goenka diamond jewels ltd Auditors report

To,

To the Members of

Goenka Diamond and Jewels Limited

Report on the Standalone Ind AS Financial Statements

Disclaimer of Opinion

We were engaged to audit the accompanying standalone Ind AS Financial statements of Goenka Diamond and Jewels Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2023 and the Statement of Profit and Loss (including other comprehensive Income), Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and notes to financial statements, including a summary of the significant accounting policies and other explanatory information.

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.

Basis for Disclaimer of Opinion

(a) We draw attention to Note No. 38 and 45 of the financial statement regarding commencement of Corporate Insolvency Resolution Process (CIRP) under Insolvency and Bankruptcy Act, 2016 and appointment of Interim Resolution Professional (IRP) to carry function as mentioned under the Code. Consequently, the powers of Board stand suspended and are exercised by the IRP in line with the provisions of the Code. Subsequent to issue of public announcement by IRP, the claims submitted by the financial and operational creditors have been collated by the IRP and no accounting adjustment has been carried out for any excess, short or non-receipt of claims from operational and financial creditors.

(b) We draw attention to Note No. 17(B)(2) and 17(B)(3) of financial statement regarding default in repayment of loans and interest to banks (including ARC) owing to which the banks have classified the account as NPA and recalled its loans and has initiated various legal actions for recovery of its dues including legal action initiated under SARFESI Act, The Recovery of Debts due to Banks and Financial Institution Act, 1993. The outstanding loans, credit balances and interest due to banks (including ARC) amounting to Rs. 17710.38 lacs and adhoc / repayment of loan amount to an asset reconstruction company (ARC) of Rs. 1405.61 lacs for which no confirmation/ statements have been provided to us are subject to reconciliation and subsequent adjustments.

(c) Refer Note No. 9(a) and (b) of financial statement regarding non-provision of the expected credit loss/ impairment relating to overdue Trade Receivables of Rs. 69775.76 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, nonreceipt of 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 results.

(d) Trade payables and other payables amounting to Rs. 29717.66 lacs are outstanding since long for which neither any confirmation have been provided nor are we aware of any legal action initiated by the vendors against the Company. In absence of current status and relevant details, we are unable to comment on the payment obligation in this regard and its consequential impact on the financial statements.

(e) Refer Note No. 17(B)(2) regarding default in repayment of loans taken from the banks and non-provision of interest on such loans and consequently based on the calculation done by the management total interest amounting to Rs. 20979.19 Lacs determined at estimated rates, have not been provided for in the books of accounts including interest amounting to Rs. 2730.80 Lacs for year ended on March 31,2023. Accordingly, finance cost for the year ended on March 31,2023 is understated by Rs. 2730.80 lacs.

(f) Refer Note No. 9(b), 18(b) and 5(a) of the financial statement wherein, the company has not translated following monetary items denominated in foreign currency as at year ended closing rate and has been carried forward at the rate as at 31st March 2015, 31^st 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.

i. Trade receivable amounting to Rs. 69,703.18 lacs

ii. Trade payables and other payable amounting to Rs. 29717.66 lacs

iii. Loans to subsidiary (including accrued interest) amounting to Rs. 2062.30 lacs

The company has not provided for cumulative exchange gain (net) on the above items amounting to Rs. 12793.91 lacs including exchange gain of Rs. 4361.32 lacs pertaining to the year ended on March 31, 2023 respectively. Accordingly, exchange gain is understated by Rs. 4361.32 for the year ended March 31,2023.

(g) The Company has made provision for expected credited loss of Rs. 812.35 Lacs against the interest receivable on loan from a subsidiary and has recognized loss of Rs. 49.00 lacs on current investment designated through FVTPL. No deferred tax assets thereon amounting to Rs. 216.79 lacs have been recognized which is not in accordance with Ind AS-12 "Income Taxes.

Had the exchange difference as stated in para (f) above and deferred tax thereon and interest on loans as stated in para (e) above been provided, the loss before tax for the year would have been decreased by Rs. 1630.52 Lacs respectively. Consequently, the overstatement and understatement of assets and liabilities are as under: -

( Rs. In Lakh)

Head of Assets/ Liabilities	Assets		Liabilities
	Under statement	Over Statement	Under statement	Over statement
Trade Receivables (exchange gain)	19707.68	-	-	-
Trade Payables (exchange loss)	-	-	7407.54	-
Non-Current financial assets	336.77	-	-	-
Current Financial Assets	158.46	-	-	-
Borrowings			20979.19
Current financial liabilities			1.46
Deferred Tax Liability	-	-	197.66	-
Other Equity	-	-	-	8382.93
Total	20202.91	-	28585.84	8382.93

Due to uncertainties with respect to settlement of bank dues and interest, adjustments of trade receivables and payables and its consequential impact on taxation thereof, we are unable to ascertain the tax impact and liability, on the financial results.

(h) Refer Note No. 5(b) and 41 (c) of the financial statement, no provision for the expected credit loss/ impairment on loan to a subsidiary amounting to Rs. 1249.95 Lacs has been recognized as per the requirement of Ind- AS 109 "Financial Instruments". The net worth of above subsidiary is negative and based on reasonable and supportable information regarding the current financial status and business condition of the subsidiary, there has been significant increase in credit risk and there could be delay/default in recovery of this amount. Considering the above, we are unable to comment on the amount of expected credit loss/ impairment and its consequential impact, on the financial results.

(i) The Inventory has been taken on the basis of physical verification carried out by the management (including inventory lying with franchisees on approval basis) 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. In the absence of any valuation by an independent expert, we have relied upon by the physical verification and valuation of the Inventory as certified and determined by the management.

(j) Refer Note No. 41(b) of the financial statement regarding investment of Rs. 2.03 lacs in its subsidiary namely M.B. Diamonds LLC and Rs. 7.44 lacs in its subsidiary namely Goenka Diamond and Jewels DMCC, the net-worth of these subsidiaries is negative. The Company has not made any provision for Impairment against these investments and advance.

(k) Balances with Banks amounting to Rs. 1.55 lacs (debit balances), Other non-current deposits amounting to Rs. 13.23 lacs, other current assets (balance with government authorities) amounting to Rs. 32.48 lacs, Other Current Assets and Liabilities are subject to confirmations and consequential adjustment thereof.

(l) The company has made provision for Impairment of Residential flat/office building at Jaipur having gross block of Rs. 19.72 lacs (WDV of Rs. 5.34 lacs), for which the company neither has possession of such assets nor have any title deeds/ agreement.

Material Uncertainty related to going concern

The Companys operating results have been materially affected due to various factors including non-realization of unconfirmed 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 to company/director(s) from Enforcement Directorate, Reserve Bank of India, Development Commissioner of Surat SEZ and from other regulatory authorities, commencement of CIRP proceedings as stated in Note No. 1, Debt Recovery Tribunals and other courts for recovery of banks dues and possession/attachment/sale of companys properties, assignment and transfer of dues in favor of an asset reconstruction company (ARC), pending income tax demands and consequent attachment of bank accounts by Income tax department, reliance on occasional sales for meeting out expenses, overall substantial decrease in volume of business and sales, non-payment of statutory dues and taxes, overdue unconfirmed trade payable, 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 due from banks and ARC, outcome of CIRP process 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.

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.

Responsibilities of Management for the Standalone Ind AS Financial Statements

In accordance with the applicable provisions of the Insolvency and Bankruptcy Code, 2016 ("the Code") and related rules and regulations issued thereunder, Corporate Insolvency Process ("CIRP") of Goenka Diamond and Jewels Limited was initiated by financial creditors. The Honble National Company Law Tribunal ("NCLT"), Jaipur Bench, vide order no. CP(IB)2067/MB/2019 delivered on 9^th December 2022 appointed an Interim Resolution Professional ("IRP") to manage affairs of the Company in accordance with the provisions of Code. Thereafter, NCLT vide order dated April 12, 2023 appointed Mr. Sourabh Malpani as IRP replacing the previous IRP appointed. Upon appointment of IRP under the Code, the powers of the Board of Directors of the Company remained suspended and vest with the IRP.

The Companys 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 Standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance, cash flows and changes in equity of the Company accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

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 the maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the financial reporting process of the Company.

Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our responsibility is to conduct an audit of the Companys financial statements in accordance with Standards on Auditing and to issue an auditors report. However, because of the matter described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these standalone Ind- AS financial statements.

We are independent of the Company in accordance with the Code of Ethics and provisions of the Companies Act, 2013 that are relevant to our audit of the standalone Ind-AS financial statements in India under the Companies Act, 2013, and we have fulfilled our other ethical responsibilities in accordance with the Code of Ethics and the requirements under the Companies act, 2013

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

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

b. Due to possible effects of the matters as described in the Basis of Disclaimer of Opinion paragraph, we are unable to state whether proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. Due to effects/ possible effects of the matters described in Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid standalone Ind-AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. As at March 31, 2023, there are no directors on the board of the Company. Accordingly, reporting on compliance of section 164 (2) of the Act is not applicable;

f. The matters described in Basis of Disclaimer of opinion paragraph and other observations made in statement on the matters specified in paragraph 3 and 4 of the Order above, may have an adverse effect on the functioning of the Company.

g. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;

h. With respect to the other matters to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act (as amended), in our opinion and to the best of our information and according to the explanation given to us, the remuneration paid by the Company to its Directors during the year is in accordance with the provisions of section 197 of the Act;.

i. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 39 to the Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. The amounts which were required to be transferred to the Investor Education and Protection Fund by the Company have been transferred.

iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year and therefore compliance of Section 123 of the Act, is not applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

i. In respect of the Companys Property, Plant and Equipment and Intangible Assets:

(a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of intangible assets.

(b) All the Property, Plant and Equipment have been physically verified by the management during the year. There is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its Property, Plant and Equipment. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held in the name of the Company except the following:

Description of property	Gross carrying value (INR in lakhs)	Held in the name of	Whether promoter, director or their relative or employee	Period held- indicate range, whether appropriate	Reason for not being held in name of the Company
Building for the Company	19.72* (Impaired)	Not Registered Yet	No	Prior to 2005-2006	Refer Note No. 3 of standalone financials

‘* includes residential property having gross value of Rs.9.48 lakhs for which no title deeds are available

(d) The Company has not revalued its Property, Plant and Equipment (including Right of Use assets) and intangible assets during the year. Hence reporting under clause 3 (i) (d) of the Order is not applicable.

(e) As informed by the management, no proceedings have been initiated during the year or are pending against the Company as at March 31, 2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended 2016) and rules made thereunder. Hence reporting under clause 3 (i) (e) is not applicable.

ii. (a) As per the information furnished, the Inventories have been physically verified by the management at the year-end.

In our opinion, having regard to the size, nature and location of inventory, the coverage and procedure of such verification by the management is appropriate and no discrepancies of 10% or more in aggregate for each class of inventory were noticed on such verification.

(b) The company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. As per the information and explanation given to us the quarterly returns or statements have not been submitted to bank for the reason as stated in Note No. 17 of standalone financial statement and therefore we are unable to comment on the same.

iii. As required under clause 3(iii) of the Order, the relevant details to the extent applicable in respect of the investments, guarantee and/or loans or advances in the nature of loans, secured or unsecured, made by the Company during the year to companies, firms, limited liability partnership or any other parties is given as under: -

(a) The aggregate amount during the year, and balance outstanding at the balance sheet date with respect to such loans given to others is as under:

Particulars	Guarantees (INR in lacs)	Securities (In Numbers)	Loans (unsecured) (INR in lacs)	Advances in nature of loans (INR in lacs)
Aggregate amount granted/provided during the year - Subsidiary	Nil	Nil	Nil	Nil
Balance Outstanding as at balance sheet date - Subsidiary	Nil	Nil	1249.95	Nil

(b) The Company has not made any investment, provided any guarantees, given any security or granted any loans and advances in the nature of loans and provided any guarantees and hence, reporting under clause 3 (iii) (b) of the Order is not applicable.

(c) I n respect of loans granted to subsidiary by the Company, the schedule of repayment of principal and payment of interest has not been stipulated and therefore we are unable to comment on the repayments of principal amounts and receipts of interest.

(d) I n respect of loans granted to subsidiary by the Company, in absence of any stipulation of schedule of repayment of principal and payment of interest we are unable to comment on the amount overdue for more than ninety days. However, amount of Rs. 812.35 lakhs is shown as interest due from subsidiary against which the company has made provision of equivalent amount for expected credit loss.

(e) I n the absence of any stipulation of schedule of repayment of principal, we are unable to comment on loans or advances in the nature of loans which has fallen due during the year.

(f) The Company during the year has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment. Hence, reporting under clause 3 (iii) (f) is not applicable.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of loans granted, investments made and guarantees and securities provided, where applicable.

(v) The Company has not accepted any deposit or amounts which are deemed to be deposits within the meaning of the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act, 2013 and rules framed there under. Hence, reporting under clause 3 (v) is not applicable.

(vi) As per information and explanation given to us by the management, the Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company. Hence reporting under clause 3(vi) of the order is not applicable.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) I n our opinion, the Company is not regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Goods and Services Tax (GST), Income Tax, Duty of Custom, Value added tax, Cess and other statutory dues applicable to it.

According to the information and explanations given to us, undisputed amounts payable in respect of provident fund, employees state insurance, income tax, service tax, and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months are as under: -

Nature of Statute	Nature of Dues	Amount (In Lakhs)	Period to which the amount relates	Due Date	Date of Payment
Employee Provident Fund Organization	Provident Fund	19.85	2016-17 to 2021-2022	15th day of next month	Not Yet paid
		0.41	01/04/2022 to 31/08/2022
Employee State Insurance Corporation	E.S.I.C.	2.45	2016-17 to 2021-2022	15th day of next month	Not Yet paid
		0.02	01/04/2022 to 31/08/2022
Department of Sales Tax, Maharashtra	Profession Tax	1.11	2016-17 to 2021-2022	21st day of next month	Not Yet paid
		0.08	01/04/2022 to 31/08/2022
Maharashtra Value Added Tax Act, 2002	VAT	4.25	2017-2018	July, 2017	Not Yet paid
Goods & Services Tax Act, 2017	GST	7.33	2017-2018	20th day of next month	Not Yet paid
Income Tax Act 1961	Income Tax	203.07 (excluding Interest)	Financial Year 2012-13	31-Mar-13	Not Yet paid
		53.87 (excluding Interest)	Financial Year 20122013	14th Oct 2013	Not Yet paid
Central Excise and Customs Act	Service Tax	1.40	FY 2008-2009 FY 20112012	Commissioner of Central Excise has decided appeal in favour of the Company, interest amount due	Not Yet paid

(b) Details of statutory dues including Goods and Service Tax and Income Tax which have not been deposited as on March 31,2023 on account of disputes are as under:

Nature of Statute	Nature of Dues	Amount (In lakhs)	Period to which the amount relates	Forum where dispute is pending
Income Tax Act, 1961	Income Tax	1,109.47	AY 2008-2009	During the financial year, IRP was appointed by NCLT, Jaipur and subsequently, the Income Tax Department has passed an order dismissing all cross appeals filed by assesse and revenue being not maintainable with liberty to file fresh appeal. The department has filed claim with iRp amounting to Rs. 5068.52 lakhs which has been accepted by the IRP. The amounts shown against the respective assessment year are demands as appearing during the previous financial year.
		702.63	AY 2009-2010
		70.18	AY 2010-2011
		2,556.50	AY 2010-2011
		71.71	AY 2011-2012
		1,999.72	AY 2012-2013
		80.45	AY 2013-2014
		130.26	AY 2014-2015
		1.42	AY 2018-2019
		0.40	AY 2017-2018
		0.20	AY 2016-2017
		42.12	2009-2010 to 2021-2022	Claimed accepted by IRP
Punjab Value Added Tax	VAT	31.83	FY 2012-13	In the office of Dy. Excise & Taxation Commissioner (Admn). Ludhiana Division, Ludhiana

(viii) According to the information and explanations given to us and records examined by us, there are no transactions that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Hence, reporting under clause 3 (viii) is not applicable.

(ix) (a) The Company has defaulted to various banks in re-payment of working capital - export credit facilities and Corporate

Loan which have been crystallized and/or became overdue or recalled at various dates, the summarized position of such defaults at the balance sheet date is as under: -

Details of continuing defaults

Name of Bank	Facility	Date of Default	Amount	Date of default ended
Central Bank of India/ Alchemist ARC Ltd	Post & Pre-Shipment Loans	Jan 2014	1,032.78	Continuing
Corporation Bank	Post & Pre-Shipment Loans and Term Loan	April 21,2016	2,284.80	Continuing
Punjab National Bank	Post & Pre-Shipment Loans and Term Loan	March 31,2016	4,493.31	Continuing
Name of Bank	Facility	Date of Default	Amount	Date of default ended
Punjab & Sind Bank	Post & Pre-Shipment Loans	June 30, 2014	3,141.25	Continuing
AXIS Bank / Alchemist ARC Ltd	Post & Pre-Shipment Loans and Term Loan	July 31,2016	2,089.86	Continuing
UCO Bank/ Alchemist ARC Ltd	Post & Pre-Shipment Loans	April 4, 2016	1,002.40	Continuing
Karnataka Bank/ Alchemist ARC Ltd	Post & Pre-Shipment Loans	June 29, 2016	758.82	Continuing
Axis Bank Ltd/ Alchemist ARC Ltd	Overdrawn Balances in Bank Current Account	July 31,2016	1,362.64	Continuing
Corporation Bank	Overdrawn Balances in Bank Current Account	April 21,2016	15.31	Continuing
Punjab National Bank	Overdrawn Balances in Bank Current Account	March 31,2016	2.84	Continuing
Punjab and Sindh Bank	Overdrawn Balances in Bank Current Account	June 30, 2014	1,090.84	Continuing

(b) According to (b) According to the information and explanations given to us and based on the search performed by the management of defaulter list available of various banks website, the Company has not been declared willful defaulter by any bank or financial institution or other lender. Hence, reporting under clause 3 (ix) (b) is not applicable.

(c) Based on our examinations of the records and information and explanations given to us, no term loans have been raised during the year and hence the reporting under clause 3(ix)(c) is not applicable.

(d) On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

(e) On an overall examination of the financial statements of the Company, the Company has not taken any funds during the year from any entity or person on account of or to meet the obligations of its subsidiaries.

(f) Based on our examinations of the records and information and explanations given to us, the Company has not raised loans during the year on the pledge of securities held in its subsidiaries. Hence, reporting under clause 3 (ix) (f) is not applicable.

(x) (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year and hence reporting under clause 3(x)(a) is not applicable.

(b) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible) during the year. Hence, reporting under clause 3(x)(b) is not applicable.

(xi) (a) No fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

(b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year.

(c) As represented and based on our examination of records made available to us by the management, there are no whistle blower complaints received by the Company during the year, hence reporting under clause 3(xi)(c) is not applicable.

(xii) The Company is not a Nidhi company and hence reporting under clause 3(xii) is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, the transactions with related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

(xiv) (a) In our opinion and based on our examination, the Company have an internal audit system that commensurate with the nature and size of its business.

(b) The report of internal auditor for the period under audit has been considered by us.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with its directors or persons connected with its directors. Hence, reporting under clause 3(xv) is not applicable.

(xvi) (a) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and hence reporting under clause 3(xvi)(a), (b) and (c) is not applicable.

(b) In our opinion, there is no Core Investment Company within the Group and accordingly reporting under clause 3(xvi) (d) is not applicable.

(xvii) The Company has incurred cash losses of Rs. 70.11 lakhs during the financial year covered by our audit and has not incurred cash losses in the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year, hence reporting under clause 3(xviii) is not applicable.

(xix) On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements and based on our examination of the evidence supporting the assumptions, indicate that material uncertainty exists that may cast a significant doubt on the companys ability to continue as going concern.

We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) Based on the examination of the records of the Company and information and explanation given to us, due to losses incurred, requirement of section 135 of the Act is not applicable to the Company. Hence, reporting under clause 3(xx)(a) and (b) is not applicable.

Annexure - B to the Auditors Report

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

Disclaimer of Opinion

We were engaged to audit the internal financial controls over financial reporting of GOENKA DIAMOND AND JEWELS LIMITED ("Company") as of 31 March 2023 in conjunction with our audit of the financial statements of the

Company for the year ended on that date.

We do not express an opinion on the internal financial controls over financial reporting 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 internal financial controls over financial reporting of the Company.

Basis for Disclaimer Opinion

The system of internal financial controls over financial reporting with regard to the Company were not made available to us to enable us to determine if the Company has established adequate internal financial control over financial reporting and whether such internal financial controls were operating effectively as at March 31, 2023 due to reasons as stated in Note 45 of the financial statements. We have been informed that all transactions post CIRP period have been duly approved. We have verified its supportings, approvals on test basis. Since we have not been provided with risk control matrix, process notes etc. we are unable to comment on it.

We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company, and the disclaimer has affected our opinion on the financial statements of the Company and we have issued a disclaimer of opinion on the financial statements (refer basis for disclaimer of opinion paragraph) in our audit report of even date).

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. The said responsibilities have been conferred upon to Resolution Professional upon commencement of CIRP.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by ICAI and the Standards on Auditing as specified prescribed under Section 143 (10) of the Companies Act, 2013 Act, to the extent applicable to an audit of internal financial controls.

Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate Internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of un-authorised acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

For Ummed Jain & Co.

Chartered Accountants ICAI Firm Reg. No.119250W

U. M. Jain

Partner

Membership No. 070863

Mumbai:

May 30, 2023

UDIN No: 23070863BGQKCJ9858