Professional Diamonds Ltd Auditors Report.

To the Members of PROFESSIONAL DIAMONDS LIMITED

1. Report on the Financial Statements

We have audited the accompanying financial statements of Professional Diamonds JEWELLERY LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss, and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. Managements Responsibility for the Financial Statements

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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules,2014.

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

3. Auditors 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 there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 Companys preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companys directors, as well as evaluating the overall presentation of the standalone financial statements.

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

4. Basis For Disclaimer Of Opinion

A. In respect of trade receivables, which form a significant amount of the Companys assets, amounting to Rs. 76,30,861 the auditors have not received any confirmation of balances. The management has obtained confirmation of balances from the respective parties. The amounts have been outstanding for a considerable period of time taking into account the prevailing trade practice in respect of the Companys business. During the year the company has written off an amount of Rs. 3,92,61,338 receivable from Bombay Diamonds Company Private Limited as the company has conveyed its inability to pay any further amount. 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 on the consequential impact on the financial statements.

B. The company has made long term investments in Forever Diamonds Pvt Ltd. and J R Diamonds Pvt Ltd amounting to Rs.321,800. The said investments continue to be valued at cost. In the absence of audited financial statements of the above mentioned companies we are unable to comment on the carrying costs of such investments and the provision for diminution in their value. We are unable to comment on the impact of provision for diminution in value of the investments on the financial statements.

C. In view of what is stated above regarding recoverability of trade receivables which forms a significant portion of Companys assets and write offs resulting in massive erosion of its net worth and the impact it could have on the Companys financials, we are unable to conclude on the ability of the company to carry on as a going concern.

Disclaimer Of Opinion

Because of the significance of the matters described in the Basis of Disclaimer of Opinion paragraph, specifically relating to the recoverability of Trade Receivables, we have not been able to obtain audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements.

4. 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 subsection(ll) 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 to the best of our knowledge and belief 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 Disclaimer Opinion paragraphs in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014.

(e) On the basis of written representations received from the directors as on 31st March, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

(f) 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, in our opinion and to the best of our information and according to the explanations given to us :

(i) the Company has no pending litigations as at March 31, 2016

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

(iii) there were no amounts which were required to be transferred to the Investor Education and Protection fund by the Company,

FOR RISHI SEKHRI AND CO.
chartered accountants
FRN 128216W
rishi sekhri
MUMBAI: proprietor
30th May ,2016 mem. no. 126658

Annexure 1 referred to in paragraph 8-1 titled as "Report on Other Legal and Regulatory Requirements" of the Auditors report to the members of Professional Diamonds Limited for the year ended 31st March, 2016.

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 are being physically verified by the management at each branch in accordance with a phased programme of verification. As explained to us the procedure being followed is reasonable considering the size and nature of its business. Material discrepancies, if any will be highlighted once the physical verification has been completed. The same system was there in the prior years and it was reasonable and no material discrepancies were noticed in the prior years.

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

2. The company did not have any inventories during the year under review.

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

4. The Company has not granted any loans or advances under section 185, made any investment, provide any guarantee or security under section 186. Hence, the question of reporting under clause 3(iv) of the Order does not arise.

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

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

7. (a) According to the records of the company, undisputed statutory dues including provident fund, employees state insurance , income-tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues applicable have been regularly deposited with the appropriate authorities. No undisputed amounts are outstanding for more than six months at the end of the accounting year.

(b) According to the information and explanations given to us, there are no undisputed amounts outstanding at the end of the accounting year.

8. The Company has not defaulted in payment of loans to banks during the year.

9. The Company has not raised any monies by way of initial public offer or further public offer (including debt instruments) during the year.

10 According to the information and explanations given to us and to the best of our knowledge, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

11. The company has not paid any managerial remuneration during the year.

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

13. The Company has complied with the provisions of sections 177 and 188 of the Act in respect of transactions with the related parties and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.

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

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

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

FOR RISHI SEKHRI AND CO.
chartered accountants
FRN 128216W
rishi sekhri
MUMBAI: proprietor
30th MAY ,2016 MEM. NO. 126658

Annexure 2 referred to in Paragraph 8 (2)(f) titled as "Report on Other Legal and Regulatory Requirements" of the Auditors report to the members of Professional Diamonds Limited for the year ended 31st March, 2016.

We have audited the internal financial controls over financial reporting of PROFESSIONAL DIAMONDS LIMITED ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that 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.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit, We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India, Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects,

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

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 unauthorised 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,

Opinion

The detailed information regarding system of internal financial controls over financial reporting with regards to the company except to the extent mentioned in Note No 1 to the financial statements, were not made available to us to enable us to determine if the company has established adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as at March 31, 2016.

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