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ANNUAL REPORT 2015-16 WINSOME DIAMONDS AND JEWELLERY LIMITED(Formerly Su-Raj Diamonds and Jewellery Limited)

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WINSOME DIAMONDSAND JEWELLERY LIMITED

(CIN: L36910GJ1985PLC015915)

30th Annual Report2015-2016

(01/04/2015 to 31/03/2016)


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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 Ms. Ami Kothari Independent Director

COMPANY SECRETARY Mr. Asish Narayan (upto 31st October, 2015) Mr. Romin Shah (w.e.f. 25th April, 2016)

AUDITORS M/s. R. C. Reshamwala & 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 C-13, Pannalal Silk Mills Compound L.B.S. Road, Bhandup (West) Mumbai – 400078, India


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NOTICENOTICE is hereby given that the 30th Annual General Meeting of the Members of Winsome Diamonds and Jewellery Limited will be held on Friday, 30th day of September, 2016 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 BUSINESS

1) To receive, consider and adopt the Audited Standalone and Consolidated Financial Statement for the period ended 31st March, 2016, 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 appoint a Director in place of Mr. Harshad Udani (DIN : 07014853), who retires by rotation and being eligible, offers himself for re-appointment.

3) 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 M/s. Nautam R. Vakil & Co., Chartered Accountants (Firm Regn. No. 106980W), be and are hereby appointed as Statutory Auditors of the Company, to hold office from the conclusion of this Annual General Meeting till the conclusion of 35th Annual General Meeting of the Company to be held in the year 2021 (subject to ratification of their appointment at every Annual General Meeting) on such remuneration and reimbursement of out of pocket expense 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.

By Order of the Board of Directors For Winsome Diamonds and Jewellery Limited

Place : Mumbai Romin Shah Date : 27th August, 2016 Company Secretary

NOTES:

1) 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.

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.

2) 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.

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

4) The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 24th September, 2016 to Friday, 30th September, 2016 (both days inclusive) for the purpose of Annual General Meeting.

5) 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 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.

6) 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.

7) 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.

8) 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.

9) 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.Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 30th September, 2015 (date of last Annual General Meeting) on the website of the Company.


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10) (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 Pannalal Silk Mills Compound, L.B.S. Road, Bhandup (West), Mumbai - 400 078. 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 warrants

1. Name and Folio No of Sole/First Joint Holder and

2. 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.

11) 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.

12) 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.

13. 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 please 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 30th 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 30th 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 and voting process at AGM in a fair and transparent manner.

The instructions for e-voting are as under:

(i) The voting period begins on Tuesday 27th Septmber, 2016 at (10.00 am) and ends on Thursday 29th September, 2016 at (5.00 pm). During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date i.e 23rd September,2016 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.

(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.


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Dividend Bank Details OR 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 of the Company Name i.e Winsome Diamonds and Jewellery Limited 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. Please follow the instructions as prompted by the mobile app while voting on your mobile.

(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 as Corporates.

• 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 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.

• 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].

ANNEXURE TO THE NOTICE CALLING ANNUAL GENERAL MEETING

Information pursuant to SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 regarding appointment /re-appointment of Directors.Name of Director Mr. Harshad UdaniDate of Birth 02.05.1952Date of Appointment on Board

13.01.2015

Brief profile of the Director

Mr. Udani is a Graduate and has passed LLB as well as CAIIB. He has worked for more than 39 years in Central Bank of India in various capacities. Mr. Udani has retired as Asst. General Manager from Central Bank of India.

Qualifications B.COM, LLB, CAIIB.Directorships in other Companies as on 31.03.2016

Forever Precious Jewellery and Diamond Ltd

Chairman/Member of other Committees of the Board

Winsome Diamonds and Jewellery LtdNomination and Remuneration Committee - Member. Risk Management Committee – Member. Audit Committee - Member. Corporate Social Responsibility Committee - Member. Forever Precious Jewellery and Diamond Ltd Nomination 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 Members

Your Directors are pleased to present their 30th Annual Report together with the Audited Financial Statements for the period ended 31st March, 2016.

FINANCIAL RESULTS (` in Lakhs)Particulars For the year

Ended 31st March, 2016

For the year Ended 31st

March, 2015Total Income 252.54 638.22Profit before Interest and Depreciation

63.83 (449.64)

Less: Finance Charges (Net) 33.32 29.55Depreciation 561.54 748.35Profit before Tax (531.03) (1227.54)Provision for Tax (93.70) ---Profit after Tax (437.33) (1227.54)Add : Balance in Statement of Profit and Loss Brought Forward (34825.71) (33542.55)Profit Available for Appropriation (35263.04) (34770.09)Proposed Dividend - -Corporate Tax on Proposed Dividend

- -

Short fall of Depreciation as per Companies Act

- 55.62

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

- -

Balance Carried Forward (35263.04) (34825.71)Total (35263.04) (34825.71)

OPERATIONAL REVIEW

The total income of the company during the current year was ` 253 lacs as against ` 638 lacs 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 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 Company has received small realizations from its defaulting overseas customers during the year and after the Balance sheet date. The bankers had appointed independent audit firms for forensic and investigative audit for which the Company offered explanations.

Few bankers have classified the Company and its directors as willful defaulters. However, the Company has vehemently objected 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 has received order of ED for provisional attachment of all its properties under the Prevention of Money laundering Act (PMLA). The Company has submitted the complete details of the case to the adjudicating authorities denying any money laundering done by the company.

DIVIDEND

The Board of Directors do not recommend any dividend for the period under consideration due to loss incurred by the company.

SHARE CAPITAL

There is no change in the share capital of the company during the year under review.

FIXED DEPOSITS

The 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 .

NOTICES FROM BANKS

The Company, which received notice from Standard Chartered Bank, 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.

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 management and the directors have fully cooperated with the agencies during their investigations and have submitted all the information available with them.

The Company has received the summons from the SFIO, as the Central Government has assigned Serious Fraud Investigation Office (SFIO) to investigate the affairs of the Company under section 212 of the Companies Act, 2013. The Company and the management are in process of complying with the same.

LEGAL SUIT

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.

The details have been made available on the Company’s website i.e. www.winsomejewellery.com and the summary of these details have been made available on the website of the Bombay Stock Exchange Ltd i.e. www.bseindia.com.

The overseas customers had filed appeals against the orders of the Sharjah Federal Court. Out of the 13 overseas customer’s cases, the Company has received favorable judgment in 2 cases


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in respect of which overseas customer have filed appeals and the said appeals are pending before the Federal Supreme Court. In respect of 4 out 13 overseas customer’s cases, the Sharjah Federal Appellate Court has appointed experts to re-examine the matter and the experts have submitted their reports to the Authority in which case the Company’s comment thereon are yet to be submitted. In another 7 cases, Mr. Harshad Udani and Mr. Harish Mehta have remained present at The Sharjah Federal Appellate Court for swearing on Oath in relation to the above legal cases. Judgements are awaited from the Sharjah Appellate Court.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As per the provisions of the Companies Act 2013, Mr. Harshad Udani retires by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his re-appointment.

No. of Meeting

During the year nine Board Meetings 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.

Currently, the Board has Four committees : the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Stakeholders Relationship Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of this Annual Report.

Declaration by Independent Director

All the Independent Directors have given their declaration of independence as required under Section 149(6) of the Companies Act, 2013; this has been recorded by the Board of Directors.

Board Evaluation

The Companies Act, 2013 and Listing Obligation 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 evaluation 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.

Policy on Directors appointment and remuneration

The 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.

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.

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.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The 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.

RISK MANAGEMENT

The Board of Directors of the Company has formed Risk Management Committee which have been entrusted with the responsibility to overseeing that all the risks that the organization


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faces have been identified , assessed and necessary measures being taken to mitigate such risks. However the requirement of forming such committee of board is applicable to top 100 listed companys and therefore the Board of Directors have dissolved the said committee during its meeting held on 10th May, 2016.

RELATED PARTY TRANSACTIONS

All 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 details of which are given in the notes to the financial statements. There were no other Related Party Transactions requiring disclosure in the Directors’ Report, for compliance with Section 134(3) (h) of the Companies Act, 2013. Therefore, a Nil Report is attached as Annexure I in the format prescribed i.e. Form AOC-2.

LISTING AGREEMENT

The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December 1, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the effective date. Hence Company has entered into Listing Agreement with BSE Limited during January, 2016.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance and the Management Discussion and Analysis Report is included in separate section of this Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The 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.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has no subsidiaries as on March 31, 2016. There are 2 associate companies of Winsome Diamonds and Jewellery Limited viz. Forever Precious Jewellery & Diamonds Ltd and Revah Corporation Ltd within the meaning of section 2(6) of the Companies Act, 2013 (“Act”). Pursuant to provisions of section 129(3) of the Act, Consolidated Financial Statements have been prepared of the company and all above mention associates companies and a separate statement containing the salient features of the financial statement of all above mention associates companies in Form AOC - 1 is attached herewith as Annexure II.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The 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 has in house internal controls of

administrative and statutory outgoings commensurate with its size and volume. Henceforth the Company has commenced internal audit and report of last quarter has been obtained by the company.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as Annexure III to the Board’s report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant 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 along with proper explanation relating to material departures

• 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 this Act 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

AUDITOR’S AND AUDIT REPORT

The existing Auditors, R.C Reshamwala & Co, Chartered Accountants, Mumbai retire at the conclusion of the 30th Annual General Meeting.

R. C Reshamwala & Co, Chartered Accountants, Mumbai who had been occupying the office of Auditors for more than 25 years ceases to hold the same after the conclusion of the ensuing Annual General Meeting. The Board of Directors acknowledges with thanks for the cooperation and support provided by the outgoing Auditors during their long association with the Company as statutory auditors of the Company.

The Audit Committee and Board of Directors have recommended M/s. Nautam R. Vakil & Co., Chartered Accountants, Ahmedabad as Auditors of the Company till the conclusion of 35th Annual General Meeting. The Company has received a consent letter from M/s. Nautam R. Vakil & Co., Chartered Accountants, Ahmedabad for their appointment as auditor of the Company.

The qualifications in the Auditors Report (In Italics) are followed by appropriate Board’s reply and explanations (in bold) as under:


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1. Basis for Qualified OpinionA. In accordance 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. Accordingly the exchange loss for the year is overstated thereby resulting in the total loss for the year being overstated/Profit for the year being understated by ` 318,60,93,267(net).Trade receivables are understated by ` 105,04,534,719, trade payables are understated by ` 11,62,79,134 as on the balance sheet date and foreign currency loan is understated by ` 519,22,363 (Refer Note No. 5,6 (A5), 12(b),17(c) and 21(b)).

We acknowledge Export Receivables and Overseas Trade Payables in foreign currency are monetary assets covered under Accounting Standard-11 (Standard on The Effects of Changes in Foreign Exchange Rates). Accordingly, Export Receivables and Overseas Trade Payables had been restated based on exchange rate as at 31.03.2013. In view of persistent defaults by overseas customers in clearing outstanding dues, the same have been carried forward at the same rate (based on exchange rate as at 31.03.2013) as it is deemed expedient not to take cognizance of depreciation in rupee vis-à-vis US dollar on notional basis when outstanding amounts are expected to be realized over an uncertain period of time. Since the Company does not have any other cash flows to arrange for remittances to overseas trade creditors and expects to defray these liabilities out of realisation of export receivables, the same also have not been restated based on exchange rate as at the date of balance sheet but have been carried forward based on exchange rate as at 31.03.2013. The company has also not taken into account the restatement of foreign currency loans after 31.03.2013.

B. The Company has made long term investments in Forever Precious Diamonds and Jewellery Ltd. (Forever) amounting to ` 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. 10(A1)&(A2), in the view of the management, provision for diminution in value of investments as per the requirements of Accounting Standard -13 (Accounting for Investments) is not considered necessary and hence not made. We have been provided with the financial statements of Forever for the period ended March 2016. The Auditor has observed that there are no 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 ` ` 1,411,710,801.

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.

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. During the year under review, and since April 2014,no provisions have been made for such interest. Accordingly Interest for the year is understated resulting in total loss of the Company being understated by ` 641,10,48,308.(Refer Note 21 (a)).

The Company has decided, not to provide interest on its outstanding / borrowings including term loan for windmill as all accounts are classified as NPA by the Banks. Most of the Banks do not charge any interest on the Company’s borrowings, as according to RBI Prudential norms, interest is to be charged on NPA account on actual basis and not on accrual basis. As a result of this the total loss for the year is understated by ` 641,10,48,308.

2. Basis for Disclaimer of Opinion

A. In respect of Trade Receivables a sum of ` 4,742,43,68,044 is outstanding from the overseas parties. The Sharjah Federal Court where the cases have been filed, have in their order specified that the monies are payable. The Sharjah Federal Court had appointed three independent accounting /banking expert to conduct an enquiry into transaction between the Company and defaulting customers. We have been informed that the finding of the report of the experts explicitly state that the goods were exported by the Company to UAE customers. However the copy of the report has not been made available to us. Against the said orders, these parties have filed appeal with higher authorities. In view of these court orders pending legal proceedings, we are unable to comment on time frame of the realisability of the debts and any provision to be made for unrealisability in the carrying amounts of these balances and the consequential impact, on the financial statements. (Refer Note 12, 14 and Note 25 to the financial statements)

B. As mentioned in Note No 1 regarding preparation of accounts on a Going Concern basis and the reasons stated therein and Note No. 25 of the financial statements detailing the developments that have happened in the last 3 years, the Company’s operating results have been materially affected due to various factors including non availability of finance in view of the consortium bankers recalling the financial facilities granted. These events cast significant doubts on the ability of the Company to continue as a going concern


8 9

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 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.

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 2 cases and those parties matters are pending in appeal with the Federal Supreme Court. In 4 of the party’s cases, the Sharjah Federal Appellate Court has appointed experts to re-examine the matter and the experts have submitted their reports to the Authority in which case the Company’s comment thereon are yet to be submitted. In balance 7 cases the present directors have to be present at the Sharjah Federal Court Appellate Court for swearing on Oath in relation to the above cases.

3. 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 AS-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. Refer note no.13 and 25(ii)

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 in the safe custody at Companies Premises.

The majority of the Inventory is in the joint custody with the Bank and therefore the same has not been valued by the management. Since no moment in stock the company does not envisage any impact on the financials.

As per point (ii) of CARO Report

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 ` 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 and 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 and Chennai, the management has not carried out any physical verification of such inventory. Physical verification of inventory at other branches have also not been done by the management at regular intervals.

Since majority of the inventory is held in the joint custody of the consortium of banks and the company, and as physical verification was not carried out, the question of any material discrepancy and the same 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, 2016.

SECRETARIAL AUDITOR AND HIS REPORT

The Board has appointed Kamlesh M Shah & Co, Practising Company Secretaries to conduct the Secretarial Audit of F.Y 2015-16. The Secretarial Audit report for the year ended 31st March,2016 is attached herewith as Annexure IV .

Certain observations made in the report with regard to Non availability of copy of minutes of meeting with its bankers , appointment of Chief Financial Officer and Internal Auditor.

The management would like to state that Consortium Banks was 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 proceedings of the meeting. With regard to appointment of Chief Financial Officer, the company is in process of finding suitable candidate for the said position and finalise the same as soon as possible. The internal audit has been commenced from the quarter ending March 2016 onwards.

PARTICULARS OF REMUNERATIONThe Information required under 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


8 9

(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:

Four

(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 2015-16 (aggregated)

16.05

Revenue from operations 252.54Remuneration (as % of revenue) 6.35Profit before tax (PBT) (531.04)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) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company

` In lacsParticulars Whole Time

DirectorCompany Secretary

Remuneration 6.12 9.92Revenue 252.54 252.54Remuneration (as % revenue) 2.43 3.93Profit before tax (PBT) (531.04) (531.04)Remuneration (as % of PBT) - -

(j) the key parameters for any variable component of remuneration availed by the directors;

Not Applicable

(k) 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 DIRECTORS

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The particulars regarding conservation of energy and technology absorption are not applicable to the Company as the company has stopped all its manufacturing activities.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review there was no foreign exchange earnings or outflow.

ACKNOWLEDGEMENTS

Your Company and Board wish to thank the members of the company and staff for their continued patience and co-operation.

For and on behalf of Board of Directors

Harshad Udani Harish Mehta Date : 27th August,2016 Director Director Place : Mumbai (DIN:07014853) (DIN:05316274)

Annexure - IForm No. AOC-2(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act, 2013 and

Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts / arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arm’s length basis: Winsome Diamonds and Jewellery Limited (the Company) has not entered into any contract/arrangement/transaction with its related parties which is not in ordinary course of business or at arm’s length during FY 2015-16. The Company has laid down policies and processes/procedures so as to ensure compliance to the subject section in the Companies Act, 2013 (“Act”) and the corresponding Rules.

(a) Name(s) of the related party and nature of relationship: Not Applicable


10 11

(b) Nature of contracts/arrangements/transactions: Not Applicable

(c) Duration of the contracts / arrangements/transactions: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

(e) Justification for entering into such contracts or arrangements or transactions: Not Applicable

(f) Date(s) of approval by the Board: Not Applicable

(g) Amount paid as advances, if any: Not Applicable

(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188: Not Applicable

2. Details of material contracts or arrangement or transactions at arm’s length basis:

a. Name(s) of the related party and nature of relationship: Not Applicable

b. Nature of contracts / arrangements / transactions: Not Applicable

c. Duration of the contracts / arrangements / transactions: Not Applicable

d. Salient terms of the contracts or arrangements or transactions including the value, if any: Not Applicable

e. Date(s) of approval by the Board, if any: Not Applicable

f. Amount paid as advances, if any: None

Note: The above disclosures on material transactions are based on the principle that transactions with wholly owned subsidiaries are exempt for purpose of section 188(1) of the Act

Annexure - II

Form AOC - I

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part “A”: Subsidiaries

1. Sl. No. NA

2. Name of the subsidiary NA

3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period NA

4. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. NA

5. Share capital NA

6. Reserves & surplus NA

7. Total assets NA

8. Total Liabilities NA

9. Investments NA

10. Turnover NA

11. Profit before taxation NA

12. Provision for taxation NA

13. Profit after taxation NA

14. Proposed Dividend NA

15. % of shareholding NA

Part B Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

(Amount in `)

Name of Associates Revah Corporation

Ltd

Forever Precious

Jewellery & Diamonds Ltd

1. Latest audited Balance Sheet Date

31.03.2016 31.03.2016

2. Shares of Associate/Joint Ventures held by the company on the year end

No. 24,34,700 3,92,00,000 Amount of Investment in

Associates/Joint Venture2,43,47,000/- 141,17,10,802/-

Extend of Holding % 48.69 49.003. Description of how there

is significant influenceNA NA

4. Reason why the associate/joint venture is not consolidated

NA NA

5. Networth attributable to Shareholding as per latest audited Balance Sheet

- 65,96,68,997

6. Profit/Loss for the year - -i. Considered in

Consolidation- 8,12,953

ii. Not considered in Consolidation

2,051 -

For and on behalf of Board of Directors

Harshad Udani Harish Mehta Date : 27th August,2016 Director Director Place : Mumbai (DIN:07014853) (DIN:05316274)


10 11

Annexure - IIIFORM NO. MGT 9

EXTRACT OF ANNUAL RETURNas on financial year ended on 31.03.2016

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration ) Rules, 2014.I REGISTRATION AND OTHER DETAILS:

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

KATARAGAM, SURAT -395004vi Whether listed company YESvii Name, Address & contact details of the Registrar

& Transfer Agent, if any.LINK INTIME INADIA PRIVATE LTD. C-13, PANNALAL SILK MILLS COMPOUND, L.B.S. MARG, BHANDUP (WEST), MUMBAI - 400 078

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

Sr. No

Name & Description of main products/services NIC Code of the Product /service

% to total turnover of the company

1 GOLD, DIAMONDS & JEWELLERY - -

III PARTICULARS OF HOLDING, SUBSIDIARY & ASSOCIATE COMPANIES

Sr.No

Name & Address of the Company CIN/GLN HOLDING/ SUBSIDIARY/ASSOCIATE

% OF SHARES HELD

APPLICABLESECTION

1 FOREVER PRECIOUS JEWELLERY & DIAMONDS LTD.

U36911GJ1996PLC028701 Associate 49.00 2(6)

2 REVAH CORPORATION LTD. U74999GJ2007PLC049850 Associate 48.69 2(6)

IV SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity)i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % change during the

yearDemat Physical Total % of Total

SharesDemat Physical Total % of Total

SharesA. Promoters(1) Indiana) 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 Corporates 26658385 0 26658385 25.01 26658385 0 26658385 25.01 0e) Bank/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) NRI- Individuals 0 0 0 0 0 0 0 0 0b) Other Individuals 0 0 0 0 0 0 0 0 0c) Bodies Corp. 0 0 0 0 0 0 0 0 0d) 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 0


12 13

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % change during the

yearDemat Physical Total % of Total

SharesDemat Physical Total % of Total

SharesTotal Shareholding of Promoter(A)= (A)(1)+(A)(2)

26871595 0 26871595 25.21 26871595 0 26871595 25.21 0

B. PUBLIC SHAREHOLDING(1) Institutionsa) Mutual Funds 13700 22800 36500 0.03 13700 18400 32100 0.03 0b) Banks/FI 32625 6868 39493 0.04 3425 6868 10293 0.01 -0.03C) Central Govt(s) 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) Insurance Companies 0 0 0 0 0 0 0 0 0g) FIIs 22749946 0 22749946 21.34 14850914 17100 14868014 13.95 -7.39h) Foreign Venture Capital Funds

0 0 0 0 0 0 0 0 0

i) Others (specify) 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

SUB TOTAL (B)(1): 22796271 29668 22825939 21.41 14868039 42368 14910407 13.99 -7.42(2) Non Institutionsa) Bodies Corporatesi) Indian 7985181 26314 8011495 7.51 5661220 26314 5687534 5.34 -2.17ii) 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 `1 lakhs

16799399 2917992 19717391 18.50 22647343 2898912 25546255 23.96 5.46

ii) Individuals shareholders holding nominal share capital in excess of ` 1 lakhs

24402098 0 24402098 22.89 29082259 0 29082259 27.28 4.39

c) Others (specify)c-i) Clearing Member 973040 0 973040 0.91 424261 0 424261 0.4 -0.51c-ii) Foreign Company 100 27700 27800 0.03 0 15000 15000 0.01 -0.02c-iii) Hindu Undivided Family 59987 0 59987 0.06 963338 0 963338 0.9 0.84c-iv) Trust 400 0 400 0 1000 0 1000 0 0c-v) Non resident India (Repat) 3357912 191886 3549798 3.33 2699487 190286 2889773 2.71 -0.62c-vi) Non-Resident Indan(Non Repat)

167301 1050 168351 0.15 215422 1050 216472 0.2 0.05

SUB TOTAL (B)(2): 53745418 3164942 56910360 53.38 61694330 3131562 64825892 60.80 7.42Total Public Shareholding(B)= (B)(1)+(B)(2)

76541689 3194610 79736299 74.79 76562369 3173930 79736299 74.79 0

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0 0 0 0 0 0

Grand Total (A+B+C) 103413284 3194610 106607894 100.00 103433964 3173930 106607894 100.00 0


12 13

(ii) Shareholding of Promoters

Sr No.

Shareholder's Name Shareholding at the begginning of the year Shareholding at the end of the year % change in share holding

during the year

No. of shares

% of total shares of the

company

% of shares pledged

encumbered to total shares

No. of shares

% of total shares of the

Company

% of shares pledged

encumbered to total shares

1 JATIN .R MEHTA 145630 0.14 0 145630 0.14 0 02 JATIN R. MEHTA(H.U.F.) 67580 0.06 0 67580 0.06 0 03 KOHINOOR DIAMONDS PVT. LTD. 14138996 13.26 0 14138996 13.26 0 04 DIADEM INVESTMENT AND FINANCE PVT.

LTD.3867094 3.63 0 3867094 3.63 0 0

5 BOMBAY DIAMONDS COMPANY PVT. LTD. 3422232 3.21 0 3422232 3.21 0 06 J. R. DIAMONDS PVT. LTD. 3876797 3.64 0 3876797 3.64 0 07 FOREVER DIAMONDS PVT. LTD. 930016 0.87 0 930016 0.87 0 08 FIRSTRATE DIAMONDS PVT. LTD. 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

Sr. No. Share holding at the beginning of the Year Cumulative Share holding during the yearNo. of Shares

% of total shares of the company

No of shares


At the beginning of the year N.A. N.A. N.A. N.A.Date wise increase/decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc)

N.A. N.A. N.A. N.A.

At the end of the year N.A. N.A. N.A. N.A.(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)

Sr. No. Name & Type of Transaction Shareholding at the beginning of the year - 2015

Transactions during the year Cumulative Shareholding at the end of the year - 2016

No. ofShares held

% of Total Shares of the

Company

Date of Transaction

No. of Shares No of Shares held


Company1 NEELAM CHANDNANI 368903 0.3460 368903 0.3460

Transfer 10 Apr 2015 79597 448500 0.4207Transfer 17 Apr 2015 26000 474500 0.4451Transfer 24 Apr 2015 30000 504500 0.4732Transfer 01 May 2015 5000 509500 0.4779Transfer 26 Jun 2015 50000 559500 0.5248Transfer 30 Jun 2015 25000 584500 0.5483Transfer 03 Jul 2015 60000 644500 0.6046Transfer 10 Jul 2015 28000 672500 0.6308Transfer 07 Aug 2015 20000 692500 0.6496Transfer 04 Sep 2015 12000 704500 0.6608Transfer 11 Sep 2015 10000 714500 0.6702Transfer 18 Sep 2015 9000 723500 0.6787Transfer 16 Oct 2015 5000 728500 0.6833Transfer 30 Oct 2015 6000 734500 0.6890Transfer 13 Nov 2015 15000 749500 0.7030Transfer 29 Jan 2016 9333 758833 0.7118


14 15



No. ofShares held


Company

Date of Transaction



CompanyTransfer 05 Feb 2016 1667 760500 0.7134Transfer 18 Mar 2016 17277 777777 0.7296AT THE END OF THE YEAR 777777 0.7296

2 KRISHNA AVTAR 0 0.0000 0 0.0000Transfer 11 Sep 2015 180000 180000 0.1688Transfer 09 Oct 2015 200000 380000 0.3564Transfer 29 Jan 2016 4889 384889 0.3610Transfer 19 Feb 2016 (380000) 4889 0.0046Transfer 18 Mar 2016 380000 384889 0.3610Transfer 31 Mar 2016 (4889) 380000 0.3564AT THE END OF THE YEAR 380000 0.3564

3 RITU CHANGIA 0 0.0000 0 0.0000Transfer 28 Aug 2015 162223 162223 0.1522Transfer 11 Dec 2015 150000 312223 0.2929AT THE END OF THE YEAR 312223 0.2929

4 HANSABEN DHANJI VARSANI 5000 0.0047 5000 0.0047Transfer 14 Aug 2015 299408 304408 0.2855AT THE END OF THE YEAR 304408 0.2855

5 VARSANI PURBAI MURJI 0 0.0000 0 0.0000Transfer 29 May 2015 195000 195000 0.1829Transfer 13 Nov 2015 93668 288668 0.2708AT THE END OF THE YEAR 288668 0.2708

6 VIKAS KUMAR AGRAWAL 0 0.0000 0 0.0000Transfer 25 Mar 2016 268549 268549 0.2519AT THE END OF THE YEAR 268549 0.2519

7 SURENDRA JAYKUMAR JAIN 226519 0.2125 226519 0.2125AT THE END OF THE YEAR 226519 0.2125

8 SACHIN PRABHAKAR SATOSKAR

100606 0.0944 100606 0.0944

Transfer 10 Apr 2015 100000 200606 0.1882Transfer 05 Jun 2015 25000 225606 0.2116AT THE END OF THE YEAR 225606 0.2116

9 DASHARAJ BHIMADEO KOLHE 21000 0.0197 21000 0.0197Transfer 14 Aug 2015 110000 131000 0.1229Transfer 18 Sep 2015 4280 135280 0.1269Transfer 30 Sep 2015 20220 155500 0.1459Transfer 23 Oct 2015 38000 193500 0.1815Transfer 30 Oct 2015 19500 213000 0.1998Transfer 11 Dec 2015 500 213500 0.2003Transfer 25 Dec 2015 3500 217000 0.2035Transfer 25 Mar 2016 1500 218500 0.2050AT THE END OF THE YEAR 218500 0.2050

10 MAHENDRA JAMBUKUMAR KALASHETTY

167000 0.1566 167000 0.1566


14 15



No. ofShares held


Company

Date of Transaction



CompanyTransfer 10 Apr 2015 40000 207000 0.1942Transfer 29 Jan 2016 (98) 206902 0.1941AT THE END OF THE YEAR 206902 0.1941

11 PASSAGE TO INDIA MASTER FUND LIMITED

10181818 9.5507 10181818 9.5507

Transfer 25 Sep 2015 (172084) 10009734 9.3893Transfer 30 Sep 2015 (679048) 9330686 8.7523Transfer 09 Oct 2015 (719835) 8610851 8.0771Transfer 16 Oct 2015 (204011) 8406840 7.8858Transfer 23 Oct 2015 (281082) 8125758 7.6221Transfer 30 Oct 2015 (190890) 7934868 7.4430Transfer 06 Nov 2015 (50658) 7884210 7.3955Transfer 13 Nov 2015 (15550) 7868660 7.3809Transfer 20 Nov 2015 (140952) 7727708 7.2487Transfer 27 Nov 2015 (322697) 7405011 6.9460Transfer 04 Dec 2015 (435396) 6969615 6.5376Transfer 11 Dec 2015 (277227) 6692388 6.2776Transfer 31 Dec 2015 (222773) 6469615 6.0686Transfer 08 Jan 2016 (105000) 6364615 5.9701Transfer 01 Apr 2016 (6364615) 0 0.0000AT THE END OF THE YEAR 0 0.0000

12 PRIME INDIA INVESTMENT FUND LTD

5700000 5.3467 5700000 5.3467

Transfer 01 Apr 2016 (5700000) 0 0.0000AT THE END OF THE YEAR 0 0.0000

13 SPARROW ASIA DIVERSIFIED OPPORTUNITIES FUND

2786199 2.6135 2786199 2.6135

Transfer 01 Apr 2016 (2786199) 0 0.0000AT THE END OF THE YEAR 0 0.0000

14 SHRI PARASRAM HOLDINGS PVT.LTD.

1562303 1.4655 1562303 1.4655

Transfer 10 Apr 2015 20414 1582717 1.4846Transfer 08 May 2015 (6000) 1576717 1.4790Transfer 15 May 2015 (3500) 1573217 1.4757Transfer 22 May 2015 30000 1603217 1.5038Transfer 29 May 2015 44500 1647717 1.5456Transfer 05 Jun 2015 10000 1657717 1.5550Transfer 26 Jun 2015 (45000) 1612717 1.5128Transfer 30 Jun 2015 (22000) 1590717 1.4921Transfer 03 Jul 2015 (24023) 1566694 1.4696Transfer 10 Jul 2015 (161400) 1405294 1.3182Transfer 17 Jul 2015 150 1405444 1.3183Transfer 24 Jul 2015 (2150) 1403294 1.3163Transfer 31 Jul 2015 250 1403544 1.3165Transfer 07 Aug 2015 (26220) 1377324 1.2920Transfer 14 Aug 2015 (320) 1377004 1.2917


16 17



No. ofShares held


Company

Date of Transaction



CompanyTransfer 21 Aug 2015 (176454) 1200550 1.1261Transfer 28 Aug 2015 (81556) 1118994 1.0496Transfer 04 Sep 2015 (29000) 1089994 1.0224Transfer 11 Sep 2015 3850 1093844 1.0260Transfer 18 Sep 2015 6000 1099844 1.0317Transfer 09 Oct 2015 (685) 1099159 1.0310Transfer 16 Oct 2015 (60) 1099099 1.0310Transfer 30 Oct 2015 1000 1100099 1.0319Transfer 06 Nov 2015 5400 1105499 1.0370Transfer 13 Nov 2015 (5500) 1099999 1.0318Transfer 20 Nov 2015 16000 1115999 1.0468Transfer 27 Nov 2015 6000 1121999 1.0525Transfer 04 Dec 2015 10656 1132655 1.0624Transfer 11 Dec 2015 10000 1142655 1.0718Transfer 18 Dec 2015 5399 1148054 1.0769Transfer 25 Dec 2015 8000 1156054 1.0844Transfer 31 Dec 2015 1100 1157154 1.0854Transfer 01 Jan 2016 (700) 1156454 1.0848Transfer 08 Jan 2016 (421750) 734704 0.6892Transfer 22 Jan 2016 (55200) 679504 0.6374Transfer 29 Jan 2016 (58000) 621504 0.5830Transfer 05 Feb 2016 5000 626504 0.5877Transfer 12 Feb 2016 (33000) 593504 0.5567Transfer 19 Feb 2016 (10980) 582524 0.5464Transfer 26 Feb 2016 (10600) 571924 0.5365Transfer 04 Mar 2016 2600 574524 0.5389Transfer 11 Mar 2016 (2000) 572524 0.5370Transfer 01 Apr 2016 (572524) 0 0.0000AT THE END OF THE YEAR 0 0.0000

15 LSE SECURITIES LTD. 1494484 1.4019 1494484 1.4019Transfer 10 Apr 2015 2000 1496484 1.4037Transfer 24 Apr 2015 4613 1501097 1.4081Transfer 08 May 2015 297748 1798845 1.6873Transfer 15 May 2015 (288248) 1510597 1.4170Transfer 22 May 2015 35000 1545597 1.4498Transfer 29 May 2015 (53500) 1492097 1.3996Transfer 05 Jun 2015 275000 1767097 1.6576Transfer 19 Jun 2015 (3000) 1764097 1.6548Transfer 03 Jul 2015 1000 1765097 1.6557Transfer 10 Jul 2015 9500 1774597 1.6646Transfer 17 Jul 2015 4500 1779097 1.6688Transfer 21 Aug 2015 49995 1829092 1.7157Transfer 04 Sep 2015 10000 1839092 1.7251Transfer 11 Sep 2015 16000 1855092 1.7401


16 17



No. ofShares held


Company

Date of Transaction



CompanyTransfer 18 Sep 2015 11500 1866592 1.7509Transfer 25 Sep 2015 1950 1868542 1.7527Transfer 30 Sep 2015 5700 1874242 1.7581Transfer 09 Oct 2015 9000 1883242 1.7665Transfer 16 Oct 2015 (71500) 1811742 1.6994Transfer 06 Nov 2015 550 1812292 1.7000Transfer 13 Nov 2015 (1250) 1811042 1.6988Transfer 25 Dec 2015 8442 1819484 1.7067Transfer 31 Dec 2015 5060 1824544 1.7115Transfer 08 Jan 2016 (7442) 1817102 1.7045Transfer 15 Jan 2016 11000 1828102 1.7148Transfer 22 Jan 2016 (3000) 1825102 1.7120Transfer 29 Jan 2016 (50) 1825052 1.7119Transfer 04 Mar 2016 (25400) 1799652 1.6881Transfer 18 Mar 2016 (613) 1799039 1.6875Transfer 25 Mar 2016 (7000) 1792039 1.6810Transfer 01 Apr 2016 (1792039) 0 0.0000AT THE END OF THE YEAR 0 0.0000

16 APMS INVESTMENT FUND LTD 1310000 1.2288 1310000 1.2288Transfer 03 Jul 2015 (1000000) 310000 0.2908Transfer 10 Jul 2015 (310000) 0 0.0000AT THE END OF THE YEAR 0 0.0000

17 CRESTA FUND LTD 1111698 1.0428 1111698 1.0428Transfer 15 May 2015 (38579) 1073119 1.0066Transfer 26 Jun 2015 (605817) 467302 0.4383Transfer 03 Jul 2015 (467302) 0 0.0000AT THE END OF THE YEAR 0 0.0000

18 BRIDGE INDIA FUND 969890 0.9098 969890 0.9098Transfer 10 Apr 2015 (969890) 0 0.0000AT THE END OF THE YEAR 0 0.0000

19 RUDRA MANI KAUSHIK 732062 0.6867 732062 0.6867Transfer 03 Jul 2015 (22026) 710036 0.6660Transfer 10 Jul 2015 (9860) 700176 0.6568Transfer 31 Jul 2015 (17676) 682500 0.6402Transfer 04 Sep 2015 (63000) 619500 0.5811Transfer 11 Sep 2015 6000 625500 0.5867Transfer 30 Sep 2015 (186) 625314 0.5866Transfer 22 Jan 2016 (10000) 615314 0.5772Transfer 12 Feb 2016 (5000) 610314 0.5725Transfer 01 Apr 2016 (610314) 0 0.0000AT THE END OF THE YEAR 0 0.0000

20 MUZAFFARUDDIN MOHAMMED 692200 0.6493 692200 0.6493Transfer 01 Apr 2016 (692200) 0 0.0000AT THE END OF THE YEAR 0 0.0000


18 19

(v) Shareholding of Directors & Key Managerial Personnel

Sr. No

For Each of the Directors & KMP Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares


No of shares


1 Harshad Udani At the beginning of the year - - - -Date wise increase/decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc)

- - - -

At the end of the year - - - -2 Harish Mehta

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

- - - -

At the end of the year - - - -3 S. P. Tanwar - - - -


- - - -

At the end of the year - - - -4 Harimohan Namdev - - - -


- - - -

At the end of the year - - - -5 Ami Kothari - - - -


- - - -

At the end of the year - - - -6 Asish Narayan - Company Secretary (upto 31st

October, 2015- - - -


- - - -

At the end of the year - - - -


18 19

V INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment (Amount in `)

Secured Loans excluding deposits

UnsecuredLoans

Deposits TotalIndebtedness

Indebtedness at the beginning of the financial yeari) Principal Amount - 41,69,88,67,507 - 41,69,88,67,507ii) Interest due but not paid - 1,57,43,97,341 - 1,57,43,97,341iii) Interest accrued but not due - -Total (i+ii+iii) - 43,27,32,64,848 - 43,27,32,64,848Change in Indebtedness during the financial yearAdditions - -Reduction - 26,08,017 - 26,08,017Net ChangeIndebtedness at the end of the financial yeari) Principal Amount - 41,69,62,59,490 - 41,69,62,59,490ii) Interest due but not paid - 1,57,43,97,341 - 1,57,43,97,341iii) Interest accrued but not due - -Total (i+ii+iii) - 43,27,06,56,831 - 43,27,06,56,831

VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole time director and/or Manager: (Amount in `)

Sr. No

Particulars of Remuneration Name of the MD/WTD/Manager

Total Amount

1 Gross salary Harshad Udani(a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961. 6,12,900 6,12,900(b) Value of perquisites u/s 17(2) of the Income tax Act, 1961(c) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961

2 Stock option3 Sweat Equity4 Commission

as % of profitothers (specify)

5 Others, please specifyTotal (A) 6,12,900 6,12,900Ceiling as per the Act As per provisions of the Companies Act, 2013.

B. Remuneration to other directors: (Amount in `)Sr. No

Particulars of Remuneration Name of Directors Total AmountHarishMehta

S. P. Tanwar

HarimohanNamdev

AmiKothari

1 Independent Directors(a) Fee for attending board committee meetings 21,000 Nil 21,000 17,000 59,000(b) Commission Nil Nil Nil Nil Nil(c) Others, please specify Nil Nil Nil Nil NilTotal (1) 21,000 21,000 17,000 59,000

2 Other Non Executive Directors(a) Fee for attending Board Committee Meetings Nil 16,000 Nil Nil Nil(b) Commission Nil Nil Nil Nil Nil(c) Others, please specify. Nil Nil Nil Nil NilTotal (2) Nil Nil Nil Nil NilTotal (B)=(1+2) 16,000 16,000Total Managerial Remuneration 75,000Overall Cieling as per the Act.


20 21

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD (` In Lacs)

Sr. No. Particulars of Remuneration Key Managerial Personnel1 Gross Salary CEO Company Secretary CFO Total

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

- 9.92 - 9.92

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

2 Stock Option3 Sweat Equity4 Commission

as % of profitothers, specify

5 Others, please specifyTotal - 9.92 - 9.92

VII PENALTIES/PUNISHMENT/COMPPOUNDING OF OFFENCES

Type Section of the Companies Act

Brief Description

Details of Penalty/Punishment/Compounding fees imposed

Authority (RD/NCLT/Court)

Appeall made if any (give details)

A. COMPANYPenalty

NilPunishmentCompounding

B. DIRECTORSPenalty


C. OTHER OFFICERS IN DEFAULTPenalty



20 21

Annexure - IVFORM NO. MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31st MARCH, 2016

[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 2016 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 31.03.2016 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.

(ii) The Listing Agreements entered into by the Company with Stock Exchanges.

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.


22 23

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

PLACE: AHMEDABAD PROPRIETOR DATE: 30TH JULY, 2016 ACS: 8356, COP: 2072

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

exchanges form time to time2. 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 and Complied with.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.Taxation LawsThe 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.

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

(KAMLESH M. SHAH) PLACE: AHMEDABAD PROPRIETOR DATE: 30TH JULY, 2016 ACS: 8356, COP: 2072

ANNEXURE-B

OBSERVATIONS 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.

EFFECT OF ABOVE OBSERVATIONS FINANCIAL OR OTHER OPERATIONS OF THE COMPANY AND ITS LIABILITIES

Regarding 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 Figures

Regarding 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.

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

(KAMLESH M. SHAH) PLACE: AHMEDABAD PROPRIETOR DATE: 30TH JULY, 2016 ACS: 8356, COP: 2072


22 23

MANAGEMENT DISCUSSION AND ANALYSIS

CURRENT SCENARIO

The company witnessed unprecedented turn of events during last three 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. Off the 13 cases, two judgments in Sharjah Appellant Court have come in favour of the company and these two overseas customers have filed appeal with the Federal Supreme Court in the UAE. Off the balance 11 cases, in 4 cases the Sharjah Federal Appellate Court has referred to experts to re-examine the matter and submit their report. The same has been received and forwarded to the company for their comments. As regards balance 7 cases the company has confirmed on oath regarding the amounts due from the overseas customers. We are awaiting the judgment of Sharjah Federal Appellant 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

Banglore, 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 PERFORMANCE

The 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.

(` In Lacs)Particulars 2015-16

(12 months )2014-15

(12 months )Total Revenue 252 638PBT (531) (1227)PAT (437) (1227)EPS (0.40) (1.15)

OUTLOOK

With little realization of 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.

OPPORTUNITIES, THREAT, RISKS AND CONCERNS

With unforeseen developments over the last three years the relevancy of opportunities, threats, risks and concerns are not applicable at the moment.

INTERNAL CONTROL SYSTEM

The 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 RESOURCES

During 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 STATEMENT

The 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.


24 25

CORPORATE GOVERNANCE PHILOSPHY

The 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 DIRECTORS

The Board of the Company at the year end on 31st March,2016 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 13th May, 2015, 30th May, 2015, 24th June, 2015, 12th August, 2015, 1st September, 2015, 9th November, 2015, 12th February, 2016, 24th February, 2016 and on 2nd March, 2016. 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, 2016 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

9 9 Yes 1 Nil 1

Mr. Harish Mehta (DIN 05316274)

Non-Executive & Independent Director

9 9 Yes 3 3

Mr. Harimohan Namdev(DIN 02658937)


9 9 Yes 2 - 3

Mr. Satya Prakash Tanwar (DIN 06701468)

Nominee Director representing Consortium Banks

9 8 No 1 Nil Nil

Ms. Ami Kothari (DIN 07104331)


9 9 No 1 Nil Nil

COMMITTEES OF THE BOARD

A) 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, 2016 on 30th May, 2015, 12th August, 2015, 1st September, 2015, 9th November, 2015, and on 12th February, 2016. 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

Mr. Harish Mehta Chairman 5Mr. Harshad Udani Member 5Mr. Harimohan Namdev Member 5Ms. Ami Kothari* Member -

*Appointed as member of Audit Committee as on 10th May,2016.

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 Stakeholders 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 30th May,2015, 12th August,2015, 9th November,2015 and on 12th February,2016. 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

Mr. Harish Mehta Chairman 4Mr. Harimohan Namdev

Member 4

Ms. Ami Kothari* Member -

*Appointed as member of Audit Committee as on 10th May, 2016.


24 25

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 Chief Compliance Officer of the Company upto 31st October, 2015 for complying with requirements of Securities Laws.

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 are given below:

Sr. No Name of Directors Designation1 Mr. Harish Mehta Chairman2 Mr. Harimohan Namdev Member3 Mr. Harshad Udani Member4 Ms. Ami Kothari Member

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 (Amount in Rs)

Sr. No.

Name of Directors SittingFees

SalaryPerquisites/

Commission

No. of shares

held1. Mr. Harish Mehta 21,000 Nil Nil2. Mr. Harmohan

Namdev21,000 Nil Nil

3. Mr. Satyaprakash Tanwar

16,000 Nil Nil

4. Mr. Harshad Udani Nil 6,12,900 Nil5. Ms. Ami Kothari 17,000 Nil Nil

Total 75,000 6,12,900

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. No meeting of such committee were held during the year. The composition of the risk management committee are given below

Sr. No Name of Directors Designation1 Mr. Harish Mehta Chairman2 Mr. Harimohan Namdev Member3 Mr. Harshad Udani Member

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 :

Sr.No Name of Directors Designation1 Mr. Harish Mehta Chairman2 Mr. Harshad Udani Member3 Ms. Ami Kothari Member

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 weblink is www.winsomejewellery.com

MEETING INDEPENDENT DIRECTORS

During the year one meeting of the Independent Directors were held on 28th March, 2016 . The Independent Directors, inter-alia, reviewed the performance of non-independent directors, Chairman of the Company and the Board as a whole.


26 27

GENERAL BODY MEETINGS

Year Location Date Time Special Resolution

Passed2012-2013

Mahida BhavanIcchanath

Opp. S.V.R. Engineering

College, Dumas Road, Surat

395007

27th December, 2013**31st March, 2014**

12.30 p.m.

12.30 p.m.

0

2013-2014

30th September, 2014

12.30 p.m.

1

2014-2015

30th September, 2015

12.30 p.m.

0

** 27th Annual General Meeting of the Company originally held on 27th December,2013 was adjourned. The adjourned AGM was held on 31st March,2014.

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.

DISCLOSURES

a) 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 27 of Notes to financial statements for the period ended 31st March, 2016 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 dematerialised 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 COMMUNICATION

The 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 SHAREHOLDER INFORMATION

1) Annual General Meeting

Day, Date, time and venue

Friday, 30th September, 2016, 12.30 p.m.

Mahida Bhavan, Icchanath, Opp. S.V.R. Engineering College, Dumas Road, Surat - 395 007.

2) Date of Book Closure Period

24th September, 2016 to 30th September, 2016.

3) Financial Year :

1st April to 31st March

4) Financial Calendar (tentative)

Results for the quarter ending 30th June, 2016

Second week of August, 2016

Results for the quarter ending 30th September, 2016

Second week of November, 2016


26 27

Results for the quarter ending 31st December, 2016

Second week of February, 2017

Results for year ending 31st March, 2017

Last week of May, 2017

5) Listing of Equity Shares on Stock Exchanges and Payment of Listing Fees

BSE Limited Phiroze Jeejeebhoy Towers Dalal Street, Mumbai 400 023 Scrip Code: 507892 ISIN : INE664A01015

The Annual Listing Fees for the financial year 2016-2017 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, 2015 0.49 0.39 29094.61 26897.54May, 2015 0.53 0.28 28071.16 26423.99June, 2015 0.58 0.28 27968.75 26307.07July, 2015 0.78 0.52 28578.33 27416.39August, 2015 1.16 0.67 28417.59 25298.42September,2015 0.88 0.64 26471.82 24833.54October, 2015 0.78 0.64 27618.14 26168.71November, 2015 0.77 0.57 26824.3 25451.42December, 2015 0.78 0.56 26256.42 24867.73January, 2016 1.15 0.74 26197.27 23839.76February, 2016 1.05 0.74 25002.32 22494.61March, 2016 0.88 0.65 25479.62 23133.18

7) Registrar and Transfer Agent

Link Intime India Pvt. Limited Unit: Winsome Diamonds and Jewellery Limited C-13, Pannalal Silk Mills Compound, L.B.S. Road Bhandup (West), Mumbai 400 078. Phone : (91-22) 25946970. Fax : (91-22) 2594 6969 / 2596 2691. E-Mail: [email protected] Website: www.linkintime.co.in

8) 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 lodgement

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]

10) Shareholding by Category as on 31st March, 2016Category 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 67 14910298 13.98(2) Non-Institutions 47848 64553170 60.81

Total Public Shareholding

47915 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) 47923 106335063 100

11) Distribution of Shareholding as on 31st March, 2016

Shareholding of nominal value

of `

No. of Shareholders

% to Total

Total Shares

% to Total

1 to 500 39767 82.98 5997579 5.62501 to 1000 3437 7.70 2766875 2.591001 to 2000 1705 3.56 2659602 2.492001 to 3000 648 1.35 1684058 1.583001 to 4000 333 0.69 1204935 1.134001 to 5000 431 0.90 2083772 1.955001 to 10000 723 1.51 5649590 5.3010001 to ********** 879 1.84 84561483 79.32 Total 47923 100.00 1066078940 100.00


28 29

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. 97.02 % of Company’s paid-up Equity Share Capital has been dematerialized up to March 31, 2016.

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

NIL

14) Plant Location in India

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

• 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 ` 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 Yes

2. Audit Committee 18 Yes3. Nomination and

Remuneration Committee

19 Yes

4. Stakeholders’ Relationship Committee

20 Yes

5. Risk Management Committee

21 Yes

6. Vigil Mechanism 22 Yes7. Related Party

Transaction23 Yes

8. Subsidiaries of the Company

24 NA

Sr. No

Particulars Regulation Compliance StatusYes/No/N.A

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)

17) 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.

DECLARATION

I, 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, 2016.

For Winsome Diamonds and Jewellery Limited

Harshad Udani Date :- 10th May, 2016 Whole Time Director Place :- Mumbai (DIN : 07014853)

CERTIFICATE BY EXECUTIVE DIRECTOR OF COMPANY

To,

The Board of Directors

Winsome Diamonds and Jewellery Limited

a. I / We have reviewed financial statements and the cash flow statement for the year ended on 31st March,2016 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.


28 29

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 Udani Date :- 19th May, 2016 Whole Time Director Place :- Mumbai (DIN : 07014853)

CERTIFICATE FROM PRACTISING COMPANY SECRETARY ON CORPORATE GOVERNANCE

To

The Members of

Winsome Diamonds and Jewellery Limited

We have examined the compliance of conditions of Corporate Governance by Winsome Diamonds and Jewellery Limited , for the year ended on March 31, 2016, 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. Shah Place:- Ahmedabad Propreitor Date :- 30th July,2016 ACS: 8356 COP : 2072

ANNUAL REPORT 2015-16

30

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

Company”), which comprise the Balance Sheet as at 31st March 2016, 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.

2. Management’s Responsibility for the Standalone 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 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 Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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 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 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the 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 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 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 financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

4. BasisforQualifiedOpinionA. In accordance 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. Accordingly the exchange loss for the year is overstated thereby resulting in the total loss for the year being overstated/Profit for the year being understated by ̀ 318,60,93,267(net).Trade receivables are understated by ̀ 105,04,534,719, trade payables are understated by ` 11,62,79,134 as on the balance sheet date and foreign currency loan is understated by ` 519,22,363 (Refer Note Nos. 5,6 (A5), 12(b),17(c) and 21(b)).

B. The Company has made long term investments in Forever Precious Diamonds and Jewellery Ltd. (Forever) amounting to ` 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. 10(A1)&(A2), in the view of the management, provision for diminution in value of investments as per the requirements of Accounting Standard -13 (Accounting for Investments) is not considered necessary and hence not made. We have been provided with the financial statements of Forever for the year ended 31st March 2016. The auditor has observed that there are no 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 ` 141,17,10,801. Accordingly the loss for the year have been understated and investments overstated by ` 141,17,10,801.

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

31

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. During the year under review, and since April 2014, no provisions have been made for such interest. Accordingly Interest for the year is understated resulting in total loss of the Company being understated by ` 641,10,48,308.(Refer Note 21 (a)).

5. BasisforDisclaimerofOpinionA. In respect of Trade Receivables a sum of ` 4,742,43,68,044 is outstanding from the overseas parties. The Sharjah Federal

Court where the cases have been filed, have in their order specified that the monies are payable. The Sharjah Federal Court had appointed three independent accounting / banking experts to conduct an enquiry into transactions between the Company and the defaulting customers. We have been informed that the finding of the report of the experts explicitly state that the goods were exported by the company to UAE customers. However the copy of the report has not been made available to us. Against the said orders, these parties have filed appeals with higher authorities. In view of these Court orders and pending legal proceedings, we are unable to comment on time frame of the realisability of the debts and any provision to be made for unrealisability in the carrying amounts of these balances and the consequential impact, on the financial statements. (Refer Notes Nos.12, 14 and 25 to the financial statements)

B. As mentioned in Note No. 1 regarding preparation of accounts on a Going Concern basis and the reasons stated therein and Note No.25 of the financial statements detailing the developments that have happened in the last 3 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.

6. DisclaimerofOpinion 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. EmphasisofMatter 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 AS-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. Refer note nos. 13 and 25(ii).

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, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanation given to us, 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 Rule 7 of the Companies (Accounts) Rules, 2014;


32

(e) On the basis of written representations received from the directors as on 31st March, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, 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; and

(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 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; and(iii) Amounts which were required to be transferred to the Investor Education and Protection fund were duly transferred to

the fund by the Company within the due dates.

For R. C. RESHAMWALA & CO. CHARTERED ACCOUNTANTS FRN 108832W

RAJNIKANT C. RESHAMWALAPlace : Mumbai PARTNERDate : 19th May, 2016 MEMB. NO. 005502


33

Annexure – A

Sr. No. Details of Litigations

1. Debt Recovery Tribunal, AhmedabadStandard Chartered Bank has filed Original Application No.304 of 2014 against the Company under section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of outstanding dues from the Company and the guarantee companies praying for an Order directing to disclose all movable, immovable properties other than mortgaged properties and restraining the Company from parting with possession of any movable and immovable properties and appointment of Receiver In the proceedings against Winsome, garnishee Notice has also been filed seeking an Order against the 13 entities to directly pay their dues to the consortium banks.

2 Debt Recovery Tribunal, MumbaiAxis 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.

3. 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 Customer have filed appeal and the matter is pending with The Sharjah Federal Court appellate authority or The Sharjah Federal Supreme court.

4 Bombay High Court Company has filed Defamation Suit Case No . S/512/2014 against Mr. Chaim Evan 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.

5 Bombay High Court Writ 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.

6 Bombay High Court Writ 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 (Winsome).

7 Bombay High CourtWrit Petition No. 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.

8 Labour Court - MumbaiReference (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.

9 Metropolitan Magistrate Court - MumbaiCriminal 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 Mumbai – Borivali.The case was filed charging that the company, Managing Director and Labour Commissioner being hand in glove with each other to forge documents to obtain license to employ contract labours and hence cheated the contract labourers.

10 Additional Commissioner of Customs (Bonds), BangaloreThe Additional Commissioner of Customs (Bonds), Bangalore has passed order against the Company and raised demand of `171,18,759/- including penalties/fines. The Company has filed appeal to the Commissioner of Customs (Appeal), Bangalore against the above order.


34

Annexure 1 referred to in paragraph 8.1 titled as “Report on Other Legal and Regulatory Requirements” of the Independent Auditors report to the members of Winsome Diamonds and Jewellery Limited for the year ended 31st March, 2016.(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As explained to us by the Management, the fixed assets were being physically verified by the management at each branch in accordance with a phased programme of verification. The said procedures were being followed in the past and were 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 branches where the operations have ceased / suspended, no verification has been done. Further, the management has stated that 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. 8 & 9.) Hence the question of recording any discrepancies between physical and book records being dealt with in the books of accounts has not been done.

(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 ` 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 and 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 and Chennai, the management has not carried out any physical verification of such inventory. Physical verification of inventory at other branches have also not been done by the management at regular intervals.

Since majority of the inventory is held in the joint custody of the consortium of banks and the company, and as physical verification was not carried out, the question of any material discrepancy and the same 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, 2016.

(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) In our opinion and according to the information and explanations given to us, the Company has not granted any loans or advances under section 185, nor 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, does 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 information and explanations given to us and the records of the company as examined by us, 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 :

Value Added Tax at Surat ` 2,31,878

Value Added Tax at Bangalore ` 250,145/- (Assessment Order for FY2007-08)

CST at Bangalore ` 262,963/- (Assessment Order for FY2009-10)

(b) According to the information and explanations given to us and the records of the company as examined by us, except for the amounts mentioned below, there are no disputed dues of Income-Tax, sales- tax, VAT, services tax, custom duty, excise duty and cess, which have not been deposited.


35

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

Forum where dispute is pending

Income Tax Act,1961 Income Tax 40,32,046/- A.Y 2010-11 CIT(A)Income Tax Act,1961 Income Tax 20,58,443/- A.Y 2012-13 CIT(A)Income Tax Act,1961 Income Tax 2,06,903/- A.Y 2013-14 CIT(A)Total demand 62,97,392/-Less: Refunds due, but yet to be received 4,02,71,798/-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.

(ix) The Company has not raised any monies by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanations given to us, 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 ` 4,169,62,59,490, 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 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 company has paid / provided the managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi company. Hence, the question of reporting under clause 3(xii) of the Order does not arise.


36

(xiii) The Company has entered into transactions with related parties in compliance with the provisions of sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the Financial Statements, as required under Accounting Standard 18 ‘Related Party Disclosures’, specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(xiv)The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. According, the provision of Clause 3(xiv) of the Order is not applicable to the company.

(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. According, the provision of Clause 3(xv) of the Order is not applicable to the company.

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



Annexure 2 referred to in Paragraph 8 (2)(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 for the year ended 31st March, 2016.Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013.We have audited the internal financial controls over financial reporting of WINSOME DIAMONDS AND JEWELLERY LIMITED (“the Company”) as of March 31, 2016 in conjunction with our audit of the standalone 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 the 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 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 in Note No. 1 to 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, 2016.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.




38

AUDITED BALANCE SHEET AS AT 31st MARCH, 2016Note Current Year

` Current Year

` Previous Year

`I. EQUITY AND LIABILITIES (1) Shareholders' Funds (a) Share Capital 2 1,064,709,820 1,064,709,820 (b) Reserves and Surplus 3 4,642,862,578 4,686,595,709

5,707,572,398 5,751,305,529 (2) Non-Current Liabilities (a) Deferred Tax Liabilities (Net) 4 52,290,791 52,290,791

52,290,791 52,290,791 (3) Current Liabilities (a) Trade Payables 5 678,885,180 692,740,323 (b) Other Current Liabilities 6 43,606,689,796 43,605,846,341 (c) Short Term Provision 7 37,350 -

44,285,612,326 44,298,586,664TOTAL 50,045,475,515 50,102,182,984

II. ASSETS (1) Non-Current Assets (a) Fixed Assets (i) Tangible Assets 8 332,364,906 388,516,454 (ii) In-Tangible Assets 9 2,011 4,705 (b) Non-Current Investments 10 1,416,729,554 1,416,729,554 (c) Long-term Loans and Advances 11 9,751,571 39,718,453 (d) Other Non-Current Assets 12 47,423,279,103 47,428,433,231

49,182,127,145 49,273,402,397 (2) Current Assets (a) Inventories 13 422,486,501 422,486,501 (b) Trade Receivables 14 1,088,941 4,022,509 (c) Cash and Cash Equivalents 15 163,192,834 163,984,304 (d) Short-Term Loans and Advances 16 276,580,094 238,287,273

863,348,370 828,780,587TOTAL 50,045,475,515 50,102,182,984

Summary of Significant Accounting Policies 1Notes on Financial Statements 2 to 33

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

For R. C. RESHAMWALA & CO.Chartered Accountants Harish R. Mehta Director(FRN 108832 W) DIN-05316274

Rajnikant C. Reshamwala Harshad R. Udani DirectorPartner DIN-07014853Membership No. 5502

Romin ShahCompany Secretary

Place : Mumbai Date : 19/05/2016


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AUDITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2016Particulars Note Current Year

` Previous Year

`REVENUE

I. Revenue from Operations 17 1,249,265 46,937,825

II. Other Non-Operating Income 18 24,004,801 16,884,223

III. Total Revenue (I+II) 25,254,066 63,822,048

IV. EXPENSES

Cost of Materials Consumed 19 - 43,454,774

Changes in Inventories of Finished goods, Stock-in-trade 19 - 3,996,007

Employee Benefits Expenses 20 4,403,018 14,261,116

Finance Costs 21 3,332,428 2,955,129

Depreciation and Amortization Expense 8 & 9 56,154,242 74,834,870

Other Expenses 22 14,467,879 47,074,486

Total Expenses 78,357,567 186,576,382

V. Profit before Tax (III-IV) (53,103,501) (122,754,334)

VI Tax Expense of continuing operations:Tax expenses releated to Prior Years (9,370,370) -

(9,370,370) -VII Profit After Tax (PAT) (V-VI) (43,733,131) (122,754,334)

VIII Earnings per Equity Share 23Basic & Diluted in Rupees (0.41) (1.15)







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CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2016Current Year

`Previous Year

`

Net Profit before Tax (53,103,501) (122,754,334)Adjustments for :Depreciation 56,154,242 74,834,870Interest Income (1,179,989) (1,321,295)Finance Cost 3,332,428 2,955,129(Profit)/Loss on Sale of Assets (Net) and Investment - 3,057,475Operating Profit before working capital changes 5,203,180 (43,228,155)Adjustments for :Trade and Other Receivables (30,882,382) 42,674,776Inventories - 29,424,734Trade Payable including Bank Loan recalled (12,974,338) (37,428,139)

(38,653,540) (8,556,785)Taxes paid 40,014,509 1,006,842Cash generated from operating activities 1,360,969 (7,549,943)

B. CASH FLOW FROM INVESTING ACTIVITIESSale of Fixed Assets - 711,112Interest Received 1,179,989 1,321,295

Net cash from investing activities 1,179,989 2,032,407

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Long Term borrowings - (566,915)Interest and Bank charges Paid (3,332,428) (2,955,129)

Net cash from financing activities (3,332,428) (3,522,044)

Net increase/(decrease) in cash and cash equivalent (A+B+C) (791,470) (9,039,580)Cash and Cash equivalent as at 1st April, 2015 (Opening Balance) 163,984,304 173,023,884Cash and Cash equivalent as at 31st March, 2016 (Closing Balance) 163,192,834 163,984,304







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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016.Note. 1 Summary of Significant Accounting Policies followed by the CompanyBasis of preparation of Financial Statements:These financial statements have been prepared on accrual basis, under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under section 129 and 133 and the other relevant provision of the Companies Act, 2013 (the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014.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.

1. System of Accounting and Preparation of Financial Statements:(a) All income and expenditure items are accounted on accrual basis.(b) Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in

the purchasing power of money.2. Use of Estimates: The preparation of financial statements are in conformity with generally accepted accounting principles which require estimates and

assumptions to be made by the management that affects the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Difference between actual results and estimates are recognized in the year in which the results are known/materialized.

3. Fixed Assets:(a) All fixed assets are valued at cost of acquisition, construction or manufacturing as the case may be, less depreciation.(b) Exchange differences relating to the acquisition of fixed assets are taken to the Statement of Profit and Loss.

4. Depreciation:(a) Depreciation is provided as per the “Written Down Value”based on life assigned to each assets in accordance with Schedule II

of The Companies Act 2013. Leasehold Land is amortised over the period of lease.(b) Depreciation on additions and on sale/disposal of fixed assets is computed pro-rata on day-to-day basis from the date of

purchase/put to use and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for

units shut down, no depreciation is charged.

5. Work in Progress:(a) The cost of fixed assets, acquisition/construction, installations of which are not completed are included under Capital Work-in-

Progress and the same are apportioned/transferred to respective fixed assets on installation/completion of the asset/project.(b) Expenses incurred to set up business premises/factory premises forming part of capital work-in-progress are capitalized under

the head Factory Premises.(c) Similarly, goods which are under production and cannot be termed as finished goods are treated as work-in-progress.

6. Investments:

(a) Current Investments are carried at lower of cost and quoted/fair value.


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(b) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature. Such diminutions in the value of Long Term Investments are taken through the Statement of Profit and Loss.

(c) Application monies for investment in shares are classified as an advance till the allotment of shares is completed.

7. Inventories: The Company has complied with AS-2 “Valuation of Inventories’’ issued by the Institute of Chartered Accountants of India, to the

extent practicable keeping in mind the peculiar nature of the industry.(a) Raw Materials are valued “At Cost”or“Net Realisable Value”,which ever 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.(b) 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 rawmaterials as in (a) above.(c) 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.

(d) 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.

(e) Goods procured for trading (Gold, Studded and Plain Jewellery and Diamonds) are valued “At Cost” or “Net Realisable Value”, whichever is lower.

(f) Stores and Spares are valued “At Cost”.(g) Closing stock of Goods at Bullion Trading Division are valued “At Cost” or “Net Realisable Value”, whichever is lower.

8. Foreign Exchange Transactions:(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction.

Exchange fluctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in the Statement of Profit and Loss.

(b) Monetary Assets and Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined are recognized in the Statement of Profit and Loss for the year.

(c) All foreign exchange derivative transactions are fair valued, wherever applicable, as at the year-end in consonance with (i) Accounting standards notified Under Section 211 of the Companies Act, 1956 (ii) Applicable guidelines issued by RBI and the Institute of Chartered Accountants of India in this regard (iii) Principle of Prudence which requires recognition of expected losses and non recognition of unrealized gains, wherever applicable, and (iv) Risk Management Policy relating to derivative transaction of the Company as approved by the Board with a clause which Allows using Cost Reduction Structures and relevant disclosures as prescribed by ICAI Press Release dated 02.12.2005 are made in the notes.

(d) The Company has adopted AS – 11 of the Institute of Chartered Accountants of India, in relation to its foreign exchange transactions including derivatives and options.(i) As per the Provisions of the AS -11 of the Institute of Chartered Accountants of India, the profit/loss on cancellation or

renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognised as income/expenses in the Statement of Profit and Loss for the year.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference, wherever applicable, is taken to the Statement of Profit and Loss.

(iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

9. Employees Retirement Benefits:(a) Defined Contribution Plans: The Company has Defined Contribution Plan for post employment benefit in the form of provident fund for eligible employees

which is administered by Regional Provident Fund Commissioner. Provident fund is classified as Defined Contribution Plan as the Company has no further obligation beyond making the contributions. The Company’s contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as and when incurred.


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(b) Defined Benefit Plans: The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity for eligible employees which are

administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defined Benefit Plan is provided on the basis of an actuarial valuation as carried out by LIC.The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefits are recognized as an expense as and when incurred.(d) The Company has made provision for leave encashment dues as on the last date of the year.

10. Taxation:(a) Provisions for taxation is made after considering various relief’s admissible under the provisions of the Income Tax Act, 1961.

(b) Disputed amounts of tax are considered in contingent liabilities.(c) The Company has implemented ̀ Accounting Standard 22’-“Accounting of Taxes on Income”, issued by the Institute of Chartered

Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profits and Tax Profits that originate in one period and are capable of reversal in one or more subsequent periods.

11. Borrowing Cost:

Borrowing Costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the period in which they are incurred.

12. Impairment of Fixed Assets: Considering AS-28-Impairment of Assets as specified by the Institute of Chartered Accountants of India, the Company at the end of

each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Statement of Profit and Loss in the year in which, an asset is identified as impaired, when the Carrying Rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting years is reversed if there is a upward change in the estimate of recoverable amount.

13. Provisions, Contingent Assets and Contingent Liabilities: Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past

events likely obligation with a high probability of an outflow of resources. Contingent Assets are not recognized nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.


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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2016

No. of Shares Current Year `

No. of Shares

Previous Year`

Note 2. SHARE CAPITAL’

(A) Authorised, Issued, Subscribed and Paid-up Share Capital and Par Value Per Share

AUTHORISED SHARE CAPITAL

Equity Shares of ` 10/- each 150,000,000 1,500,000,000 150,000,000 1,500,000,000

ISSUED SHARE CAPITAL


SUBSCRIBED & PAID-UP SHARE CAPITAL


Less : Calls unpaid by Shareholders other than directors 1,369,120 1,369,120

TOTAL 1,064,709,820 1,064,709,820

Current Year No. of Shares

Previous Year No. of Shares

(B) Reconciliation of number of Equity Shares outstanding at the beginning and at the end of the year

No. of Shares outstanding as at the beginning of the Year 106,607,894 106,607,894

Add :

- Shares allotted during the year as fully paid-up - -

106,607,894 106,607,894

The Company has only one class of equity shares having a par value of ` 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.

SHAREHOLDERS Current Year Previous Year

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

(C) Shares in the Company held by each shareholder holding more than 5 % shares

Passage To India Master Fund Limited 6,469,615 6.06% 10,181,818 9.55%

Prime India Investment Fund Limited 5,700,000 5.35% 5,700,000 5.35%

Kohinoor Diamonds Private Limited 14,138,996 13.26% 14,138,996 13.26%

TOTAL 26,308,611 24.67% 30,020,814 28.16%

The above share holding data is compiled on the basis of details available with the Company as on 31st December 2015 as the Share holding pattern as on 31st March 2016 is not available with the Company.


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Current Year `

Current Year `

Previous Year `

Note 3. RESERVES AND SURPLUS1) CAPITAL RESERVE

As per Balance Sheet 50,341,338 50,341,338

2) SECURITIES PREMIUM ACCOUNTAs per last Balance Sheet 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

4,718,825,619 4,718,825,619

3) GENERAL RESERVEAs per Balance Sheet 2,850,000,000 2,850,000,000

4) GENERAL RESERVE - FOREIGN EXCHANGE / METALPRICE FLUCTUATIONAs per Balance Sheet 550,000,000 550,000,000

5) SURPLUS/(DEFICIT) IN THE STATEMENT OF PROFIT & LOSS- As per last Balance Sheet (3,482,571,249) (3,354,255,469)- Less : Short fall of Depreciation consequent upon change - (5,561,445)in useful life as per Companies Act 2013- Add : Net Profit after Tax transferred fromStatement of Profit & Loss (43,733,131) (122,754,334)- Balance as at the close of the Year (3,526,304,380) (3,482,571,249)

TOTAL 4,642,862,578 4,686,595,709

Note 4 : DEFERRED TAX LIABILITIES (NET)Deferred Tax Liabilities- On account of Depreciation difference 52,290,791 52,290,791 Deferred Tax Liabilities (Net) 52,290,791 52,290,791

NOTES :

The Company has implemented `Accounting Standard 22’ - “Accounting of Taxes on Income”, issued by The Institute of Chartered Accountants of India, which is mandatory in nature.

The Book Profits and Tax Profits originate in one period and are capable of reversal in one or more subsequent periods/ years.

There is Deferred Tax Assets for the year ended 31st March, 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.


46

Current Year `

Previous Year `

Note 5. TRADE PAYABLES UNSECURED Trade Payables 678,885,180 692,740,323TOTAL 678,885,180 692,740,323

As stated in the Note no. 25, Export Receivables and Overseas Trade Payables had been restated based on exchange rate as at 31.03.2013. In view of persistent defaults by overseas customers in clearing outstanding dues, the same have been carried forward at the same rate (based on exchange rate as at 31.03.2013) as it is deemed expedient not to take cognizance of depreciation in rupee vis-à-vis US dollar on notional basis when outstanding amounts are expected to be realized over an uncertain period of time. Since the Company does not have any other cashflows to arrange for remittances to overseas trade creditors and other creditors and expects to defray these liabilities out of realisation of export receivables, the same also have not been restated based on exchange rate as at the date of balance sheet but have been carried forward based on exchange rate as at 31.03.2013. Had it been restated on the basis of exchange rate as at 31.03.2016, the amount payable would have been higher by ` 116,279,134/-. (Previous Year ` 79,676,830).

Current Year`

Current Year`

Previous Year `

Note 6. OTHER CURRENT LIABILITIES 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 4,334,892,861 4,337,500,878- Outstanding in respect of Fund Based credits availed ofupon inter-changeability from Non Fund Based limits 1,844,657,912 1,844,657,912

6,179,550,773 6,182,158,790

II DEVOLVED LETTER OF CREDITSDevolved Letters of Credit 19,723,665,198 19,723,665,198Overdrawn Current Accounts 15,784,481,795 15,784,481,795

35,508,146,993 35,508,146,993

III Overdue instalments of long term debt 8,561,724 8,561,724

IV Net Interest Provided as per note 21 1,574,397,341 1,574,397,341The Company had been sanctioned Regular Fund Based Working Capital Credit Limits (Export Packing Credit and Post Shipment Credit) of ` 375,00,00,000 (Previous Year ` 375,00,00,000) and Non-Fund Based Working Capital Credit Limits (Stand-By Letters of Credit and Bank Guarantees) of ` 3470,00,00,000 (Previous Year ` 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


47

Current Year`

Current Year`

Previous Year `

(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.

(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

B AMOUNTS PAYABLE TO RELATED PARTIESUnsecured - Short term Loan (Refer Note No.27) 332,462,161 326,365,427

C OTHER CURRENT LIABILITIESCurrent maturities of long term debt to Bank - 566,915Unpaid/Unclaimed dividends 2,663,219 4,900,610Sales Tax / VAT payable / Service Tax Payable 669,931 655,028Other payables 237,654 93,513TOTAL 43,606,689,796 43,605,846,341

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


48

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.

A5 The bank has not provided with information on crystalisation of a foreign currency loan. The Company continues to restate the foreign currency liabilties at year/period end till 31st March 2014. The Company has not restated its foreign currency liabilities for year ending 31st March 2016. Had it been restated on the basis of exchange rate as at 31.03.2016, the amount payable would have been higher by ` 51,922,363/-. (Previous Year ` 7,467,778/-).

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. 25 for legal cases filed by the Company against its defaulting overseas customers.

B As the Company had not declared any dividend for the FY 2015-2016 and FY 2014-2015 , 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, the Company transferred unclaimed dividend in respect of FY 2007-2008 amounting to ` 2,267,754/- (During the previous Year ` 2,168,537/- for FY 2006-2007) to Investor Education and Protection Fund.

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 ` 7,918,400/- and Interest ` 11,91,525/- due there on. No Interest is provided after 31/03/2014. The default is continuing as on the date of balance sheet.

E There were minor delays for few days during the year in repayment of instalments of Loan and Interest to ICICI Bank for vehicle loan availed of by the Company. As at the end of the year the loan has been fully repaid.

Note 7. SHORT TERM PROVISIONSCurrent Year

` Previous Year

`

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


49

Not

e 8.

FIX

ED A

SSET

S - T

AN

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LER

econ

cilia

tion

of th

e gr

oss

carr

ying

am

ount

s an

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t car

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g am

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begi

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ar 3

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arch

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16

Desc

riptio

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ross

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ount

Accu

mul

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n N

et c

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Amou

ntAs

at 1

st A

pril

2015

Sale

s/Sc

rapp

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Disp

osse

d O

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the

year

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t 31st

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pril

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Prov

ided

du

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the

year

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the

year

Char

ged

off a

gain

st

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t 31st

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201

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at 3

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Mar

ch 2

016

As a

t 31st

M

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201

5

(1)

(2)

(3)=

1-2

(4)

(5)

(6)

(7)

(8)=

4+5-

6-7

9=3-

810

= 1

-4`

``

``

``

``

`01

. Lan

d

Leas

ed 7

,260

,099

7,2

60,0

99 5

24,7

72 3

3,43

1 5

58,2

03 6

,701

,896

6,7

35,3

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. Bui

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Fact

ory

Prem

ises

171

,117

,290

171

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,290

106

,734

,768

5,7

11,7

23 1

12,4

46,4

91 5

8,67

0,79

9 6

4,38

2,52

2

Offi

ce P

rem

ises

147

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147

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61,

309,

213

4,2

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0,38

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2,42

0,64

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6,62

1,81

503

. Pla

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ipm

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d 5

55,4

05,2

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55,4

05,2

25 3

87,6

91,9

90 3

2,08

2,62

3 4

19,7

74,6

13 1

35,6

30,6

12 1

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. Fur

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45,

483,

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45,

483,

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38,

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7,89

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. Ele

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57,

763,

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57,

763,

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46,

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11,

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23,

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21,

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452

854

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07. A

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9,90

6 1

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6 5

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768

,633

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388

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,454

471

,757

,168


50

Note 9. FIXED ASSETS - INTANGIBLE

Gross carrying Amount Accumulated Depreciation Net carrying Amount

Description As at 1st April 2015

Sales/Scrapped/ Dispossed

Off during the year

As at 31st March 2016

As at 1st April 2015

Provided during the

year


Off during the year

Charged off against Retained Earning




(1) (2) (3)=1-2 (4) (5) (6) (7) (8)=4+5-6-7 9=3-8 12 = 1-4

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

Previous Year 5,683,217 5,642,980 40,237 4,454,325 14,964 4,433,757 - 35,532 4,705 1,228,892

GRAND TOTAL 1,157,190,464 - 1,157,190,464 768,669,305 56,154,242 - - 824,823,547 332,366,917 388,521,159

Previous Year 1,184,532,764 27,342,300 1,157,190,464 711,846,704 74,834,870 23,573,713 5,561,444 768,669,305 388,521,159 472,686,060

Notes :

1) Impairment of Fixed Assets :

a) Please refere note no. 12 in Accounting Policy.

b) The Company has taken into consideration the Provisions of Accounting Standard 28 - Impairment of Assets.

The Company does not have any assets, which would require impairment and provisions.

2) Of the total WDV of Fixed Assets, ` 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.

3) Assets in the Column Sold/Scrapped/Dispossed off above, includes Assets lying in the tenanted properties not recoverable due to vacation of such premises has been written off at WDV.

Similarly the assets also includes certain softwares /hardwares for business no longer in operation for eg. Commodity/Derivatives/bullion.

The total WDV of such assets above is ` Nil (Previous Year ` 3,122,190/-).

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.


51

Current Year `

Previous Year `

Note 10. NON-CURRENT INVESTMENTS(A) Other Investments(i) (i) In Equity of Associate Companies

Unquoted, fully paid up (at Cost)39,200,000 (Previous Period : 39,200,000) Equity Shares of ` 10 each of Forever

Precious Jewellery & Diamonds Ltd., fully paid-up1,411,710,802 1,411,710,802

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

1 1

(ii) In Equity of Other CompaniesUnquoted, fully paid up (at Cost) 17,500 (Previous Period : 17,500) Equity Shares of ` 100 each

of Peakok Jewellery Ltd., fully paid-up 5,012,750 5,012,750 576,250 (Previous Period : 576,250) Equity Shares of ` 10 each

of Carbon Accessories Ltd., fully paid-up 1 1 (iii) Investments in Government or Trust Securities

2 (Previous Period : 2) Indira Vikas Patra of ` 500 each 1,000 1,000 1 (Previous Period :1) National Savings Certificates of ` 5000 5,000 5,000

TOTAL 1,416,729,554 1,416,729,554

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.

A2 FPJDL has also initiated legal action against its defaulting overseas cutomers.B1 The Company has accounted for permanent diminution in the value of long term investments in group concern as above.

Note 11. LONG-TERM LOANS AND ADVANCES

Unsecured, Considered good

Security Deposits 6,397,659 5,720,402 Loans and Advances to Related Parties 11,000 11,000 Advance Income Tax /TDS (Net of Provision 3,342,912 33,987,051 for Taxation)TOTAL 9,751,571 39,718,453

Note 12. OTHER NON-CURRENT ASSETS Long Term Trade ReceivablesUnsecured, Considered good 47,423,279,103 47,428,433,231 TOTAL 47,423,279,103 47,428,433,231

(a) Please refer Note : 25(b) Export receivables had been restated based on exchange rate as at 31.03.2013. In view of persistent defaults by certain overseas

customers in clearing outstanding dues, the same have been carried forward at the same rate (based on exchange rate as at 31.03.2013) while drawing up accounts for the year under review as it is deemed expedient not to take cognizance of depreciation in rupee vis-à-vis US dollar on notional basis when outstanding amounts are expected to be realized over an uncertain period of time. Had it been restated on the basis of exchange rate as at 31.03.2016, the export receivables (including the receivables considered as Trade Receivable in Note No. 14) would have been higher by ` 10,504,534,719/-(Previous Year ` 7,237,384,562/-).


52

Current Year`

Previous Year `

Note 13. INVENTORIES(as certified by Management)(a) Raw Materials 26,084,565 26,084,565(b ) Finished Goods 392,679,844 392,679,844(c) Stores and spares 3,722,092 3,722,092TOTAL 422,486,501 422,486,501

NOTESa) 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 ` 393,500,031.

b) The Stock at Chennai SEZ and Cochin SEZ unit are also in joint custody with PNB since November 2013 at Company's premises.c) The Company has not carried out any valuation of Inventory during the year or as at 31st March, 2016 as per requirement of

AS -2. 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, 2016.

Note 14. TRADE RECEIVABLESOutstanding for more than six months from the datethey became due for payment(Unsecured, considered good) 1,088,941 804,383

Others(Unsecured, considered good) - 3,218,126

TOTAL 1,088,941 4,022,509

Note 15. CASH AND CASH EQUIVALENTS(A) Cash and cash equivalents(i) Balance with Banks (a) In Current Account 142,150,769 143,661,581 (b) In EEFC account 760,858 760,858(ii) Cash on Hand 59,891 154,129

142,971,518 144,576,568

(B) Other Bank Balance (EARMARKED)(i) Earmarked Bank balances Unpaid dividend bank account 3,412,280 5,649,669

(ii) Bank Fixed Deposits held as margin money or as security against: Bank Guarantees 16,809,036 13,758,067

20,221,316 19,407,736TOTAL 163,192,834 163,984,304


53

Current Year`

Previous Year `

Note 16. SHORT-TERM LOANS AND ADVANCESUnsecured, considered goodVAT Refund Receivables 746,125 2,973,691 Others 275,833,969 235,313,582 TOTAL 276,580,094 238,287,273

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 17. REVENUE FROM OPERATIONSales - 39,185,187

Other Operating IncomeNet gain / loss on foreign currency transactions /translation (other than adjusted as finance costs) 1,249,265 -Labour Charges received - 7,732,838Sale of Scrap - 19,800TOTAL 1,249,265 46,937,825Sales of Manufactured GoodsJewellery - Gold - 39,185,187TOTAL - 39,185,187

a) All export receivables were restated on the basis of exchange rate as at 31.03.2013. In view of persistent defaults by overseas customers in clearing outstanding dues, it is deemed expedient not to take cognisance of depreciation of rupee vis-à-vis dollar since last restatement, especially as the outstanding amounts are expected to be realised in phased manner over an uncertain period of time. Accordingly, export receivables have been carried forward on the basis of exchange rate as at 31.03.2013 and have not been restated on the bais of exchange rate as at the end of the accounting year i.e. 31.03.2016.

b) Likewise, Trade Payables in respect of Imports have been carried forward on the bais of exchange rate as at 31.03.2013 and have not been restated on the basis of exchange rate as at the end of the accounting year i.e. 31.03.2016 as the same are expected to be paid off out of realisations from export receivables.

c) Had the export receivables and import payables been restated on the basis of year end exchange rate as at 31.03.2016, Net gain / (loss) on Foreign Currency Transactions / Translations would have been higher by ` 3,230,547,853/- for the current year. (Previous year ` 2,152,907,396). The Total net gain till date would have been higher by ` 10,388,255,585/-

Note 18. OTHER NON OPERATING INCOME

Rentals from property 31,116 7,276,870Interest Received from Banks 1,179,989 1,321,295Interest Received from Others 158,831 -Profit on Sale of Assets - 64,715Service Tax Refund 18,896,856 -Sale of Electricity of Windmill 2,475,961 -Miscellaneous Income 1,262,048 8,221,343TOTAL 24,004,801 16,884,223

Prior Period IncomeRental from property 31,116 -


54

Current Year `

Previous Year `

Note 19. COST OF MATERIAL CONSUMEDOpening Stock 26,084,565 51,569,256Add : Purchases - 17,970,083

26,084,565 69,539,339Less : Closing Stock 26,084,565 26,084,565Cost of Material Consumed - 43,454,774Material Consumed Comprises ofGold - 43,454,774TOTAL - 43,454,774

CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK IN TRADE

Inventories at the beginning of the YearFinished Goods 392,679,844 396,675,851

392,679,844 396,675,851Inventories at the end of the YearFinished Goods 392,679,844 392,679,844

392,679,844 392,679,844Net (increase) / decrease - 3,996,007

Note 20. EMPLOYEE BENEFITS EXPENSESSalaries and Wages, Bonus, Gratuity and Allowances 3,697,452 13,384,398 Contribution to PF, ESIC and Gratuity Fund 2,421 307,862 Remuneration to whole time Directors 612,900 278,403 Staff Welfare Expenses 90,245 290,453 Total 4,403,018 14,261,116

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

The details as provided by the Insurance Company for the Year ended 31st March, 2016 are reproduced here below.

a) Defined Contribution Plan:

The Company has recognized ` Nil (` 273,627) towards contribution made to Employees Provident and family Pension Fund.

b) Defined Benefit Plan:

Sr. No.

Particulars As on 31st March, 2016

As on 31st March, 2015

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 52,082 672,637(b) Interest Cost 4,167 53,811(c) Current Service Cost 17,298 93,032(d) Benefits Paid - (2,910,711)(e) Actuarial (Gain)/Loss on obligation (825) 2,143,313(f) Present Value of Obligation as at 31st March, 2015 72,722 52,082


55

Sr. No.

Particulars As on 31st March, 2016

As on 31st March, 2015

3 Change in the Fair Value of Plan Assets(a) Fair Value of Plan Assets as at 1st April, 2014 165,818 2,987,120(b) Expected Return on Plan Assets 13,846 89,409(c) Employer’s Contributions - -(d) Benefits Paid - 2,910,711(e) Actuarial Gain/(Loss) on Plan Assets Nil Nil(f) Fair Value of Plan Assets as at 31st March, 2015 179,664 165,818

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 89,409(c) Contributions 13,846 -(d) Benefits Paid - (2,910,711)(e) Fair Value of Plan assets at the end of the Year 179,664 165,818(f) Funded Status 106,942 113,736

5 Actuarial Gain/Loss recognized(a) Actuarial (Gain) / Loss for the Year-Obligation 825 2,143,313(b) Actuarial (Gain) / Loss for the Year-Plan Assets Nil Nil(c) Total (Gain) / Loss for the Year – Obligation (825) (2,143,313)(d) Actuarial (Gain) / Loss recognized in the Year (825) (2,143,313)

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 52,082(b) Fair value of Plan Assets as at the end of the Year 179,664 165,818(c) Funded Status 106,942 113,736(d) Net Assets/(Liability ) recognized in Balance Sheet 106,942 113,736

7 Expenses recognized in Statement of Profit and Loss :(a) Current Service cost 17,298 93,032(b) Interest Cost 4,167 53,811(c) Expected Return on Plan Assets (13,846) (89,409)(d) Net Actuarial (Gain)/Loss recognized in the Year (825) 2,143,313(e) Expenses recognized in Statement of Profit & Loss 6,794 2,200,747

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

The expenses includes Expenses for the prior periodRemuneration to whole time Directors 12,900 278,403Salaries and Wages, Bonus, Gratuity and Allowances - 12,767

12,900 291,170


56

Current Year`

Previous Year `

Note 21. FINANCE COSTSInterest Expenses 926,361 392,656 Bank Charges and other Borrowing costs 2,406,067 2,562,473 Total 3,332,428 2,955,129

(a) The board of directors of the Company in its meeting held on 30th May 2015 have decided not to provide Interest for the year on its outstandings / borrowings including Term loan for windmill as all their accounts are classified as NPAs. Most of the Banks do not charge any interest on the Company’s borrowings as according to RBI prudential norms, interest is to be charged on NPA account on actual basis and not on accrual basis. The Interest Charged by some banks during the year which is not considered by the Company amounts to ` 472,780,490/- (Previous Year ` 2,146,853,979/-). Had it been Provided in its accounts @ 12.5 % of the outstanding amounts being the average rate for the rupee export finance, the Interest (Finance Cost) would have been higher by ` 6,411,048,308/- (Previous Year ̀ 5,658,678,505/-).This action has resulted in the loss for the year being lower by ̀ 6,411,048,308/- (Previous Year ` 5,658,678,505/-.)

(b) The Company has not restated its foreign currency liabilities for year ending 31st March 2016. Had it been restated on the basis of year end exchange rate as at 31.03.2016, the finance cost would have been higher by ` 44,454,586/-. (Previous Year ` 7,467,778).

(c) The interest expenses includes Expenses for the prior period amounting to ` 193,163/- (Previous Year ` 77,771/-).

Current Year `

Current Year `

Previous Year `

Note 22. OTHER EXPENSESMANUFACTURING EXPENSESLabour Charges /Assortment Charges - 15,123,509 Power and Fuel consumed 1,132,523 2,136,863 Stores, spares and packing materials consumed - 297,690 Repairs - Plant and Machinery - 114,718 Repairs - Factory Buildings 18,485 24,623 Repairs - Others 425,133 2,476,252 Lease Rent 213,707 684,154

1,789,848 20,857,809 Directors' Sitting fees 75,000 130,000 Insurance 25,726 572,399 Rates and Taxes (including wealth tax) 603,243 610,779 Freight & Forwarding Charges 1,200 13,219 Payments to statutory auditorsas auditors 85,875 500,000 for tax audit 50,000 150,000 for certification 155,762 54,944 reimbursement of expenses (out of pocket expenses) 13,443 152,946

305,080 857,890 Legal, Professional and Consultancy charges 7,168,105 12,933,587 Advertisement, Publicity and Sale Promotion 437,764 565,974 Loss on Disposal/Write off of Fixed Assets - 3,122,190 Miscellaneous Expenses 4,061,913 7,410,639 TOTAL 14,467,879 47,074,486


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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 ` 213,707/- (` 684,154).

Minimum future lease rentals payable are :(a) Payable within one Year 664,203 520,203 (b) Payable within one Year and five Years 2,080,812 2,080,812 (c) Payable after five Years - -

Minimum future lease rentals receivable in respect of assets given on operating lease in the form of Plant and Machinery after 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 Prior Period ExpensesThe expenses includes Expenses for the prior periodProfessional Fees 131,972 591,800 Lease Rent - 54,869 Rates and Taxes 22,977 10,322 Miscellaneous Expenses 4,392 - Repairs and Maintenance 88,863 - Payments to statutory auditors 180,000 -

428,204 656,991 3 Miscellaneous expenses includes:

Security Charges 1,309,957 1,888,516 Sundry Balance W/off 464,538 1,923,181 Housekeeping Expenses 249,588 358,752 Travelling Expenses 294,383 500,268 Printing & Stationary 483,615 312,316 Postage & Courier Charges 166,234 531,323 Office Expenses 118,727 188,985 Others 974,871 1,707,298 Total Miscellaneous Expenses 4,061,913 7,410,639


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Current Year `

Previous Year`

Note 23. Earnings per share:Profit computation for both Basic and Diluted earnings per share of `10 eachNet profit as per Statement of Profit and Loss (43,733,130) (122,754,334)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) 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 `) (0.41) (1.15)

Note 24. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)Contingent Liabilities (a) EPCG Benefits 35,414,184 35,414,184 (Custom Duties payable if Export obligation not met)(b ) Directors Remuneration - 12,900 TOTAL 35,414,184 35,427,084

The company does not envisage any liability in respect of income tax as net gain on account of restatement of export receivables and overseas trade payable (Refer Note 12b and 5) is likely to get offset by additional interest provision if company were to pay interest at applicable rates including penal interest on compounding basis (Refer Note 21).The Company has implemented the Provisions of Accounting Standard 29 – Provisions, Contingent Liabilities and Contingent Assets.The Company has recognised the Contingent liabilities and as such no provision is considered necessary.The Company does not have any Contingent Assets which require provision.Note 25.(i) The Company has witnessed unprecedented turn of events during last three years. The Company enjoyed credit facilities of

` 375 crores as Fund Based limits and ` 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.

The overseas customers had filed appeals against the orders of the Sharjah Federal Court. Of the 13 overseas customer’s cases, the Company has received favorable judgment in 2 cases and now those two parties’ matters are pending in appeal with the Federal Supreme Court. In 4 of the party cases, the Sharjah Federal Appellate Court has appointed experts to re-examine the matter and the experts have submitted their reports to the Authority in which case the Company’s comment thereon are yet to be submitted.


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In another 7 cases, the present directors have to be present at The Sharjah Federal Court Appellate Court for swearing on Oath in relation to the above legal cases.

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 Company has received notices from Debt Recovery Tribunals in Mumbai and Ahmedabad. The Company is persuing the matter. The Company has also received notices, under the SARFAESI Act, for attachment of its assets, at all locations, from Standard Chartered Bank the Lead Bank of the Consortium.

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.

(ii) 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 ` 39,35,00,031. The stock at Chennai SEZ and Cochin SEZ are also in the joint custody with PNB since November 2013 at Company’s premises respectively.

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.

(iii) 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 31st October 2015 and the new Company Secretary was appointed w.e.f. 25th April 2016.

Note 26. 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.Note 27. As per the provisions of Accounting Standard 18-“Related Party Transactions” issued by the Institute of Chartered Accountants of India, the details of Related Party Transactions based on disclosure certificate issued by the Directors, is as mentioned herein below:i) List of Related Parties : Particulars Associates Forever Precious Jewellery and Diamonds Limited Revah Corporation Limited Key Management Personnel Mr.Asish Narayan (Company Secretary)upto 31/10/15. Mr. Harshad Udani - Executive DirectorA. Transactions for the year ended 31.03.2016

Associates Key Management Personnel

Total

1. Loan Received 53,97,074(4,718,998)

Nil(Nil)

53,97,074(4,718,998)

2. Interest on Loan 777,400(Nil)

Nil(Nil)

777,400(Nil)

3. Loan amountReceived Back

Nil(388,574)

Nil(Nil)

Nil(388,574)

4. DirectorsRemuneration **

Nil(Nil)

6,12,900(1,300,767)

6,12,900(1,300,767)

5. Company Secretary’sRemuneration

Nil(Nil)

9,91,669(1,700,006)

9,91,669(1,700,006)

B. Outstanding as on 31st March 2016

1. Loans Payable 33,24,62,161(32,31,06,048)

Nil(Nil)

33,24,62,161 (32,31,06,048)

** Remuneration to director Mr. Harshad Udani ` 612,900/- is provided in the book and the payment is subject to approval of Consortium of Bank and Central Government.

Remuneration includes professional fees paid to Mr. Jaikumar Kapoor ` Nil (` 1,022,364/-)


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Note 28.The Engineering Division at Jodhpur has closed its operation. The carrying value of the total assets to be disposed off at Jodhpur is `10,054,219 (`10,063,880) as at the Balance Sheet date.Note 29. 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 ` in lacs PercentageImported -

(-)-

(-)Indigenous - -

(43,454,774) (100)- -

(43,454,774) (100)ii) Break-up of Stores and Spares

Consumed :Imported -

(-)-

(-)Indigenous - -

(297,690) (100)- -

(297,690) (100)Note 30. 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.Letters have been sent by the Auditors to all banks asking for independent confirmations of the amounts outstanding and due to the Banks. The said confirmations have not been received by the Auditors from some of the Banks.Note31. The provision for depreciation is adequate and not in excess of the amounts reasonably necessary.Note 32. 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 ` 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 33. 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

We have audited the accompanying consolidated financial statements of WINSOME DIAMONDS AND JEWELLERY LIMITED (“the Holding Company”) and its Associates which comprise of the Consolidated Balance Sheet as at 31st March 2016, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as “consolidated financial statements”).

2. Management’s Responsibility for the Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Holding Company including its associates in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules,2014.

The respective Board of Directors of the Holding Company and its associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Holding Company and for preventing and detecting frauds and other irregularities; the 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

3. Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the 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 thereunder.

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 consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated 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 accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditor in terms of their report referred to in sub paragraph (b) of 4 below is sufficient and appropriate to provide a basis for our qualified audit opinion on the consolidated financial statements.

4. Basis for Qualified Opinion

A. In accordance 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. Accordingly the exchange loss for the year is overstated thereby resulting in the total loss for the year being overstated/Profit for the year being understated by ` 318,60,93,267(net).Trade receivables are understated by ` 105,04,534,719, trade payables are understated by ` 11,62,79,134as on the balance sheet date and foreign currency loan is understated by `519,22,363 (Refer Note No. 5,6 (A5), 12(b),17(c) and 21(b)).

B. (i) In the consolidated financial statements the Company has long term investments in Forever Precious Diamonds and Jewellery Ltd. (Forever) amounting to ` 1,67,34,78,235 thereby resulting in it holding a 49 % stake in the equity of that company. As stated in para 8, the financials of Forever and its associates and subsidiaries have been consolidated in the enclosed financial statements. We have been provided with the consolidated financial statements of Forever for the year ended


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31st March 2016. We have observed that there are no business operations in Forever. Further the auditors of Forever have qualified the financial statements stating that the management of Forever has not provided for gain on revaluation of monetary assets as per AS – 11 (Standard on The Effects of Changes in Foreign Exchange Rates), amounting to ` 138,29,46,447(net) for the year, understating of outstanding trade receivable of ̀ 4,68,94,23,930/-, understating of trade payables and foreign currency loans of ` 23,64,70,061/- both as on the balance sheet date and non provision of interest on bank loans of ` 231,06,57,925/-for the year. The auditors have also qualified the non provision of unrealisability of Trade Receivable and Other Term Loans amounting to ` 21,55,59,56,688, non provision for diminution in investment in subsidiary and non valuation of closing stock as on the year end. The auditors have further termed the company as a non-going concern. The Management while consolidating the profits of Forever has not considered such qualification of the auditors. In the view of the management, the qualifications of the auditor would have no impact on the reserves consolidated and accordingly no provision for diminution in value of investments as per the requirements of Accounting Standard -13 (Accounting for Investment) would be required. In our view the management is required to consider such qualifications and consolidate the share of the company in the reserves to the extent of the investments held in Forever. Accordingly the loss for the year have been understated and investments overstated by ` 1,67,34,78,235/-.

(ii) Further the Auditor of Forever 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 state of affairs of the Group and its associate entities as at 31st March, 2016, and their consolidated loss and their consolidated cash flows for the year ended on that date. As we neither audited nor received the audited financial statement of wholly owned subsidiary Forever Jewellery FZE, in UAE.

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. During the year under review, and since April 2014,no provisions have been made for such interest. Accordingly Interest for the year is understated resulting in total loss of the Company being understated by ` 641,10,48,308.(Refer Note 21 (a)).

5. BasisforDisclaimerofOpinionA. In respect of Trade Receivables a sum of ` 4,742,43,68,044is outstanding from the overseas parties. However the Sharjah Federal

Court where the cases have been filed, have in their order specified that the monies are payable. The Sharjah Federal Court had appointed three independent accounting / banking experts to conduct an enquiry into transactions between the Company and the defaulting customers. We have been informed that the finding of the report of the experts explicitly state that the goods were exported by the company to UAE customers. However the copy of the report has not been made available to us. Against the said orders, these parties have filed appeals with higher authorities. In view of these Court orders pending legal proceedings, we are unable to comment on time frame of the realisability of the debts and any provision to be made for unrealisability in the carrying amounts of these balances and the consequential impact, on the financial statements. (Refer Note 12, 14 and Note 25 to the financial statements)

B. As mentioned in Note No 1 regarding preparation of accounts on a Going Concern basis and the reasons stated therein and Note No.25 of the financial statements detailing the developments that have happened in the last 3 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.

6. DisclaimerofOpinion 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. EmphasisofMatter 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 AS-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. Refer note no.13 and 25(ii).


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8. Other Matters The Consolidated Financial Statement also include the Associate Companies’ share of net profit of ` 8,12,943 for the year ended

31st March, 2016 and the Associate Companies’ accumulated profits of ` 26,09,54,490 till 31st March, 2016 are considered in the Consolidated Financial Statement in respect of Forever Precious Jewellery & Diamonds Ltd. In case of Revah Corporation Ltd., the associate company, the accumulated loss being in excess of the Investment in the said associate, the investment therein has become nil. The above two associate companies’ financial statement have not been audited by us. These audited statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statement, in so far as it relates to the amounts and disclosures included in respect of these associates and our report in term of sub-section (3) & (11) of Section 143 of the Act, in so far as it relates to the aforesaid associates, is based solely on the reports of the other auditors. The other auditor has qualified his report stating that the Consolidated Financial Statements do not give the information required by the Act and does not give a true and fair view in conformity with the accounting principles as the auditor have neither audited nor received the audited financial statement of the wholly owned subsidiary of Forever viz. Forever Jewellery FZE, in UAE.

Our opinion on the Consolidated Financial Statements and our Report on Other Legal and Regulatory Requirements below is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements certified by the Management.

9. Report on Other Legal and Regulatory Requirements 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 Group so far as appears from our examination of those books and the reports of the other auditors;

(c) The Consolidated Balance Sheet, Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements.

(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 Rule 7 of the Companies(Accounts) Rules,2014.

(e) On the basis of written representations received from the directors as on 31st March, 2016, and taken on record by the Board of Directors of the Holding Company and its associates, none of the directors is disqualified as on 31st March, 2016, 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 1.

(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 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) Amounts which were required to be transferred to the Investor Education and Protection fund were duly transferred to the

fund by the Company within the due dates.

For R.C.RESHAMWALA & CO. CHARTERED ACCOUNTANTS

FRN 108832W

RAJNIKANTC. RESHAMWALA PARTNER Place : Mumbai MEMB. NO. 005502Date : 19th May, 2016


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Sr. No. Details of Litigations

1. Debt Recovery Tribunal, AhmedabadStandard Chartered Bank has filed Original Application No.304 of 2014 against the Company under section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of outstanding dues from the Company and the guarantee companies praying for an Order directing to disclose all movable, immovable properties other than mortgaged properties and restraining the Company from parting with possession of any movable and immovable properties and appointment of Receiver In the proceedings against Winsome, garnishee Notice has also been filed seeking an Order against the 13 entities to directly pay their dues to the consortium banks.

2 Debt Recovery Tribunal, MumbaiAxis 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.

3. 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 Customer have filed appeal and the matter is pending with The Sharjah Federal Court appellate authority or The Sharjah Federal Supreme court.

4 Bombay High Court Company has filed Defamation Suit Case No . S/512/2014 against Mr. Chaim Evan 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.

5 Bombay High Court Writ 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.

6 Bombay High Court Writ 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 (Winsome).

7 Bombay High CourtWrit Petition No. 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.

8 Labour Court - MumbaiReference (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.

9 Metropolitan Magistrate Court - MumbaiCriminal 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 Mumbai – Borivali.The case was filed charging that the company, Managing Director and Labour Commissioner being hand in glove with each other to forge documents to obtain license to employ contract labours and hence cheated the contract labourers.

10 Additional Commissioner of Customs (Bonds), BangaloreThe Additional Commissioner of Customs (Bonds), Bangalore has passed order against the Company and raised demand of `171,18,759/- including penalties/fines. The Company has filed appeal to the Commissioner of Customs (Appeal), Bangalore against the above order.


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Details of Pending Litigations in Associate Companies.Details of Litigations1 Debt Recovery Tribunal, AhmedabadPunjab National Bank has filed Original Application No. 304 of 2014 against the Holding Company under section 19(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 for recovery of outstanding dues from the Holding Company and the guarantee companies praying for an Order directing to disclose all movable, immovable properties other than mortgaged properties and restraining the holding Company from parting with possession of any movable and immovable properties and appointment of Receiver.In the proceedings against the holding Company, Garnishee Notice has also been filed seeking an Order against the 13 entities to directly pay their dues to the consortium banks.2 Sharjah Federal Court, SharjahThe holding company has filed legal suit against its defaulting overseas customers for non-payment of its export bills at Sharjah Federal Court, Sharjah. The holding Company has received order in all the 13 cases. The court has confirmed the debts payable to the holding company and ordered the overseas customer to pay along with interest @ 5% p.a.The overseas customer has filled appeal against the orders of Sharjah Federal Court. Out of the 13 overseas customer's cases, the holding company has received favourable0 judgement in 3 cases and now those 3 parties matters are pending with Federal Supreme Court. In 5 party's case appellate authority has appointed expert to re- examine the matter and the experts have submitted reports to the Authority in which case holding Company's comment thereon is yet to be submitted. In another 5 cases, the present director has to be present at The Sharjah Federal Court Appellate authority in connection with the swearing in the court on 17/05/2016.


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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, 2016.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013.

1. In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2016, we have audited the internal financial controls over financial reporting of WINSOME DIAMONDS AND JEWELLERY LIMITED (“the Company”) and its Associate Companies, which are companies incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of Holding company and Associate Companies, which are companies incorporated in India, are 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 the 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’ Responsibility

Our 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 financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the associate company, which is company incorporated in India, in terms of their reports referred to in the Other Matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A 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 Reporting

Because 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


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Opinion

The system of internal financial controls over financial reporting with regards to the company except to the extent mentioned in Note No. 1 to 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, 2016.

We have considered the disclaimer reported above in determining the nature timing and extent of audit test applied in our audit of the consolidated financial statement of the company and the disclaimer has affected our opinion on the financial statements of the consolidated company and we have issued a qualified and disclaimer of opinion on the consolidated financial statements.

Other Matters

Our aforesaid report under section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting in so as it relates to an associate company, which is a company incorporated on India, is based on the corresponding report of the auditors of such company incorporated in India.

For R.C.RESHAMWALA & CO. CHARTERED ACCOUNTANTS

FRN 108832W

RAJNIKANTC. RESHAMWALA PARTNER Place : Mumbai MEMB. NO. 005502Date : 19th May,2016


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AUDITED CONSOLIDATED BALANCE SHEET AS AT 31st MARCH, 2016Note Current Year Current Year

` `I. EQUITY AND LIABILITIES

(1) Shareholders' Funds(a) Share Capital 2 1,064,709,820(b) Reserves and Surplus 3 4,904,630,009

5,969,339,829(2) Non-Current Liabilities

(a) Deferred Tax Liabilities (Net) 4 52,290,791(3) Current Liabilities

(a) Trade Payables 5 678,885,180(b) Other Current Liabilities 6 43,606,689,796(c) Short Term Provision 7 37,350

44,285,612,326TOTAL 50,307,242,946

II. ASSETS(1) Non-Current Assets

(a) Fixed Assets(i) Tangible Assets 8 332,364,906(ii) Intangible Assets 9 2,011

(b) Non-Current Investments 10 1,678,496,986(c) Long-term Loans and Advances 11 9,751,571(d) Other Non-Current Assets 12 47,423,279,103

49,443,894,576(2) Current Assets

(a) Inventories 13 422,486,501(b) Trade Receivables 14 1,088,941(c) Cash and Cash Equivalents 15 163,192,834(d) Short-Term Loans and Advances 16 276,580,094

863,348,370TOTAL 50,307,242,946

Summary of Significant Accounting Policies 1Notes on Financial Statements 2 to 34





Place : MumbaiDate : 19/05/2016


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AUDITED CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2016Particulars Note Current Year

`

REVENUE

I. Revenue from Operations 17 1,249,265

II. Other Non-Operating Income 18 24,004,801

III. Total Revenue (I+II) 25,254,066

IV. EXPENSES

Cost of Materials Consumed 19 -

Changes in Inventories of Finished goods, Stock-in-trade 19 -

Employee Benefits Expenses 20 4,403,018

Finance Costs 21 3,332,428

Depreciation and Amortization Expense 8 & 9 56,154,242

Other Expenses 22 14,467,879

Total Expenses 78,357,567

V. Profit before Tax (III-IV) (53,103,501)

VI Tax Expense of continuing operations:

Tax expenses releated to Prior Years (9,370,371)

(9,370,371)

VII Profit After Tax (PAT) (V-VI) (43,733,130)

VIII Share of Profit /(Loss) of Associates (Net) 812,943

IX Group Profit / (Loss) available for Appropriation (42,920,187)

VIII Earnings per Equity Share 24

Basic & Diluted in Rupees (0.40)







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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2016Current Year

`

A. CASHFLOWFROMOPERATINGACTIVITIESNet Profit before Tax (53,103,501)Adjustmentsfor:Depreciation 56,154,242Interest Income (1,179,989)Finance Cost 3,332,428(Profit)/Loss on Sale of Assets (Net) and Investment -Operating Profit before working capital changes 5,203,180Adjustmentsfor:Trade and Other Receivables (30,882,382)Inventories -Trade Payable including Bank Loan recalled (12,974,338)

(38,653,540)Taxes paid 40,014,509Cash generated from operating activities 1,360,969

B. CASHFLOWFROMINVESTINGACTIVITIESSale of Fixed Assets -Interest Received 1,179,989Net cash from investing activities 1,179,989

C. CASHFLOWFROMFINANCINGACTIVITIESProceeds from Long Term borrowings -Interest and Bank charges Paid (3,332,428)Net cash from financing activities (3,332,428)Net increase/(decrease) in cash and cash equivalent (A+B+C) (791,470)Cash and Cash equivalent as at 1st April, 2015 (Opening Balance) 163,984,304Cash and Cash equivalent as at 31st March, 2016 (Closing Balance) 163,192,834







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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016.Note. 1 Summary of Significant Accounting Policies followed by the Company

Basis of preparation of Consolidated Financial Statements:

These consolidated financial statements have been prepared on accrual basis, under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standards notified under section 129 and 133 and the other relevant provision of the Companies Act, 2013 (the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014.

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 through 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.

1. System of Accounting and Preparation of Consolidated Financial Statements:

a) The consolidated financial statements have been prepared in accordance with generally accepted accounting principles and complying with the Accounting Standard (AS-21) – Consolidated Financial Statements and (AS-23) – Accounting for Investment in Associates in Consolidated Financial Statements issued by the Institute of Chartered Accountants of India.

b) All income and expenditure items are accounted on accrual basis.

c) Financial statements are based on historical costs. These costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

2. Principles of Consolidation:

a) The consolidated financial statements comprise the financial statement of Winsome Diamonds & Jewellery Limited (‘The Company’) and it’s Associates in India are Forever Precious Jewellery & Diamonds Limited and Revah Corporation Limited.

b) Investment in associate companies is accounted as per Accounting Standard (AS)23 “Accounting for Investments in Associates in Consolidated Financial Statements’’ issued by the Institute of Chartered Accountants of India.

3. Reporting Dates of Subsidiaries/Associates for Consolidation:

For the purpose of preparing these statements, the financials of ‘The Company’ and its associates Forever Precious Jewellery and Diamonds Limited and Revah Corporation Limited for the year ended 31st March, 2016 are considered.

4. Use of Estimates:

The preparation of financial statements are in conformity with generally accepted accounting principles which require estimates and assumptions to be made by the management that affects the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting year. Difference between actual results and estimates are recognized in the year in which the results are known /materialized.

5. Fixed Assets:

(a) All fixed assets are valued at cost of acquisition, construction or manufacturing as the case may be, less depreciation.

(b) Exchange differences relating to the acquisition of fixed assets are taken to the Statement of Profit and Loss.

6. Depreciation:

(a) Depreciation is provided as per the “Written Down Value” based on life assigned to each assets in accordance with Schedule II of The Companies Act 2013. Leasehold Land is amortised over the period of lease.

(b) Depreciation on additions and on sale/disposal of fixed assets is computed pro-rata on day-to-day basis from the date of purchase/put to use and up to the date of sale.

(c) Depreciation on new unit is taken from the date of commissioning of the unit.


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(d) Depreciation is also considered on those assets (idle assets) which were not used for whole or part of the year. However for units shut down, no depreciation is charged.

7. Work in Progress:

(a) The cost of fixed assets, acquisition/construction, installations of which are not completed are included under Capital Work-in-Progress and the same are apportioned/transferred to respective fixed assets on installation/completion of the asset/project.

(b) Expenses incurred to set up business premises/factory premises forming part of capital work-in-progress are capitalized under the head Factory Premises.

(c) Similarly, goods which are under production and cannot be termed as finished goods are treated as work-in-progress.

8. Investments:

(a) Current Investments are carried at lower of cost and quoted/fair value.

(b) Long term Investments are stated at cost of acquisition. Provision for diminution in the value of long term investments is made if such diminution is considered other than temporary in nature. Such diminutions in the value of Long Term Investments are taken through the Statement of Profit and Loss.

(c) Application monies for investment in shares are classified as an advance till the allotment of shares is completed.

9. Inventories:

The Company has complied with AS-2 “Valuation of Inventories’’ issued by the Institute of Chartered Accountants of India, to the extent practicable keeping in mind the peculiar nature of the industry.

(a) 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.

(b) 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 (a) above.

(c) 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.

(d) 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.

(e) Goods procured for trading (Gold, Studded and Plain Jewellery and Diamonds) are valued “At Cost” or “Net Realisable Value”, whichever is lower.

(f) Stores and Spares are valued “At Cost”.

(g) Closing stock of Goods at Bullion Trading Division are valued “At Cost” or “Net Realisable Value”, whichever is lower.

10. Foreign Exchange Transactions:

(a) Transactions in foreign currency are accounted at the exchange rate/average rate prevailing on the date of transaction. Exchange fluctuations between the transaction date and the settlement date in respect of revenue transactions are recognized in the Statement of Profit and Loss.

(b) Monetary Assets and Liabilities denominated in Foreign Currency are translated at year end exchange rates and the Profit/Loss so determined are recognized in the Statement of Profit and Loss for the year.

(c) All foreign exchange derivative transactions are fair valued, wherever applicable, as at the year-end in consonance with (i) Accounting standards notified Under Section 211 of the Companies Act, 1956 (ii) Applicable guidelines issued by RBI and the Institute of Chartered Accountants of India in this regard (iii) Principle of Prudence which requires recognition of expected losses and non recognition of unrealized gains, wherever applicable, and (iv) Risk Management Policy relating to derivative transaction of the Company as approved by the Board with a clause which Allows using Cost Reduction Structures and relevant disclosures as prescribed by ICAI Press Release dated 02.12.2005 are made in the notes.

(d) The Company has adopted AS – 11 of the Institute of Chartered Accountants of India, in relation to its foreign exchange transactions including derivatives and options.


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(i) As per the Provisions of the AS - 11 of the Institute of Chartered Accountants of India, the profit/loss on cancellation or renewal of derivative instruments such as forward contract and option contract undertaken to hedge exchange fluctuation/price risks are recognised as income/expenses in the Statement of Profit and Loss for the year.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference, wherever applicable, is taken to the Statement of Profit and Loss.

(iii) Premium or discount at the inception of forward exchange contract is amortized as expenses or income over the life of contract.

11. Employees Retirement Benefits:

(a) Defined Contribution Plans:

The Company has Defined Contribution Plan for post employment benefit in the form of provident fund for eligible employees which are administered by Regional Provident Fund Commissioner. Provident fund is classified as Defined Contribution Plan as the Company has no further obligation beyond making the contributions. The Company’s contributions to Defined Contribution Plans are charged to the Statement of Profit and Loss as and when incurred.

(b) Defined Benefit Plans:

The Company has Defined Benefit Plan for post employment benefit in the form of Gratuity for eligible employees which are administered through a Group Gratuity Policy with Life Insurance Corporation of India (LIC). The liability for the above Defined Benefit Plan is provided on the basis of an actuarial valuation as carried out by LIC. The actuarial method used for measuring the liability is the Projected Unit Credit Method.

(c) Termination benefits are recognized as an expense as and when incurred.

(d) The Company has made provision for leave encashment dues as on the last date of the year.

12. Taxation:

(a) Provisions for taxation is made after considering various relief’s admissible under the provisions of the Income Tax Act, 1961.

(b) Disputed amounts of tax are considered in contingent liabilities.

(c) The Company has implemented ̀ Accounting Standard 22’-“Accounting of Taxes on Income”, issued by the Institute of Chartered Accountants of India, which is mandatory in nature. The Company has recognized Deferred Taxes which result from the timing difference between the Book Profits and Tax Profits that originate in one period and are capable of reversal in one or more subsequent periods.

13. Borrowing Cost:

Borrowing Costs that are attributable to the acquisition/construction of fixed assets are capitalized as part of the cost of the respective assets. Other borrowing costs are recognized as expenses in the period in which they are incurred.

14. Impairment of Fixed Assets:

Considering AS-28-Impairment of Assets as specified by the Institute of Chartered Accountants of India, the Company at the end of each year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the Statement of Profit and Loss in the year in which, an asset is identified as impaired, when the Carrying Rate of the asset exceeds its recoverable value. The impairment loss booked in prior accounting years is reversed if there is a upward change in the estimate of recoverable amount.

15. Provisions, Contingent Assets and Contingent Liabilities:

Provisions involving substantial degree of estimation in quantum are recognized when, there is and present, as a result of past events likely obligation with a high probability of an outflow of resources. Contingent Assets are not recognized nor disclosed in the financial statements. Contingent Liabilities, if material, are disclosed in the notes to the accounts.


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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016

No. of Shares Current Year `

Note 2. SHARE CAPITAL(A) Authorised, Issued, Subscribed and Paid-up Share Capital and Par Value Per ShareAUTHORISED SHARE CAPITALEquity Shares of ` 10/- each 150,000,000 1,500,000,000

ISSUED SHARE CAPITALEquity Shares of ` 10/- each 106,607,894 1,066,078,940

SUBSCRIBED & PAID-UP SHARE CAPITALEquity Shares of ` 10/- each 106,607,894 1,066,078,940

Less : Calls unpaid by Shareholders other than directors 1,369,120TOTAL 1,064,709,820

Current Year No. of Shares

(B) Reconciliation of number of Equity Shares outstanding at the beginning and at the end of the year No. of Shares outstanding as at the beginning of the Year 106,607,894 Add : - Shares allotted during the year as fully paid-up -

106,607,894

The Company has only one class of equity shares having a par value of ` 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.

SHAREHOLDERS Current Year No. of Shares % of Holding

(C) Shares in the Company held by each shareholder holding more than 5 % sharesPassage To India Master Fund Limited 6,469,615 6.06%Prime India Investment Fund Limited 5,700,000 5.35%Kohinoor Diamonds Private Limited 14,138,996 13.26%TOTAL 26,308,611 24.67%

The above share holding data is compiled on the basis of details available with the Company as on 31st December 2015 as the Share holding pattern as on 31st March 2016 is not available with the Company.


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Current Year ` `

Note 3. RESERVES AND SURPLUS1) CAPITAL RESERVE

As per Balance Sheet 50,341,3382) SECURITIES PREMIUM ACCOUNT

As per last Balance Sheet 4,724,538,450 Less : Allotment / Call Money in Arrears other than Directors - As per Last Balance Sheet 5,712,831

4,718,825,6193) GENERAL RESERVE

As per Balance Sheet 2,850,000,0004) GENERAL RESERVE - FOREIGN EXCHANGE / METAL

PRICE FLUCTUATION As per Balance Sheet 550,000,000

5) SURPLUS/(DEFICIT) IN THE STATEMENT OF PROFIT & LOSS - As per last Balance Sheet (3,482,571,249) - Less : Short fall of Depreciation consequent upon change - in useful life as per Companies Act 2013 - Add: Share of Profit /(Loss) of Associates of earlier years 260,954,489 - Add : Net Profit after Tax transferred from Statement of Profit & Loss (42,920,187) - Balance as at the close of the Year (3,264,536,948) TOTAL 4,904,630,009

Note 4. DEFERRED TAX LIABILITIES (NET)Deferred Tax Liabilities - On account of Depreciation difference 52,290,791Deferred Tax Liabilities (Net) 52,290,791NOTES :The Company has implemented `Accounting Standard 22’ - “Accounting of Taxes on Income”, issued by The Institute of Chartered Accountants of India, which is mandatory in nature.The Book Profits and Tax Profits originate in one period and are capable of reversal in one or more subsequent periods/ years.There is Deferred Tax Assets for the year ended 31st March 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.

Note 5. TRADE PAYABLESUNSECUREDTrade Payables 678,885,180Total 678,885,180As stated in the Note no. 25, Export Receivables and Overseas Trade Payables had been restated based on exchange rate as at 31.03.2013. In view of persistent defaults by overseas customers in clearing outstanding dues, the same have been carried forward at the same rate (based on exchange rate as at 31.03.2013) as it is deemed expedient not to take cognizance of depreciation in rupee vis-à-vis US dollar on notional basis when outstanding amounts are expected to be realized over an uncertain period of time. Since the Company does not have any other cashflows to arrange for remittances to overseas trade creditors and other creditors and expects to defray these liabilities out of realisation of export receivables, the same also have not been restated based on exchange rate as at the date of balance sheet but have been carried forward based on exchange rate as at 31.03.2013. Had it been restated on the basis of exchange rate as at 31.03.2016, the amount payable would have been higher by `116,279,134/-.


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`

Current Year `

Note 6. OTHER CURRENT LIABILITIES

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 CRYSTALISED

EXPORT PACKING CREDIT & POST SHIPMENT CREDIT

- Outstanding against Regular and Ad-hoc Fund Based limits 4,334,892,861

- Outstanding in respect of Fund Based credits availed of

upon inter-changeability from Non Fund Based limits 1,844,657,912

6,179,550,773

II DEVOLVED LETTER OF CREDITS

Devolved Letters of Credit 19,723,665,198

Overdrawn Current Accounts 15,784,481,795

35,508,146,993

III Overdue installments of long term debt 8,561,724

IV Net Interest Provided as per note 21 1,574,397,341

The Company had been sanctioned Regular Fund Based Working Capital Credit Limits (Export Packing Credit and Post Shipment Credit) of ` 375,00,00,000 and Non-Fund Based Working Capital Credit Limits (Stand-By Letters of Credit and Bank Guarantees) of ` 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.


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`

Current Year `

(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

B AMOUNTS PAYABLE TO RELATED PARTIES

Unsecured - Short term Loan (Refer Note No.27) 332,462,161

C OTHER CURRENT LIABILITIES

Current maturities of long term debt to Bank -

Unpaid/Unclaimed dividends 2,663,219

Sales Tax / VAT payable / Service Tax Payable 669,931

Other payables 237,654

TOTAL 43,606,689,796

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 exant 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.


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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 development 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.

A5 The bank has not provided with information on crystalisation of a foreign currency loan. The Company continues to restate the foreign currency liabilties at year/period end till 31st March 2014. The Company has not restated its foreign currency liabilities for year ending 31st March, 2016. Had it been restated on the basis of exchange rate as at 31.03.2016, the amount payable would have been higher by ` 51,922,363/-.

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. 25 for legal cases filed by the Company against its defaulting overseas customers.

B As the Company had not declared any dividend for the FY 2015-2016 and FY 2014-2015 , 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, the Company transferred unclaimed dividend in respect of FY 2007-2008 amounting to ` 2,267,754/- to Investor Education and Protection Fund.

D The Overdue installments 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 ` 7,918,400/- and Interest ` 11,91,525/- due there on. No Interest is provided after 31/03/2014. The default is continuing as on the date of balance sheet.

E There were minor delays for few days during the year in repayment of installments of Loan and Interest to ICICI Bank for vehicle loan availed of by the Company. As at the end of the year the loan has been fully repaid.

Current Year `

Note 7. SHORT TERM PROVISIONSProvision for Employee Benefits 37,350 Total 37,350


79

Not

e 8.

FIX

ED A

SSET

S - T

AN

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LE

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n of

the

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and

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e be

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ch, 2

016

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et c

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(1)

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810

= 1

-4

``

``

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``

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01. L

and

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ased

7,2

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99 7

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524

,772

33,

431

558

,203

6,7

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96 6

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02. B

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ings

Fa

ctor

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71,1

17,2

90 1

71,1

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58,

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799

64,

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82,

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86,

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815

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7,76

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1,65

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0,97

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332

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388

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80

Note 9. FIXED ASSETS - INTANGIBLE

Gross carrying Amount Accumulated Depreciation Net carrying AmountDescription As at 1st April

2015Sales/

Scrapped/ Dispossed

Off during the year


As at 1st April 2015

Provided during the

year


Off during the year

Charged off against Retained Earning




(1) (2) (3)=1-2 (4) (5) (6) (7) (8)=4+5-6-7 9=3-8 12 = 1-41. 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 4,705Previous Year 5,683,217 5,642,980 40,237 4,454,325 14,964 4,433,757 - 35,532 4,705 1,228,892GRAND TOTAL 1,157,190,464 - 1,157,190,464 768,669,305 56,154,242 - - 824,823,547 332,366,917 388,521,159

Notes :1) Impairment of Fixed Assets :

a) Please refere note no. 14 in Accounting Policy.b) The Company has taken into consideration the Provisions of Accounting Standard 28 - Impairment of Assets. The Company does not have any assets, which would require impairment and provisions.

2) Of the total WDV of Fixed Assets, ` 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.3) Assets in the Column Sold/Scrapped/Dispossed off above, includes Assets lying in the tenanted properties not recoverable due to

vacation of such premises has been written off at WDV. Similarly the assets also includes certain softwares /hardwares for business no longer in operation for eg. Commodity/Derivatives/

bullion. The total WDV of such assets above is ` Nil (Previous Year ` 3,122,190/-).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.

Current Year`

Note 10. NON-CURRENT INVESTMENTS(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 ̀ 10 each of Forever Precious Jewellery & Diamonds Ltd., fully paid-up

1,411,710,802

(Capital Reserve on aquitions ` 5,197,543)Add: Share of Profit - Earlier years 260,954,490Less: Impact of Consolidated Associate Co.Less: Share of Profit/(Loss) 812,943

1,673,478,2352,434,700 ( Previous Period : 2,434,700) Equity Shares of ` 10 each of Revah Corporation Ltd.,

fully paid-up1

Add: Share of Loss of Earlier years (1) -


81

Current Year`

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

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

5,012,750

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

1

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

TOTAL 1,678,496,986

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.

A2 FPJDL has also initiated legal action against its defaulting overseas cutomers.B1 The Company has accounted for permanent diminution in the value of long term investments in group concern as above.B2 The accumulated loss of Revah Corporation Ltd., an associates, being in excess of the Investment in the said associates.,

the investment there in, has become nil.

Note 11. LONG-TERM LOANS AND ADVANCESUnsecured, Considered goodSecurity Deposits 6,397,659Loans and Advances to Related Parties 11,000Advance Income Tax /TDS (Net of Provision for Taxation) 3,342,912TOTAL 9,751,571

Note 12. OTHER NON-CURRENT ASSETSLong Term Trade ReceivablesUnsecured, Considered good 47,423,279,103TOTAL 47,423,279,103

(a) Please refer Note : 25(b) Export receivables had been restated based on exchange rate as at 31.03.2013. In view of persistent defaults by certain overseas

customers in clearing outstanding dues, the same have been carried forward at the same rate (based on exchange rate as at 31.03.2013) while drawing up accounts for the year under review as it is deemed expedient not to take cognizance of depreciation in rupee vis-à-vis US dollar on notional basis when outstanding amounts are expected to be realized over an uncertain period of time. Had it been restated on the basis of exchange rate as at 31.03.2016, the export receivables (including the receivables considered as Trade Receivable in Note No. 14) would have been higher by ` 10,504,534,719/-.

Note 13. INVENTORIES(as certified by Management)(a) Raw Materials 26,084,565(b ) Finished Goods 392,679,844(c) Stores and spares 3,722,092TOTAL 422,486,501


82

NOTESa) 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 ` 393,500,031.

b) The Stock at Chennai SEZ and Cochin SEZ unit are also in joint custody with PNB since November 2013 at Company’s premises.c) The Company has not carried out any valuation of Inventory during the year or as at 31st March, 2016 as per requirement of

AS -2. 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 stock in Joint Custody with banks, the valuation as done on 31st March, 2015 has been adopted for 31st March, 2016.

Current Year `

Note 14. TRADE RECEIVABLESOutstanding for more than six months from the datethey became due for payment(Unsecured, considered good) 1,088,941Others(Unsecured, considered good) -TOTAL 1,088,941

Note 15. CASH AND CASH EQUIVALENTS (A) Cash and cash equivalents (i) Balance with Banks (a) In Current Account 142,150,769 (b) In EEFC account 760,858 (ii) Cash on Hand 59,891

142,971,518

(B) Other Bank Balance (EARMARKED) (i) Earmarked Bank balances Unpaid dividend bank account 3,412,280 (ii) Bank Fixed Deposits held as margin money or as security against: Bank Guarantees 16,809,036

20,221,316 TOTAL 163,192,834

Note 16. SHORT-TERM LOANS AND ADVANCESUnsecured, considered goodVAT Refund Receivables 746,125Others 275,833,969TOTAL 276,580,094

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.


83

Current Year `

Note 17. REVENUE FROM OPERATIONSales -Other Operating IncomeNet gain / loss on foreign currency transactions / translation (other than adjusted as finance costs) 1,249,265Labour Charges received -Sale of Scrap -TOTAL 1,249,265

a) All export receivables were restated on the basis of exchange rate as at 31.03.2013. In view of persistent defaults by overseas customers in clearing outstanding dues, it is deemed expedient not to take cognisance of depreciation of rupee vis-à-vis dollar since last restatement, especially as the outstanding amounts are expected to be realised in phased manner over an uncertain period of time. Accordingly, export receivables have been carried forward on the basis of exchange rate as at 31.03.2013 and have not been restated on the basis of exchange rate as at the end of the accounting year i.e. 31.03.2016.

b) Likewise, Trade Payables in respect of Imports have been carried forward on the basis of exchange rate as at 31.03.2013 and have not been restated on the basis of exchange rate as at the end of the accounting year i.e. 31.03.2016 as the same are expected to be paid off out of realisations from export receivables.

c) Had the export receivables and import payables been restated on the basis of year end exchange rate as at 31.03.2016, Net gain / (loss) on Foreign Currency Transactions / Translations would have been higher by ` 3,230,547,853/- for the current year. The Total net gain till date would have been higher by ` 10,388,255,585/-

Note 18. OTHER NON OPERATING INCOMERentals from property 31,116Interest Received from Banks 1,179,989Interest Received from Others 158,831Profit on Sale of Assets -Service Tax Refund 18,896,856Sale of Electricity of Windmill 2,475,961Miscellaneous Income 1,262,048TOTAL 24,004,801Prior Period IncomeRental from property 31,116

Note 19. COST OF MATERIAL CONSUMEDOpening Stock 26,084,565Add : Purchases -

26,084,565

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

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

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

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


84

Current Year `

Note 20. EMPLOYEE BENEFITS EXPENSESSalaries and Wages, Bonus, Gratuity and Allowances 3,697,452Contribution to PF, ESIC and Gratuity Fund 2,421Remuneration to whole time Directors 612,900Staff Welfare Expenses 90,245Total 4,403,018

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

The details as provided by the Insurance Company for the Year ended 31st March, 2016 are reproduced here below.

a) Defined Contribution Plan: The Company has recognized ` Nil towards contribution made to Employees Provident and family Pension

Fund.

b) Defined Benefit Plan:

Sr. Particulars As on31st March, 2016

1 Assumption(a) Discount Rate 8%(b) Salary Escalation 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, 2015 72,722

3 Change in the Fair Value of Plan Assets(a) Fair Value of Plan Assets as at 1st April, 2014 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, 2015 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


85

Sr. Particulars As on31st March, 2016

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 6,794Note : The estimate of future salary increases considered in actuarial valuation taking into account inflation, seniority, promotion and other relevant factors.

Prior Period ExpensesThe expenses includes Expenses for the prior periodRemuneration to whole time Directors 12,900

12,900

Current Year `

Note 21. FINANCE COSTSInterest Expenses 926,361Bank Charges and other Borrowing costs 2,406,067Total 3,332,428

(a) The board of directors of the Company in its meeting held on 30th May 2015 have decided not to provide Interest for the year on its outstandings / borrowings including Term loan for windmill as all their accounts are classified as NPAs. Most of the Banks do not charge any interest on the Company’s borrowings as according to RBI prudential norms, interest is to be charged on NPA account on actual basis and not on accrual basis. The Interest Charged by some banks during the year which is not considered by the Company amounts to ` 472,780,490/-. Had it been Provided in its accounts @ 12.5 % of the outstanding amounts being the average rate for the rupee export finance, the Interest (Finance Cost) would have been higher by ` 6,411,048,308/-. This action has resulted in the loss for the year being lower by ` 6,411,048,308/-.

(b) The Company has not restated its foreign currency liabilities for year ending 31st March 2016. Had it been restated on the basis of year end exchange rate as at 31.03.2016, the finance cost would have been higher by ` 44,454,586/-.

(c) The interest expenses includes Expenses for the prior period amounting to ` 193,163/-.


86

Current Year Current Year ` `

Note 22. OTHER EXPENSESMANUFACTURING EXPENSESLabour Charges /Assortment Charges -Power and Fuel consumed 1,132,523Stores, spares and packing materials consumed -Repairs - Plant and Machinery -Repairs - Factory Buildings 18,485Repairs - Others 425,133Lease Rent 213,707

1,789,848Directors' Sitting fees 75,000Insurance 25,726Rates and Taxes (including wealth tax) 603,243Freight & Forwarding Charges 1,200Payments to statutory auditorsas auditors 85,875for tax audit 50,000for certification 155,762reimbursement of expenses (out of pocket expenses) 13,443

305,080Legal, Professional and Consultancy charges 7,168,105Advertisement, Publicity and Sale Promotion 437,764Loss on Disposal/Write off of Fixed Assets -Miscellaneous Expenses 4,061,913TOTAL 14,467,879

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 ` 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 assets given on operating lease in the form of Plant and Machinery after 01/10/2002 and Building after 01/08/2001 are :(a) Receivable within one Year Nil(b) Receivable within one Period and five Years Nil(c) Receivable after five Years Nil


87

2 Prior Period ExpensesThe expenses includes Expenses for the prior periodProfessional Fees 131,972Rates and Taxes 22,977Miscellaneous Expenses 4,392Repairs and Maintenance 88,863Payments to statutory auditors 180,000

428,2043 Miscellaneous Expenses include :

Security Charges 1,309,957Sundry Balance W/off 464,538Housekeeping Expenses 249,588Travelling Expenses 294,383Printing & Stationary 483,615Postage & Courier Charges 166,234Office Expenses 118,727Others 974,871Total Miscellaneous Expenses 4,061,913

Current Year`

Note 23. Earnings per share:Profit computation for both Basic and Diluted earnings per share of ` 10 eachNet profit as per Statement of Profit and Loss (42,920,187)Weighted Average No. of Equity SharesShares at the beginning of the year A 106,607,894Shares allotted during the year B -Date of allotment -Effective No. of shares (allotted during the year) For calculation of EPS on the basis of No. of days C -Total Shares for calculation of EPS (A+C) D 106,607,894Less: Shares which are partly paid – to the extent of 50% E 273,824 50% thereof F 136,912Weighted Average No. of Equity Shares for EPS (D-F) 106,470,982Total Shares as at the close of the Year (A+B) 106,607,894Earning per Share (in `) (0.40)

Note 24. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)Contingent LiabilitiesEPCG Benefits 35,414,184(Custom Duties payable if Export obligation not met)TOTAL 35,414,184


88

The company does not envisage any liability in respect of income tax as net gain on account of restatement of export receivables and overseas trade payable (Refer Note 12b and 5) is likely to get offset by additional interest provision if company were to pay interest at applicable rates including penal interest on compounding basis (Refer Note 21).The Company has implemented the Provisions of Accounting Standard 29 – Provisions, Contingent Liabilities and Contingent Assets.The Company has recognised the Contingent liabilities and as such no provision is considered necessary. The Company does not have any Contingent Assets which require provision. Note 25. (i) The Company has witnessed unprecedented turn of events during last three years. The Winsome Group enjoyed credit facilities of

` 375 crores as Fund Based limits and ` 3470 crores as Non Fund Based limits, alongwith 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 realization from its defaulting overseas customers during the year and also 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.

The overseas customers had filed appeals against the orders of the Sharjah Federal Court. Of the 13 overseas customer’s cases, the Company has received favorable judgment in 2 cases and now those two parties’ matters are pending in appeal with the Federal Supreme Court. In 4 of the party cases, the Sharjah Federal Appellate Court has appointed experts to re-examine the matter and the experts have submitted their reports to the Authority in which case the Company’s comment thereon are yet to be submitted. In another 7 cases, the present directors have to be present at The Sharjah Federal Court Appellate Court for swearing on Oath in relation to the above legal cases.

Few bankers have classified the companies and its directors as willful defaulters. However, the companies have 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 has received notices from Debt Recovery Tribunals in Mumbai and Ahmedabad. The Company is persuing the matter. The Company has also received notices, under the SARFAESI Act, for attachment of its assets, at all locations, from Standard Chartered Bank the Lead Bank of the Consortium.

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

(ii) INVENTORY Entire inventory of Winsome Diamond’s 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 on 30.09.2013 and as per their report, the total value of inventory was ` 39,35,00,031. The stock at Chennai SEZ and Cochin SEZ are also in the joint custody with PNB since November 2013 at Company’s premises respectively.

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.

(iii) 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 31st October 2015 and the new Company Secretary was appointed w.e.f. 25th April 2016.


89

Note 26. 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.Note 27. As per the provisions of Accounting Standard 18 - “Related Party Transactions” issued by the Institute of Chartered Accountants of India, the details of Related Party Transactions based on disclosure certificate issued by the Directors, is as mentioned herein below:

i) List of Related Parties : ParticularsAssociates Forever Precious Jewellery and Diamonds Limited

Revah Corporation LimitedKey Management Personnel Mr.Ashish Narayan (Company Secretary) till 31/10/15.

Mr. Harshad Udani - Executive Director WEF March 2015.A. Transactions for the year ended 31.03.2016

Associates Key Management Personnel

Total

1. Loan Received 5,397,074 Nil 5,397,0742. Interest on Loan 777,400 Nil 777,4003. Loan amount

Received BackNil Nil Nil

4. DirectorsRemuneration **

Nil 612,900 612,900

5. CompanySecretary’sRemuneration

Nil 991,669 991,669

B. Outstanding as on 31st March 2016

1. Loans Payable 332,462,161 Nil 332,462,161 ** Remuneration to director Mr. Harshad Udani ` 612,900/- is provided in the book and the payment is subject to approval of Consortium of Bank and Central Government.Note 28. The Engineering Division at Jodhpur has closed its operation. The carrying value of the total assets to be disposed off at Jodhpur is ` 10,054,219 as at the Balance Sheet date.Note 29. 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.Letters have been sent by the Auditors to all banks asking for independent confirmations of the amounts outstanding and due to the Banks. The said confirmations have not been received by the Auditors from some of the Banks.Note 30. The provision for depreciation is adequate and not in excess of the amounts reasonably necessary.Note 31. 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 ` 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, 2006


90

Note 32.Statement of Net assets or Profit or loss attributable to owners and minority interest

Name of the Entity

1

As % of consolidated net assets

2

Net assets i.e. total assets minus total liabilities

3

As % of consolidated profit or loss

4

Share in profit or loss

5Associates(Investment as per equity method)Indian1-Forever Precious Jewellery and Diamonds Limited

- 1,673,478,235 - 812,943

Note 33. As there is no consolidation in the earlier years, in this consolidated balance sheet, the previous year figures are not given as per AS-21 “Consolidated Financial Statements”.






WINSOME DIAMONDS AND JEWELLERY LIMITEDRegistered Office: Kesharba Market – 2, Gotalawadi, Katargam, Surat – 395 004

Phone: +91-22-40046746│Fax: +91-22-43470944│CIN: L36910GJ1985PLC015915www.winsomejewellery.com│Email: [email protected]

ATTENDANCE SLIPRegistered Folio No./ DP ID/ Client ID

No. of Shares held

Name and Address of the Member(s)

I hereby record my presence at the 30th Annual General Meeting of the Company held at Mahida Bhawan, Icchanath, Opp. S.V.R. Engineering College, Dumas Road, Surat 395 007 on Friday, 30th September, 2016 at 12.30 p.m.

_________________________ Member’s/Proxy’s SignatureNotes:1. Please fill up the Attendance Slip and hand it over at the entrance of the Meeting hall.2. Members are requested to bring their copy of the Annual Report to the Meeting

WINSOME DIAMONDS AND JEWELLERY LIMITEDRegistered Office: Kesharba Market – 2, Gotalawadi, Katargam, Surat – 395 004

Phone: +91-22-40046746│Fax: +91-22-43470944│CIN: L36910GJ1985PLC015915www.winsomejewellery.com│Email: [email protected]

PROXY FORM(Pursuant to section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014

Name of the Member:

Registered Address:

Email ID:

Folio no./ DP ID No/ Client ID No………………………….................……..

I/We being a member(s) holding …....................…………..shares of Winsome Diamonds and Jewellery Limited hereby appoint:

1. Name : ……………………………….............................................................................. Email ID :……………………………….....................................

Address :………....................................................................…………………………..… Signature :……….............……………………..... or failing him

2. Name : ……………………………….............................................................................. Email ID :……………………………….....................................

Address :………....................................................................…………………………..… Signature :……….............……………………..... or failing him

3. Name : ……………………………….............................................................................. Email ID :……………………………….....................................

Address :………....................................................................…………………………..… Signature :……….............……………………..........................

as /my our proxy to attend and vote (on a poll) for me/us as my /our behalf at the 30th Annual General Meeting of the Company to be held on Friday, 30th September, 2016 at 12.30 p.m at Mahida Bhavan, Icchanath, Opp S.V R Engineering College, Dumas Road, Surat-395007 and at any adjournment thereof in respect of such resolutions as are indicated below:Resolution No.

Description of Resolutions For Against

1. Adoption of Audited Standalone and Consolidated Financial Statements of the Company for the period ended 31st March, 2016, the Statement of Profit and Loss and Cash Flow Statement along with the Schedules and the Reports of the Directors and Auditors’ thereon.

2. Re-appointment of Mr. Harshad Udani (DIN : 07014853) who retires by rotation and being eligible offers himself for re-appointment as a Director.

3. Appointment of Auditors to hold office from the conclusion of this Annual general meeting until the conclusion of the 35th Annual general meeting of the Company and fixing their remuneration.

Signed this __________ day of ___________2016.

____________________ _________________________ ___________________________ _________________________Signature of Shareholder Signature of first proxy holder Signature of second proxy holder Signature of third proxy holder

Note: The Proxy to be effective should be deposited at the Registered Office of the Company not less than 48 hours before the commencement of the Meeting.

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If undelivered please return to:Winsome Diamonds And Jewellery Limited

906/907/908, 9th Floor, The PlazaNear Dharam Palace, 55 Gamdevi

Grant Road, Mumbai – 400 007, India

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