Dear Shareholders,
 
 THE MACROECONOMIC ENVIRONMENT DURING FY12 WAS REPLETE WITH
 UNCERTAINTIES AND STRESSES. THE FRAGILITY OF THE GLOBAL ECONOMIC
 ENVIRONMENT AND A SLOW RECOVERY RATE GLOBALLY NOTWITHSTANDING, WE AT
 GITANJALI GEMS, VIGOROUSLY SOUGHT, IDENTIFIED OPPORTUNITIES AND
 NAVIGATED CHALLENGES TO CHART A CHALLENGING YEAR SUCCESSFULLY.
 
 Our company''s efforts were based on a firmly-entrenched belief that is
 at the core of our business. We believe we have the potential to track
 opportunities and find success in every situation. Our ability to look
 beyond the norm has been catalytic in our reporting a successful and
 profitable year.
 
 There are over a billion people in India. It is a gigantic market with
 a large youth population. Disposable incomes in India are on the rise.
 This translates to mounting aspirations for products such as branded
 jewellery.  We, at Gitanjali were well-poised to take advantage of this
 and as a result were able to grow customer wallet share in FY12.
 
 We have succeeded through aggressively expanding our presence in
 smaller Indian cities and towns. Our success has proved that jewellery
 consumers are shifting from the unorganised sector to the organised
 sector. It has also proved that branded jewellery is rapidly becoming
 the preferred option for consumers in these regions and that the
 increase in demand for branded jewellery is not limited to large cities
 alone. That is another reason for our company to be optimistic.
 
 Our strategy is to position multiple brands uniquely, linking them to
 occasions, classes and situations and then marketing these across
 regions through a diverse mix of company owned stores, shop-in-shops
 and franchising. Gitanjali''s portfolio of brands is intended to ensure
 that there are no gaps left and that dynamic and rapidly changing
 consumer needs are addressed through our bouquet of brands.
 
 We are now one of the leading players the world over in jewellery
 branding and retailing. Our presence spans the value chain in full,
 from the sourcing of diamonds to the retailing of jewellery. Being
 integrated, the company enjoys benefits that emanate at the value
 chain''s intermediate stages.  Gitanjali not only finds a place amongst
 the largest global branded jewellery and retail players but is also
 among the fastest growing companies in this space.
 
 We recognise that diamond jewellery is rapidly gaining ground in an
 Indian market dominated predominantly by gold. Diamonds are also being
 viewed as a form of financial security and a repository of value. These
 are significant in uncertain times when risk-aversion is on the rise.
 By offering a range of brands as well as trust and convenience to
 consumers, our company enjoyed high growth during the year. Regional
 preferences have been incorporated in the new collections, brands and
 designs that were launched during the year. Our brands continue to
 enjoy strong recall owing to vigorous promotional campaigns and the
 choice of leading celebrities as brand ambassadors.
 
 As pioneers in the branded jewellery business, Gitanjali has been and
 will continue to benefit from this transition.  We have succeeded by
 capitalising on our first mover position by recognising emergent
 patterns and shifts and adapting accordingly. We have, for example,
 adopted modern retail formats such as boutiques, shop-in- shops and
 Jewel Souk (a multi-brand store), all aimed to enrich the consumer
 jewellery purchasing experience.
 
 Gitanjali''s portfolio of brands is a potent one. Both current and
 potential jewellery consumers are familiar with the company''s
 brands-Gili, Asmi, Nakshatra and D''damas to name some.  During the
 year, nine of our Indian brands were independently valued at Rs. 5,584
 Cr. We are constantly innovating-creating new designs, new collections,
 introducing new channels for the sale of jewellery, supporting new
 product launches with promotional campaigns thus reaching out to
 consumers in a variety of ways and so enthralling them.  These
 initiatives have been immensely successful.
 
 In the year 2011-2012, we commenced a business reorganising exercise
 whereby we strategically reorganised our business into three focused
 verticals in order to enhance value for stakeholders. The vertical
 under the operating-cum-holding company Gitanjali Brands Limited (GBL),
 on a consolidated basis, holds all our Indian brands for distribution
 and retail of jewellery in India.
 
 Our portfolio is well-balanced in terms of presence in India and
 overseas and in terms of a balance between diamond and gold jewellery.
 This has accelerated the improvement in the annual performance.
 
 Incisive strategic initiatives relating to a gamut of activities from
 branding to the launch of new collections, new store openings and sales
 provided powerful impetus to our company''s revenues which swelled by
 33%.
 
 We service consumers through over 4000 points of sale. In India we are
 present across 300 cities and towns. In order to leverage our position
 of supremacy, we have expanded our retail presence aggressively during
 the year 2011-2012. We added 23 own stores, taking the number of these
 stores to 233. Gitanjali added 57 stores in the shop-in-shop format
 resulting in this number increasing to 577. Our company also added 64
 franchisees which took the number of franchisees to 319. The size of
 our company''s retail network increased consequently from 1.3 million
 square feet in 2010-2011to 1.7 million square feet in 2011-2012 We
 intend to scale up to 2 million square feet by FY 2015.
 
 The driver for the expansion of our retail presence will be our growing
 franchise network. This will address the fast growing demand for
 branded jewellery in small towns and cities. As a result of its
 constantly increasing retail footprint, the company achieved high sales
 from stores that matured during the year 2011-2012. Gitanjali''s
 occupancy of over 60% of the Indian organised mall space is the largest
 in the jewellery category.
 
 A word on our US business - The retail chain, Samuels has turned
 profitable.  The Group currently operates through a 110 doors in the
 US. The business witnessed a robust top and bottom line growth during
 the year. Supply chain synergies also contributed to healthy returns
 and profits.
 
 Expansions and acquisitions have been in focus during the year. We aim
 to have a powerful presence in the leading jewellery markets globally
 namely, the USA, Japan, China, India and the Middle-East. We opened
 three more stores in the Middle-East taking the store count in that
 region to four.  We also want to serve emerging markets. Our Italian
 brands service international design preferences which are different
 from designs that are suitable for India.
 
 Gitanjali incorporated Aston Luxury Group in Hong Kong to explore and
 expand the international business of the Group in the Asia Pacific
 region.  Gitanjali acquired Crown Aim which is in Hong Kong. The entity
 has a state- of-the-art manufacturing unit in China as well as in-depth
 sourcing capabilities. With an output of over 1000 pieces of jewellery
 each day Crown Aim ensures additional profit capture and enhanced
 merchandising capabilities for Gitanjali. Crown Aim has a subsidiary -
 “Alfred Terry”, in the UK, which distributes jewellery across 2,000
 points in the UK and in the rest of Europe. The company acquired
 Leading Jewels of Japan KK to expand business in Japan and the
 adjoining region. The company incorporated Leading Singapore Jewels
 Pte. Ltd with the objective to expand business in Singapore and the Far
 Eastern regions
 
 We expect to continue to benefit from the increasing share of organised
 players in the jewellery space in India.  Our astute understanding of
 market and individual segment requirements, focus on increasing market
 visibility, maintaining the strong brand recall we enjoy among
 customers, innovations and design concepts will fuel our growth
 globally. The synergies that our company''s alliances and acquisitions
 provide for in terms of learning and efficiencies will drive our
 expansion in keeping with our vision and corporate philosophy.
 
 On behalf of Gitanjali, I would like to thank you for the trust and
 faith that you have demonstrated. It is these that above all drive us
 on to consolidate and reinforce our position and enhance value.
 
 Warm regards,
 
 Mehul C. Choksi
 
 Chairman and Managing Director