Gitanjali Gems Limited

• Billion dollar turnover.
• Strong growth in jewellery segment, driven by domestic jewellery retail brands.
• Expansion and diversification strategy on track.

Mumbai – June 29, 2009

Gitanjali Gems Limited, one of India’s leading integrated diamond and jewellery retailing and manufacturing companies announced its audited financial results for the year ended 31st March 2009. The company maintained a turnover of a billion dollars and reported a strong growth across its jewellery sales, led by a robust domestic demand, and a strong portfolio of brands that service the Indian retail jewellery consumer. The company also maintained a reasonable profit margin though impacted adversely by a general slowdown in the global economy, rising finance cost, foreign currency fluctuations and a recessionary situation in the United States, a key export market. The company’s effective cost control and efficiency strategy was successful in countering the impact of the global slowdown which resulted in higher inventories, increased receivables and as a result, a higher carrying cost.

Highlights 2008-09

Consolidated

• Revenues increased by 5.32% from Rs. 4831.74 cr. for the year ended 31st March, 2008 to Rs. 5088.88 cr. for the year ended 31st March, 2009.
• Jewellery sales went up from Rs. 2165.83 crores in the previous year to Rs. 2693.90 crores in the current year, representing a 24 per cent growth.
• The share of jewellery in the total turnover went up from 45 per cent to 53 per cent.
• Despite the economic downturn, operating profits before interest and exceptional items grew from 226.8 crores to Rs. 251.60 representing an 10% per cent growth.
• The net profit for the year stood at Rs. 150.58 crores for 2008-09, marginally lower compared to the Rs. 160.69 crores in the previous year.
• Basic earnings per share stood at Rs. 17.70 while diluted earnings were Rs. 15.34 per share

Strategy and outlook

The company will continue to focus on growing its domestic retail business, maturing its acquisitions overseas and follow the organic and inorganic route to growth. Its diversification in the Lifestyle space is also expected to contribute to revenue, and the infrastructure projects are also going to be implemented as per plan.

The company has taken effective steps to optimize its production costs further and improve profitability. At the same time, the balance sheet is being

made stronger through a gradual reduction in the finance cost to preserve profitability and increase shareholder value.

Gitanjali Gems Limited expects that as a result of these strategies, its profits will grow by almost 30 per cent in the year 2009-10.

Management comment

Commenting on the results, Mr. G K Nair, Executive Director, Gitanjali Gems Limited said, “Our results represent the strength and resilience of our business model and the effectiveness of the strategies we followed. Our constant focus on progressive value addition is well reflected in the growth of the jewellery business, more specifically, domestic retail. We are confident of improving our margins further through investment in our brands and distribution network, as well as the facilitation of infrastructure for the industry at a national level.”

About Gitanjali Gems Limited

Gitanjali Gems (GGL) is an India based integrated diamond and jewellery manufacturer and retailer established in 1966. The company`s activities are spread across the entire value chain from sourcing and processing rough diamonds to manufacturing, branding and retailing gold and diamond jewellery.

Gitanjali Gems Ltd., part of the Gitanjali Group of Companies promoted by Mr. Mehul Choksi, is one of the largest and fastest growing diamond and jewellery businesses in the world. The Group has been the pioneers of the jewellery retail revolution, with several of their brands enjoying strong equity amongst consumers, including Gili, Asmi, D’Damas, Maya Sangini. Gitanjali’s brands are thus, the most visible jewellery brands in the Indian market today.

Gitanjali has combined a world class manufacturing discipline with a reach-enhancing retail strategy to emerge as one of the most valuable jewellery conglomerates in the country today.

Gitanjali has four decades of experience, being one of the earliest diamond houses in India. The company was accorded a Sight by the Diamond Trading Company Ltd., London as early as 1968, making it amongst the first Sightholders in this part of the world. Having received over 50 National and Council awards from the Ministry of Commerce for outstanding exports, it is today one of the largest diamond exporting companies in India. Presently the Gitanjali Group has highly modernized diamond cutting and polishing facilities at 5 locations in India and globally diversified manufacturing operations in Bangkok, Vietnam and China and a marketing network spread across Europe, Hong Kong, USA and Japan.

Being a DTC Sightholder, a diamond and jewellery manufacturer, the Group has strategically positioned itself to manufacture and promote diamonds as well as studded jewellery all the way to the retail level.