Shree Ganesh Jewellery House (I) Limited ('the Company') formerly Shree Ganesh Jewellery House Private Limited, was incorporated in 2002. The Company is engaged in the business of manufacture and sale of handcrafted gold jewellery, diamond and studded jewellery. The name of the Company changed to Shree Ganesh Jewellery House Limited on conversion to public limited company with effect from 14th August, 2007. During the year 2009-10 the Company has made an Initial Public Offering (IPO) to issue 12,136,497 equity shares of face value of Rs. 10 each at Rs. 260 each (including a securities premium of Rs. 250 each) and got listed on National Stock Exchange and Bombay Stock Exchange. During the year 2012-13, the Company has further changed its name from Shree Ganesh Jewellery House Limited to Shree Ganesh Jewellery House (I) Limited with effect from 4th December, 2012.

2. Share Capital

a. Terms / rights attached to equity shares

The Company has only one class of Equity Shares having a par value of Rs. 10/- per Share. Each holder of equity shares is entitled to one vote per Share. The Company declares and pay dividends in Indian Rupees.

In the event of liquidation of the company, the holders of Equity Shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

3. "The Company through its wholly owned subsidiary Shree Ganesh Jewellery House FZE, in the month of August 2013 entered into an agreement for purchase of bullion from one of its supplier for 35 Tons quantity @USD 1420/oz based on orders in hand for bullion. However due to non-allowance and frequent changes in RBI policies for import of gold, the Company could not import bullion and the Company had to rescind the contract in the month of October 2013 @USD 1259/oz and accordingly the company had incurred a loss of USD 180,820,029/- i.e. approx Rs. 108,599.33 (Rs. 60.059/USD). To fund the losses the subsidiary entered into an arrangement with the supplier for supply of diamonds on 30% COD basis (30% equals the amount of loss) and balance on a credit period of approx 2 years.

Total losses suffered Rs. 108,599.33, of which the subsidiary of the Company had absorbed approx Rs. 49,522.85 (USD 82,456,536/-) to the extent of its net worth. The balance Rs. 59,076.47 is provisioned in the previous year as doubtful debt on account of receivables from its subsidiary because of non-ability to pay the amount by its subsidiary.

Investment value of Rs. 6157.63 appearing in the books of the Company is also provided for since the networth of the subsidiary has become negative due to loss incurred by them as explained above.

Rs. 253,234.93 shown as Long term non-current assets receivable from its subsidiary is because the same is sold by its subsidiary to the party with whom bullion transactions was booked and subsequently cancelled and arrangement for supply of bullion under 30% COD and balance on deferred payment basis i.e. on 2 years credit.

As explained above the company had incurred a total loss of Rs. 1,171.56 (PBT) in the previous year. Further since the subsidiary had sold goods of approx Rs. 2,532.35 on a credit of 2 years. The company underwent a liquidity crunch and was not able to pay towards liquidity dues. During the year 2013-14, the company had incurred total operating loss of Rs. 117,181.86 Lacs, negative cash from operations of Rs. 135,296.71 Lacs, failed to repay its long term borrowings of Rs. 3,000 Lacs and short terms borrowings of Rs. 281,291.72 Lacs, unable to pay its creditors of Rs. 60,213.45 Lacs. Accordingly the Company had filed a request with its bankers for composite Corporate Debts restructuring for debts taken by the Company.

Further during the previous financial year, one of our wholly owned subsidiary Shree Ganesh Jewellery House (Ghana) Ltd. purchased gold of approx 5.00 Kgs. However there was a theft and the Company has taken due steps to recover but has not recovered the same yet. Hence provision to that effect has been created.

4. CONTINGENT LIABILITIES

                                                  As at         As at
                                               31st March,   31st March
                                                  2015           2014
i. Corporate Guarantees given

- on behalf of subsidiaries                     10,110.00     10,500.00

- on behalf of other group companies            39,108.50     33,660.00

5. The company has not entered into forward contracts which are outstanding on balance sheet date in the current year and previous year.

6. Segment information in accordance with Accounting Standard 17 prescribed by Companies (Accounting Standard)

The Company is engaged in the business of manufacture and sale of gold jewellery and other articles of various designs/ specification based on customer's requirements and the company's manufacturing facilities are located in India. The risk and returns of the Company are affected predominantly by the fact that it operates in different geographical areas i.e. domestic sales and export sales and accordingly geographical segment have been considered as the primary segment information.

In view of the fact that gold jewellery and other articles are manufactured and sold based on design/ specification specified by the customer there are no business segment to be reported under secondary segment information.

7. Based on the information available with the Company, there are no dues to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006.

8. As per AS - 22 , issued by Company (Accounting Standards) Rules, 2006, on the basis of virtual certainty Deferred Tax Assets was recognised in the year 2013-2014. However as per recent assessment based on the outcome of Consortium Meeting held with all the consortium members regarding withdrawal of support from debt restructuring proposal of the Company, the carrying amount of the deferred tax asset is charged to Profit and Loss Account as it is no longer probable that sufficient taxable profit will be available to allow the benefit of deferred tax asset to be utilised in near future.

9. The company has taken an office and other premises on operating lease. Minimum lease payment charged during the year to the Profit and Loss Account aggregated to Rs. 65.76 (previous year Rs. 164.84).

10. During the year, the Company had written off MAT credit asset based on the assessment of current financial projections, it is probable that the Company may not be able to avail MAT benefit in the time span of next 10 years, as the projected profit taxable under normal income tax is lesser than the profit chargeable under MAT for next couple of years.

11. The Company had filed Flash Report under Corporate Debt Restructuring (CDR) mechanism for restructuring of its debt. However, in Consortium meeting of all the Banks held on 22nd January, 2015, the banks had decided to withdraw their support for restructuring the credit facilities offered to the Company .

The Company had again requested vide mail dated 4th Feb, 2015, all the lenders for reconsideration of the restructuring proposal so that the operations of the Company remain unaffected and a proper repayment schedule with mutual consent may be finalised. However the matter has been requested for reconsideration to the consortium Banks. Further, the Company filed a writ petition before the Honb'le High Court at Calcutta on 11th March, 2015 challenging inter alia the actions of the CDR Empowered Group and State Bank of India and the Honb'le High Court passed an interim order inter alia directing continuation of the "Holding on Operation" by the Company.

12. Fixed deposit amounting to Rs. 3031.08 (previous year Rs. 2287.58) pledged as security with Axis Bank against cash credit sanctioned was adjusted with the cash credit balance in the Company's books on maturity of the Fixed Deposit. However, as per cash credit account statement furnished by the bank the Fixed Deposit figure was not adjusted with the cash credit account balance. Thus, cash credit balance as per bank confirmation showed excess by Rs. 3031.08 (previous year Rs. 2287.58). Further, as per confirmation received from the bank the matured amount was not adjusted in the cash credit account but was transferred to a separate account of the bank. The bank is yet to provide explanations for such transfers made There is primafacie no impact on the profit/loss for the current quarter.

13. Cash credit balance of Dhanalaxmi Bank was shown less as per Company's books by Rs. 91.59. Cash credit balance as per Company's books was Rs. 1827.27 (previous year Rs. 1485.55) and balance as per bank confirmation was Rs. 1918.87 (previous year Rs. 1577.15). The Company had contested the excess amount claimed by the Bank in the High Court of Kolkata and had received a stay order on the excess claim made by the bank. However, as per order passed by the court on 10th March, 2014, pendency of the writ petition shall not preclude the respondents (bank) to proceed strictly in accordance with the Master Circular of Reserve Bank of India on Wilful Defaulters. As per order dated 8th September, 2014 of Hon'ble High Court, Kolkata, this writ petition succeeds. However, the amount remains unresolved till date.

14. The Company has been incurring cash losses in the current and previous financial year. Its current liabilities is exceeded the current assets and having negative cash flows. The Management is in the process of restructuring and is confident that these measures are expected to result in sustainable cash flows and accordingly the Company has continued to prepare its accounts on going concern basis.

15. The previous year's figures have been regrouped or reclassified wherever necessary to confirm with the current year's presentation.