WINSOME DIAMONDS AND JEWELLERY LIMITED REPORT 2014-15 WINSOME DIAMONDS AND JEWELLERY LIMITED (Formerly Su-Raj Diamonds and Jewellery Limited) 2 1 BOARD OF DIRECTORS Mr. Harish Mehta

ANNUAL REPORT 2014-15 WINSOME DIAMONDS AND JEWELLERY LIMITED(Formerly Su-Raj Diamonds and Jewellery Limited)

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WINSOME DIAMONDS AND JEWELLERY LIMITED

29th Annual Report2014-2015

(01/04/2014 to 31/03/2015)


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BOARD OF DIRECTORS Mr. Harish Mehta Director Mr. S. P. Tanwar Nominee Director Mr. Harimohan Namdev Director Mr. Harshad Udani Executive Director (w.e.f. 13th January, 2015) Mr. Ami Kothari Director (w.e.f. 23rd March, 2015) Mr. Jaikumar Kapoor Director (upto 2nd January, 2015)

COMPANY SECRETARY Mr. Asish Narayan

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 Twenty-Ninth Annual General Meeting of the Members of Winsome Diamonds and Jewellery Limited will be held on Wednesday, the 30th day of September, 2015 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:AS ORDINARY BUSINESS:1) To receive, consider and adopt the Audited Balance Sheet

for the period (6 months) ended 31st March, 2015, the Profit and Loss Account for the period ended on that date along with the Schedules and the Reports of the Directors and Auditors thereon.

2) To appoint a Director in place of Mr. Harimohan Namdev (DIN: 02658937), 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 142 and other applicable provisions, if any, of the Companies Act, 2013 and Rules made thereunder, and pursuant to the recommendations of the Audit Committee of the Board of Directors, R.C. Reshamwala & Co., Chartered Accountants (Firm Regn. No. 108832W), 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 the next Annual General Meeting of the Company at such remuneration as shall be fixed by the Audit Committee/ Board of Directors of the Company from time to time in consultation with the Auditors plus applicable service taxes and reimbursement of travelling and out of pocket expense incurred by them for the purpose of audit .”

AS SPECIAL BUSINESS:4) Appointment of Mr. Harshad Udani as Director To consider and, if thought fit, to pass, with or without

modification if any, the following resolution as an Ordinary Resolution:

“RESOLVED THAT Mr. Harshad Udani (DIN: 07014853) who was appointed as an Additional Director by the Board of Directors under the provisions of Section 161(1) of the Companies Act, 2013 read with Article 147(1) of the Articles of Association of the Company, and who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member signifying his/its intention to propose Mr. Harshad Udani as a candidate for the office of Director of the Company, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”

5) Appointment of Mr. Harshad Udani as Whole-time Director To consider and, if thought fit, to pass, with or without

modification if any, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 196, 197 and 203 of the Companies Act, 2013 (‘the Act’) and the rules made there under (including any statutory modification(s) or re-enactment thereof for the time being in force) read with schedule V of the Act and subject to the approval of the Consortium Bank and Central Government, consent of the Company be and is hereby accorded by way of a special resolution to the appointment of and terms of remuneration payable to Mr. Harshad Udani (DIN No. 07014853) as Whole-time Director for the period of three years with effect from 23rd March, 2015 upon the terms and conditions as set out in the Explanatory Statement annexed to the Notice convening this meeting.

RESOLVED FURTHER THAT Board of Directors or a committee thereof be and is hereby authorized to take all such steps as may be necessary, proper or expedient to give effect to the aforesaid resolution.”

6. Appointment of Ms. Ami Kothari as an Independent Director

To consider and, if thought fit, to pass, with or without modification if any, the following resolution as an Ordinary Resolution:

“RESOLVED THAT Ms. Ami Kothari (DIN : 07104331) who was appointed as an Additional Director by the Board of Directors w.e.f 23rd March, 2015 in terms of Section 161(1) of the Companies Act, 2013 read with Article 147(1) of the Articles of Association of the Company, and who holds office upto the date of this Annual General Meeting and in respect of whom the Company has received a notice in writing from a member signifying his/its intention to propose Ms. Ami Kothari as a candidate for the office of Director of the Company, be and is hereby appointed as Non Executive Director of the Company.”

“RESOLVED FURTHER THAT pursuant to the provisions of Sections 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 (the Act) and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification (s) or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, Ms. Ami Kothari (DIN : 07104331), who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of the Act and who is eligible for appointment, be and is hereby appointed as an Independent Director of the Company to hold office for 5 (five) consecutive years for a term up to 34th Annual General Meeting in the calendar year 2020.”

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

Place : Mumbai Asish NarayanDate : 1st September, 2015 Company Secretary


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NOTES:1) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

MEETING IS ENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND AND VOTE ON A POLL ONLY INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.

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) The instrument appointing a proxy must be deposited with the Company at its Registered Office not less than 48 hours before the commencement of the meeting.

3) Members/Proxies should bring the Attendance Slip duly filled in for attending the meeting.

4) Pursuant to Section 91 of the Companies Act, 2013, and in accordance with Clause 15 and 16 of the listing agreement(s), the Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 24th September,, 2015 to Wednesday, 30th September, 2015 (both days inclusive) for the purpose of Annual General Meeting.

5) Explanatory Statement pursuant to Section 102(1)(a) of the Companies Act, 2013 is annexed herewith and forms part of the notice.

6) Brief resume of the Directors seeking appointment/re-appointment at the ensuing Annual General Meeting as per Clause 49 is mentioned in Corporate Governance Report which forms part of the Annual Report.

7) Shareholders seeking information with regard to Accounts are requested to write to the Company at an early date to enable the management to keep the information ready.

8) Shareholders are requested to bring their copy of Annual Report to the Meeting.

9) The Equity Shares of the Company are compulsorily traded in electronic form with effect from 28th August, 2000. The shareholders who have not yet dematerialized their shares are requested to dematerialize their shares by opening DP Account with nearest Depository Participant at the earliest to avail the benefits of dematerialization.

10) Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, dividends for the financial year ended as on 31st March, 2008 and thereafter, 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 Section 125(1) of the Companies Act, 2013.

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, 2014 (date of last Annual General Meeting) on the website of the

Ministry of Corporate Affairs. Information in respect of such unclaimed dividend when due

for transfer to the said Fund is given below:

Financial Year Ended Date of Declaration of

Dividend

Last Date forClaiming Dividend

31.03.2008 (01.04.2007–31.03.2008)

26.09.2008 30.10.2015

31.03.2010 (01.04.2009–31.03.2010)

30.09.2010 30.09.2017

31.03.2011 (01.04.2010-31.03.2011)

30.09.2011 30.09.2018

According to the provisions of Section 125(3) of the Companies Act, 2013 that the person whose amounts referred to in clauses (a) to (d) of sub-section (2) of Section 205C transferred to Investor Education and Protection Fund, after the expiry of the period of seven years as per provisions of the Companies Act, 2013, shall be entitled to get refund out of the fund in respect of such claims in accordance with rules made under this section.

10) In order to provide protection against fraudulent encashment of the warrants, Members holding Share Certificates in physical form are requested to notify any change in their addresses or bank mandates immediately 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.

11) Corporate Members intending to send their authorised representatives are requested to send a duly certified copy of the Board Resolution authorising their representatives to attend and vote at the Annual General Meeting.

12) Shareholders/Investors are requested to make all correspondences in connection with registration of 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., by addressing letters directly 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 quoting their registered folio number or their client ID number with DP ID number to enable the Company to resolve the Shareholders’ grievances smoothly and speedily.

13) Ministry of Corporate Affairs (MCA) has issued Circular Nos. 17/2011 dated 21.04.2011 and 18/2011 dated 29.04.2011 propagating “Green Initiative”, by allowing paperless compliances by serving documents through electronic mode (e-mail). In view of the above, Company proposes has been sending all future shareholders’ communication like Notices, Company’s Annual Reports etc. through electronic mode also. This will also ensure prompt receipt of communication and avoid loss in postal transit.


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We intend using shareholder’s e-mail id to send various Notices / Correspondences etc. in future. If your e-mail is not registered with your Depository Participant, kindly register the same at the earliest.

In case you are holding shares in physical mode, please forward your e-mail id to the Company or its Registrars, M/s. Link Intime India Private Limited.

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

Act, 2013 (the Act) read with rule 20 of the Companies (Management and Administration) Rules, 2014 (hereinafter called “the Rules” for the purpose of this section of the Notice) and clause 35B of the listing agreement, the Company is providing facility to exercise votes on the items of business given in the Notice through electronic voting system, to members holding shares as on 23rd September 2015 (End of Day) being the Cut-off date (Record date for the purpose of Rule 20 (3) (vii) of the Rules) fixed for determining voting rights of members, entitled to participate in the e-voting process, through the e-voting platform provided by CDSL

The instructions for shareholders voting electronically are as under:(i) The voting period begins on 25.09.2015 (9.00 A.M)

and ends on 27.09.2015 (6.00 P.M). During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (record date) of 23.09.2015, 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.(vi) 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.

DOB Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.

Dividend Bank Details

Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio.

• Please enter the DOB or Dividend Bank Details in order to login. If 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.

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

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

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

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

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

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

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

(xvi) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xvii) If Demat account holder has forgotten the same 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) Note for Non – Individual Shareholders and Custodians• Non-Individual shareholders (i.e. other than


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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 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.

(xix) 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].

EXPLANATORY STATEMENT PURSUANT TO SECTION 102(1)(a) OF THE COMPANIES ACT, 2013.Item No. 4Mr. Harshad Udani was appointed as an Additional Director of the Company by the Board of Directors at its meeting held on 13th March, 2015. Mr. Harshad Udani will hold office as an Additional Director upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member proposing the candidature of Mr. Harshad Udani for the office of the Director of the Company under the provisions of Section 160 of the Companies Act, 2013.Mr. Harshad Udani had been appointed as Whole-time Director of the Company subject to the requisite approvals of shareholders, banks and Central Government at the Board Meeting held on 23rd march, 2015.. He has 39 years of banking experience in various capacities. He has retires as Asst. General Manager from Central Bank of India.In the beneficial interest of the Company, your Directors recommend the Ordinary Resolution for approval.None of the Directors of the Company other than Mr. Harshad Udani is in any way, concerned or interested in the said resolution.Item No. 5The Board of Directors of the Company at its meeting held on 23rd March, 2015 had appointed Mr. Harshad Udani as Whole-time Director with immediate effect for a period of 3 years subject to the requisite approvals of Consortium banks, Central Government and Shareholders. The Company has also made an application to Standard Chartered Bank, the consortium leader for its requisite no objection certificate for appointment of Whole-time Director.The following are the main terms and conditions of appointment of Mr. Harshad Udani as Whole-time Director of the Company:

1. Tenure of appointment: The appointment of Mr. Jaikumar Kapoor is for a period of 3 years with effect from 23rd March, 2015.

2. Nature of Duties; The Whole-time Director shall have the general control, management and superintendence of the business of the Company subject to the supervision and control of the Board.

3. Remuneration: 50,000/- per month (which is within the ceiling limit prescribed under the Act )

4. This appointment may be terminated by either party by giving to the other one months’ notice to other party of such termination or.

5. If at any time Whole-time Director cease to be Director of the Company, he shall cease to Whole-time Director in terms of the agreement and such agreement shall terminate forthwith.

In compliance with the provisions of Section 196, 197 and Schedule V and other applicable provisions, if any, of the Companies Act, 2013, the terms of appointment and remuneration stated above are now being place before the members for their approval.The Directors recommend the resolution set out in item No.5 of the accompanying notice as a Special Resolution.None of the Directors of the Company or Key Managerial Personnel or their respective relatives other than Mr. Harshad Udani are concerned or interested in the said resolutionItem No. 6Ms. Ami Kothari was inducted on Board as an Additional Director of the Company by the Board of Directors at its meeting held on 23rd March, 2015. Ms. Ami Kothari will hold office as an Additional Director upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member proposing the candidature of Ms. Ami Kothari for the office of the Director of the Company under the provisions of Section 160 of the Companies Act, 2013.Ms. Ami Kothari is a Non-Executive Director of the Company. She is a Member of The Institute of Company Secretaries of India and also a Law Graduate. She has a Rich Experience of Corporate Laws and Corporate Governance and Compliance Strategies.In compliance with the provisions of Sec149 of the Companies Act,2013 read with Schedule IV of the act, the appointment of Ms. Ami Kothari are now being place before the members for their approval.The Directors recommend the resolution set out in item No.5 of the accompanying notice.None of the Directors of the Company other than Ms. Ami Kothari is in any way, concerned or interested in the said resolution.All the documents referred to in the accompanying notice shall be available for inspection at the Registered Office of the Company on any working day between 11.00 a.m. and 1.00 p.m. upto the date of the Annual General Meeting and will also be available for inspection at the meeting.

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

Place : Mumbai Asish NarayanDate : 1st September, 2015 Company Secretary


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DIRECTORS’ REPORTTo,The MembersThe Directors present the Twenty-Ninth Annual Report together with the Audited Accounts for the year ended 31st March, 2015.FINANCIAL RESULTS

(` in crore)

Particulars For the year Ended 31st

March, 2015

6 Months Period

Ended 31st March, 2014

Total Income 6.38 5.35Profit before Interest and Depreciation

(4.50) 0.01

Less: Finance Charges (Net) 0.30 253.39Depreciation 7.48 2.95Profit before Tax (12.28) (256.33)Provision for Tax --- 1.33Profit after Tax (12.28) (257.66)Add : Balance in Statement of Profit and Loss Brought Forward (335.43) (77.76)Profit Available for Appropriation (347.71) (335.43)Proposed Dividend - -Corporate Tax on Proposed Dividend

- -

Short fall of Depreciation as per Companies Act

0.55 -

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

- -

Balance Carried Forward (348.26) (335.43)Total (348.26) (335.43)OPERATIONAL REVIEWThe total income of the Company during the current year was ̀ 638 lacs as against ` 535 lacs in the previous period (6 months). The Company continued to incur loss mainly due to higher depreciation as a result of new Company law provisions and legal expenses incurredDuring the preceding two years the Company witnessed unprecedented turn of events. The failure of overseas customers, from the UAE, in making payments for Company’s exports resulted in the Company defaulting in meeting its obligations. This had resulted in the Company defaulting in meeting its obligations. The bankers appointed independent audit firms for forensic and investigative audit for which the Company offered explanations.The Company sent notices to the defaulting overseas customers in October 2013. As no positive actions were received from the defaulting overseas customers the Company initiated legal proceedings before the Conciliation Committee of Sharjah Federal Court, the step preceding to filing of commercial cases before the Sharjah Court in May 2014. The Reports of the Accounting Experts/

Banking Experts appointed by the Sharjah Federal Court of First Instance, First Plenary Commercial Department and the Sharjah Federal Court of First Instance, Second Plenary Commercial Department in various suits filed by the Company against 13 UAE companies that had defaulted in payment of dues amounting to USD 1.2 billion. These reports have been made available on the Company’s website i.e. www.winsomejewellery.com and the summary of these reports have been made available on the website of the Bombay Stock Exchange i.e. www.bseindia.com.The Sharjah Federal Court has passed orders in respect of the legal proceedings instituted against the UAE based defaulting customers in the following 2 out of the 13 cases :Winsome & Al-Subhi - case no(3511/2014)Winsome & Al-Ihsan- case no(3431/2014)Orders of the Sharjah Court on the remaining 11 legal cases are awaited.DIVIDENDThe Board of Directors do not recommend any dividend for the period under consideration due to loss incurred by the Company.SHARE CAPITALThe Paid up Equity Capital of the Company as at March 31, 2015 was ` 106.47 crores comprising of 10,66,07,894 shares of ` 10 each. The Company has not issued any shares during the year.FINANCEThe cash and cash equivalent as at March 31, 2015 stood at ` 16.29 crores. The Company’s working capital facilities have been withheld by the consortium due to non-payment of dues of the banks, as its overseas customers failed to make payment towards exports made by the Company during the year 2012-13.NOTICES FROM BANKSThe Company, which received notice from Standard Chartered Bank, under the SARFAESI Act, has denied all the allegations made therein. Some of the banks, in the consortium, have sent notices to the promoter/ guarantor and also to the companies who have provided corporate guarantees.The banks had lodged complaints with the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) to carry out investigations against the Company and its management. The management and the directors have fully cooperated with the agencies during their investigations and have submitted all the information available with them.LEGAL SUITThe Company has initiated legal proceedings against its defaulting overseas customers in Sharjah Federal Court to recover its outstanding dues. The case is under progress and the experts appointed by the UAE Court have sought explanations from the defaulting overseas customers. The court, in its order, has directed two of the defaulting customers to pay the outstanding amounts to the Company with interest. The decision against the remaining eleven overseas customers is yet to be decided/ confirmed by the Sharjah Court. Your Company is hopeful of an early favourable outcome from the proceedings.


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FIXED DEPOSITSThe Company has not accepted any deposit, within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 made thereunder.PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTSThe Company has not given any loans or guarantees covered under the provision of section 186 of the Companies Act, 2013.The details of investments made by the Company is given in the notes to financial statements.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACYThe Company has no formal internal control system in place after the devolvement. All the locations have stopped its activities as at March 31, 2015. The Company, however, has in house internal controls for administrative and statutory outgoings commensurate with its size and volume.CORPORATE SOCIAL RESPONSIBILITY (CSR)The Company has formed a CSR committee. In light of continuing losses in the preceding two years and with no activities the Company has not made any contribution towards the same. The Company is committed to give its due contribution as soon as the situation improves.CONSERVATION OF ENERGYThe particulars regarding conservation of energy are not applicable to the Company as the Company has stopped all its manufacturing activities.TECHNOLOGY ABSORPTIONIn the absence of any production activity there is no need for any technology absorption.FOREIGN EXCHANGE EARNINGS AND OUTGODuring the year under review there was no foreign exchange earnings or outflow.INDUSTRIAL RELATIONSThere are no activities in any of the units of the Company. However, in Goa Unit of the Company which was in operation till December, 2014, the relations with the workmen were cordial.DIRECTORSMr. Harshad Udani (DIN: 07014853) was appointed as an Additional Director of the Company with effect from 13th January, 2015 under Section 161 of the Companies Act, 2013 and holds office upto the date of ensuing Annual General Meeting.In compliance with the provisions of section 203 of the Companies Act, 2013, Mr. Harshad Udani was appointed as Whole Time Director of the Company w.e.f 23rd March, 2015 subject to the requisite approvals of shareholders, banks and Central Govt.Ms. Ami Kothari ( DIN: 07104331) was appointed as an Additional Director of the Company w.e.f 23rd March 2015 fulfilling the requirement for the appointment of a Women Director as per requirements of Companies Act, 2013.Mr. Jaikumar Kapoor (DIN: 00337011) resigned from the Company due to ill-health w.e.f 02nd January, 2015. The Board wishes to

place on record its appreciation of the contribution of Mr. Kapoor during his tenure as director.Declaration by Independent DirectorThe Company has received necessary declarations from each independent Director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.Board EvaluationThe Companies Act, 2013 and Clause 49 of the Listing Agreement 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.Policy on Directors appointment and remunerationThe current policy is to have an appropriate mix of executive and independent Directors to maintain the independence of the Board, and separate its functions of governance and management. The Board periodically evaluates the need for change in its composition and size.The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.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.


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MeetingsA calendar of meetings is prepared and circulated in advance to the Directors.During the year nine Board Meetings (including adjourned meetings) and four Audit Committee Meetings (including adjourned 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.DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to Section 134(5) of the Companies Act, 2013, the Directors state that -• in the preparation of the Annual Accounts, the applicable

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

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

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

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

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

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

RELATED PARTY TRANSACTIONSAll related party transactions, if any, that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Management Personnel or other designated persons which may have a potentially conflict with the interest of the Company at large.SUBSIDIARY COMPANIESThe Company does not have any subsidiary during the year under review.CODE OF CONDUCTThe Board has approved code of conduct in place which is applicable to all the members of the Board and its employees in the course of day to day operations of the Company.All the Board Members and Senior Management personnel have confirmed compliance with the Code.

VIGIL MECHANISM/ WHISTLE BLOWER POLICYThe Company has vigil mechanism / whistle blower policy in place to deal with instances of fraud or mismanagement, if any.A whistle blower may report any violation or any instances of fraud or mismanagement to the Chairman of the Audit Committee. The policy ensures that strict confidentiality is maintained whilst dealing with concerns also that no discrimination will be meted out to any person for a genuinely raised concern.PREVENTION OF INSIDER TRADINGThe Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code required pre-clearance for dealing the Company’s shares and prohibits the purchase or sale of Company’s shares by the Directors and designated employees while in possession of unpublished sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for the implementation of the Code.All Board Directors and designated employees have complied with the Code.AUDITOR’S REPORTThe qualifications in the Auditors Report (In Italics) are followed by appropriate Board’s reply and explanations (in bold) as under:1. Basis for Qualified 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 loanat 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 inthe total loss for the year being over stated/profit understated by Rs. 214,54,39,618(net).Trade receivables are understated by Rs. 723,73,84,562, trade payables are understated by Rs. 796,76,830as on the balance sheet date and foreign currency loan is understated by Rs.74,67,778(Refer Note No. 7, 8 (A5), 14(b),19(c) and 23(b)).

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 expects to defray these liabilities out of realisation of export receivables, the same also


8 9

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 31.03.2015, the amount payable would have been higher by Rs. 74,67,778/-.

B. The Company has made long term investments in Forever Precious Diamonds and Jewellery Ltd. (Forever) amounting to Rs. 141,17,10,802, thereby resulting in it holding a 49 % stake in the equity of that Company. The said investments continue to be valued at cost. As stated in Note No. 12 A 1 & 2, 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 2014. We have observed that there are no significant business operations in Forever. Further the auditors of Forever have qualified the financial statements and termed the Company as a non-going concern. In view of the above the Company should have provided the diminution in value of investments amounting to Rs. 141,17,10,801. Accordingly the loss for the year have been understated and investments overstated by Rs. 141,17,10,801.

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 four 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. The Company was providing for interest at 12.5 % p.a. on all outstanding which was the average rate of rupee export finance. During the year under review no provisions have been made for such interest and provisions made during the year have been reversed at year end. Accordingly Interest for the year is understated resulting in total loss of the Company is understated by Rs. 565,86,78,505.(Refer Note 23 (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. The Interest charged by some banks during the period under review which is not considered by the Company amounts to Rs.214,68,53,979. The Company used to provide interest in its accounts

@ 12.5 % p.a. of the outstanding amounts being the average rate for rupee export finance. Thus interest that should have been charged to Profit and loss for the year under review amount to Rs. 565,86,78,505.

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

Rs. 4,743,24,55,740 the auditors have not received any confirmations of balances even after requesting for the confirmations. The management has obtained confirmation of balances from the respective parties only as on 31st March, 2013 and none thereafter. There have been defaults on the payment obligations by the debtors on the due dates. Various attempts have been made by the management and lenders for recovery, however such attempts have not resulted into any significant collections or getting commitment from the parties regarding schedule of payments which are acceptable to the management / lenders. In view of the above we are unable to comment on 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 14 and Note 16 to the financial statements)

Against the defaulting overseas customers the Company had initiated proceedings before the Conciliation Committee of Sharjah Federal Court. The Court appointed Accounting and Financial Experts to look into the activities of the defaulting overseas customers. Based on the findings of the Experts the Court has directed two of the thirteen overseas customers to pay the outstanding amounts due to the Company alongwith interest. Decisions against the remaining defaulting overseas customers is expected soon and is likely to be favourable to the Company.

B. As mentioned in Note No 1 regarding preparation of accounts on a Going Concern basis and the reasons stated therein and Note No. 27 of the financial statements detailing the developments that have happened in the last 2 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 since the volumes of business have also drastically dropped in the last 2 years. 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, no positive steps taken by the management, 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 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.


8 9


3. Disclaimer of Opinion Because of the significance of the matters described in the

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


4. Emphasis of MatterA. As mentioned in note no. 27(ii), the Company has

not appointed any Internal Auditors for the year and accordingly no internal audits were carried out for the year.

The Company has not appointed any internal auditor for the year under consideration as all the activities of the Company came to standstill, as the Company did not receive monies against its exports which resulted in the Company defaulting in its payments to the consortium banks. The Company is likely to appoint an internal auditor as soon as the situation improves. The Company, however, has internal control to check its administrative and statutory expenses.

B. As mentioned in note no. 27 (iii), the Company has not done any valuation of stocks of Diamonds which are in the joint custody with the bank. To that extent the increase or decrease in the value of diamond stocks as at year end, as per AS-2 Valuation of Inventories, is not determined.

As per point 2(a) of CARO ReportIn June 2013, the banks have placed the stock of diamonds belonging to the Head Office and the Mumbai Branch office of the Company valued at ` 39,35,00,031 in the joint custody. The

bank had done a test check valuation as on 30th September, 2013 when officers of the Company were also present, of the said stock which has been then forwarded to the Company. During the period the stocks of Chennai & Cochin SEZ were 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 period under consideration, except for the stock lying in joint custody of the banks at HO, Cochin & Chennai where the management has not carried out the physical verification of inventory, physical verification of inventory at other places has been done by the management at regular intervals.AUDITOR’S REPORT AND SECRETARIAL AUDIT REPORTAs required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Certain observations made in the report with regard to late filing of some forms were mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the Company would ensure in future that all the provisions are complied to the fullest extent.AUDITORSThe Auditors R C Reshamwala and Co., Chartered Accountants, Mumbai, retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.SECRETARIAL AUDITPursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Management Personnel ) Rules , 2014 the Company has appointed S G and Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as “ANNEXURE A”.EXTRACT OF ANNUAL RETURNThe details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as “ANNEXURE B”.MEETINGS OF THE BOARDNine Board Meetings (including adjourned Board Meetings) were held during the year. For further details please refer report on Corporate Governance on page no. 23 of this annual report.RISK MANAGEMENTThough the Company’s operations has come to a grinding halt post devolvement of Letter of Credits issued in favour of bullion banks, the probability of any operational risks has come to a naught. However, pursuant to section 134 (3) of the Companies Act, 2013 & Clause 49 of the listing agreement, the Company had constituted business risk management committee. The details of the Committee and its terms of reference are set out in the corporate governance report forming part of the Board’s report.PARTICULARS OF REMUNERATIONThe Information required under section 197 of the Companies Act, 2013 and the rules made there-under in respect of the employees of the Company is as under:


10 11

(a) the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year

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

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

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

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

Company: Five(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 lacs

Remuneration of Key Managerial Personnel (KMP) during the financial year 2014-15 (aggregated)

27.22

Revenue from operations 624

Remuneration (as % of revenue) 2.72

Profit before tax (PBT) (12.28)

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 lacs

Particulars Chief Financial officer

Company Secretary

Remuneration 10.22 17Revenue 624 624Remuneration (as % revenue)

2.72 2.72

Profit before tax (PBT) (12.28) (12.28)Remuneration (as % of PBT)

N.A N.A

(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;

NilNone of the employees receive remuneration in excess of the limits as prescribed in the information required pursuant to Section 197 read with sub rule (2) of rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company.PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORSDuring the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORTSThe Company has been in compliance with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges, save and except those conditions which could not be complied with owing to lack of proper composition of Board of directors.Report on Corporate Governance, Management Discussion and Analysis and Secretarial Auditor’s Certificate on compliance with the Corporate Governance requirements have been included in this Annual Report in separate sections.ACKNOWLEDGEMENTSYour Company and Board wish to thank the members of the Company and staff for their continued patience and co-operation.

On behalf of the Board of Directors

Place: Mumbai H. Udani H. MehtaDate: 12/08/2015 Director Director


10 11

“Annexure - A”Form No. MR-3

Secretarial Audit Report [Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies

(Appointment and Remuneration Personnel) Rules, 2014]

Secretarial Audit ReportFor the Financial Year ended 31st March, 2015

To,The Members,WINSOME DIAMONDS AND JEWELLERY LIMITED,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 us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s 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, We hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2015 has complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2015 according to the provisions of:

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

II. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

III. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

IV. 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 Takeovers) Regulations, 2011;

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

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

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

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

V. Other laws applicable to the Company as per the representations made by the Company. We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards with respect to Board and general meetings of The Institute of Company Secretaries of India which are not in force as on the date of this report.

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

a) Secretarial Standards by The Institute of Company Secretaries of India. The same was not notified by the ICSI till 31st March, 2015.

b) The Listing Agreements entered into by the Company with BSE.

During the period under review and as per the explanations and representations made by the management and subject to clarifications given to us, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, etc., mentioned above, except:

i) Non Filing of Form MGT-14 in respect to Board Resolution passed on 13th February, 2015ii) The Company is taking necessary steps to formulate CSR Committee as required under Companies Act, 2013 in its

upcoming Board Meeting.iii) The Company is in the process of appointing Chief Financial Officer and Internal Auditor.


12 13

We further report thatThe Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. 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 provisions of the Act.

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 a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the decisions were carried out with requisite majority by the members of the Board and Committees and the same were duly recorded in the minutes of the meeting of the Board of Directors and the Committees of the Company. Any dissent raised was also noted in the minutes.

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 compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, there were no instances of:

i. Public / Rights / Preferential issue of shares / debentures / sweat equity.

ii. 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

This Report is to be read with our letter of even date which is annexed as Annexure and

forms an integral part of this Report.

For SG and Associates,Company Secretaries

Suhas Ganpule,Proprietor,

Membership No: 12122C. P No: 5722

Date: 7th August, 2015Place: Mumbai


12 13

Annexure to Secretarial Auditor’s ReportTo,The Members,Winsome Diamonds And Jewellery Ltd.Mumbai.Our report of even date is to be read along with this letter.1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an

opinion on these secretarial records based on our audit.2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness

of the contents of the secretarial record. The verification was done on test basis to ensure that the correct facts are reflected in secretarial records. We believe that the practices and processes, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.4. Where ever required, we obtained management representation about the compliance of laws, rules, regulations, norms and

standards and happening of events.5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, norms and standards is the responsibility

of management. Our examination was limited to the verification of procedure on test basis.6. The secretarial audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with

which the management has conducted the affairs of the Company.7. We have reported, in our audit report, only those non-compliance, especially in respect of filing of applicable forms/documents,

which, in our opinion, are material and having major bearing on financials of the Company.

For SG & Associates

(Suhas S. Ganpule)Practising Company SecretaryProprietorMembership No. 12122 /CP No. 5722

Date: 7th August, 2015Place: Mumbai

SECRETARIAL AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCETo,The Members ofWINSOME DIAMONDS AND JEWELLERY LTD.We have examined the compliance of conditions of Corporate Governance by Winsome Diamonds And Jewellery Ltd (the ‘Company’), for the year ended March 31, 2015, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange. 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 of the financial statements of the Company.In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above-mentioned Listing Agreement.We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For SG and Associates,Company Secretaries

Suhas Ganpule,Proprietor,

Place : Mumbai Membership No: 12122Date : 7th August, 2015 C. P No: 5722


14 15

“Annexure - B”FORM NO. MGT 9

EXTRACT OF ANNUAL RETURNas on financial year ended on 31.03.2014

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

i CIN L36910GJ1985PLC015915ii Registration Date 10-09-85iii Name of the Company WINSOME DIAMONDS & JEWELLERY LTD.iv 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

SL No Name & Description of main products/services NIC Code of the Product /service

% to total turnover of the Company

1 GOLD, DIAMONDS & JEWELLERY2

III PARTICULARS OF HOLDING , SUBSIDIARY & ASSOCIATE COMPANIES

Sl 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 REVAH CORPORATION LTD. U74999GJ2007PLC049850 Associate 48.69

IV SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity)

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 year

Demat Physical Total % of Total Shares


A. Promoters(1) Indian 0a) Individual/HUF 213210 0 213210 0.20 213210 0 213210 0.20 0b) Central Govt.or State Govt.

0 0 0 0 0 0 0 0

c) Bodies Corporates 26658385 0 26658385 25.01 26658385 0 26658385 25.01 0d) Bank/FI 0 0 0 0 0 0 0 0e) Any other 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 0a) NRI- Individuals 0 0 0 0 0 0 0 0b) Other Individuals 0 0 0 0 0 0 0 0c) Bodies Corp. 0 0 0 0 0 0 0 0d) Banks/FI 0 0 0 0 0 0 0 0e) Any other… 0 0 0 0 0 0 0 0SUB TOTAL (A) (2) 0 0 0 0 0 0 0 0Total Shareholding of Promoter (A)= (A)(1)+(A)(2)

26871595 0 26871595 25.21 26871595 0 26871595 25.21 0


14 15

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 year



B. PUBLIC SHAREHOLDING(1) Institutionsa) Mutual Funds 13700 22800 36500 0.03 13700 22800 36500 0.03 0b) Banks/FI 36225 6868 43093 0.04 32725 6868 39593 0.04 -8.12C) Cenntral govt 0 0 0 0 0 0 0 0d) State Govt. 0 0 0 0 0 0 0 0e) Venture Capital Fund 0 0 0 0 0 0 0 0f) Insurance Companies 0 0 0 0 0 0 0 0g) FIIs 62455153 12700 62467853 58.60 22749946 12700 22762646 21.35 -63.56h) Foreign Venture Capital Funds

0 0 0 0 0 0 0 0

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

SUB TOTAL (B)(1): 62505078 42368 62547446 58.67 22796371 42368 22838739 21.42 -63.49(2) Non Institutionsa) Bodies corporates 1480361 27914 1508275 1.41 7985181 26314 8011495 7.51 431.17i) Indian 0 0 0 0 0 0 0 0ii) Overseas 0 0 0 0 0 0 0 0 0b) Individuals 0 0 0 0 0 0 0 0 0i) Individual shareholders holding nominal share capital upto Rs.1 lakhs

9797098 2990887 12787985 12.00 16799399 2917992 19717391 18.50 54.19

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

2130940 0 2130940 2.00 24402098 0 24402098 22.89 1045.13

c) Others (specify)c-i) Clearing Member 74197 0 74197 0.07 973040 0 973040 0.91 1211.43c-ii) Foreign Company 0 15000 15000 0.01 0 15000 15000 0.01 0c-iii) Hindu Undivided Family 85537 250 85787 0.08 59987 0 59987 0.06 -30.07c-iv) Trust 400 0 400 0 400 0 400 0 0c-v) Non resident India (Repat) 282644 196586 479230 0.45 3357912 191886 3549798 3.33 640.73c-vi) Non-Resident Indan(Non Repat) 105989 1050 107039 0.10 167301 1050 168351 0.16 57.28SUB TOTAL (B)(2): 13957166 3231687 17188853 16.12 53745318 3152242 56897560 53.37 231.01Total Public Shareholding(B)= (B)(1)+(B)(2)

76462244 3274055 79736299 74.79 76541689 3194610 79736299 74.79 0

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0 0 0 0 0

Grand Total (A+B+C) 103333839 3274055 106607894 100.00 103413284 3194610 106607894 100.00 0(ii) SHAREHOLDING OF PROMOTERS

Sl No.

Shareholders Name Shareholding at the beginning 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 pledgedencumbered to total shares

No. of shares


% 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


16 17

(iii) CHANGE IN PROMOTERS’ SHAREHOLDING : There is no change in promoter’s shareholding during FY 2014-15.

(iv) Shareholding Pattern of top ten Shareholders (other than Direcors, Promoters & Holders of GDRs & ADRs)

Sl. No

Shaeholding at the beginning of the year

as on 01.04.2014

Change in Shareholding during

the year

Shareholding at the end of the year as on

31.03.2015For Each of the Top 10 Shareholders No.of

shares% of total

shares of the

company

No of shares

% of total shares of the

company

No of shares

% of total shares of the

company1 Passage to India Master Fund Ltd. 10181818 9.55 0 0 10181818 9.552 Sparrow Asia Diversified Opportunities Fund 9810593 9.20 (7024394) (6.59) 2786199 2.613 Davos International Fund 8545454 8.02 (8545454) (8.02) 0 04 Leman Diversified Fund 7898182 7.41 (7898182) (7.41) 0 05 Bridge India Fund 7332839 6.88 (7332839) (6.88) 0 06 Prime India Investment Fund Ltd. 5700000 5.35 0 0 5700000 5.357 Lotus Global Investment Ltd. 3746160 3.51 (3746160) (3.51) 0 08 Cresta Fund Ltd. 2900000 2.72 (1788302) (1.68) 1111698 1.049 Elara India Opportunities Fund Ltd. 2100000 1.97 0 0 0 0

10 Mavi Investment Fund Ltd. 1310000 1.23 0 0 0 011 Shri Parasram Holdings Pvt. Ltd. 0 0 1562103 1.47 1562103 1.4712 APMS Invstment Fund Ltd. 0 0 1310000 1.23 1310000 1.2313 LSE Securities Ltd. 0 0 1077821 1.01 1077821 1.0114 Bridge India Fund 0 0 969890 0.91 969890 0.9115 Rudra Mani Kaushik 0 0 732062 0.69 732062 0.6916 Muzaffaruddin Mohammed 0 0 692200 0.65 692200 0.65

The aforesaid holding by top ten shareholders is due to market operations and during the Financial Year 2014-2015.

(v) Shareholding of Directors & KMP

Sl. No

Shareholding at the end of the year

Cumulative Shareholding during the year

For Each of the Directors & KMP No.of shares


No of shares


1 Jaikumar Kapoor - DirectorAt 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)

2 Harish MehtaAt the end 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)

- -

3 S. P. Tanwar- Nominee DirectorAt the end 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)

- -

4 Harimohan Namdev - DirectorAt the end 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)

- -


16 17

Sl. No

Shareholding at the end of the year

Cumulative Shareholding during the year

For Each of the Directors & KMP No.of shares


No of shares


5 Harshad Udani - DirectorAt the end 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)

- -

6 Ami Kothari - DirectorAt the end 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)

- -

7 Asish Narayan - Company SecretaryAt the end 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)

- -

V INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment

UnsecuredLoans

Deposits TotalIndebtedness

Indebtness at the beginning of the financial yeari) Principal Amount 41,701,546,205 41,701,546,205ii) Interest due but not paid 1,573,862,233 1,573,862,233iii) Interest accrued but not due -Total (i+ii+iii) 43,275,408,438 43,275,408,438Change in Indebtedness during the financial yearAdditionsReductionNet ChangeIndebtedness at the end of the financial yeari) Principal Amount 41,698,867,507 41,698,867,507ii) Interest due but not paid 1,574,397,341 1,574,397,341iii) Interest accrued but not due -Total (i+ii+iii) 43,273,264,848 43,273,264,848

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

Sl. No

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

Jaikumar Kapoor Harshad Udani1 Gross salary - - -

(a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961.(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) - - -Ceiling as per the Act 6,000,000 6,000,000


18 19

B. Remuneration to other directors:

Sl. No

Particulars of Remuneration Total Amt.Harish Mehta

S. P. Tanwar

Harimohan Namdev

Harshad Udani

Ami Kothari

1 Independent Directors(a) Fee for attending board committee meetings 51,000 47,000 30,000 - 2,000 130,000(b) Commission - - - - - -(c ) Others, please specify - - - - - -Total (1) 51,000 47,000 30,000 - 2,000 130,000

2 Other Non Executive Directors(a) Fee for attending Board Committee Meetings - - - - - -(b) Commission - - - - - -(c ) Others, please specify. - - - - - -Total (2) - - - - - -Total (B)=(1+2) 51,000 47,000 30,000 - 2,000 130,000Total Managerial Remuneration 130,000Overall Cieling as per the Act. 6,000,000

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

Sl. 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.

17.00 10.22 27.22

(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 Option - - -3 Sweat Equity - - -4 Commission - - -

as % of profit - - -others, specify - - -

5 Others, please specify - - -Total 17.00 10.22 27.22

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. COMPANY-

PenaltyPunishmentCompoundingB. DIRECTORS

-PenaltyPunishmentCompoundingC. OTHER OFFICERS IN DEFAULT

-PenaltyPunishmentCompounding


18 19

MANAGEMENT DISCUSSION AND ANALYSISGLOBAL OUTLOOKIn the year 2014-15, the gem and jewellery industry successfully battled several economic issues including the downturn in China, the political and terrorist unrest in Middle East, declining European market and the suffering Russian rouble, which had a direct and adverse impact on the gem and jewellery exports that saw a downward trend.The lower costs of importing roughs through the SNZ (special notified zone) establishment in India is anticipated to benefit the Indian G&J industry hugely in the coming years and will result in an upward growth curve. The scrapping of 80:20 rule has boosted the exports of gold jewllery. The industry is optimistic about maintaining the current levels of performance and looks forward to align with diamond mining companies such as De Beers, Rio Tinto and others to promote diamond and diamond jewelry at a generic level.Performance of the year gone byThe overall gross exports of gems & Jewellery at US$ 39898.81 million (` 243885.81 crores) is showing a decline of 0.62% in dollar terms and growth of 0.43% in rupee term as compared to US$ 40147.50 million (` 242837.07 crores) for the period April 2013-March 2014The overall gross imports of Gems & Jewellery at US$ 31470.78 million (` 192074.99 crores) is showing a growth of 1.29% (2.65% in Rs. term) as compared to US$ 31071.18 million (` 187109.89 crores) for the same period previous year.This import is reflected through a positive impact on the exports of both plain and studded Gold and silver jewellery, propelling growth for Indian design and manufacturing sector.India, which is becoming the leading centre for gems and jewellery, is planning to increase its footprint in Russia and the Commonwealth of Independent States (CIS) countries.Cut and Polished DiamondsThe overall gross export of Cut & Polished diamonds at $ 23160.18 million (` 141514.28 crores) is showing a decline of 5.46% (-4.50% ` term) as compared to $ 24498.48 million (` 148185.20 crores) for the same period of previous year. This can be attributed to the decline in volume terms of the gross Import of rough diamonds at ` 1473.41 lakh carats during April 2014 – March, 2015 that has shown a decline of 9.06% compared with the imports at ` 1620.17 lakhs carats during April 13 - March 14.At the same time, the overall gross Imports of Cut & Polished diamonds at $ 6943.07 million (` 42410.19 crores) is showing a growth of 6.15% (7.11% ` term) as compared to $ 6540.77 million (` 39585.97 crores) for the same period of previous year. Gross Imports of rough diamonds at $ 16740.85 million (` 102131.80 crores) in April 2014 - March 2015 have shown a growth of 0.15% (+ 1.75 % ` term) compared with the imports at $ 16716.22 million (` 100377.27 crores) for April 13 - March 14, owing to the increasing costs due to the anticipated shortage of roughs as compared to the increasing demand of diamond.

Gold & Silver JewelleryProvisional gross export of Gold jewellery for the period April 14 - March 15 at US$ 9852.18 million (` 60198.63 crores) shows growth of 17.77% (18.64% ` term) over the comparative figure of US$ 8365.68 million (` 50738.85 crores ) for April 13 - March 14. Provisional gross export of Silver Jewellery for the period April 14 - March 15 at US$ 2054.52 million (` 12583.73 crores) shows growth of 39.29% (41.41% ` term) over the comparative figure of US$ 1475.02 million (` 8898.78 crores ) for April 13 - March 2014. This growth stands testimony to the design and manufacturing excellence of the Indian gem and jewellery sector and a true reflection of PM Modi’s ‘Make in India’ vision.COMPANY’S PERFORMANCEThe unforeseen and unexpected developments in the previous years have affected the workings of the Company. There have been no significant performance during the current year. There have been no further realization of export bills. The Company has, however, lodged a legal suit in the Court in UAE to recover its monies. The legal suit is in progress. The Company’s Financial Performance are as follows:

(` In Lacs )Particulars 2014-15

( 12 months )2013-14

( 6 months )2012-13

( 18 months )Total Revenue 638 535 717431PBT (1227) (25633) (42812)PAT (1227) (25766) (42627)EPS (1.15) (24.26) (40.06)

OUTLOOKWith no 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 UAE.OPPORTUNITIES, THREAT, RISKS AND CONCERNSWith unforeseen developments over the last two years the relevancy of opportunities, threats, risks and concerns are not applicable at the moment.INTERNAL CONTROL AND SYSTEMSThe Company has internal control system commensurate with its size and nature of business to ensure efficiency of operations, compliance and applicable laws and other statutory regulations as well as with internal controls, protection of resources and assets.HUMAN RESOURCESDuring the year under review all the units have stopped functioning due to unforeseen development as mentioned above. The Company has only administrative personnel and relation with them is cordial.CAUTIONARY STATEMENTThe Company has not made any projections, estimates nor any expectations for the future. They are looking forward to the outcome of the legal suit filed in the UAE against its defaulting overseas customers.


20 21

CORPORATE GOVERNANCE PHILOSPHYThe Company is committed to ensure high standards of transparency and accountability in all its activities. The best management practices and high levels of integrity in decision making are followed to ensure long term wealth generation and creation of value for all the stakeholders. The Company follows all the principles of corporate governance in its true spirit.BOARD OF DIRECTORSComposition of the BoardAs on 31st March, 2015, the Board of Directors comprised of 5 members, out of which three are Independent Directors, One Nominee Director and one Executive Director.Board MeetingsThe Board meets at least once in every quarter to review the quarterly results and other items of the Agenda and, if necessary, additional meetings are held.Nine Board Meetings (including adjourned meetings) were held during the financial year ended 31st March, 2015. These were held on 28th May, 2014, 30th May, 2014, 23rd June, 2014, 12th August, 2014, 12th November, 2014, 20th December, 2014, 13th January, 2015, 13th February, 2015 and 23rd March, 2015.The following table gives attendance of the Directors in the Board Meetings (including adjourned meetings) along with the attendance in the last Annual General Meeting held on 30.09.2014:

Name of Director

Appointment / Cessation, if any, during the period

Category Number ofBoardMeetings held

Number of BoardMeetings attended

Attendance at the last A.G.M. held on 30.09.2014Date of

Appoint-ment

Date ofCessation

Mr. Harish Mehta

16.10.2013 - Non-Exec-utive & In-dependent Director

9 9 Yes

Mr. Harimohan Namdev


9 9 Yes

Mr. Satya Prakash Tanwar

27.09.2013 - Nominee Director represent-ing Con-sortium Banks

9 8 No

Mr. Harshad Udani

13.01.2015 - Executive Director

3 3 No

Ms. Ami Kothari


1 1 No

Mr. Jaikumar Kapoor

10.01.2014 02.01.2015 Executive Director

6 6 Yes

Directorships and Committee positions held by the DirectorsIn accordance with Clause 49 of the Listing Agreement, none of the Directors is a member in more than ten Committees or is acting as a chairman of more than five committees across companies in which he is Director. For the purpose of considering the limits of the committees, only the chairmanship and membership of the Audit Committee and Shareholders Grievances Committee / Stakeholders’ Relationship Committee are considered.The Directorships and Committee positions held by the Directors in various other companies as on 31st March, 2015 are given below:

Name of Director

Category Number ofDirector-ship in Other

Companies

Number of Committee

positions held in other Companies

Chairman Member

Mr. S. P. Tanwar

Nominee Director

1 Nil Nil

Mr. Harish Mehta Director 2 1 Nil


Director 3 Nil 1

Mr. Harshad Udani

Executive Director

1 Nil Nil

Ms. Ami Kothari Director 1 Nil Nil

Conduct of the Board MeetingsThe day to day matters concerning the business is conducted by the Executives of the Company under the direction of Executive Directors of the Company with the supervision of the Board. The Board holds its meetings at regular intervals to review and discuss the performance of the Company and other pertinent issues relating to the Company.The Agenda of the meeting is circulated in advance to the Board Members backed by background information to enable them to take appropriate decisions. The Board is kept informed of all major events/items and approvals taken wherever necessaryThe regular information placed before the Board, inter-alia, includes:• Quarterly results for the Company.• Minutes of the meetings of the audit committee and other

committees of the Board.• Materially important show cause, demand, prosecution

notices and penalty notices, if any.• Non-compliance of any regulatory, statutory nature or listing

requirements and shareholders service such as non-payment of dividend, delay in share transfer etc.

Remuneration paid to DirectorsDetails of remuneration paid to Directors for the financial year ended 31st March, 2015.


20 21

(`)

Sr. No.

Name of the Director

BoardMeetingSittingFees

AuditCom-mitteeSit-tingFees

Remu-naration Commit-teeSitting Fees

SalaryPerquisitesSuper-annuation/Commission/ESOP

Total

1. Mr. Harish Mehta

27000 23000 1000 Nil 51000

2. Mr. Harmohan Namdev

27000 2000 1000 Nil 30,000

3. Mr. S. P. Tanwar

26000 21000 Nil Nil 47000

4. Mr. Harshad Udani

Nil Nil Nil Nil Nil

5. Ms. Ami Kothari

1000 Nil 1000 Nil 2,000

6. Mr. Jaikumar Kapoor

Nil Nil Nil 10,22,000 10,22,000

Total 81,000 46,000 3,000 10,22,000 11,52,000Code of ConductA 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.Risk ManagementAs 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.COMMITTEES OF THE BOARDAs on 31st March, 2015 the Company had three committees of the Board, Audit Committee, Stakeholders’ Relationship Committee and Nomination and Remuneration Committee. The decisions relating to the constitution of committees, appointment of members and fixing of terms of service for committee members are taken by the Board of Directors. Composition of the said committees, number of meetings held and attendance during the financial year is as follows:a) Audit Committee

1. Terms of Reference Apart from all the matters provided in Clause 49 of the

Listing Agreement and section 177 of the Companies Act, 2013, the Audit Committee meets statutory auditors as and when required and discusses their findings, suggestions, observations and other related matters. It also reviews major accounting policies followed by the Company. During the period under review, no internal audits were carried out.

2. Composition The Audit Committee consists of two independent

Directors and a whole-time Director. The Audit Committee was re-constituted during the year on 13th January, 2015 whereupon Mr. Harshad Udani was inducted as a member of the Audit Committee replacing Mr. Jaikumar Kapoor, ex-Director of the Company. As on 31st March, 2015, Audit Committee comprising of the following Directors:a. Mr. Harish Mehta, Chairmanb. Mr. Harmohan Namdev, Memberc. Mr. Harshad Udani, Member

3. Meetings and Attendance during the year Five Audit Committee Meetings (including adjourned

meetings) were held during the Financial Year ended on 31st March, 2015. These were held on 28th May, 2014, 30th May, 2014, 12th August, 2014, 12th November, 2014 and 13th February, 2015. The following table gives attendance of the Members in the Audit Committee Meeting:

Name of Members Status No. of Meetings Attended

Mr. Jaikumar Kapoor Executive Director 4Mr. S. P. Tanwar Nominee Director 3Mr. Harish Mehta Non-Executive &

IndependentDirector

5


Non-Executive & IndependentDirector

2

Mr. Harshad Udani Executive Director 1 The statutory auditors, internal auditors are permanent

invitees to the audit committee. The Company Secretary acts as secretary of the committee. Members of the Audit Committee including the Chairman have accounting and financial management expertise. The Chairman of the Audit Committee attended the Annual General Meeting (AGM) held on 30th September, 2014 to answer shareholder’s queries.

The Committee acts as a link between the management, statutory and internal auditors and Board of Directors to oversee the financial reporting process. The terms of reference, role and scope of Audit Committee are in accordance with Clause 49 of the Listing Agreement with the Stock Exchanges read with section 177 of the Companies Act, 2013, which, inter-alia, includes the following:• To review compliance with internal control systems;• To hold periodic discussions with the Statutory

Auditors of the Company concerning the accounts of the Company, internal control systems, scope of audit and observations of the Auditors;

• To review quarterly, half-yearly and annual financial results of the Company before submission to the Board;


22 23

• To make recommendations to the Board on any matter relating to the financial management of the Company;

• Recommending to the Board, the appointment, re-appointment and if required, the replacement and removal of Statutory Auditors and fixation of Audit fees.

b) Stakeholders’ Relationship Committee As on 31st March, 2015 the Shareholders/Investors Grievances

Committee comprised of Mr. Harish Mehta (Chairman) and Mr. S. P. Tanwar.

The Stakeholders Relationship Committee looks into redressing investor’s grievances like transfer of shares, non-receipt of shares, non-receipt of dividends, non-receipt of annual report, etc.

Name and designation of the compliance officer: Mr. Asish Narayan, Company Secretary.

During the year, the Committee met four times, details of which are as under:

Sr. No.

Date Committee strength

No. of members present

1 30.05.2014 2 22. 12.08.2014 2 23. 12.11.2014 2 24. 13.02.2015 2 2

During the year 66 complaints were received from shareholders. All the complaints have generally been resolved to the satisfaction of the complainants

c) Nomination and Remuneration Committee In compliance with the provisions of Clause 49 of the Listing

Agreement and section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee meets as and when required to recommend to the Board the appointment or removal of Director(s) and also for carrying out the evaluation of every directors’ performance and recommend to the Board a Policy relating to remuneration for the Directors, Key managerial personnel and other employees.

The Committee comprises of three Independent Directors

Name of the member DesignationMr. Harish Mehta ChairmanMr. Harimohan Namdev MemberMr. Harshad Udani MemberMs. Ami Kothari Member

The committee met once during the financial year ended 31st March, 2015. The attendance sheet of the members at the meeting were as follows:

Name of the member Designation No. of meetings attended

Mr. Harish Mehta Chairman 1Mr. Harimohan Namdev

Member 1

Mr. Harshad Udani Member 1Ms. Ami Kothari Member 1

d) Risk Management Committee The Company in terms of section 134 (3) of the Companies

Act, 2013 & Clause 49 of the listing agreement had constituted risk management committee comprising of the following members:1. Mr. Harish Mehta, Chairman2. Mr. Harimohan Namdev, Member3. Mr. Harshad Udani, Member 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.

NOMINATION AND REMUNERATION POLICYThe Nomination and Remuneration Policy has been adopted by the Nomination and Remuneration Committee and Board of Directors. The Nomination and Remuneration Policy is comprehensive policy which is in consonance with the industry practices. The policy ensures equality, fairness and consistency in rewarding the employees on the basis of individual performance. The policy is uploaded on the website www.winsomejewellery.comREMUNERATIONThe 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. Non Executive Directors are paid ` 1000/- for attending each meeting of the Board and Audit Committee. Mr. Harshad Udani had been appointed as Whole-time Director at the Board meeting held on 23rd March, 2015 and the payment of remuneration is subject to the approval of the Shareholders, Banks and Central Government.MANAGEMENTManagement Discussion and AnalysisManagement Discussion and Analysis report forms part of the Annual Report and has been detailed separately in the report.DISCLOSURESa) The particulars of transactions between the Company and

its related parties as required by Accounting Standard (AS)-18 issued by the Institute of Chartered Accountants of India are set out in point 32 of Notes to financial statements as at and for the 12 months period ended 31st March, 2015 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.


22 23

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.

f) The Company has adopted and complied with all the mandatory requirements under Clause 49 of the Listing Agreement and there is no case of violation or infringement of the same during the period.

g) 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.

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

SHAREHOLDERSAppointment / Re-appointment of DirectorsMr. Harimohan Namdev, Director, retire by rotation and being eligible, offer himself for re-appointment at the forthcoming Annual General Meeting.The brief particulars of Director seeking appointments/re-appointments is given below:Mr. Harshad UdaniMr. Harshad Udani was appointed as a Director of the Company 13th January, 2015. Mr. Udani is a Graduate and has passed LLB as well as CAIIB (I). He had worked for more than 39 years in Central Bank of India in various capacities. Mr. Udani has retired Asst. General Manager from Central Bank of India. He had also been appointed as Whole-time Director subject to the requisite approval of shareholders, banks and Central government.Ms. Ami KothariMs. Ami Kothari was appointed as an Additional Director of the Company by the Board of Directors at its meeting held on 23rd March, 2015.Ms. Ami Kothari is a non executive Director of the Company She is an Associate member of The Institute of Company Secretaries of India. She is also a Law Graduate from Gujarat University. She has an expertise in compliance strategies and Corporate Governance.Independent Directors MeetingIndependent Directors are regularly updated on performance or any strictures or notices received by the Company from any statutory authority or banks. The Independent Directors Mr. Harish Mehta, Mr. Harimohan Namdev and Ms. Ami Kothari met on 29 March, 2015 without any Senior Management Personnel to evaluate the performance of Non-Independent Directors.Communication with shareholdersWinsome Diamonds and Jewellery Limited has its own web-site www.winsomejewellery.com and all important information

relating to the Company, including results, press releases, etc. are posted on web-site. The results of the Company are published in leading newspapers like Business Standard / The Financial Express /Gandhinagar Western Times.Investor GrievancesThe Company has constituted a Shareholders/Investors Grievances Committee for redressing shareholders’ complaints, as mentioned earlier in this report. Grievance redressal division/compliance officer’s e-mail ID as per clause 47(f) of Listing Agreement, exclusively for the purpose of registering complaints by investors: [email protected] from the Secretarial Auditors of the Company, M/s. S.G. And Associates, Company Secretaries, confirming the compliance with the conditions of corporate governance, as stipulated under Clause 49 of Listing Agreement, is annexed to the Directors Report forming part of the Annual Report.General Body Meetings

Year Location Date Time2011-2012 Mahida Bhavan

IcchanathOpp. S.V.R. Engineering

College, Dumas Road, Surat

395007

22nd June, 2012*29th September, 2012*

12.30 p.m.

2012-2013 27th December, 2013**31st March, 2014**

12.30 p.m.12.30 p.m.

2013-2014 30th September, 2014 12.30 p.m.* The following Special Resolutions were passed at the Extra-Ordinary General Meeting held on 22nd June, 2012:(i) Change of Name of the Company(ii) Payment of Commission to Mr. Jatin R. Mehta as Chairman of

the Company upto 0.50% of the Net Profit.The following resolutions were passed by the Members through postal ballot during the 18 months ended 30th September, 2013:(i) Ordinary Resolution under section 192A, 293(1)(a) of the

Companies Act, 1956 for sale of Unit at Kochi, Kerala.(ii) Ordinary Resolution under section 192A, 293(1)(a) of the

Companies Act, 1956 for creation of further mortgage and/or charge and hypothecation to provide security under Section 293(1)(a) of the Companies Act, 1956 in favour of consortium of Banks.

Mr. Dhiren Dave, Practising Company Secretary conducted the postal ballot exercise.

The following resolutions was passed by the Members through postal ballot during the Financial Year ended 31st March, 2015:Ordinary Resolution for Modification of the Directors’ Report for the 18 months period ended 30th September, 2013.The Company had dispatched to all the shareholders by way of physical as well as Electronic mail the notice required under Section 110 of the Companies Act, 2013. The Company had also extended the requisite electronic voting facility to all shareholders as required under Companies Act, 2013.** 27th Annual General Meeting of the Company originally held on 27th December, 2013 was adjourned. The adjourned AGM was held on 31st March, 2014.


24 25

General Shareholder Information:Annual General Meeting:Day, Date, time and venue30th September, 2015, 12.30 p.m.Mahida Bhavan, Icchanath, Opp. S.V.R. Engineering College, Dumas Road, Surat - 395 007.Financial Calendar (tentative)Financial year:1st April to 31st MarchResults for the quarter ending 30th June, 2015Second week of August, 2015Results for the quarter ending 30th September, 2015Second week of November, 2015Results for the quarter ending 31st December, 2015Second week of February, 2016Results for year ending 31st March, 2015Last week of May, 2016Date of Book Closure Period24th September, 2015 to 30th September, 2015.Listing of Equity Shares on Stock Exchanges and Payment of Listing FeesBSE Limited Scrip Code: 507892Phiroze Jeejeebhoy TowersDalal Street, Mumbai 400 023The Annual Listing Fees for the financial year 2014-2015 has been paid to BSE Limited.DEMAT SEGMENT ISIN : INE664A01015Market Price Data :The price of the Company’s Equity Shares-High, Low during each month in the last financial year:

MONTH BSE(in ` per share)

Indices : Sensex

High Low High LowApril, 2014 6.99 4.92 22939.31 22197.51May, 2014 8.45 4.54 25375.63 22277.04June, 2014 5.99 3.81 25725.12 24270.20July, 2014 3.97 1.76 26300.17 24892.00August, 2014 2.13 1.59 26674.38 25232.82September, 2014 1.97 1.50 27354.99 26220.49October, 2014 1.63 1.35 2789432 25910.77November, 2014 1.65 1.26 28822.37 27739.56December, 2014 1.52 1.36 28809.64 26469.42January, 2015 0.75 0.50 29844.16 26776.12February, 2015 0.73 0.53 29560.32 28044.49March, 2015 0.64 0.40 30024.74 27248.45Delisting of SharesThe Shares of the Company were delisted from National Stock Exchange (NSE) with effect from 31st March, 2015.

Registrar and Transfer Agent:Link Intime India Pvt. LimitedUnit: Winsome Diamonds and Jewellery LimitedC-13, Pannalal Silk Mills Compound, L.B.S. RoadBhandup (West), Mumbai 400 078.Phone : (91-22) 25946970.Fax : (91-22) 2594 6969 / 2596 2691.E-Mail: [email protected]: www.linkintime.co.inShare Transfer SystemShareholders/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. Shareholder’s/Investor’s Grievance Committee is authorized to approve the registration of transfer of shares in the physical segment. 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.Company’s Registered Office Address:Winsome Diamonds and Jewellery LimitedKesharba Market – 2, GotalawadiKatargam, Surat – 395 004Gujarat State, India.Phone: 0261-2535055 Fax: 0261-2533435Investor’s Service Cell:Winsome Diamonds and Jewellery Limited906/907/908, 9th Floor, The PlazaNear Dharam Palace, 55, GamdeviGrant Road, Mumbai-400007Phone: (022) 49200300; Fax (022) 49200333E-mail: [email protected] of Shares and LiquidityThe Equity Shares of the Company are compulsorily traded in electronic form with effect from 28th August, 2000. 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.The total number of shares dematerialized as on 31st March, 2015 are 10,34,13,284 shares representing 97.00% of Share Capital. The Equity Shares of the Company are frequently traded at BSE Limited and National Stock Exchange of India Limited (BSE & NSE).Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity : NILLocation of Factories:• 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.


24 25

Shareholding Pattern as on 31st March, 2015

CATEGORY NO. OFSHARES HELD

% OFSHAREHOLDING

A. Promoter’s Holding1. Promoters

i) Indian Promoters: a. Individuals b. Bodies Corporateii) Foreign Promoters

2,13,2102,66,58,385

-

0.2025.01

-

2. Persons acting in Concert - -

Sub Total 2,68,71,595 25.21B. Non–Promoters Holding3. Institutional Investor

a. Mutual Funds and UTIb. Banks, Financial

Institutions (Central / State Government Institutions/ Non-Government Institutions)

c. Insurance Companiesd. Foreign Banke. FIIs

36,50039,493

-100

2,27,62,646

0.030.04

-0.00

21.35

Sub Total 2,28,38,739 21.424. Others 8,11,72,369 23.86

a. Private Corporate Bodiesb. Indian Publicc. NRIsd. Any Other (Non-executive Directors and their Relatives)

80,11,4951,97,17,391

37,33,1490

7.5118.50

3.52

Sub Total 3,14,62,035 29.51GRAND TOTAL 10,66,07,894 100.00

Distribution of Shareholding as on 31st March, 2015

Shareholding of nominal value of ` No. of Shareholders % to Total Total Amount ` % to TotalUp to 5,000 40043 83.73 60389540 5.675,001 to 10,000 3386 7.08 27091820 2.5410,001 to 20,000 1660 3.47 25815330 2.4220,001 to 30,000 633 1.32 16399420 1.5430,001 to 40,000 313 0.65 11340940 1.0640,001 to 50,000 356 0.74 17131930 1.6150,001 to 1,00,000 662 1.39 51149850 4.81,00,001 and above 773 1.62 856760110 80.36 Total 47826 100.00 1066078940 100.00

For and on behalf of the Board of Directors

Place: Mumbai H. Udani H. MehtaDate: 12/08/2015 Director Director

ANNUAL REPORT 2014-15

INDEPENDENT AUDITOR’S REPORTTo the Members of WINSOME DIAMONDS AND JEWELLERY LIMITED1. Report on the 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 2015, 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 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 of these financial statements that give a true and fairview 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 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 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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. 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 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 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 understated by Rs. 214,54,39,618(net).Trade receivables are understated by Rs. 723,73,84,562, trade payables are understated by Rs. 796,76,830 as on the balance sheet date and foreign currency loan is understated by Rs.74,67,778(Refer Note No. 7, 8 (A5), 14(b),19(c) and 23(b)).

B. The Company has made long term investments in Forever Precious Diamonds and Jewellery Ltd. (Forever) amounting to Rs. 141,17,10,802, thereby resulting in it holding a 49 % stake in the equity of that company. The said investments continue to be valued at cost. As stated in Note No. 12 A 1 & 2, 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 31stMarch 2014. We have observed that there are no significant business operations in Forever. Further the auditors of Forever have qualified the financial statements and termed the company as a non-going concern. In view of the above the Company should have provided the diminution in value of investments amounting to Rs. 141,17,10,801. Accordingly the loss for the year have been understated and investments overstated by Rs. 141,17,10,801.

C. Due to the defaults of the Company to the banks, the Company’s accounts have been classified as NPAs by the banks. Most of the banks have not charged interest on the Company’s borrowings / loans, while some banks have been charging interest at higher rates. The company till last year/period was providing for interest at 12.5 % on all outstanding which was the average rate of rupee export finance. During the year under review no provisions have been made for such interest at the year end and provisions made during the year have been reversed at year end. Accordingly Interest for the year is understated resulting in total loss of the Company is understated by Rs. 565,86,78,505. (Refer Note 23 (a)).

5. Basis for Disclaimer of OpinionA. In respect of Trade Receivables amounting to Rs.

4,743,24,55,740 the auditors have not received any confirmations of balances even after requesting for the confirmations. The management has obtained confirmation of balances from the respective parties only as on 31st March, 2013 and none thereafter. There have been defaults on the payment obligations by the debtors on the due dates. Various attempts have been made by the management and lenders for recovery, however such

25 A

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

attempts have not resulted into any significant collections or getting commitment from the parties regarding schedule of payments which are acceptable to the management / lenders. In view of the above we are unable to comment on 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 14 and Note 16 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. 27 of the financial statements detailing the developments that have happened in the last 2 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 since the volumes of business have also drastically dropped in the last 2 years. 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, no positive steps taken by the management, 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 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. Disclaimer of Opinion Because of the significance of the matters described in the

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

7. Emphasis of MatterA. The Company has not appointed any Internal Auditors for

the year and accordingly no internal audits were carried out for the entire year. (Refer note no. 27(ii))

B. The Company has not carried out any valuation of the stocks of Diamonds and Pearls which are lying with them/in the joint custody with the bank. To that extent the increase or decrease in the value of diamond pearl stocks 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. 27(iii))

8. Report on Other Legal and Regulatory Requirements1.) As required by The Companies (Auditors Report) Order,

2015 (“the Order”) issued by the Central Government of India in terms of subsection(11) of section 143 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the said order.

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.

(e) On the basis of written representations received from the directors as on 31st March, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

(f) with respect to the 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

RAJNIKANT.C. RESHAMWALAPARTNER

MUMBAI: 30th May,2015 MEMB. NO. 005502

25 B


Annexure – ASr. No.

Details of Litigation

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 ReceiverIn the proceedings against the Winsome, 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 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.

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

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

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

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

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

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

ANNEXURES TO THE AUDITORS’ REPORT(Referred to in para 8 (1) of our auditor’s report of even date on the accounts for the year ended 31st March, 2015 of WINSOME DIAMONDS AND JEWELLERY LIMITED.On the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we state that:1. (a) The Company has maintained proper records, showing full

particulars including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets were being physically verified by the management at each branch in accordance with a phased programme of verification. The said procedure was being followed in the past was reasonable considering the size and nature of its business and no material discrepancies were noticed in the past years. However during the current year in case of some branches where the operations have ceased / suspended, complete verification has not been done.Material discrepancies, if any will be highlighted once the physical verification would be completed. (Refer to note Nos. 10 & 11.)

2. (a) In June 2013, the banks had placed the stock of diamonds belonging to the Head Office and the Mumbai Branch office of the Company valued at Rs. 39,35,00,031 in the joint custody of the Company and the banks.The banks had done a test check valuation of the said stock as on 30th September, 2013 where officers of the Company were also present. The said valuation has been then forwarded to the company.Since November 2013 the stocks of Chennai SEZ & Cochin SEZ were also valued and put in the joint custody of the banks. Confirmation of the stocks lying with the bank has been confirmed by the management on the basis of the letter obtained from the bank as on that date. For the current year under consideration, the stock lying in joint custody of the banks at HO, Cochin & Chennai the management hasnot carried out any physical verification of such inventory.Physical verification of inventory at other branches has been done by the management at regular intervals.

(b) The procedures of physical verification of inventories, other than that in the joint custody of the banks, as followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) As stated by the management, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records, were not material. Since majority of the inventory is held in the joint custody of the consortium of banks, which was not available for our verification, we have relied on the certificate of the bank and the Company and hence we are unable to comment on the stock of inventory as at the year ended March 31, 2015.

3. (a) As per the information and explanations given to us and the records produced before us for our verification, the Company has not granted unsecured loan to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.Accordingly, clause 3 (iii) (a) & (b) of the Order is not applicable to the Company.

4. In our opinion and according to the explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business with regards to purchases of inventory, fixed assets and sale of goods and services. During the course of the audit we have not observed any continuing failure to correct major weaknesses in internal control.

5. The Company has not accepted deposits from the public. As the company has not accepted deposits, the questions of verifications of the directives of the Reserve Bank of India and the relevant

25 C


provisions of the Companies Act and the rules framed thereunder and their compliance does not arise.

6. In the Present case, the Central Government has not prescribed the maintenance of Cost Records under section 148 (1) of the Companies Act, 2013. Accordingly clause 3 (vi) of the Order is not applicable to the Company. As such the question of reviewing the books of account to be maintained by the Company pursuant to such an order does not arise.

7. (a) According to the records of the company, undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance dues, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material 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 undisputed amounts due and outstanding for a period exceeding 6 months are as below :

Value Added Tax at Surat & Bangalore: Rs. 1,70,026 (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, service tax, customs duty, excise duty, wealth tax and cess, which have not been deposited.

Name of the Statute

Nature of dues

Amount(Rs.) Period to which the amount relates

Forum where dispute is pending

Income Tax Act,1961

Income Tax

40,32,046/- A.Y 2010-11

CIT(A)

Income Tax Act,1961

Income Tax

9,87,022/- A.Y 2011-12

Request for Rectification u/s 154 and CIT(A)

Income Tax Act,1961

Income Tax

2,06,903/- A.Y 2013-14

CIT(A)

Total demand 52,25,971/-Less: Refunds due, but yet to be received

66,87,937/-

Tax payable Nil (c) The Company has transferred the amount required to be

transferred to investor education and protection fund in accordance with the relevant provisions of the Act and rules made there under. The same have been transferred within the stipulated time.

8. The Company does not have accumulated losses. The Company has incurred cash losses in the financialyear covered by our audit. The Company has also incurred cash losses in the immediately preceding financial period.

9. The Company has defaulted in payment of loans to banks during the year preceding the previous financial period and continued in this financial year. The details of such default are as under:

Bank Name Total Amount Defaulted

Date Default started

Axis 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 18/03/2013

Bank Name Total Amount Defaulted

Date Default started

Central 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 periods. 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.

10. As informed to us, the Company had given guarantees of USD 5.5 mn for credit facilities availed by its erstwhile overseas subsidiary,Su-Raj Diamonds and Jewellery DMCC, from banks.The Company had divested its entire equity holding in the said subsidiary in the past. However the said guarantee had not been released since then, and the status of the guarantee was not available with the Company. The tenure of the guarantee has expired as on 31st March, 2015 and hence the same has been considered as discharged. Thus the company has not given any guarantees for loans taken by others from banks or financial institutions as on the balance sheet date.

11. On the basis of the review of the utilization of funds on overall basis and related information as made available to us by the Company, prima facie no fresh loans have been raised by the company during the year and the term loans raised in the past by the Company were applied for the purpose for which they had been raised.

12. We have been informed by the management, that the Banks who have lent funds to the Company, outstanding as at the balance sheet date amounting to Rs. 41,699,434,422/-,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.

For R.C. RESHAMWALA & CO.CHARTERED ACCOUNTANTS

FRN 108832W

RAJNIKANT.C. RESHAMWALAPARTNER

MUMBAI: 30th May,2015 MEMB. NO. 005502

25 D


26

AUDITED BALANCE SHEET AS AT 31st MARCH, 2015Note Current Year

` Current Year

` Previous Period

`

I. EQUITY AND LIABILITIES(1) Shareholders' Funds (a) Share Capital 2 1,064,709,820 1,064,709,820 (b) Reserves and Surplus 3 4,686,595,709 4,814,911,488

5,751,305,529 5,879,621,308(2) Non-Current Liabilities (a) Long-Term Borrowings 4 - 566,915 (b) Deferred Tax Liabilities (Net) 5 52,290,791 52,290,791 (c) Other Long Term Liabilities 6 - 10,000,000

52,290,791 62,857,706(3) Current Liabilities (a) Trade Payables 7 692,740,323 717,944,356 (b) Other Current Liabilities 8 43,605,846,341 43,607,724,966 (c) Short-Term provisions 9 - 345,481

44,298,586,664 44,326,014,803TOTAL 50,102,182,984 50,268,493,817

II. ASSETS(1) Non-Current Assets (a) Fixed Assets (i) Tangible Assets 10 388,516,454 471,457,168 (ii) Intangible Assets 11 4,705 1,228,892 (b) Non-Current Investments 12 1,416,729,554 1,416,729,554 (c) Long-term Loans and Advances 13 39,718,453 45,866,812 (d) Other Non-Current Assets 14 47,428,433,231 47,406,485,357

49,273,402,397 49,341,767,783(2) Current Assets (a) Inventories 15 422,486,501 451,911,235 (b) Trade Receivables 16 4,022,509 49,511,508 (c) Cash and Cash Equivalents 17 163,984,304 173,023,884 (d) Short-Term Loans and Advances 18 238,287,273 252,279,407

828,780,587 926,726,034TOTAL 50,102,182,984 50,268,493,817

Summary of Significant Accounting Policies 1Notes on Financial Statements 2 to 36

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

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

Rajnikant C. Reshamwala PartnerMembership No. 5502

Asish Narayan Company Secretary

Harshad R. Udani Director

Place : MumbaiDate : 30/05/2015


27

AUDITED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH, 2015Particulars Note Current Year

` Previous Period

`

REVENUEI. Revenue from Operations 19 46,937,825 42,939,513

II. Other Non-Operating Income 20 16,884,223 10,596,306

III. Total Revenue (I+II) 63,822,048 53,535,819

IV. EXPENSES

Cost of Materials Consumed 21 43,454,774 14,818,261 Changes in Inventories of Finished goods, Stock-in-trade 21 3,996,007 6,674,007

EmployeeBenefitsExpenses 22 14,261,116 11,956,054

Finance Costs 23 2,955,129 2,533,928,586

Depreciation and Amortization Expense 10 & 11 74,834,870 29,474,580

Other Expenses 24 47,074,486 20,003,462

Total Expenses 186,576,382 2,616,854,950

V. Profit before Tax (III-IV) (122,754,334) (2,563,319,131)

VI. Tax Expense of continuing operations:

Deferred Tax 6 - 13,234,687 - 13,234,687

VII. Profit After Tax (PAT) (V-VI) (122,754,334) (2,576,553,818)

VIII. Earnings per Equity Share 25 Basic & Diluted in Rupees (1.15) (24.20)








28

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH,, 2015Current Year

`Previous Period

`

A. CASH FLOW FROM OPERATING ACTIVITIESNetProfitbeforeTax (122,754,334) (2,563,319,131)Adjustments for :Depreciation 74,834,870 29,474,580Interest Income (1,321,295) (946,475)Finance Cost 2,955,129 2,533,928,586(Profit)/LossonSaleofAssets(Net)andInvestment 3,057,475 -OperatingProfitbeforeworkingcapitalchanges (43,228,155) (862,440)Adjustments for :Trade and Other Receivables 42,674,776 145,602,316Inventories 29,424,734 (347,408)Trade Payable including Bank Loan recalled (37,428,139) 2,257,208,869

(8,556,784) 2,401,601,337Taxes paid 1,006,842 (1,034,521)Cash generated from operating activities (7,549,942) 2,400,566,816

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets - (2,122,076)Sale of Fixed Assets 711,112 -Purchase of Investments - -Sale of Investments - -Interest Received 1,321,295 946,475Net cash from investing activities 2,032,407 (1,175,601)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from Share Premium -Proceeds from Short Term borrowings -Proceeds from Long Term borrowings (566,915) (576,012)Proceeds from Share Capital -Interest and Bank charges Paid (2,955,129) (2,533,928,586)Netcashfromfinancingactivities (3,522,044) (2,534,504,598)Net increase/(decrease) in cash and cash equivalent (A+B+C) (9,039,579) (135,113,383)Cash and Cash equivalent as at 1st April, 2014 (Opening Balance) 173,023,884 308,137,267Cash and Cash equivalent as at 31st March, 2015 (Closing Balance) 163,984,304 173,023,884








29

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2015.

Note. 1 Summary of Significant Accounting Policies followed by the Company

Basis of preparation of Financial Statements:

Thesefinancialstatementshavebeenpreparedonaccrualbasis,underhistoricalcostconventionand incompliance, inallmaterialaspects,withtheapplicableaccountingprinciplesinIndia,theapplicableaccountingstandardsnotifiedundersection129and133andthe other relevant provision of the Companies Act, 2013 (the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014.

1. ThemanagementassumesthattheCompanywillhaveadequatecashflowsfromproceedsofexportrealizationstodefrayitsentiredebt obligations in a phased manner. The Company has provided all the required details evidencing receipt of its export consignment by defaulting overseas customers to Honourable Court in Sharjah, UAE. The Honourable Court has appointed expert/s to look into thefactsofthematter.TheCompanyishopefulofafavourableoutcomeofthelegalsuitfiledagainstdefaultingoverseascustomers,whichisinprogress,inUAEandishopefulofresumingitsnormaloperationsoncethecashflowimproves.Hencetheaccountsofthe 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) Financialstatementsarebasedonhistoricalcosts.Thesecostsarenotadjustedtoreflecttheimpactofthechangingvalueinthe purchasing power of money.

2. Use of Estimates:

Thepreparationoffinancialstatementsareinconformitywithgenerallyacceptedaccountingprincipleswhichrequireestimatesandassumptionstobemadebythemanagementthataffectsthereportedamountsofassetsandliabilitiesonthedateofthefinancialstatements 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) Allfixedassetsarevaluedatcostofacquisition,constructionormanufacturingasthecasemaybe,lessdepreciation.

(b) ExchangedifferencesrelatingtotheacquisitionoffixedassetsaretakentotheStatementofProfitandLoss.

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 ofpurchase/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) Thecostoffixedassets,acquisition/construction,installationsofwhicharenotcompletedareincludedunderCapitalWork-in-Progressandthesameareapportioned/transferredtorespectivefixedassetsoninstallation/completionoftheasset/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,goodswhichareunderproductionandcannotbetermedasfinishedgoodsaretreatedaswork-in-progress.

6. Investments:

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


30

(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 takenthroughtheStatementofProfitandLoss.

(c) Applicationmoniesforinvestmentinsharesareclassifiedasanadvancetilltheallotmentofsharesiscompleted.

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”, 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) Stockonhandasonthelastdatewhichisunderprocessingandnotyetconvertedtofinishedgoodsisconsideredtobeapartof 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 intofinishedgoodswhicharetechnicallyevaluatedkeepinginviewthewidevarietyandgradesofdiamonds.

(d) Finished Goods of Jewellery are valued “At Cost” or “Net Realisable Value”, whichever is lower. Cost includes cost of raw materials,labourcostandproportionatelyallocatedothercostsrelatedtoconvertingthemintofinishedgoods.

(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. ExchangefluctuationsbetweenthetransactiondateandthesettlementdateinrespectofrevenuetransactionsarerecognizedintheStatementofProfitandLoss.

(b) MonetaryAssetsandLiabilitiesdenominatedinForeignCurrencyaretranslatedatyearendexchangeratesandtheProfit/LosssodeterminedarerecognizedintheStatementofProfitandLossfortheyear.

(c) All foreign exchange derivative transactions are fair valued, wherever applicable, as at the year-end in consonance with (i) AccountingstandardsnotifiedUnderSection211oftheCompaniesAct,1956(ii)ApplicableguidelinesissuedbyRBIandtheInstitute 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) AspertheProvisionsoftheAS-11oftheInstituteofCharteredAccountantsofIndia,theprofit/lossoncancellationorrenewalofderivativeinstrumentssuchasforwardcontractandoptioncontractundertakentohedgeexchangefluctuation/pricerisksarerecognisedasincome/expensesintheStatementofProfitandLossfortheyear.

(ii) Option contract open at the year end are recognized at year end rate and the Mark to Market difference, wherever applicable, istakentotheStatementofProfitandLoss.

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


31

9. Employees Retirement Benefits:

(a) DefinedContributionPlans:

TheCompanyhasDefinedContributionPlanforpostemploymentbenefitintheformofprovidentfundforeligibleemployeeswhichisadministeredbyRegionalProvidentFundCommissioner.ProvidentfundisclassifiedasDefinedContributionPlanastheCompanyhasnofurtherobligationbeyondmakingthecontributions.TheCompany’scontributionstoDefinedContributionPlansarechargedtotheStatementofProfitandLossasandwhenincurred.

(b) DefinedBenefitPlans:

TheCompanyhasDefinedBenefitPlanforpostemploymentbenefitintheformofGratuityforeligibleemployeeswhichareadministeredthroughaGroupGratuityPolicywithLifeInsuranceCorporationofIndia(LIC).TheliabilityfortheaboveDefinedBenefitPlanisprovidedonthebasisofanactuarialvaluationascarriedoutbyLIC.Theactuarialmethodusedformeasuringthe liability is the Projected Unit Credit Method.

(c) Terminationbenefitsarerecognizedasanexpenseasandwhenincurred.

(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 differencebetweentheBookProfitsandTaxProfitsthatoriginate inoneperiodandarecapableofreversal inoneormoresubsequent periods.

11. Borrowing Cost:

BorrowingCoststhatareattributabletotheacquisition/constructionoffixedassetsarecapitalizedaspartofthecostoftherespectiveassets. Other borrowing costs are recognized as expenses in the period in which they are incurred.

12. Impairment of Fixed Assets:

ConsideringAS-28-ImpairmentofAssetsasspecifiedbytheInstituteofCharteredAccountantsofIndia,theCompanyattheendofeach year determines whether there are any Assets that require a provision for impairment loss. Impairment loss is charged to the StatementofProfitandLossintheyearinwhich,anassetisidentifiedasimpaired,whentheCarryingRateoftheassetexceedsitsrecoverable value. The impairment loss booked in prior accounting years is reversed if there is a upward change in the estimate of recoverable account.

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 eventslikelyobligationwithahighprobabilityofanoutflowofresources.ContingentAssetsarenotrecognizednordisclosedinthefinancialstatements.ContingentLiabilities,ifmaterial,aredisclosedinthenotestotheaccounts.


32

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2015Note 2. SHARE CAPITAL(A) Authorised, Issued, Subscribed and Paid-up Share Capital and Par Value Per Share

No. of Shares Current Year`

No. of Shares Previous Period `

AUTHORISED SHARE CAPITAL

Equity Shares of Rs.10/- each 150,000,000 1,500,000,000 150,000,000 1,500,000,000 ISSUED SHARE CAPITAL

Equity Shares of Rs.10/- each 106,607,894 1,066,078,940 106,607,894 1,066,078,940

SUBSCRIBED & PAID-UP SHARE CAPITAL

Equity Shares of Rs.10/- each 106,607,894 1,066,078,940 106,607,894 1,066,078,940

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

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

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

Current Year No. of Shares

Previous Period No. of Shares

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

Add :

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

- -

106,607,894 106,607,894

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

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

SHAREHOLDERS Current Year Previous Period No. of Shares % of Holding No. of Shares % of Holding

1) Passage To India Master Fund Limited 10,181,818 9.55% 10,181,818 9.55%2) SparrowAsiaDiversifiedOpportunitiesFund - - 9,810,593 9.20%3) Davos International Fund - - 8,545,454 8.02%4) LemanDiversifiedFund - - 7,898,182 7.41%5) Prime India Investment Fund Limited 5,700,000 5.35% 5,700,000 5.35%6) Bridge India Fund - - 7,332,839 6.88%7) Kohinoor Diamonds Private Limited 14,138,996 13.26% 14,138,996 13.26%

TOTAL 30,020,814 28.16% 63,607,882 59.67%


33

Note 3. RESERVES AND SURPLUS

Current Year`

Current Year`

Previous Period`

1) CAPITAL RESERVEAs per Balance Sheet 50,341,338 50,341,338

2) SECURITIES PREMIUM ACCOUNTAs per last Balance Sheet 4,724,538,450 4,724,538,450

Less : 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 (3,354,255,469) (777,701,651)

- Less : Short fall of Depreciation consequent upon change (5,561,445) -

in useful life as per Companies Act 2013

-Add:NetProfitafterTaxtransferredfrom

StatementofProfit&Loss (122,754,334) (2,576,553,818)

- Balance as at the close of the Year (3,482,571,248) (3,354,255,469)

TOTAL 4,686,595,709 4,814,911,488

Note 4. LONG-TERM BORROWINGSTERM LOANS (SECURED){ Excluding Amounts due in next 12 months (Current Maturities of

Long Term Debts) which is shown under Other Current Liabilities }

From Banks

ICICI Bank Ltd. - 566,915

Secured by Hypothecation of Vehicles acquired ( AX-2115 )

The term loan is repayable in 11 Equated monthly installments and ending in February 2016 .

Rate of Interest is 10.32% p.a. Tenure of the loan is 5 year.

TOTAL - 566,915

NOTE :There were minor delays for few days during the period 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 Period, there are no delays in repaytments of car loans.


34

Current Year`

Current Year`

Previous Period`

Note 5. DEFERRED TAX LIABILITIES (NET)Deferred Tax Liabilities- On account of Depreciation difference 52,290,791 52,290,791Deferred Tax Liabilities (Net) 52,290,791 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. TheBookProfitsandTaxProfitsthatoriginateinoneperiodandarecapableofreversalin one or more subsequent periods for the year.There is Deferred Tax Assets for the year ended 31st March 2015. The Company has not recognised Deferred Tax Assets as there has substantial losses for the year and the past few years. There is no certainity that the said losses would be adjusted against future profit.ThusasamatterofprudenceDeferredTaxAssetshasnotbeenconsidered.

Note 6. OTHER LONG TERM LIABILITIESTrade/Security Deposits Received against Plant andMachineries leased to Su-Raj Jewellery (I) Private Ltd. - 10,000,000TOTAL - 10,000,000

Note 7. TRADE PAYABLES UNSECURED Trade Payables 692,740,323 717,944,356TOTAL 692,740,323 717,944,356As stated in the Note no. 27, 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 theCompanydoesnothaveanyothercashflows toarrange for remittances tooverseas 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 31.03.2015, the amount payable would have been higher by Rs.79,676,830/-. (Previous Period as at 31st March, 2014 Rs.57,158,767).

Note 8. 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 4,337,500,878 4,359,453,191- Outstanding in respect of Fund Based credits availed of upon inter-changeability from Non Fund Based limits 1,844,657,912

1,844,657,912

6,182,158,790 6,204,111,103II DEVOLVED LETTER OF CREDITS

Devolved Letters of Credit 19,723,665,198 21,631,498,574Overdrawn Current Accounts 15,784,481,795 13,856,839,696

35,508,146,993 35,488,338,270


35

Current Year`

Current Year`

Previous Period`

III Overdue instalments of long term debt 8,561,724 9,096,832IV Net Interest Provided as per note 23 1,574,397,341 1,573,862,233

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

(A) Hypothecation of(1) Inventory and Book Debts (both present and future) of the Company(2) Plant and Machinery and Fixtures and Fittings (fastened to earth or

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

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

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

(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) OfficePremisesatGamdeviinMumbaioftheCompany(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, PromoterTerm 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.29) 326,365,427 321,646,429

C OTHER CURRENT LIABILITIESCurrent maturities of long term debt to Bank 566,915 576,012Unpaid/Unclaimed dividends 4,900,610 7,075,355Sales Tax / VAT payable / Service Tax Payable 655,028 2,105,077Other payables 93,513 913,655TOTAL 43,605,846,341 43,607,724,966


36

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.

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

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

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

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 2015. Had it been restated on the basis of exchange rate as at 31.03.2015, the amount payable would have been higher by Rs.7,467,778/-. (Previous Period Rs. Nil).

A6 FewBankshaveclassifiedtheCompanyanditsdirectorsaswillfuldefaulters.However,theCompanyhasvehementlydeniedthesame 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 The Company has initiated legal proceedings before the Conciliation Committee of Sharjah Federal Court, the step preceding to filingofcommercialcasesbeforetheSharjahCourtinMay2014.ThecaseisunderprogressandtheexpertsappointedbytheUAECourt have sought explanations from the defaulting overseas customers. Your Company is hopeful of an early favourable outcome from the proceedings.

B As the Company had not declared any dividend for the FY 2013-2014 (6 month period) and FY 2012-2013 (18 month period), 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 just did 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 2006-2007 amounting to Rs.2,168,537 (During the previous Period Rs.1,773,828 for FY 2005-2006) 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 Rs.7,918,400/- and Interest Rs. 1,191,525/- (Previous Period Rs. 535,108/-) due there on. The default is continuing as on the date of balance sheet.

E There were minor delays for few days during the period 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, there are no delays in repaytments of car loans.

Current Year`

Previous Period`

Note 9. SHORT-TERM PROVISIONSProvisionforEmployeeBenefits - 345,481Total - 345,481


37

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38

11 FIXED ASSETS - INTANGIBLE

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

April 2014Additions /

adjustments during the

year

Sales/Scrapped/ Dispossed Off during

the year

As at 31st March 2015

As at 1st April 2014

Provided during the

year

Sales/Scrapped/ Dispossed Off during

the year

Charged off

against Retained Earning




(1) (2) (3) (5)=1+2-3-4 (6) (7) (8) (9) (10)=6+7-8-9 11=5-11 (5)-(9)

12 = 1-6 (8)-(12)

1. Computer Software

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

5,683,217 - 5,642,980 40,237 4,454,325 14,964 4,433,757 - 35,532 4,705 1,228,892Total 5,683,217 - 5,642,980 40,237 4,454,325 14,964 4,433,757 - 35,532 4,705 1,228,892Previous Period 5,683,217 - - 5,683,217 4,148,153 306,172 - 4,454,325 1,228,892GRAND TOTAL 1,184,532,764 - 27,342,300 1,157,190,464 711,846,704 74,834,870 23,573,713 5,561,444 768,669,305 388,521,159 472,686,060Previous Period 1,182,410,688 2,522,070 399,994 1,184,532,764 682,372,125 29,474,579 254,203 254,203 711,846,704 472,686,060 500,038,563

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

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

The Company has not been providing depreciation in respect of these assets.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 Rs.3,122,190/-.4) The Company has considered depreciation as per Schedule II of the Companies Act,2013.Thus assets which have exceeded their

estimatedusefullifehavenotbeenchargeddepreciationandarereflectedattheirrealizableresidual/scrapvalue.Theotherassetshave been depreciated over their useful life as per Schedule II provisions.

5) Of the above, following assets are given on lease to various Companies as on 31st March 2015.

Current Year`

Previous Period `

1. Land - 1,371,7272. Air Conditioners - 1,050,2343. Computers - 153,0964. Electrical Installations - 2,311,3505. Equipments - 3,542,2996. Factory Premises - 17,358,3667. OfficePremises - 4,429,7128. Furniture & Fixtures - 3,070,1699. Plant & Machinery - 112,593,95810. Mould and Dies - 416,373TOTAL - 146,297,284


39

Current Year `

Previous Period `

Note 12. 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 Rs. 10each of Forever Precious Jewellery & Diamonds Ltd.,fully paid-up 1,411,710,802 1,411,710,802

2,434,700 (Previous Period : 2,434,700) Equity Shares of Rs. 10 each of Revah Corporation Ltd., fully paid-up 1 1Less: Diminution in the value of Investments - -

1 1 (ii) In Equity of Other Companies Unquoted, fully paid up (at Cost)

17,500 (Previous Period : 17,500) Equity Shares of Rs. 100 eachof Peakok Jewellery Ltd., fully paid-up 5,012,750 5,012,750

576,250 (Previous Period : 576,250) Equity Shares of Rs. 10 eachof Carbon Accessories Ltd., fully paid-up 1 1

Less: Diminution in the value of Investments - - 1 1

(iii) Investments in Government or Trust Securities2 (Previous Period : 2) Indira Vikas Patra of Rs. 500 each 1,000 1,0001 (PreviousPeriod:1)NationalSavingsCertificatesofRs.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 period ended 31stMarch,2014havequalifiedFPJDLasanon-goingconcern.

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 13. LONG-TERM LOANS AND ADVANCESUnsecured, Considered good

Capital Advances - 311,890

Security Deposits 5,720,402 11,891,403

Loans and Advances to Related Parties 11,000 399,574

Advance Income Tax /TDS (Net of Provision for Taxation) 33,987,051 33,263,945

TOTAL 39,718,453 45,866,812


40

Current Year`

Previous Period`

Note 14. OTHER NON-CURRENT ASSETS

Long Term Trade Receivables

Unsecured, Considered good 47,428,433,231 47,406,485,357

TOTAL 47,428,433,231 47,406,485,357

(a) Please refer Note : 27(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 31.03.2015, the export receivables (including the receivables considered as Trade Receivable in Note No. 16) would have been higher by Rs.7,237,384,562 (Previous Period Rs. 5,061,959,103/-).

Note 15. INVENTORIES

(as certified by Management)

(a) Raw Materials 26,084,565 51,569,256

(b ) Finished Goods 392,679,844 396,675,851

(c) Stores and spares 3,722,092 3,666,128

TOTAL 422,486,501 451,911,235

NOTESa) As stated by the Management, entire inventory of diamonds and pearls at Surat & Mumbai which, though hypothecated in favour

of consortium, was in Company’s possession has been placed in the lockers in PNB and is in the joint custody with PNB since 18.06.2013. The banks had got inventory valued on 30.09.2013 and the total value of inventory, as per valuation report, was Rs.393,500,031.

b) The Stock at Chennai SEZ 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 fresh valuation of Diamonds during the year or as at 31st March 2015 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. The Company has valued its stock of Gold ar rates prevailing as at 31st March 2015.

Note 16. TRADE RECEIVABLES

Outstanding for more than six months from the date

they became due for payment

(Unsecured, considered good) 804,383 46,031,151

Others

(Unsecured, considered good) 3,218,126 3,480,357

TOTAL 4,022,509 49,511,508


41

Current Year`

Previous Period`

Note 17. CASH AND CASH EQUIVALENTS(A) Cash and cash equivalents (i) Balance with Banks (a) In Current Account 143,661,581 148,809,867 (b) In EEFC account 760,858 760,858 (ii) Cash on Hand 154,129 554,079

144,576,568 150,124,804(B) Other Bank Balance (i) Earmarked Bank balances Unpaid dividend bank account 5,649,669 7,824,415 (ii) Bank Fixed Deposits held as margin money or as security against: Bank Guarantees 13,758,067 15,074,665

19,407,736 22,899,080TOTAL 163,984,304 173,023,884

Note 18. SHORT-TERM LOANS AND ADVANCESUnsecured, considered goodLoans and advances to Related parties - 1,000,000

I T / F B T Refund Receivables - 1,729,948

VAT Refund Receivables 2,973,691 1,243,743

Others 235,313,582 248,305,716

TOTAL 238,287,273 252,279,407 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 19 REVENUE FROM OPERATIONSales 39,185,187 19,419,635Other Operating Income Net gain / loss on foreign currency transactions /translation(otherthanadjustedasfinancecosts) - 17,381,291 Labour Charges received 7,732,838 5,874,587 Sale of Scrap 19,800 264,000 TOTAL 46,937,825 42,939,513 Sales of Manufactured Goods Diamonds - 174,690 Jewellery - Gold 39,185,187 19,124,143 Others - 120,802 TOTAL 39,185,187 19,419,635


42

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. 31.03.2015.

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 period i.e. 31.03.2015 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 exchange rate as at 31.03.2015, Net gain / (loss) on Foreign Currency Transactions / Translations would have been higher by Rs. 2,152,907,396 for the current year. (Previous period loss of Rs.1,355,674,462). The Total net gain till date would have been higher by Rs. 7,157,707,732 .

Current Year`

Previous Year`

Note 20 OTHER NON OPERATING INCOMERentals from property 7,276,870 4,182,442Interest Received from Banks 1,321,295 946,475ProfitonSaleofAssets 64,715 -Miscellaneous Income 8,221,343 5,467,389TOTAL 16,884,223 10,596,306Prior Period IncomeThe Miscellaenous Income includes Income for the prior period - 1,361,165

Note 21. COST OF MATERIAL CONSUMEDOpening Stock 51,569,256 44,301,340Add : Purchases 17,970,083 22,086,177

69,539,339 66,387,517

Less : Closing Stock 26,084,565 51,569,256Cost of Material Consumed 43,454,774 14,818,261

Material Consumed Comprises ofRough / Semi processed Diamonds - 109,587Gold 43,454,774 14,708,674TOTAL 43,454,774 14,818,261

-CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK IN TRADEInventories at the beginning of the YearFinished Goods 396,675,851 403,349,858

396,675,851 403,349,858Inventories at the end of the YearFinished Goods 392,679,844 396,675,851

392,679,844 396,675,851Net (increase) / decrease 3,996,007 6,674,007


43

Current Year`

Previous Year`

Note 22. EMPLOYEE BENEFITS EXPENSESSalaries and Wages, Bonus, Gratuity and Allowances 13,384,398 10,201,160

Contribution to PF, ESIC and Gratuity Fund 307,862 244,570

Remuneration to whole time Directors 278,403 1,285,379

Staff Welfare Expenses 290,453 224,945

Total 14,261,116 11,956,054

TheAccountingStandard–AS15(revised2005)onEmployeeBenefitsissuedbytheInstituteof Chartered Accountants of India has been adopted by the Company.

The details as provided by the Insurance Company for the Year ended 31st March, 2015 are reproduced here below.

a) DefinedContributionPlan: The Company has recognized Rs. 273,627 (Rs.219,206) towards contribution made to

Employees Provident and family Pension Fund.b) DefinedBenefitPlan:

Sr. Particulars As on31st March, 2015

As on31st March, 2014

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 672,637 2,570,772(b) Interest Cost 53,811 205,662(c) Current Service Cost 93,032 373,180(d) BenefitsPaid (2,910,711) 461,450(e) Actuarial (Gain)/Loss on obligation 2,143,313 (2,015,527)(f) Present Value of Obligation as at 31st March, 2015 52,082 672,637

3 Change in the Fair Value of Plan Assets(a) Fair Value of Plan Assets as at 1st April, 2014 2,987,120 2,184,710(b) Expected Return on Plan Assets 89,409 258,264(c) Employer’s Contributions - 1,005,596(d) BenefitsPaid 2,910,711 461,450(e) Actuarial Gain/(Loss) on Plan Assets Nil Nil(f) Fair Value of Plan Assets as at 31st March, 2015 165,818 2,987,120

4 Table showing Fair Value of Plan Assets(a) Fair value of Plan Assets at beginning of Year(b) Actual return on Plan Assets 89,409 258,264(c) Contributions - 1,005,596(d) BenefitsPaid (2,910,711) (461,450)(e) Fair Value of Plan assets at the end of the Year 165,818 802,410(f) Funded Status 113,736 2,314,483

5 Actuarial Gain/Loss recognized(a) Actuarial (Gain) / Loss for the Year-Obligation 2,143,313 2,015,527(b) Actuarial (Gain) / Loss for the Year-Plan Assets Nil Nil(c) Total (Gain) / Loss for the Year – Obligation (2,143,313) (2,015,527)(d) Actuarial (Gain) / Loss recognized in the Year (2,143,313) (2,015,527)


44

Sr. Particulars As on31st March, 2015

As on31st March, 2014

6 TheamountstoberecognizedintheBalanceSheetandStatementofProfitandLoss(a) Present Value of Obligations as at the end of Year 52,082 672,637(b) Fair value of Plan Assets as at the end of the Year 165,818 2,987,120(c) Funded Status 113,736 2,314,483(d) Net Assets/(Liability ) recognized in Balance Sheet 113,736 2,314,483

7 ExpensesrecognizedinStatementofProfitandLoss:(a) Current Service cost 93,032 373,180(b) Interest Cost 53,811 205,662(c) Expected Return on Plan Assets (89,409) (258,264)(d) Net Actuarial (Gain)/Loss recognized in the Year 2,143,313 (2,015,527)(e) ExpensesrecognizedinStatementofProfit&Loss 2,200,747 1,694,949Note : The estimate of future salary increases considered in actuarial valuation taking into accountinflation,seniority,promotionandotherrelevantfactors.

Peior Period ExpensesThe expenses includes Expenses for the prior period 278,403

Remuneration to whole time Directors 12,767Salaries and Wages, Bonus, Gratuity and Allowances 291,170

Current Year`

Previous Period`

Note 23. FINANCE COSTSInterest Expenses 392,656 2,541,144,115Bank Charges and other Borrowing costs 2,562,473 1,385,450Net loss on Foreign Currency Transactions and Translations - (8,600,979)Total 2,955,129 2,533,928,586

(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 itsoutstandings/borrowingsincludingTermloanforwindmillasalltheiraccountsareclassifiedasNPAs.MostoftheBanksdonotcharge any interest on the Company’s borrowings as according to RBI prdential 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 Rs.2,146,853,979/-. The Company used to provide for interest in its accounts @ 12.5 % of the outstanding amounts beingtheaverageratefortherupeeexportfinance.ThustheInterestthatshouldhavebeenchargedtotheProfitandlossfortheyear amounts to Rs. 565,86,78,505/-.This action has resulted in the loss for the year being lower by Rs. 5,658,678,505/-.

(b) The Company has not restated its foreign currency liabilities for year ending 31st March 2015. Had it been restated on the basis of exchangerateasat31.03.2015,thefinancecostwouldhavebeenhigherbyRs.7,467,778/-.(PreviousPeriodRs.Nil).

(c) The interest expenses includes Expenses for the prior period Rs. 77,771/-.

Current Year`

Current Year`

Previous Period `

24. OTHER EXPENSESMANUFACTURING EXPENSESLabour Charges /Assortment Charges 15,123,509 6,906,036Power and Fuel consumed 2,136,863 1,247,179Stores, spares and packing materials consumed 297,690 438,025Repairs - Plant and Machinery 114,718 312,243Repairs - Factory Buildings 24,623 54,130Repairs - Others 2,476,252 1,273,936Lease Rent 684,154 313,845

20,857,809 10,545,394


45

Current Year`

Current Year`

Previous Period `

Directors' Sitting fees 130,000 550,000Insurance 572,399 270,375Rates and Taxes (including wealth tax) 610,779 612,790Donation - Others - 2,740Freight & Forwarding Charges 13,219 53,333Payments to statutory auditors :as auditors 500,000 350,000for tax audit 150,000 150,000forcertification 54,944 100,000reimbursement of expenses (out of pocket expenses) 152,946 83,828

857,890 683,828Legal, professional and consultancy charges 12,933,587 2,497,249Advertisement, Publicity and Sale Promotion 565,974 602,449Loss on Disposal/Write off of Fixed Assets 3,122,190 -Miscellaneous Expenses 7,410,639 4,185,304TOTAL 47,074,486 20,003,462

Notes :1 Insurance charges include Rs. NIL (Previous Period Rs. 11,593) for

ECGC Premium reimbursed to banks.2 The Company has various operating leases for factory premises and

office facilities that are renewable on a periodic basis and can beterminated at the option of either party. Rental expenses for operational leasesrecognizedinthestatementofProfitandLossfortheYearareRs. 684,154 /- (Rs. 3,13,845).

Minimum future lease rentals payable are :(a) Payable within one Year 520,203 687,431(b)PayablewithinoneYearandfiveYears 2,080,812 2,509,724(c)PayableafterfiveYears - 1,000,000

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 7,592,884(b)ReceivablewithinonePeriodandfiveYears Nil 10,314,763(c)ReceivableafterfiveYears Nil 16,763,400

3 Prior Period ExpensesThe expenses includes Expenses for the prior periodProfessional Fees 591,800 51,745Factory Expenses - 4,113Labour Charges - 115,250Staff Welfare Expenses - 7,246Lease Rent 54,869 -Rates and Taxes 10,322 -

656,991 178,354


46

Current Year `

Previous Period `

Note 25. Earnings per share:

Profit computation for both Basic and Diluted earnings per share of Rs.10 eachNetprofitasperStatementofProfitandLoss (122,754,334) (2,576,553,818)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 273,824 273,82450% thereof F 136,912 136,912Weighted Average No. of Equity Shares for EPS (D-F) 106,470,982 106,470,982Total Shares as at the close of the Year (A+B) 106,607,894 106,607,894Earning per Share (in Rs.) (1.15) (24.20)

Note 26. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) Contingent Liabilities(a) EPCGBenefits 35,414,184 35,414,184

(Custom Duties payable if Export obligation not met)(b) Guarantees - 298,705,000(c) Directors Remuneration 12,900 -

TOTAL 35,427,084 334,119,184The 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 14b and 7) 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 23).The Company had extended Corporate Guarantee for USD 5.5 million-Rs.298,705,000 for its erstwhile subsidiary to Standard Chartered Bank, London as additional collateral security for business transactions of Su-Raj Diamonds And Jewellery DMCC (SDJDMCC) (erstwhile subsidiary of the Company). The Company has divested its holding in the erstwhile subsidiary in January 2013. In the opinion of managment SDJDMCC has fully squared up all transactions, however, SCB is yet to discharge the guarantee. Now as the tenure of the guarantee expired on 31/03/2015, the same is considered as discharged. The Company has not given any other guarantee.The Company has appointed Mr. Harshad Udani as Whole Time Director effective 23rd March 2015. The proportionate remuneration for the year of Rs. 12,900/- to Mr Udani is not provided as payment of Remuneration to Whole Time Director is subject to approval from the Consortium of Banks and Central Government which is not yet received.The Company has implemented the Provisions of Accounting Standard 29 – Provisions, Contingent Liabilities and Contingent Assets.The Company has recognised the above Contingent liabilities and as such no provision is considered necessary.The Company does not have any Contingent Assets which require provision.Note 27. During the preceding 2 years, the Company witnessed unprecedented turn of events. The Company enjoyed credit facilities of Rs. 375 crores as Fund Based limits and Rs. 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


47

due to the enabling provision in the gold loan agreement, wherein a single default enables bullion suppliers to recall all the gold loan.ThebankersappointedindependentauditfirmsforforensicandinvestigativeauditforwhichtheCompanyofferedexplanations.The Company sent notices to the defaulting overseas customers in October 2013. As no positive actions were received from the defaulting overseas customers, the Company initiated legal proceedings before the Conciliation Committee of Sharjah Federal Court, the step precedingtofilingofcommercialcasesbeforetheSharjahCourtinMay2014.Thecaseisunderprogressandtheexpertsappointedby the UAE Court have sought explanations from the defaulting overseas customers. Your Company is hopeful of an early favourable outcome from the proceedings.FewbankershaveclassifiedtheCompanyanditsdirectorsaswillfuldefaulters.However, theCompanyhasvehementlydeniedthesame and reiterated that they were victim of circumstances beyond their control and are taking all possible steps to recover the same.During the year the Company received notice from Debt Recovery Tribunal. The matter is in progress. The Company also received notice, under the SARFAESI Act, for attachment of its assets, at all locations, from Standard Chartered Bank, 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.During the year under review, the Directors in their meeting 20th December 2014 decided for closure of Goa unit. Accordingly the Company has paid / provided all statutory dues to employees and workers.INTERNAL AUDITWiththeCompany’sbusinesshavingcometostandstill,theCompanybeingdeclaredNPAbythebanksandtheconsequentfinancialcrises, the Company has not appointed internal auditor for the year.INVENTORYEntire 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 on 30.09.2013 and as per their report, the total value of inventory was Rs.39,35,00,031. The stock at Chennai SEZ and Cochin SEZ are also in the joint custody with PNB since November 2013 at Company’s premises.TheInventoryhasnotbeenverifiedbythemanagementthereafterfortheabovelocationasthesameisinthejointcustodywiththeBank. The Company has not carried out any fresh valuation of Diamonds and the valuation done on 30th September 2013 for ascertaining the market value has been adopted by the Company.Note 28. The Company has only one segment 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 29. As per the provisions of Accounting Standard 18 - “Related Party Transactions” issued by the Institute of Chartered Accountants of India, thedetailsofRelatedPartyTransactionsbasedondisclosurecertificateissuedbytheDirectors,isasmentionedhereinbelow:

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

Revah Corporation LimitedKey Management Personnel Mr. Jaikumar Kapoor (Director upto 05 .01.2015)

Mr.Ashish Narayan (Company Secretary) A. Transactions for the year ended 31.03.2015

Associates Key Management Personnel

Total

1. Loan Received 4,718,998 (14,175)

Nil(Nil)

4,718,998(14,175)

2. Loan amount Received Back

388,574(499,500)

Nil(Nil)

388,574(499,500)

3. Directors RemunerationCompany

Nil (Nil)

1,300,767(1,622,459)

1,300,767(16,22,459)

4. Secretary’s Remuneration Nil (Nil)

1,700,006(821,682)

1,700,006(821,682)


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B. Outstanding as on 31st March 20151. Loans and

AdvancesNil

(388,574)Nil

(1,000,000)Nil

(1,388,574)2. Loans Payable 323,106,048

(321,646,429)Nil

(Nil)323,106,048

(321,646,429)** Remuneration includes professional fees paid to Mr. Jaikumar Kapoor Rs. 1,022,364/- (Rs.337, 080/-)Loan given to Mr Jaikumar Kapoor amounting to Rs. 1,000,000/- before he became director of the Company towards his medical expenses has been written off during the year.Note 30.The Engineering Division at Jodhpur has closed its operation. The carrying value of the total assets to be disposed off at Jodhpur is Rs. 10,054,219 (Rs. 10,063,880) as at the Balance Sheet date.Note 31.AdditionalinformationasrequiredundertheCompaniesAct,2013ascertifiedbyaDirectorisasfollows:

Rs. in lacs Rs. in lacsa) Value of Imports on CIF basis

Raw Materials - (-)Stores and Spares - (-)Capital Goods - (-)

- (-)b) Expenditure in foreign currency on account of

Travelling Expenses 58,172 -

c) i) Break-up of the value of Raw Materials Consumed : Rs. in lacs PercentageImported -

(-)-

(-)Indigenous 43,454,774

(14,818,261)100

(100)43,454,774

(14,818,261)100

(100)ii) Break-up of Stores and Spares Consumed :

Imported -(-)

-(-)

Indigenous 297,690(438,025)

100(100)

297,690 (438,025)

100(100)

d) Remittance of dividend in foreign currency :No. of Non-Resident Shareholders NA NANo. of shares held by them NA NADividend Year NA NADividend Amount (Rs. in Lacs) NA NA


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Note 32. TheCompanyhadreceivedConfirmationsason31st March 2013 from those overseas customers who have defaulted in payments. Creditorsandotherdebtor’sconfirmationareyettobereceived.EmailbytheAuditorstotheoverseasSundryDebtorsoftheCompanyaswellastoMajorlocaldebtorsandcreditorstoconfirmthebalances as well as the transactions as on 31stMarch,2015hadbeensent.Howeverthesaiddebtors/creditorshavenotconfirmedthesametotheAuditors.SimilarlylettershavebeensentbytheAuditorstoallbanksaskingforindependentconfirmationsoftheamountsoutstandingandduetotheBanks.ThesaidconfirmationshavenotbeenreceivedbytheAuditorsfromsomeoftheBanks.Note 33.The provision for depreciation and for all known liabilities are adequate and not in excess of the amounts reasonably necessary.Note 34.AspertheinformationavailablewiththeCompanyandcertifiedbythem,totaloutstandingduetoSmallEnterprisesasrequiredtobedisclosed under the Micro, Small and Medium Enterprises Development Act, 2006 at the end of the year is Rs. Nil (Nil).Note 35.Figuresinbracketsinnotes1to34pertaintopreviousperiodwhichwasfor6months,itisnotcomparable,asthecurrentyearfiguresare for 12 months.Note 36. PreviousPeriodfigureshavebeenre-arranged,re-groupedorre-classifiedwherevernecessary.







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Documents

WINSOME DIAMONDS AND JEWELLERY LIMITED REPORT 2014-15 WINSOME DIAMONDS AND JEWELLERY LIMITED (Formerly Su-Raj Diamonds and Jewellery Limited) 2 1 BOARD OF DIRECTORS Mr. Harish Mehta