C Mahendra Exports Ltd. के अकाउंट के लिये नोट

Mar 31, 2015

1. Terms / rights attached to Equity shares

The Company has only one class of equity shares having a par value of '10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of the liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. Terms / rights attached to 6% Redeemable Preference shares

During year ended 31 March 2010 the Company has issued 12,500,000 6% Redeemable Preference shares of ' 10 each at ' 100 each (including ' 90 premium). Each holder of 6% Redeemable Preference shares is entitled to one vote per share only on resolution place before the Company which directly affect the right attached to 6% Redeemable Preference shares.

6% Redeemable Preference shares shall be redeemable in 3 equal installments commencing from 7th, 8th and 9th year from the date of issue i.e. 27/03/2010.

3. Segmental reporting

The Company has only one business segment viz. Gems and Jewellery, which is being considered as the primary segment.

The financial information about business segment is not applicable since segment results / revenue / assets of the wind mill business are not more than 10 percent of the combined business results / revenue / assets.

4. Related party disclosures

i. Related party relationships:

a) Subsidiaries (where control exist)

: C. Mahendra International Limited - India C. Mahendra NV (Formerly known as C Mahendra BVBA) -Belgium Ciemme Jewels Limited - India C. Mahendra Exports (H.K.) Ltd. - Hongkong C. Mahendra (USA) Inc. - USA International Gems & Jewellery FZE - UAE Al Daspa Gems & Jewellery FZE - UAE

C. Mahendra DMCC - UAE C. Mahendra Trading - India C. Mahendra International Limited - Mauritius Ciemme Entertainment Pvt.Ltd - India

b) Key Management Personnel

Mahendra C Shah (Chairman and Executive Director) Champak K Mehta (Manging Director) Sandeep M Shah (Upto 29/12/2014, Executive Director) Babulal V Virvadia (Chief Financial Officer) Swapnil Dafle (Company Secretary)

c) Relative of key management personnel

: Moghiben C. Shah Dipika C. Mehta Rasilaben M. Shah Vikram M. Shah Sandeep M. Shah Hansa P. Mehta Hemali J. Shah Nayna P. Mehta Jignesh M. Shah Kanu C. Shah Prakash K. Mehta Suresh K. Mehta Paras C. Mehta Alka K. Shah Krupa S. Shah Kevin P. Mehta Sadhana S.Mehta Pravin K. Mehta Pravin C. Shah Ramila P. Shah Samir S. Shah Suken Shah Suresh K. Mehta Sweety P. Shah Vipul B. Virvadia Bhavin B. Virvadia

d) Enterprises in which key : management personnel have significant influence

C. Mahendra Commodities Private Limited C. Mahendra Capital Ltd. Champak K. Mehta (HUF) Mahendra C. Shah (HUF) Infojewels (India) Private Limited Polo Developers Private Limited Ashesha Trading Private Limited CM Infojewels Private Limited

e) Enterprises in which relative of : key management personnel have significant influence

C. K. Shah (HUF) Kanu C. Shah (HUF) Pravin C. Shah (HUF) Allright Trading Private Limited KPM Dimon LLC

5. Contingent liabilities and Commitments

Particulars As at As at 31/03/2015 31/03/2014 (Rs.) (Rs.)

Contingent liabilities (not provided for):

Guarantee given to banks in respect of credit facilities sanctioned to a subsidiary company (USD 11,000,000; as at 31/03/2014 USD 12,000,000) 689,048,800 721,797,600

Bond executed in favour of The President of India towards manufacture of goods for exports 441,740,000 441,740,000

Bond executed in favour of The President of India towards provisional release of seized goods 30,622,000 30,622,000

Bank guarantee in favour of President of India towards Bonded Warehouse 2,600,000 2,600,000

Disputed penalty under Customs Act 11,000,000 11,000,000

Disputed service tax liabilities 20,174,407 20,174,407

Disputed income tax liabilities 259,581,739 111,997,722

Unpaid Lease rent payment 1,80,000 —

The Company has received notice U/s 147 of the Income tax Act, 1961 for reopening of AY 2007-08, 2008-09, 2009-10 & AY 2010-11 for alleged bogus purchase. The assessment proceeding are yet to be commenced.

6. a) The Consortium of the bankers which had granted various working and export facilities have withdrawn these facilities and have called upon the Company to repay their outstanding. to the promoters, guarantors and also to the companies who have provided corporate guarantees.. Further the banks have issued notice of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002.

b) Most banks had not provided bank confirmations (including working capital facility and overdraft) since the accounts are freezed by the consortium of banks as a result facility has been ceased to be operational.

c) The Company has provided for interest upto the period where it has been charged by the banks. No interest is provided by the Company amounting to Rs. 915,371,518 where the banks has not intimated to the Company.

d) After the balance sheet date symbolic possession has been taken of most office premises of the company.

7. Trade receivables amounting to Rs. 11,949,340,981 and Loans and advances receivable amounting to Rs. 87,185,015 are outstanding for more than one year.

b) The account of Trade Receivables, Loans and Advances and Trade Payables are however, subject to formal confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current period's financial statements on such reconciliation/adjustments.

c) During the year the company had send notices to its overseas customers. No response is received from the overseas customers but the company is hopeful of the recovery.

d) Amounts receivable and payable from same party are netted off for presentation in the financial statements.

8. During the year, share of loss from Investment in partnership firm - M/s C Mahendra Trading is not considered.

9. In view of loss incurred no provision is made for Dividend on 12,500,000 no of 6% Redeemable Preference shares of Rs. 10 each as on 31st March, 2015 which amounts to Rs. 7,500,000/- (PY Nil).

10. The Company Secretary and Chief Financial Officer have resigned on 01/04/2015. In the absence of the Company Secretary and Chief Financial Officer, these financial statements have not been authenticated by Company Secretary and Chief Financial Officer under Section 203 of Companies Act, 2013.

11. Pursuant to the Companies Act, 2013 ("the Act") coming in to effect from April1, 2014, the Company has not realigned the remaining useful life of its fixed assets in accordance with the provision prescribed under Schedule II to the Act.. However the depreciation has continued to provide depreciation on written down value method except plant and machinery relating to Windmill at the rates and in the manner specified in erst while Schedule XIV of old Companies Act, 1956. Depreciation on Windmill is provided on straight line method. Leasehold land is amortised over the lease period. Due to above the impact in financial statement could not be ascertained.

12. There were disputes among promoters. The management is of the opinion that no adjustment is required to be made on account of the disputes.

13. Sundry balance written off includes Rs. 25,682,264/- being reversal of part amount of insurance claim receivable provided in earlier years. As the Hon'ble Bombay High Court order has been contested by the Insurance Company

14. a) Small scale undertakings to whom the company owes a sum which is outstanding for more than 30 days at the Balance Sheet is not available. In view of this, information required to be furnished is not given.

b) Suppliers/ Service providers covered under Micro, Small Medium Enterprises Development Act 2006 have not furnished the information regarding filing of necessary memorandum with the appropriate authority. In view of this, information required to be disclosed u/s 22 of the said Act is not given.

15.During the year the company has incurred heavy loss in the year under review and due to the company turning into NPA, the Company is yet to initiate its Corporate Social Responsibility (CSR) activities as per Section 135 of the Companies Act, 2013.

16. Previous year's figures have been regrouped or rearranged, wherever considered necessary to conform to current year's presentation. Figures in bracket are in respect of previous year.

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Mar 31, 2014

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. Board of Directors has declared interim dividend during the year.

In the event of the liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Terms / rights attached to 6% Redeemable Preference shares

During year ended 31 March 2010 the Company has issued 12,500,000 6% Redeemable Preference shares of Rs.10 each at Rs.100 each (including Rs.90 premium). Each holder of 6% Redeemable Preference shares is entitled to one vote per share only on resolution place before the Company which directly affect the right attached to 6% Redeemable Preference shares. The dividend proposed by the Board of Directors is subject to approval of the shareholders in ensuing annual General Meeting.

6% Redeemable Preference shares shall be redeemable in 3 equal installments commencing from 7th, 8th and 9th year from the date of issue i.e. 27/03/2010.

Money Received against Share Warrants

The Company on January 22, 2013 issued 1 warrant convertible upto 11,21,008 number of equity shares on preferential basis at a price of Rs. 13,34,00,000/- per warrant to Bennett Coleman & Co. Ltd. These warrants are convertible upto 11,21,008 no of equity shares of the Company at the option of the warrant holders from the closing date and ending at the end of 17 months. The company received Rs. 3,33,50,000/- against the warrants being 25% of the total consideration. As at March 31, 2014 no shares have been issued against these warrants.

SHORT TERM BORROWINGS

Working capital loans from banks are secured by hypothecation of whole of the current assets (both present and future) (first pari passu) of the Company consisting of stocks, bills receivable, book debts, moveable plant and machinery and other moveables as well as the equitable mortgage of various properties including land and building standing in the name of the Company (both present and future), directors, relatives and associate companies and lien on fixed deposits with the bank and keyman insurance policies and deposits with Bharat Diamond Bourse and personal guarantee of directors, shareholders and their relatives.

Foreign currency loans carries interest @ 2% to 4% p.a. (previous year 2% to 4% p.a.) and Rupee loans carries interest @ 11% to 18% p.a. (previous year 9% to 18% p.a.).

Loans and advances from related parties are repayable on demand and carries interest @ 2.25% to 9% p.a.

TRADE PAYABLES

The Company has not received any information from its suppliers regarding their registration under the ''Micro, Small and Medium Enterprises Development Act, 2006''. Hence interest if any payable as required under Act has not been provided and the information required to be given in accordance with Section 22 of the said Act, is not ascertainable and hence, not disclosed. However there is no interest payment to Micro, Small and Medium enterprises during the year.

Mode of valuation:

i. Raw materials - Rough diamonds are valued at lower of cost or net realisable value. The cost is determined by weighted average method on lot wise basis. Rough diamond rejection is valued at estimated realisable value.

ii. Finished goods - Polished diamonds are valued at technical estimate of cost or net realizable value, whichever is lower. Cost includes cost of materials consumed and related conversion costs which are technically evaluated by the management, in view of the nature of the variation in the value of individuals diamonds, existence of multiple grades and the differentials in conversion costs. of estimated cost as certified by directors or net realisable value.

iii. Consumables are valued at lower of estimated cost or net realisable value.

Contingent liabilities and Commitments

Particulars As at As at 31/03/2014 31/03/2013 (Rs.) (Rs.) Contingent liabilities (not provided for):

Guarantee given to banks in respect of credit facilities sanctioned to a subsidiary company (USD 12,000,000; as at 31/03/2013 USD 10,000,000) 721,797,600 543,845,000

Bond executed in favour of The President of India towards manufacture of goods for exports 441,740,000 441,740,000

Bank guarantee in favour of The President of India for de-bonding of EOU unit - 1,800,000

Bond executed in favour of The President of India towards provisional release of seized goods 30,622,000 30,622,000

Bank guarantee in favour of President of India towards Bonded Warehouse 2,600,000 -

Disputed penalty under Customs Act 11,000,000 11,000,000

Disputed service tax liabilities 20,174,407 15,494,737

Disputed income tax liabilities 111,997,722 667,872

Related party disclosures

i. Related party relationships:

a) Subsidiaries : C. Mahendra International Limited - India (where control C. Mahendra BVBA - Belgium exist) Ciemme Jewels Limited - India C. Mahendra Exports (H.K.) Ltd. - Hongkong C. Mahendra (NY) LLC - USA Ciemme (NY) LLC - USA C. Mahendra (USA) Inc. - USA International Gems & Jewellery FZE - UAE Al Daspa Gems & Jewellery FZE - UAE C. Mahendra DMCC - UAE C. Mahendra Trading - India C. Mahendra International Limited - Mauritius Ciemme Entertainment Pvt.Ltd - India

b) Key managerial : Mahendra C. Shah personnel Champak K. Mehta Sandeep M. Shah

c) Relative of key : Monghiben C. Shah management Dipika C. Mehta personnel Rasilaben M. Shah Vikram M. Shah Hansa P. Mehta Hemali J. Shah Nayna P. Mehta Jignesh M. Shah Kanu C. Shah Prakash K. Mehta Suresh K. Mehta Paras C. Mehta Alka K. Shah Krupa S. Shah Kevin P. Mehta Sadhna S.Mehta Pravin K. Mehta Pravin C. Shah Ramila P. Shah Samir S. Shah Suken Shah Suresh K. Mehta Sweety P. Shah

d) Enterprises in : C. Mahendra Commodities Private Limited which key C. Mahendra Capital Ltd. management Champak K. Mehta (HUF) personnel have Mahendra C. Shah (HUF) significant Infojewels (India) Private Limited influence Polo Developers Private Limited Ashesha Trading Private Limited CM Infojewels Private Limited

e) Enterprises in : C. K. Shah (HUF) which relative of Kanu C. Shah (HUF) key management Pravin C. Shah (HUF) personnel have Allright Trading Private Limited significant KPM Dimon LLC influence

Notes:

i. The related party relationships have been determined on the basis of the requirements of the Accounting Standard (AS) - 18 ''Related Party Disclosures’ and Related party relationship is as identified by the management and the same have been relied upon by the auditors.

ii. The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year, except where control exist, in which case the relationships have been mentioned irrespective of transactions with the related party.

For credit facilities and term loan of Rs. 10,547,260,609/- as at 31/03/2014 (as at 31/03/2013 Rs. 10,227,705,343) from bank, the directors / shareholders and their relatives have jointly given personal guarantees to the bank.

The Company has given corporate guarantee to the bank towards working capital facilities sanctioned to subsidiary Company C. Mahendra BVBA [(outstanding as at 31/03/2014 Rs. 7,217,976,000) and (as at 31/03/2013 Rs. 543,845,000)].

Segmental reporting

The Company has only one business segment viz. Gems and Jewellery, which is being considered as the primary segment.

The financial information about business segment is not applicable since segment results / revenue / assets of the wind mill business are not more than 10 percent of the combined business results / revenue / assets.

Notes:

i. Secondary segments identified are as per the requirements of Accounting Standard (AS) -17 ''Segment Reporting'', taking into account the organisation structure as well as the differing risks and returns.

ii. The segment revenue and total assets includes the revenue and assets respectively, which are identifiable with each segment and amounts allocated to the segments on a reasonable basis.

The Company has entered into agreements for obtaining office premises on rent which are in nature of operating leases. The period of lease range from 11 months to 60 months and are cancellable in nature. Amount paid / payable in respect of such leases are charged to statement of profit and loss on accrual basis.

In the opinion of the Directors, current assets, loans, advances and deposits are approximately of the value stated, if realised in the ordinary course of business. Amounts receivable and payable from same party are netted off for presentation in the financial statements

Previous year''s figures have been regrouped or rearranged, wherever considered necessary to conform to current year''s presentation. Figures in bracket are in respect of previous year.

Balances of debtors, loans and advances and creditors are subject to Confirmation.

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Mar 31, 2013

1. Related party disclosures

i. Related party relationships:

a) Subsidiaries (where control exist)

: C. Mahendra International Limited - India C. MahendraBVBA Ciemme Jewels Limited C. Mahendra Exports (H.K.) Ltd. C. Mahendra (NY) LLC Ciemme (NY) LLC C. Mahendra (USA) Inc. Best Shine Limited (upto 31/03/2013) International Gems & Jewellery FZE Al Daspa Gems & Jewellery FZE C. Mahendra DMCC C. Mahendra Trading

C. Mahendra International Limited - Mauritius (w.e.f 29/05/2012) Ciemme Entertainment Pvt.Ltd (w.e.f 14/02/2013)

b) Key managerial personnel : Mahendra C. Shah

Champak K. Mehta Sandeep M. Shah

c) Relative of key management personnel

: Moghiben C. Shah Dipika C. Mehta Rasilaben M. Shah Vikram M. Shah Hansa P. Mehta Hemali J. Shah Nayna P. Mehta JigneshM. Shah Kanu C. Shah Prakash K. Mehta Suresh K. Mehta Paras C. Mehta AlkaK. Shah Krupa S. Shah Kevin P. Mehta Sadhna S.Mehta Pravin K. Mehta Pravin C. Shah Ramila Shah Samir Shah Suken Shah Suresh K. Mehta Sweety P. Shah

d) Enterprises in which key management personnel have significant influence

: C. Mahendra Commodities Private Limited C. Mahendra Infra Power Ltd. Champak K. Mehta (HUF) Mahendra C. Shah (HUF) Infojewels (India) Private Limited Polo Developers Private Limited Ashesha Trading Private Limited CM Infojewels Private Limited

e) Enterprises in which relative of key management personnel have significant influence

: C. K. Shah (HUF) Kanu C. Shah (HUF) Pravin C. Shah (HUF) Allright Trading Private Limited

Notes:

i. The related party relationships have been determined on the basis of the requirements of the Accounting Standard (AS) - 18 ''Related Party Disclosures'' and Related party relationship is as identified by the management and the same have been relied upon by the auditors.

ii. The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year, except where control exist, in which case the relationships have been mentioned irrespective of transactions with the related party.

2. Segmental reporting

The Company has only one business segment viz. Gems and Jewellery, which is being considered as the primary segment.

The financial information about business segment is not applicable since segment results / revenue / assets of the wind mill business are not more than 10 percent of the combined business results / revenue / assets.

3. The Company has entered into agreements for obtaining office premises on rent which are in nature of operating leases. The period of lease range from 11 months to 60 months and are cancellable in nature. Amount paid / payable in respect of such leases are charged to statement of profit and loss on accrual basis.

4. During the year Financial Year 2010-11, the Company completed an Initial Public Offer (IPO) of 15,000,000 equity shares of Rs.10 each for cash at a price of Rs.110 each aggregating to Rs.1,650,000,000. The premium of Rs.100 per share, amounting to Rs.1,500,000,000 from the allotment was credited to Securities Premium Account. The share issue expenses incurred by the Company has been adjusted against the Security Premium Account.

Pursuant to the public issue, shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange effective from 20 January 2011.

5. In the opinion of the Directors, current assets, loans, advances and deposits are approximately of the value stated, if realised in the ordinary course of business. Amounts receivable and payable from same party are netted off for presentation in the financial statements

6. Previous year''s figures have been regrouped or rearranged, wherever considered necessary to conform to current year''s presentation. Figures in bracket are in respect of previous year.

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Mar 31, 2012

A) Terms / rights attached to Equity shares:

The Company has only one class of equity shares having a par value ofRs.10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of the shareholders in ensuing Annual General Meeting.

In the event of the liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b) Terms / rights attached to 6% Redeemable Preference shares:

During year ended 31 March 2010 the Company has issued 12,500,000 6% Redeemable Preference shares of Rs.10 each at Rs.100 each (including Rs.90 premium). Each holder of 6% Redeemable Preference shares is entitled to one vote per share only on resolution placed before the Company which directly affect the right attached to 6% Redeemable Preference shares. The dividend proposed by the Board of Directors is subject to approval of the shareholders in ensuing Annual General Meeting.

6% Redeemable Preference shares shall be redeemable in 3 equal installments commencing from 7th, 8th and 9th year from the date of issue i.e. 27/03/2010.

Term loans from banks:

Loan 1

Secured by hypothecation of two wind turbine generators and personal guarantee of directors, shareholders and their relatives and corporate guarantee of subsidiary company and associate company.

Repayable in 60 monthly installments ofRs.2,250,000, starting from the end of 6 months from the first drawdown date (i.e. December 2007) and it carries interest @ 13% to 14% p.a.

Loan 2

Secured by hypothecation of eight wind turbine generators, equitable mortgage of land on which windmill is erected and personal guarantee of directors and shareholders.

Repayable in 24 quarterly installments ofRs.15,625,000, starting from the end of 6 months from the first drawdown date (i.e. June 2006) and it carries interest @ 14.50% p.a.

Vehicle loans from banks:

Secured by hypothecation of vehicles.

Loan 1

Repayable in 36 monthly installments of Rs.56,600 (along with interest), starting from 07/11/2009 and it carries interest @ 8.73%.

Loan 2

Repayable in 36 monthly installments of Rs.50,000 (along with interest), starting from 05/08/2010 and it carries interest @ 8.28%.

Loan 3

Repayable in 36 monthly installments of Rs.71,044 (along with interest), starting from 01/12/2011 and it carries interest @ 11%.

Vehicle loans from others:

Secured by hypothecation of vehicles.

Loan 1

Repayable in 35 monthly installments of Rs.28,125 (along with interest), starting from 10/08/2010 and it carries interest @ 8.43%.

Loan 2

Repayable in 36 monthly installments of Rs.71,500 (along with interest), starting from 26/12/2011 and it carries interest @ 10.12%.

Working capital loans from banks are secured by hypothecation of whole of the current assets (both present and future) (first pari passu) of the Company consisting of stocks, bills receivable, book debts, moveable plant and machinery and other moveables as well as the equitable mortgage of various properties including land and building standing in the name of the Company (both present and future), directors, relatives and associate companies and lien on fixed deposits with the bank and keyman insurance policies and deposits with Bharat Diamond Bourse and personal guarantee of directors, shareholders and their relatives.

Foreign currency loans carries interest @ 2% to 4% p.a. (previous year 2% to 4% p.a.) and Rupee loans carries interest @ 11% to 18% p.a. (previous year 9% to 18% p.a.).

Loans and advances from related parties are repayable on demand and carries interest @ 2.25% to 9% p.a.

The Company has not received any information from its suppliers regarding their registration under the 'Micro, Small and Medium Enterprises Development Act, 2006'. Hence interest if any payable as required under Act has not been provided and the information required to be given in accordance with Section 22 of the said Act, is not ascertainable and hence, not disclosed.

In order to comply with Accounting Standard (AS)-2 "Valuation of Inventories", during the year, management has changed the basis of ascertaining cost of polished diamonds to lot wise weighted average basis instead of estmated cost upto 31 March 2011. Accordingly stock of polished diamonds as at 31 March 2012 is valued at lower of lot-wise weighted average cost or net realisable value. Asat 31 March 2012, the weighted average cost is certified by independent cost accountant and net realisable value is certified by approved valuer. The cost (estimated by directors) asat31 March 2011 has been apportioned to various lot at the begining of the year on a rational basis.

The impact of the above, on the valuation of inventory and profit for the year is not material in view of the management.

1. Contingent liabilities and Commitments

Particulars As at As at 31/03/2012 31/03/2011 (Rs.) (Rs.)

Contingent liabilities (not provided for):

Guarantee given to banks in respect of credit facilities sanctioned to a subsidiary company (USD 10,000,000; as at31/03/2011 USD 5,000,000) 512,065,000 223,500,000

Bond executed in favour of The President of India towards manufacture of goods for exports 441,740,000 461,740,000

Bank guarantee in favour of The President of India for de-bonding of EOU unit 1,800,000 -

Bond executed in favour of The President of India towards provisional release 30,622,000 30,622,000 of seized goods

Disputed penalty under Customs Act 11,000,000 11,000,000

Disputed service tax liabilities 15,494,737 241,156

Disputed income tax liability 446,962 446,962

Commitments:

Estimated amount of contracts remaining to be executed on capital account 41,236,265 41,236,265 (net of advances)

Investment to be made out of IPO proceeds in C. Mahendra BVBA, a subsidiary 344,807,800 570,062,500 company(refer note 42)

Others:

The arrears of dividend on 12,500,000 6% Redeemable Preference shares of - 7,602,740 Rs. 10 each (includes dividend for the year Rs. 7,500,000).

Notes:

i. The related party relationships have been determined on the basis of the requirements of the Accounting Standard (AS) -18 'Related Party Disclosures' and the same have been relied upon by the auditors.

ii. The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year, except where control exist, in which case the relationships have been mentioned irrespective of transactions with the related party.

ii. Transactions with related parties:

a) Details of related party transactions are as follows:

For credit facilities and term loan ofRs.9,223,606,005 as at 31/03/2012 (as at 31/03/2011 Rs.8,401,647,442) from bank, the directors / shareholders and their relatives have jointly given guarantees to the bank.

The Company has given corporate guarantee to the bank towards working capital facilities sanctioned to subsidiary Company C. Mahendra BVBA [(outstanding as at 31/03/2012 Rs. 512,065,000) and (as at 31/03/2011 Rs. 223,500,000)].

2. Segmental reporting

The Company has only one business segment viz. Gems and Jewellery, which is being considered as the primary segment.

The financial information about business segment is not applicable since segment results / revenue / assets of the wind mill business are not more than 10 percent of the combined business results / revenue / assets.

Notes:

i. Secondary segments identified are as per the requirements of Accounting Standard (AS) -17 'Segment Reporting', taking into account the organisation structure as well as the differing risks and returns.

ii. The segment revenue and total assets includes the revenue and assets respectively, which are identifiable with each segment and amounts allocated to the segments on a reasonable basis.

3. The Company has entered into agreements for obtaining office premises on rent which are in nature of operating leases. The period of lease range from 11 months to 60 months and are cancellable in nature. Amount paid / payable in respect of such leases are charged to statement of profit and loss on accrual basis.

4. The Company is required to comply with the transfer pricing regulations under Section 92-92F of the Income Tax-Act, 1961. The management is of the opinion that its international transactions are at arms length and that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

5. During the previous year, the Company completed an Initial Public Offer (IPO) of 15,000,000 equity shares of Rs.10 each for cash at aprice Of Rs.110 each aggregating to Rs.1,650,000,000. The premium of Rs.100 per share, amounting to Rs.1,500,000,000 from the allotment was credited to Securities Premium Account. The share issue expenses incurred by the Company has been adjusted against the Security Premium Account.

Pursuant to the public issue, shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange effective from 20 January 2011.

# Object of the issue revised vide special resolution passed in Annual General Meeting held on 16 September 2011.

* Represents loan given to Ciemme Jewels Limited for expenses incurred or to be incurred towards objects of the issue.

6. In the opinion of the Directors, current assets, loans, advances and deposits are approximately of the value stated, if realised in the ordinary course of business. Amounts receivable and payable from same party are netted off for presentation in the financial statements

7. Previous year's figures have been regrouped or rearranged, wherever considered necessary to conform to current year's presentation. Figures in bracket are in respect of previous year.

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Mar 31, 2011

1. Commitments and contingent liabilities not provided for:

Particulars As at As at

31/03/2011 31/03/2010

Rs. Rs.

a) Estimated amount of 41,236,265 42,140,081 contracts remaining to be executed on capital account and not provided for (net of advances)

b) Guarantee given to banks 223,500,000 225,950,000 in respect of credit facilities sanctioned to subsidiary Company (USD 50 lacs)

c) Bond executed in favour of 461,740,000 10,000,000 The President of India towards manufacture of goods for exports

d) Bond executed in favour of 30,622,000 30,622,000 The President of India towards provisional release of seized goods

e) Disputed penalty under 11,000,000 11,000,000 Customs Act

f) Disputed service tax liability 241,156 241,156

g) Disputed income tax liability 446,962 446,962

2. Valuation of inventories

In respect of the stock of finished goods (polished diamonds), cost is based on technical estimate by the management. In view of the nature of variation in the value of individual diamonds, the differentials in their costs, it is not practical to compute the cost of polished diamonds using either FIFO or weighted average cost. In view of the multiple grades, it is not practical to use specific cost. The basis of computing cost used on consistent basis, to avoid distortion in valuation, is to that extent a deviation from that prescribed by Accounting Standard (AS)-2 'Valuation of Inventories'. The impact on profit for the year, reserves and surplus and inventories as at 31 March 2011, due to the above deviations is not ascertainable.

3. The Company was incorporated on 4 January 2007 as C. Mahendra Exports Private Limited pursuant to conversion of the partnership firm M/s. C. Mahendra Exports under Part IX of The Companies Act, 1956. Thereafter on 14 March 2007 it was converted into C. Mahendra Exports Ltd.

Prior to its conversion, the partnership firm had revalued certain class of its fixed assets as at 1 April 2006 on the basis of valuation done by an approved valuer. The net difference between the written down value ('WDV') as per books and revalued value was Rs.306,549,580, which had been added to the WDV of the fixed assets as at 1 April 2006 with corresponding credit to Partners Current Capital Account, which was not in accordance with Accounting Standard (AS)-10 "Accounting for Fixed Assets".

On conversion into company, the written down value of fixed assets as on 3 January 2007 have been carried forward in the books of the Company as cost. Also the Company has not disclosed the details of revaluation in its financial statements and depreciation relating to the revalued amount is being charged to the profit and loss account. This is not in accordance with Accounting Standard (AS)-10 "Accounting for Fixed Assets" and (AS)-6 "Depreciation".

The Impact of the above on the profit for the year, reserves and surplus, fixed assets gross value, accumulated depreciation as at 31 March 2011 is not ascertained.

4. The arrears of dividend on 12,500,000 6% Redeemable Preference shares of Rs.10 each as on 31/03/2011 is Rs.7,602,740 (as at 31/03/2010 Rs.102,740), which include dividend for the year Rs.7,500,000 (previous year Rs.102,740).

5. Quantitative details (As certified by the Management)

a) Licensed Capacity: Not applicable

b) Installed Capacity:

i. Manufacturing of polished diamonds: 240,000 pieces (based on technical estimate of the management)

ii. Electricity generation from windmills: 13,000 KW

11 . In the opinion of the Directors, current assets, loans, advances and deposits are approximately of the value stated, if realised in the ordinary course of business. Amounts receivable and payable from same party are netted off for presentation in the financial statements.

6. Related party disclosures

i. Related party relationships:

a) Subsidiaries (where control exist)

C. Mahendra International Limited

C. Mahendra BVBA

Ciemme Jewels Limited

Ciemme BVBA (upto 01/10/2009)

C. Mahendra Exports (H.K.) Ltd.

C. Mahendra (NY) LLC

Ciemme (LA) Inc. (upto 01/04/2010)

Ciemme (NY) LLCC. Mahendra (USA) Inc.

Best Shine Limited (w.e.f.31/03/2010)

International Gems & Jewellery FZE (w.e.f. 31/03/2010)

Al Daspa Gems & Jewellery FZE (w.e.f. 31/03/2010)

C. Mahendra DMCC (w.e.f. 13/06/2010)

C. Mahendra Trading (w.e.f. 07/03/2011)

b) Key managerial personnel :

Mahendra C. Shah

Champak K. Mehta

Sandeep M. Shah

c) Relative of key management personnel :

Moghiben C. Shah

Dipika C. Mehta

Rasilaben M. Shah

Vikram M. Shah

Vimlaben K. Mehta

Hansa P. Mehta

Hemali J. Shah

Nayna P. Mehta

Jignesh M. Shah

Kanu C. Shah

Prakash K. Mehta

Suresh K. Mehta

Paras C. Mehta

Alka K. Shah

Krupa S. Shah

Sadhna S.Mehta

Pravin K. Mehta

Pravin C. Shah

d) Enterprises in which key management personnel have significant influence :

Champak K. Mehta (HUF)

Mahendra C. Shah (HUF)

Polo Developers Private Limited

Ashesha Trading Private Limited

e) Enterprises in which relative of key management personnel have significant influence :

C. K. Shah (HUF)

Kana C. Shah (HUF)

Pravin C. Shah (HUF)

Allright Trading Private Limited

Notes:

i. The related party relationships have been determined on the basis of the requirements of the Accounting Standard (AS) - 18 'Related Party Disclosures' and the same have been relied upon by the auditors.

ii. The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year, except where control exist, in which case the relationships have been mentioned irrespective of transactions with the related party.

The Company has given corporate guarantee to the bank towards working capital facilities sanctioned to subsidiary Company C. Mahendra BVBA [(outstanding as at 31/03/2011 Rs.22.35 Crores) and (outstanding as at 31/03/2010 Rs.22.59 Crores)].

7. Segmental reporting

The Company has only one business segment viz. Gems and Jewellery, which is being considered as the primary segment.

The financial information about business segment is not applicable since segment results / revenue / assets of the wind mill business are not more than 10 percent of the combined business results / revenue / assets.

8. The Company is required to comply with the transfer pricing regulations under Section 92-92F of the Income Tax-Act, 1961. The management is of the opinion that its international transactions are at arms length and that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

9. The Company has not received any information from its suppliers regarding their registration under the 'Micro, Small and Medium Enterprises Development Act, 2006'. Hence interest if any payable as required under Act has not been provided and the information required to be given in accordance with Section 22 of the said Act, is not ascertainable and hence, not disclosed.

10. The Company has entered into agreements for obtaining office premises on rent which are in nature of operating leases. The period of lease range from 11 months to 60 months and are cancellable in nature. Amount paid / payable in respect of such leases are charged to profit and loss account on accrual basis.

11. During the year, the Company completed an Initial Public Offer (IPO) of 15,000,000 equity shares of Rs.10 each for cash at a price of Rs.110 each aggregating to Rs.1,650,000,000. The premium of Rs.100 per share, amounting to Rs.1,500,000,000 from the allotment was credited to Securities premium account. The share issue expenses of Rs.93,688,585 incurred by the Company has been adjusted against the Security premium account.

Pursuant to the public issue, shares of the Company are listed on National Stock Exchange and Bombay Stock Exchange effective from 20 January 2011.

12. Previous year figures have been regrouped or rearranged, wherever considered necessary. Figures in bracket are in respect of previous year.