradereceivablesandforeigndebtobligationswithfloatinginterestrates.ThecompanymanagesitsForeignexchangeriskbyregularlyreviewingtheexchangemarket.However,astheCompanydoesnothavebusinessoperationrecentyears,theexposureislimitedtoaccoountbalancesatbalancesheetdates.

b Credit risk Creditriskistheriskthatcounterpartywillnotmeetitsobligationsunderafinancialinstrumentorcustomercontract,leadingtoa

financial loss.Thecompany isexposedtocredit risk fromitsoperatingactivities(primarily tradereceivablesandotherfinancialassets)andfromitsfinancingactivities,includingdepositswithbanksandfinancialinstitutions,foreignexchangetransactionsandotherfinancialinstruments.

Creditriskfrombalanceswithbanksandfinancialinstitutionsismanagedbythecompany’streasurydepartmentinaccordancewiththecompany’spolicy.Investmentsofsurplusfundsaremadeonlywithapprovedcounterpartiesandwithincreditlimitsassignedtoeachcounterparty.Counterpartycreditlimitsarereviewedbythecompany’sboardofdirectorsonanannualbasis,andmaybeupdatedthroughouttheyearsubjecttoapprovalofthegroup’sfinancecommittee.Thelimitsaresettominimisetheconcentrationofrisksandthereforemitigatefinanciallossthroughcounterparty’spotentialfailuretomakepayments.

Themanagementassumesthatthecompanywillhaveadequatecashflowsfromproceedsofexportrealizationstodefrayitsentiredebtobligationsinaphasedmanner.ThecompanyhasprovidedalltherequireddetailsevidencingreceiptofitsexportconsignmentbydefaultingoverseascustomerstotheHonourableCourtinSharjah,UAE.Thecompanyishopefulofafavourableoutcomeofthelegalsuitfiledagainstdefaultingoverseascustomers,whichisinprogress,inUAEandishopefulofresumingitsnormaloperationsoncethecashflowimproves.

Forrecognitionofimpairmentlossonfinancialassetsandriskexposure,thecompanydeterminesthatwhethertherehasbeenasignificantincreaseinthecreditrisksinceintialrecognition.Ifcreditriskhasnotincreasedsignificantly,12-monthsECLisusedtoprovideforimpairmentloss.However,ifcreditriskhasincreasedsignificantly,lifetimeECLisused.

Basedoninternalevaluation,thecreditriskofallFinancialAssetshasnotincreasedsignificantlyafterinitialrecognition.Therefore,allowanceismeasuredusing12monthsExpectedCreditLoss(ECL)andfull lifetimeexpectedcredit lossmodelisnotusedtomeasuretheallowanceforanyFinancialAsset.


100

FinancialAssetsforwhichlossallowanceismeasuredusing12monthsexpectedcreditloss(ECL)isasfollows:


31.03.2016`

01.04.2015`

Tradeandotherreceivables 56,141,390,380 57,928,902,763 54,669,840,30256,141,390,380 57,928,902,763 54,669,840,302

Thecompanyhasnotrecognisedanylossallowanceunder12monthsexpectedcreditloss(ECL)model.

c Liquidity risk

Liquidityriskisdefinedastheriskthatthecompanywillnotbeabletosettleormeetitsobligationsontimeoratareasonableprice.Thecompany’streasurydepartmentisresponsibleforliquidity,fundingaswellassettlementmanagement.Inaddition,processesandpoliciesrelatedtosuchrisksareoverseenbyseniormanagement.Managementmonitorsthecompany’snetliquiditypositionthroughrollingforecastsonthebasisofexpectedcashflows.Asmajorofborrowingandpayableisunderdisputeandrepaymentofthesetotallydependsonrecoveryoftradereceivables.Asofnow,thecompanyhasconsideredallitssignificantdebtsaspartofcurrentassetspresumingitiscallabledebtbybanksandcounterparties.

d Capital management

Forthepurposesofthecompany’scapitalmanagement,capitalincludesissuedcapitalandallotherequityreserves.Theprimaryobjectiveofthecompany’scapitalmanagementistomaximizeshareholdervalue.Thecompanymanagesitscapitalstructureandmakesadjustmentsinthelightofchangesineconomicenvironmentandtherequirementsofthefinancialcovenants.Thecompanymonitorscapitalusinggearingratio,whichisnetdebt(totaldebtlesscashandcashequivalents)dividedbytotalcapitalplusnetdebt.


31.03.2016`

01.04.2015`

Netdebt(totaldebtlesscashandcashequivalents) 62,894,507,368 56,360,347,802 49,880,425,473Total capital (5,657,797,326) 4,149,332,469 7,871,786,321Totalcapitalandnetdebt 57,236,710,042 60,509,680,271 57,752,211,794Gearingratio 109.88% 93.14% 86.37%

31 Explanatory notes on first time adoption of Ind AS

a First time adoption of Ind AS

Thesefinancialstatements,fortheyearendedon31stMarch,2017,arethefirstfinancialsofWinsomeDiamondsandJewelleryLimitedbeingpreparedinaccordancewithIndAS.Forperiodsuptoandincludingtheyearended31stMarch,2016,thecompanyhasprepareditsfinancialstatementsinaccordancewithaccountingstandardsnotifiedundersection133oftheCompaniesAct,2013,readtogetherwithparagraph7oftheCompanies(Accounts)Rules,2014(IndianGAAP).Thereforecomparativeinformationisreclassified/remeasuredsoastocomplywithIndAS.

Thecompany’sdateoftransitiontoIndASis1stApril,2015.Therefore,the‘OpeningBalanceSheet’ason1stApril,2015,StatementofProfitandLossforyearendedon31stMarch,2016andBalanceSheetasat31stMarch,2016hasbeenrestatedasperIndAS.ThisnoteexplainstheprincipaladjustmentsmadebythecompanyinrestatingitsIndianGAAPfinancialstatements,includingthebalancesheetasat1stApril,2015andthefinancialstatementsasatandfortheyearended31stMarch,2016.


101

b Reconciliation of equity and profit and loss as previously reported under IGAAP to IND AS

1 Reconciliation of equity

Particulars As At 31.03.2016

`

As At 31.03.2015

`Total Equity as per previous GAAP 5,707,572,398 5,751,305,529Adjustments:

RecognitionofTradePayable-ForeignCurrencyTranslationatbalancesheetdate(Lossonexchange)

(116,279,134) (79,676,830)

RecognitionofTradereceivable-ForeignCurrencyTranslationatbalancesheetdate(Gainonexchange)

10,504,534,719 7,237,384,562

Recognitionofforeigncurrencyloan-ForeignCurrencyTranslationatbalancesheetdate(Lossonexchange)

(51,922,364) (7,467,778)

Interestexpensesrecognisedforborrowings 12,069,726,813) (5,658,678,505)Total net impact (1,733,393,592) 1,491,561,449Total Equity as per Ind AS 4,149,332,469 7,871,786,321

2 Reconciliation of total comprehensive income

Particulars FY 2016-17 FY 2015-16Profit after tax as per IGAAP (5,340,186.00) (43,733,130)

Income / Expense to be recognised under Ind AS1 Exchangegainrecognisedforremeasurementoftradepayable,trade

receivableandforeigncurrencyloans(1,370,316,688) 3,186,093,267

2 Interestexpensesrecognisedforborrowings (7,182,741,550) (6,411,048,308)3 IncreaseinExtinguishmentGainduetoInterestprovision 199,665,215 -

Total comprehensive income as per Ind AS (8,360,134,040) (3,268,688,171)3 Impact of Ind-AS on cash flows statement for the year ended 31 March 2016

Particulars Indian GAAP Adjustments Ind ASNetCashflowfromoperatingactivities 1,360,968 6,455,502,893 6,456,863,861NetCashflowfrominvestingactivities 1,179,989 - 1,179,989NetCashflowfromfinancingactivities (3,332,428) (6,455,502,894) (6,458,835,321)NetIncrease/(Decrease)incashandcashequivalents (791,470) - (791,470)CashandCashequivalentsasat1April2015 163,984,304 - 163,984,304CashandCashequivalentsasat31March2016 163,192,834 - 163,192,834

c Options availed on the first time adoption of Ind AS 101

IndAS101allowsfirst-timeadopterscertainexemptionsfromtheretrospectiveapplicationofcertainrequirementsunderIndAS.TheGrouphasappliedthefollowingIndAS101exemptionsfromthetransitiondatei.e.April01,2015:a) IndAS103BusinessCombinationshasnotbeenappliedtoacquisitionsofentiteswhichareconsideredbusinessesunderInd

ASthatoccurredbeforetransitiondatei.e.,April01,2015.UseofthisexemptionmeansthattheIndianGAAPcarryingamountsofassetsandliabilities,thatarerequiredtoberecognisedunderIndAS,istheirdeemedcostatthedateoftheacquisition.Afterthedateoftheacquisition,measurementisinaccordancewithrespectiveIndAS.AssetsandliabilitiesthatdonotqualifyforrecognitionunderIndASareexcludedfromtheopeningIndASbalancesheet.TheCompanydidnotrecogniseorderecognisedanypreviouslyrecognisedamountsasaresultofIndASrecognitionrequirements.

b) TheCompanyhaselectedtoavailexemptionunderIndAS101touseIndiaGAAPcarryingvalueasdeemedcostatthedateoftransitionforallitemsofproperty,plantandequipmentandintangibleassetsasperthestatementoffinancialpositionpreparedinaccordancewithpreviousGAAP.


102

32Related party disclosures

Associate company ForeverPreciousJewelleryandDiamondsLimitedRevahCorporationLimited

Fellow subsidiary company NA

Key Management personnel MrHarshadUdani-ExecutiveDirectorMr.AsishNarayan-CompanysecretaryWEF01/02/2017Mr.RominShah-Companysecretary-upto02/11/2016

Transaction during the year 2016-17 `

2015-16 `

AssociatesLoanReceived 8,700,000 5,397,074InterestonLoan 1,133,285 777,400Key Management PersonnelRemunerationtoDirectors 600,000 612,900RemunerationtoCompanySecretary 522,181 991,669Outstanding at the end of the yearAssociatesLoanOutstanding 342,182,117 332,462,161**Remuneration todirectorMr.HarshadUdaniRs.600,000/- (Rs.612,900/-) isprovided in thebookand thepayment issubject toapprovalofConsortiumofBankandCentralGovernment.

33 Standard issued but not effective:

ThemanagementisinprocessofassessingimpactoffollowingstandardswhicharesignifanttooperationoftheCompany.

In March 2017, the Ministry of CorporateAffairs issued the Companies (IndianAccounting Standards) (Amendments) Rules, 2017,notifyingamendmentstoIndAS7,‘Statementofcashflows’.TheseamendmentsareinaccordancewiththerecentamendmentsmadebyInternationalAccountingStandardsBoard(IASB)toIAS7,‘Statementofcashflows’.TheamendmentsareapplicabletothecompanyfromApril1,2017.TheamendmenttoIndAS7requirestheentitiestoprovidedisclosuresthatenableusersoffinancialstatementstoevaluatechangesinliabilitiesarisingfromfinancingactivities,includingbothchangesarisingfromcashflowsandnon-cashchanges,suggestinginclusionofareconciliationbetweentheopeningandclosingbalancesinthebalancesheetforliabilitiesarisingfromfinancingactivities,tomeetthedisclosurerequirement.ThecompanywillincorporatethedisclosureinFinancialstatementsfortheyearended31stMarch2018.

Ind-AS115(revenuerecognition)-Thecoreprincipleofthisstandardisthatanentitywillrecognizerevenuewhenittransferscontrolovergoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforunderlyingperformanceobligationsarisingfromthetransaction.Note 34.(i) TheCompanyhaswitnessedunprecedentedturnofeventsduringlastfouryears.TheCompanyenjoyedcreditfacilitiesofRs.375

croresasFundBasedlimitsandRs.3470croresasNonFundBasedlimits,alongwithadhoclimitstotheextentof20%oftheabovelimitsforpeakperiod,from14banks.TheNonFundBasedlimitsweremainlyusedforpurchase/importofgoldfromoverseasbullionbanksaswellasfromnominatedagenciesinIndiaagainstStandbyLettersofCreditoftheconsortiumbanks.

DuringtheendofMarch2013,theoverseascustomersfromtheUAEdefaultedinmakingpaymentsfortheCompany’sexportswhichresulted in theCompanydefaulting inmeeting itsobligations.Theconsortiumbankswere,however,obliged topay to thebullionsuppliersduetotheenablingprovisioninthegoldloanagreement,whereinasingledefaultenablesbullionsupplierstorecallallthegoldloan.ThebankersappointedindependentauditfirmsforforensicandinvestigativeauditforwhichtheCompanyofferedexplanations.TheCompanyhasreceivedsmallrealizationsfromitsdefaultingoverseascustomersduringtheyearandaftertheBalancesheetdate.

TheCompanyhadinitiatedlegalproceedingsagainstitsdefaultingoverseascustomersbeforetheSharjahFederalCourtandhadreceivedordersfromSharjahFederalCourtincaseof13overseasdefaulters.TheCourthasconfirmedthedebtspayablebythepartiestotheCompanyandorderedtheoverseascustomertopaytheoutstandingduesalongwithinterest@5%p.a.

TheoverseascustomershavefiledanappealagainstthejudgmentoftheSharjahFederalCourtandtheSharjahFederalAppellatecourthaspassedordersinfavouroftheCompanyandnowthematterispendingonlyinonecasewiththeSharjahFederalAppellateCourt.Thereafterintwocases,theyhavemovedtoSharjahFederalSupremecourtanditsjudgmentisawaited.

FewbankershaveclassifiedtheCompanyanditsdirectorsaswillfuldefaulters.However,theCompanyhasvehementlydeniedthesameandreiteratedthattheywerevictimofcircumstancesbeyondtheircontrolandaretakingallpossiblestepstorecoverthesame.


103

TheDebtrecoverytribunal,AhmedabadhaspassedorderagainsttheCompanyandannouncedauctionofassetsoftheCompany.AftertheBalanceSheetdate,theDRThasconfirmedtheAuctionsalesofImmovablepropertyatJodhpurforRs.711,00,000/-andmovablepropertyatGoaforRs.160,00,000/-..

ThematterwithDebtRecoveryTribunal,Mumbaiisinprogress.Meanwhile,theAxisBankhasissuednoticeunderSARFAESIActforauctionsalesofWindmilloftheCompany.

Thebankshad lodgedcomplaintswith theCentralBureauof Investigation(CBI)andEnforcementDirectorate(ED)tocarryoutinvestigationsagainsttheCompanyanditspromoter.Themanagementandthedirectorshavefullycooperatedwiththeagenciesduringtheirinvestigations.

TheCompanyhasreceivedSummonsfromSFIO(SeriousFraudInvestigationOffice)forsubmittingvariousdetailsoftheCompany.TheCompanyisextendingitsfullco-operation.

TheReserveBankofIndiaissuednoticetotheCompanyunderFEMAfornon-realisationofforeignexchangefromexportsmadeduring2012-13tooverseascustomersofRs.636.14crore.TheCompanyhasalreadyinformedtimetotimeReserveBankofIndiaaboutdefaultmadebyoverseascustomersandthestatusoflegalcases.TheReservebankofIndiahasincludedthenameoftheCompanyinlistofwillfuldefaulterstoSupremeCourtofIndia.Thematterisyetpendingwiththecourt.

(ii) ONE TIME SETTLEMENT Duringtheyear,theStateBankofMauritius(onebankofthememberConsortiumbanks)hasenteredinagreementwiththeoverseas

customersoftheCompanyandtheCompanyforsettlementoftheoutstandingloanoftheCompany.TheoverseascustomershaveagreedtopaydirectlytoStatebankofMauritiusUS$1,050,833/-againstoutstandingcollectionbillsofUS$8,241,431.11thruStateBankofMauritius.

(iii) INVENTORY EntireinventoryofdiamondsandpearlslyingatSuratandMumbaihasbeenplacedinthelockersinPNBandisinthejointcustody

withPNBsince18.06.2013.ThebanksarrangedforvaluationofinventorybyCustomsapprovedvaluersason30.09.2013andaspertheirreport,thetotalvalueofinventorywasRs.39,35,00,031.ThestockatChennaiSEZandCochinSEZareinthejointcustodywithPNBsinceNovember2013atCompany’spremisesrespectively.ThestockatGoaisinjointcustodywithPNBandthestockhasbeenshiftedtoPNBbranchatGoainMarch2017.TheStockatBangaloreisalsoinjointcustodyatfactorypremisesattheyearendandshiftedtoPNBbankBangaloreinMay2017.

TheInventoryhasnotbeenverifiedbythemanagement.TheCompanyhasnotcarriedoutanyfreshvaluationofInventoryasonthebalancesheetdate.

(iv) APPOINTMENT OF KEY MANAGEMENT PERSONNEL TheCompanyhasnotappointedawholetimeChiefFinancialOfficer(CFO),aftertheresignationofthepreviousCFOeffective5th

January2015,aspertheprovisionsofSection203oftheCompaniesAct,2013readalongwithrule8oftheCompanies(AppointmentandRemunerationofManagerialPersonnel)Rules,2014,duetocostconstraints.

TheCompanySecretaryresignedfromtheCompanyeffective14thNovember2016andthenewCompanySecretarywasappointedw.e.f.4thFebruary2017.

Note 35.TheCompany has not carried out any business activities during the year and hence the question of reporting as per theprovisionsofAccountingStandard17-“SegmentReporting”issuedbytheInstituteofCharteredAccountantsofIndiadoesnotarise.Note 36.AdditionalinformationasrequiredundertheCompaniesAct,2013ascertifiedbyaDirectorisasfollows:

a) i)Break-upofthevalueofRawMaterialsConsumed: Rs.inlacs Percentage Imported -

(-)- (-)

Indigenous -(-)

-(-)

-(-)

-(-)

ii)Break-upofStoresandSparesConsumed:

Imported -(-)

- (-)

Indigenous (-) -(-)

- (-)

-(-)


104

Note37.TheCompanyhad receivedConfirmationsason31stMarch2013 from thoseoverseas customerswhohavedefaulted inpayments.Creditorsandotherdebtor’sconfirmationareyettobereceived.

TheCompanyhasreceivedordersfromSharjahFederalCourtincaseof13overseasdefaulters.TheCourthasconfirmedthedebtspayabletotheCompany.

Note38.Theprovisionfordepreciationisadequateandnotinexcessoftheamountsreasonablynecessary.

Note39.AspertheinformationavailablewiththeCompanyandcertifiedbythem,totaloutstandingduetoMicro,SmallandMediumEnterprisesasrequiredtobedisclosedundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006attheendoftheyearisRs.Nil(Nil).TheCompanyhasnotreceivedanyintimationfromanyofthecreditorsconfirmingthattheyfallwithintheprovisionsofMicro,SmallandMediumEnterprisesDevelopmentAct,2006

Note40.DetailsoftheCashtransactionsdonebytheCompanyinSpecifiedBankNotesandothernotesduring08/11/2016to30/12/2016.SBNs OtherDenominationnotes Total

Closingcashinhandason08.11.2016 - 2,016 2,016(+)PermittedReceipts - 18,324 18,324(-)PermittedPayments - 18,324 18,324(-)AmountDepositedinBanks - - -Closingcashinhandason30.12.2016 - 2,016 2,016Note41.StatementofNetassetsorProfitorLossattributabletoownersandminorityinterest

Name of the Entity As % of Consolidated

net assets

Net assets i.e. Total assets minus total

liabilities

As % of Consolidated profit or loss

Share in Profit or loss

Associates(Investment as per equity method)IndiaForeverPreciousJewelleryandDiamondsLtd - 139,868,711 - (1,446,995,754)Note42.PreviousYear’sfigureshavebeenre-arranged,re-groupedorre-classifiedwherevernecessary.






WINSOME DIAMONDS AND JEWELLERY LIMITEDRegisteredOffice:AshokaTower,KesharbaMarket-2,Gotalawadi,Katargam,Surat395004.

PROXY FORM(Pursuanttosection105(6)oftheCompaniesAct,2013andRule19(3)oftheCompanies(ManagementandAdministration)Rules,2014

NameoftheMember:

RegisteredAddress:

EmailID:

Foliono./DPIDNo/ClientIDNo………………………….................……..

I/Webeingamember(s)holding…....................…………..sharesofWinsomeDiamondsandJewelleryLimitedherebyappoint:

1. Name:……………………………….............................................................................. EmailID:……………………………….....................................

Address:………....................................................................…………………………..… Signature:……….............…………………….....orfailinghim

2. Name:……………………………….............................................................................. EmailID:……………………………….....................................

Address:………....................................................................…………………………..… Signature:……….............…………………….....orfailinghim

3. Name:……………………………….............................................................................. EmailID:……………………………….....................................

Address:………....................................................................…………………………..… Signature:……….............……………………..........................

as/myourproxytoattendandvote(onapoll)forme/usonmy/ourbehalfatthe31stAnnualGeneralMeetingoftheCompanytobeheldonThursday,28thSeptember,2017at12.30p.matMahidaBhavan,Icchanath,OppS.VREngineeringCollege,DumasRoad,Surat-395007andatanyadjournmentthereofinrespectofsuchresolutionsasareindicatedbelow:

Resolution No.

Description of Resolutions For Against

1. Toreceive,considerandadopttheAuditedStandaloneandConsolidatedFinancialStatementfortheperiodended31stMarch,2017,theStatementofProfitandLossandCashFlowStatementalongwiththeSchedulesandtheReportsoftheDirectorsand

2. TonoteandapprovethatMr.HarishMehta(DIN:05316274),whoretiresbyrotationandduetohismedicalandhealthreasonsdoesnotofferhimselfforre-appointment.

3. Ratificationofauditors’appointmenttilltheconclusionofthenextannualgeneralmeeting

4. AppointmentofMr.KalpeshSanghaniasanIndependentDirector

Signedthis__________dayof___________2017.

____________________ _________________________ ___________________________ _________________________SignatureofShareholder Signatureoffirstproxyholder Signatureofsecondproxyholder Signatureofthirdproxyholder

Note: TheProxytobeeffectiveshouldbedepositedattheRegisteredOfficeoftheCompanynotlessthan48hoursbeforethecommencementoftheMeeting.

AffixOneRupeeRevenueStamp

TEAR

HER

E

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