Goenka Diamond & Jewels Ltd Directors Report.

Dear Shareholders,

Your Directors are pleased to present the Thirtieth Annual Report together with the Audited Financial Statements for the financial year ended March 31, 2020.

Financial Highlights

Particulars 31.03.2020 31.03.2019
Sales and Other Income 1449.78 808.89
Less: Expenses 1409.41 820.60
Profit / (Loss) before tax and depreciation 40.37 (11.71)
Less: Depreciation 44.55 49.92
Net Profit/(Loss) before Tax (4.18) (61.63)
Less: Income tax provision 0.00 0.00
Less: Deferred Tax 5.42 13.37
Less: Earlier Years Income Tax 0.00 0.00
Less: MAT Credit Entitlement 0.00 0.00
Profit/(Loss) after tax (9.58) (75.00)
Balance brought forward from previous year 11988.20 12063.21
Profit available for appropriation 11978.61 11988.20
Appropriation
Issue of Bonus shares
Transfer to General Reserve
Proposed Dividend on Equity shares
Tax on Proposed Dividend
Profit carried over to Balance Sheet 11978.61 11988.20
Earnings per share (0.00) (0.02)

State of Companys Affairs

Your Directors wish to inform you that during the current financial year ended March 31, 2020, the sales and other income of the Company were Rs. 1,449.78 lakhs in comparison of Rs. 808.89 Lakhs for the Fianncial Year ended on March 31, 2019. During the Fianancial Year 2019 20 the company incurred Net Loss before tax of Rs. 4.18 Lakhs against Net loss before tax of Rs. 61.63 lakhs in the previous year. The management of the company would like to appraise that the operations of the company are in recovery mode. However, due to pandemic of COVID – 19 hitting the global economy in current financial year the operations of the company has slowed down along with the global slowdown. However the Companys operations which were allready materially affected, please refer note no

43 of standalone financial statements. The management is of the opinion that company will reinstate its profitability in coming years. In the current year companys losses have declined. However, company is still facing liquidity crunch and the same shall be done away with increasing performance of the company. The previous year figures are re-grouped / re-arranged due to adoption of Indian Accounting standards ("Ind As") as per the applicable rules and regulations in force.

Dividend

Due to losses incurred by the company during the year, the directors do not recommend any dividend.

IPO Fund Utilization

The details of IPO proceeds which have been utilized by the Company are as given under. The Company has utilized major portion of IPO proceeds for expansion as and when the correct opportunity and favorable market conditions were available. However, insignificant portion of the proceeds allocated for the expansion is left unutilized and the remaining amounts of Rs. 76.98 lakhs have been attached / adjusted by government authorities against disputed dues.

Directors and Key Managerial Personnel

Your Board comprises of 6 directors comprising of 2 promoter directors, 1 professional director and 3 independent directors including one woman director. Definition of ‘Independent Director is derived from Regulation 16(b) of the SEBI LODR and Section 149(6) of the Companies Act, 2013. Based on the confirmation / disclosures received from the Directors under section 149(7) of the Companies Act 2013 and on evaluation of the relationships disclosed, the Non-Executive Independent Directors – Mr. Bhau Dhure. Mr. Tushar Momaiyah and Mrs. Dhara Atul Shah are considered as Independent Directors, who are not liable to retire by rotation.

In compliance with the requirements of Section 203 of the Companies Act, 2013, Mr. Nandlal Goenka, Chairman, Mr. Navneet Goenka, Vice Chairman & Managing Director and CFO and, Nidhi Kanoongo, Company Secretary & Compliance Officer of the Company continued as Key Managerial Personnel.

Directors Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013 (‘the Act), in relation to the Annual Financial Statements for the Financial Year 2019-2020, your Directors, to the best of their knowledge and ability, confirm that: a) in the preparation of the annual accounts for the year ended March 31, 2020, the applicable Ind As, which is adopted first time in preparation of financial statements for the year ended March 31, 2020 as per the applicable laws and rules and regulations for the time being in force the read with requirements set out under

Schedule III to the Act, have been followed along with proper explanation relating to material departures; b) 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 as at March 31, 2020 and of the loss of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the 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 fraud and other irregularities; d) the directors have prepared the annual accounts on a "going concern" basis. However, the Statutory Auditors have expresses doubts on the ability of the company to continue as a going concern. e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively, except that the credit given to the overseas buyers in the previous year(s). The present outstanding amount of debtors receivable is majorly due to the credit sales made in the previous year(s). Likewise, the payments of statutory dues and bank dues need to be regularized, though the same is the result of the liquidity crunch the company is presently facing mainly due to extending credit to buyers. The company has initiated legal proceedings against the debtors in the respective courts. f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Subsidiary Company and Consolidated Financials

In compliance with Section 129 of the Act, a statement containing requisite details including performance and financial position of each of the subsidiary companies is annexed to this report in Form AOC-1 As per the requirements of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, and other rules and regulations as may be applicable from time to time, the audited consolidated financialstatements of your company is prepared in accordance with applicable Indian

Accounting Standards (Ind AS) are enclosed herewith.

Board Evaluation

Pursuant to the provisions of companies Act, 2013, and SEBI LODR, the Board has carried out evaluation of performance of its own, the independent directors individually as well the evaluation of the working of its ‘Audit, ‘Nomination & Remuneration and ‘Stakeholders Relationship committees. The performance evaluation of non-independent directors was carried out by the independent directors in a separate meeting.

The manner in which the evaluation has been carried out has been explained in Corporate Governance Report.

Remuneration Policy

The current policy is an appropriate mix of executive and independent directors to maintain the independence of the Board. The Nomination & Remuneration Committee framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel, Senior

Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

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

Deposits and Unclaimed Dividend

During the year under review, your company has not accepted any public deposit under Chapter V of the Companies Act, 2013.

During the year under review, pursuant to section 124 of the Companies Act, 2013 and Investor Education and

Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016 (the "Rules") framed there under,

Number of Meetings of the Board

The Board met Four times in financial year 2019-2020, on May 29, 2019, August 14, 2019, November 14, 2019 and February 07, 2020. The maximum interval between any two meetings did not exceed 120 days. However, in

Financial Year 2020-21 the first Board meeting of the Company was held on June 30, 2020, which exceeded the gap of 120 Days. This was due to global pandemic of COVID-19. The Ministry of Corporate Affairs vide general circular no. 11/2020 dated March 24, 2020 has given one time relaxation from maximum gap of 120 days in two consecutive meetings upto maximum gap of 180 days till the next two quarters that is till quarter ending September 2020.

Details of Committees of the Board

The Company has following Committees of the Board:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

1. Audit Committee

The Present Audit Committee comprises namely Mr. Bhau Dhure, Mr. Navneet Goenka, Mrs. Dhara Shah and Mr. Tushar Momaiyah. The committee was reconstituted in the meeting of Board of Directors dated February 07, 2020.

Mr. Bhau Dhure – Chairman Mr. Navneet Goenka – Member. Mrs. Dhara Shah – Member. Mr. Tushar Momaiyah – Member*

*Mr. Tushar Momaiyah appointed as an additional director w.e.f. February 07, 2020 All the recommendations made by the committee were accepted by the Board.

2. Nomination and Remuneration Committee

The Present Nomination and Remuneration Committee comprises namely Mrs. Dhara Shah, Mr. Bhau Dhure and Mr. Tushar Momaiyah. The committee was reconstituted in the meeting of Board of Directors dated February 07, 2020.

Mr. Tushar Momaiyah – Chairman* Mrs. Dhara Shah – Member Mr. Bhau Dhure – Member

All the recommendations made by the committee were accepted by the Board. *Mr. Tushar Momaiyah appointed as an additional director w.e.f. February 07, 2020

3. Stakeholders Relationship Committee

The Present Stakeholders Relationship Committee comprises namely Mr. Bhau Dhure, Mr. Navneet Goenka and Mrs. Dhara Shah. The committee was reconstituted in the meeting of Board of Directors dated February 07, 2020.

Mr. Bhau Dhure – Chairman *Mr. Tushar Momaiyah – Member Mrs. Dhara Shah – Member

All the recommendations made by the committee were accepted by the Board. *Mr. Tushar Momaiyah is appointed as an Additional Director w.e.f. February 07, 2020.

The details of the meetings held and attendance of the members of the above committees of the Board are provided in the Corporate Governance report.

Statutory Auditors

M/s. Ummed Jain & Co., (Firm Regn. No. 119250W) Chartered Accountant, Mumbai Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting.

It is proposed to re-appoint M/s. Ummed Jain & Co., (Firm Regn. No. 119250W) Chartered Accountant, Mumbai as statutory auditor of the Company and they have confirmed their eligibility to the effect that their appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The proposal for their appointment is included in the notice of Annual General Meeting sent herewith.

Auditors Report

In respect of the observations made by Auditors in their report, your Directors wish to state that the replies in that respect have been given in the Directors Report in a separate section.

Secretarial Auditor

The Board has appointed Mr. Vishal N. Manseta, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2019-20. The Secretarial Audit Report for the financial year ended March 31, 2020 is annexed to this Report.

Secretarial Audit Report

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

Contracts and Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material. Accordingly, the particulars of the transactions as prescribed in Form AOC-2 of the rules prescribed under Chapter IX relating to Accounts of Companies under Companies Act, 2013 are not required to be disclosed as they are not applicable. Members are requested to refer Note 35 and 42 to the Standalone financial statements which sets out related party disclosures.

As per Regulation 23 of the SEBI LODR, the Board has adopted a ‘Policy on Materiality of Related Party

Transactions and Dealing with Related Party Transactions which may be accessed on the Companys website i.e. www.goenkadiamonds.com

Extract of Annual Return

The extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Companies (Management & Administration) Rules, 2014 is annexed to this report as on March 31, 2020.

Sexual Harassment

The Company is committed to provide a safe and conducive work environment to its employees and has detailed procedure for the redressal of complaints pertaining to sexual harassment. Your Directors further state that during the year under review, there were no cases filed pursuant to the sexual harassment at workplace.

Material Changes and Commitments, affecting the financial position of the Company

With the impact of COVID – 19 pandemic resulting into a major slow down at global level, the same has affected companys operational cycle adversely. However the Companys operations which were allready materially affected, please refer note no 43 of standalone financial statements. At the same time considering the practical situation on humanitarian ground the company has neither laid off any staff of the company at the same time there was no deduction and/or retention of salary payable to the staff of the company. This policy of the company has adversely affected the cash flow of the company. However, looking at the present scenario the management is of the view that in such difficult situation the laying down activity or reduction / deduction and/or retention of salary payable would have led entire staff into financial crunch.

There have been no material changes and commitments, affecting the financial occurred between the end of the financial year to which the financial statements relate and the date of this report except during the financial year 2018 19 the Corporation Bank, one of the lenders bank of the company has moved to the NCLT Jaipur for the recovery of outstanding dues, as companys account has turned NPA. Due to

COVID – 19 the next hearing date for the same is not yet certain. The matter being sub judice the directors of the company are not able to comment on the same. However, the directors will intimate the members of the company and the regulators from time to time as per the regulations as may be applicable from time to time.

Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Companys operations in future

Thereare nosignificant orders passed by the Regulators/ Courts/ Tribunals which would impact the going concern status of the Company and its future operations.

Corporate Social Responsibility

The provisions related to Corporate Social Responsibility as mentioned in the Act are not applicable to the company.

Risk Management Policy

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Companys management systems, organizational structures, processes, standards, code of conduct and behaviors govern how the company conducts the business and manages associated risks.

Internal Financial Controls the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively, except that the credit given to the overseas buyers in the previous year(s). The present outstanding amount of debtors receivable is majorly due to the credit sales made in the previous year(s). Likewise, the payments of statutory dues and bank dues need to be regularized, though the same is the result of the liquidity crunch the company is presently facing mainly due to extending credit to buyers.

The company has initiated legal proceedings against the debtors in the respective courts.

Share Capital

The paid up equity share capital of the Company as on March 31, 2020 was Rs. 31,70,00,000/- During the year under review, the Company has not issued shares with differential voting rights and sweat equity shares.

Vigil Mechanism

The Company has established Vigil Mechanism and adopted Whistle blower policy for its directors and employees to report concern about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct or ethics policy. The mechanism provides adequate safeguards against victimization of persons who use such mechanism. Protected disclosures can be made by a whistle blower through an e-mail or dedicated telephone line or a letter to the senior executives or to the Chairman of the Audit Committee. During year under review, no personnel were denied access to the Audit Committee.

Corporate Governance

As per SEBI LODR, a separate section on corporate governance practice which is followed by your Company, together with a certificate from Mr. Vishal N. Manseta, Practicing Company Secretary is given in this annual report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The prescribed particulars of employees required under section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached and form part of this report.

Green Initiatives

Electronic copies of the Annual Report 2019-20 and Notice of the 30th Annual General Meeting are sent to all members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their email addresses are requested to register their email ids with their DPs in order to cooperate with the company in implementation of green initiative; and help to protect the environment.

STATUTORY AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

a) Auditors observation : We do not express an opinion on the accompanying standalone Ind AS financial statements of the Company. Because of the significance of the matter described in the Basis for Disclaimer of Opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on this standalone Ind AS Financial Statements Management Reply: The management has provided the major audit evidence to excepting the at certain occasions the account confirmation of overseas debtors and creditors and few bank confirmations owing to the frozen bank accounts and bank accounts converted in NPA. The Company has approached consortium bankers and ARC for settlement of loan dues and assumes that Company will have adequate cash flow from export realisation to defray its entire debt obligation and payment to creditors in phased manner The promoters of the Company are also ready to infuse funds in the company and to raise fund from alternate means to meet short term and long term obligations of the Company.

b) Auditors observation : Refer Note 9(b), 19(b), 5(a) and 12(a) of the standalone Ind AS financial statements wherein, the company has not translated following monetary items denominated in foreign currency as at the year ended closing rate and has been carried forward at the rate as at 31st March 2015, 31st March 2016, and / or 31st March 2017, which is not in accordance with Ind-AS -21 "The Effect of changes in Foreign Exchange Rates" and accounting policy followed by the Company.

Management Reply: It was deemed prudent not to take cognizance of unrealised exchange difference on notional basis due to uncertainties with regard to expected time frame for realisation of Trade Receivables and loans & advances to subsidiaries. Consequently, the payment to creditors is also dependent on recovery from these Trade receivables and loans & advances to subsidiaries. The company shall account for the actual exchange difference at the time of realization of these trade receivables, Loans and advances and at the time of payment to trade payables.

c) Auditors observation : The Company has defaulted in repayment of loans taken from the banks due to which the banks have recalled their loans and have initiated legal actions. Refer Note 20(D)(2) and 20 (D) (3) of standalone Ind AS financial statement wherein its stated that the management has decided not to provide interest on such loans and consequently based on the calculation done by the management total interest amounting to Rs. 13311.46 Lacs determined at estimated rates, has not been provided for in the books of accounts including interest amounting to Rs. 2911.29 Lacs pertaining to the year ended March 31, 2020. Accordingly, finance cost for the year is understated by Rs. 2911.29 Lacs.

Management Reply: The management has taken requisite steps with regards to legal action initiated by the banks and It has been decided by the Board not to provide any interest on working capital borrowing availed by the Company, due to pending proposal for settlement of entire dues, envisaging part-payment of principal amount due to the banks, also management is in discussion with ARC for takeover of outstanding dues.

d) Auditors observation : Refer Note No. 9(a) of standalone Ind AS financial statements regarding non-provision of the expected credit loss/ impairment relating to overdue Trade Receivables of Rs. 69,806.99 Lacs as per the requirement of Ind- AS 109 "Financial Instruments". In view of defaults in payment obligations by the Trade Receivables on due date, non-recoveries from Trade Receivables, non-confirmations/ reconciliation from Trade receivables, initiation of legal action/ suits against Trade Receivables by the company, notices/ summon to the Company from Enforcement Directorate, Reserve Bank of India, Development Commissioner of Surat SEZ and in absence of clear forward looking information regarding outcome of pending legal actions initiated and time frame and quantum of realisability of these Trade receivables, we are unable to determine the amount of expected credit loss/ impairment based on provision matrix as per the requirements of Ind-AS 109 "Financial Instruments" and its consequential impact, on the financial statements..

Management Reply: There have been defaults on payment obligations by the trade receivables on due date and recoveries from these trade receivablesarenotsignificant, due to certain unfavourable developments in earlier years and economic slowdown especially in diamond sector. No confirmations have been received by trade receivables. The Company is taking all possible efforts to recover old trade receivables and had initiated legal action wherever considered necessary. However, looking at the past record regarding recovery from Trade receivables, the management is of the opinion that looking to the uncertainty regarding time frame and quantum of realisation from these trade receivables, amount of expected credit loss required to be recognised cannot be estimated and therefore no provision for expected credit loss is required to be made against these trade receivables.

e) Auditors observation : Refer Note No. 5(b) and 40(c) of standalone Ind AS financial statements regarding non-provision of the expected credit loss/ impairment on loan to a subsidiary amounting to Rs. 1943.49 Lacs

(including accrued interest) and investment in an entity by way of Optionally Convertible Debentures amounting to Rs. 621.91 Lacs (including accrued interest) as per the requirement of Ind- AS 109 "Financial Instruments". The net worth of above subsidiary and entity is negative and based on reasonable and supportable information regarding the current financial status and business condition of these entities, there has been significant increase in credit risk and there could be delay/default in recovery of these amounts. Considering the above, we are unable to comment on the amount of expected credit loss/ impairment and its consequential impact, on the financial statements.

Management Reply: Loans given to subsidiaries is in the nature of long term loan for set up of business of the subsidiary and is part of net investment in the subsidiary. The operation of the subsidiary shall soon be revived and these loans will be recovered in near future and therefore non provision for expected credit loss is required.

In respect of investment in OCD, the company assumes that the amount shall be recovered as per the terms of repayment and therefore no impairment is required.

f) Auditors observation: The Companys operating results have been materially affected due to various factors including non-realization of Trade receivables, defaults in repayment of loans and interest to banks, non-availability of finance due to recall of loans by banks in consortium, legal actions/ insolvency proceedings initiated by banks against company for recovery of its dues, notices/ summon from Enforcement Directorate, Reserve Bank of India, Development Commissioner of Surat SEZ and from other regulatory authorities, pending proceeding with National Company Law Tribunal, Debt Recovery Tribunals and other courts for recovery of banks dues and possession/attachment/sale of companys properties, assignment and transfer of dues of banks in favor of an asset reconstruction company (ARC), pending income tax demands and consequent attachment of bank accounts by Income tax department, reliance on cash sales for meeting out expenses, overall substantial decrease in volume of business and sales, non-payment of statutory dues and taxes, overdue creditors, non realization of loan and interest thereon from a subsidiary etc.. We are also unable to determine the impact of actions and forthcoming actions that may be taken by various legal and statutory authorities due to various factors mentioned herein above. These events cause significant doubts on the ability of the company to continue as a going concern. The appropriateness of the going concern assumption is dependent on the companys ability to raise adequate finance from alternative means, settlement of its dues to banks and ARC and recoveries from overseas Trade Receivables to meet its short term and long term obligations as well as to establish consistent business operation. The above situation indicates that material uncertainty exist that cast significant doubt on companys ability to continue as a going concern.

g) Auditors observation: Because of the significance of the matters described above in the "Basis of Disclaimer of Opinion" section of our report, absence of sufficient appropriate audit evidences and Material uncertainty related to Going Concern paragraph above, it is not possible to form an opinion on the financial statements due to the potential interaction of the multiple uncertainties and their possible cumulative effect on the financial statements. Accordingly, we do not express an opinion on the financial statements

h) Auditors observation: Balances of Trade Receivables, Trade Payables and Current Assets and Liabilities are subject to confirmations and consequential adjustment thereof

Management Reply: Due to certain unfavourable developments and sluggish market in earlier periods, there is substantial decrease in sales and volume of the business. Recoveries from trade receivables are slow and there is a temporary mismatch in the cash flow resulting in overdue creditors, default in repayment of statutory dues and dues to banks owing to which all banks have classified the account as NPA and recalled their loans.

The management is hopeful that these old trade receivables shall be recovered as the company has initiated legal actions against such debtors, wherever considered necessary. The Company has approached consortium bankers and ARC for settlement of loan dues and assumes that Company will have adequate cash flow from export realisation to defray its entire debt obligation and payment to creditors in phased manner. Further, the management is taking all possible steps to revive the business operations and has achieved the turnover of

Rs. 651.72 lacs during the year. The management is confident that the business modal of the company is still intact and it can carry on the business of the company in profitable manner. The Company is trying its best to successfully come out of this phase as is hopeful that the bankers and ARC will accept its restructuring/ onetime settlement proposal and at the same time is also confident that it will have adequate cash flow from export realization and internal accruals to defray its entire debt obligation in phased manner. The promoters of the Company are also ready to infuse funds in the company and to raise fund from alternate means to meet short term and long term obligations of the Company. Hence the accounts of the Company are prepared on going concern basis. The matter is pending before NCLT, Jaipur the detailed explanation is given in directors report above

. i) Auditors observation: The Inventory has been taken on the basis of physical verification carried out by the management as at the year-end and its valuation is based on determination of estimated net realizable value and specific identification which involves technical judgment of management. We have relied upon by the physical verification and valuation of the Inventory as certified and determined by the management.

Management Reply: Management has put its best efforts in properly valuing the inventory based on determination of estimated net realizable value and specific identification.

j) Auditors observation: Balances with Banks amounting to Rs 39.14 lacs (debit balances) and Rs. 2471.64 lacs (credit balance) at the year end, Trade Payables and Other Current Assets and Liabilities are subject to confirmations and consequential adjustment thereof

Management Reply: Regarding balances of few banks and a asset reconstruction company having outstanding dues of Rs. 9770.13 lacs have neither issued bank statements nor confirmed balance outstanding as at year-end.

However, the management to the best of its knowledge and belief have recorded all the transactions.

k) Auditors observation: Refer Note No. 40(b) regarding investment of Rs. 2.03 lacs and advance of Rs. 59.78 lacs to subsidiary namely M.B. Diamonds LLC and investment of Rs. 7.44 lacs in its subsidiary namely Goenka Diamond and Jewels DMCC, the net-worth of these subsidiaries as at the year end is negative. The Company has not made any provision for Impairment against these investments and advance.

Management Reply: No provision has been made on an investment of Rs. 2.03 lakhs and advance given of Rs.

59.78 lakhs by the Company to its subsidiary namely M/s. M. B. Diamond LLC (Russia) & has made investment of Rs. 7.44 lacs in its subsidiary namely Goenka Diamond and Jewels DMCC whose net-worth is negative as the management is of view that the investment is in the nature of long term investment and the diminution in value is temporary in nature. The management is confident that the subsidiary shall revive its business operations in near future.

l) Auditors observation: Refer Note No. 43 of standalone Ind AS financial statements, which describes managements assessment of the impact of the COVID-19 pandemic on the standalone financial statements of the Company. However, in view of highly uncertain economic environment, a definitive assessment of the impact on the subsequent periods is highly dependent upon the circumstances as they evolve

Management Reply: The Company has considered internal and external information up to the date of approval of these standalone financial statements including economic forecast, expected recoveries from trade receivables and settlement of its dues with banks/ARC and expects to recover the carrying value of property, plant & equipment, investments, inventories and other current assets appearing in the financial statements of the Company. The impact of the global health pandemic may be different from that estimated as at the date of approval of these standalone financial statements and the Company will continue to closely monitor any material changes to future economic conditions m) Regarding auditors observations at point no. (a) to (d), point no. (f) to (g) as reported by them under section 143(3), management replies may be found in the above paragraphs. n) Regarding observation made by Auditors at point No. vii (a), (b) and (c) of the Annexure "A" to Auditors Report:

Management reply: The company is committed to pay all its outstanding undisputed statutory dues. Regarding the disputed outstanding taxes, the appeal is pending before ITAT Mumbai and regarding PVAT, Company is confident that it will be able to get favorable orders from the concerned appellate authorities. o) Regarding observation made by the Auditors at Point No. (viii) of the Annexure "A" to Auditors Report

Management Reply: The management reply is given in above points p) Regarding observation made by the Auditors in the point no (a) of Annexure "B" to Auditors Report, whereby they have pointed out internal control weakness relating to ascertainment of customers credit worthiness etc., which has resulted in huge old outstanding dues from customers

Management Reply: Though the company has taken all due care at the time of sale of goods to customers, it strongly feels that the internal financial control system in this regard needs to be improvised. The management is of the view that due to certain unfavourable developments and slugglish market in earlier periods, the recovery from trade receivables is slow. The management is hopeful that these trade receivables shall be recovered as the company has initiated legal action by way of sending legal notices and filing court cases. q) Regarding observation made by the Auditors in the point no (b) Annexure "B" to Auditors Report, whereby they have pointed out irregularities in payment of statutory dues / taxes and interest and loan repayment to banks

Management Reply: Due to slow recovery from trade receivables, there is a temporary deficit in the cash flow resulting in default in payment of statutory dues / taxes; and repayment of dues to banks. The Company is taking all possible efforts to recover old trade receivables and revive its business operations. Nonetheless, the management is committed to pay all statutory dues/ taxes. Regarding repayment of dues to banks, the company has approached bankers with proposal of One Time Settlement.

SECRETARIAL AUDITORS REMARKS AND MANAGEMENTS REPLIES THEREUPON

1) Auditors Observation on legal action taken by the banks

Management Reply: the management has taken requisite steps with regards to legal action initiated by the banks

2) Auditors Observation on assignment and transfer of dues of three bank in favor of an asset reconstruction company (ARC)

Management Reply : The banks have classified the account as NPA and recalled their loans. And as consequence two banks dues were assigned and transfer to an asset reconstruction company (ARC)

3) Auditors Observation made on delay in payment of statutory dues:

Management Reply: The management is of the view that due to certain unfavourable developments and slugglish market in earlier periods, the recovery from trade receivables are slow and there is a mismatch in the cash flow resulting in default in payment of statutory dues.

4) Auditors Observation made on long outstanding Trade Receivables and non realization of overseas debtors for more than 180 days:

Management Reply: The Company has already filedlegal suits against the major overseas buyers in respective courts. Legal suits against other overseas buyers are in the process of being filed for the recovery of Export

Outstanding.

5) Auditors observation relating to default in repayment of principal and interest to bankers, declaration of companys account as NPA; and recall of loans:

Management Reply: Due to slow recovery from trade receivables, there is a temporary deficit in the cash flow resulting in default in repayment of dues to banks owing to which the bankers have classified the account as

NPA and recalled their loans. The Company is taking all possible efforts to recover old trade receivables and has also initiated legal action where ever considered necessary. The Company is taking steps to revive its business operations and has approached consortium bankers with proposal of One Time Settlement (OTS) and also management is in discussion with ARC.

6) Auditors observation regarding legal actions/ insolvency proceedings initiated by banks against company for recovery of its dues, notices/ summon from Enforcement Directorate, Reserve Bank of India, Development Commissioner of Surat SEZ and from other regulatory authorities, pending proceeding with National Company

Law Tribunal, Debt Recovery Tribunals and other courts for recovery of banks dues

Management Reply: Due to default in repayment of dues to banks owing to which the bankers have classified the account as NPA and recalled their loans. the matter is pending with the legal authorities and with regards to NCLT matter is pending before NCLT, Jaipur and regarding notice from development commissioner of Surat

SEZ, matter is pending for hearing.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Conservation of Energy:

The Company is engaged in manufacturing of gems and jewellery and as such its operations do not account for substantial energy consumption. However, the Company is taking all possible measures to conserve energy, in its endeavor towards conservation of energy your Company ensure optimal use of energy, avoid wastages and conserve energy as far as possible. Several environment friendly measures were adopted by the Company such as minimising air-conditioning usage, Shutting off all the lights when not in use

Technology Absorption, Adoption and Innovation

The Company continuously monitors and keep track of technological upgradation in the field of Jewellery manufacturing and the same are reviewed and considered for implementation. Your Company continued its focus on quality up-gradation and product enhancements. The company uses indigenous technology for its operations.

Research and Development

The nature of the business of the company is categorically end user business of large size diamonds and high end jewellery wherein research and development expense are more in the nature of designing rather than development of new technology.

Foreign Exchange Earnings and Outgo

The information regarding foreign exchange earnings and outgo is contained in note no. 31 (v) of notes on Financial Statements.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of sweat equity shares to employees of the company under any scheme.

2. Issue of shares under Employee Stock Option Scheme.

3. Re-appointment of an independent director for second term of five years.

4. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries.

5. There were no companies which have become or ceased to be Subsidiaries, Joint Ventures or associate companies during the year.

6. There was no change in nature of business.

7. There were no loans, guarantees or investments given / made by the Company under Section 186 of the Act.

Acknowledgement

Your Directors place on record their gratitude to Central Government, State Governments, Financial Institutions and Companys Bankers for assistance, co-operation and encouragement they extended to the Company. The Directors are also grateful to the valued customers, esteemed shareholders, dedicated employees and public at large for their patronage and confidence reposed in the company.

On behalf of the Board of Directors
For Goenka Diamond and Jewels Limited
NANDLAL GOENKA NAVNEET GOENKA
CHAIRMAN VICE CHAIRMAN &
MANAGING DIRECTOR

Place: Mumbai

Date: November 11, 2020

Particulars of Employees pursuant to section 197 of the Companies Act, 2013 read with Rules 5 (1) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014

Sr. No. Requirement of Rule 5(1) Details
(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; Directors
1. Mr. Nandlal Goenka : 2.00
2. Mr. Navneet Goenka : 1.60
3. Mr. Bhau Dhure : 0.22
4. Mrs. Dhara Shah : 0.22
(ii) the percentage increase / (decrease) in remuneration of each director, Chief Financial Directors
1. Mr. Nandlal Goenka : N.A.
Officer, Chief Executive Officer, Company 2. Mr. Navneet Goenka : N.A.
Secretary or Manager, if any, in the financial year; 3. Mr. Bhau Dhure : N.A.
4. Mrs. Dhara Shah : N.A.
Chief Financial Officer
5. Mr. Navneet Goenka : N.A.
Company Secretary
6. Ms. Nidhi Kanoongo : 0.00%
(iii) the percentage increase in the median remuneration of employees in the financial year; 0.00%
(iv) the number of permanent employees on the rolls of company; 16 Employees as on 31.03.2020
(v) variations in the market capitalisation of the company, and previous financial year; Market capitalization (Rs. / Crore):
As on As on %
31.03.2020 31.03.2019 Increase/ decrease
6.97 9.83 (29.09%)
(vi) Price earnings ratio as at the closing date of the current financial year and previous financial year As on As on
31.03.2020 31.03.2019
N.A. N.A. (Due to negative EPS)
(vii) Percentage increase or 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 99.99% decline in the market quotation of the companys share in comparison to the last public offer.
(viii) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration Average increase of Non Managerial
Remuneration : 00.00%
Average increase in Managerial Remuneration : N.A.
(ix) affirmation that the remuneration is as per the remuneration policy of the company. It is hereby affirmed that the remuneration paid during the year ended March 31, 2020 is as per the Remuneration Policy of the Company.

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

Note - : Mr. Tushar Momaiyah Independent Director was appointed on February 07, 2020 and Mr. Sanjeev Kumar Jain Executive Director was appointed on August 21, 2020.