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Sovereign Diamonds Ltd.

BSE: 523826 Sector: Consumer
NSE: N.A. ISIN Code: INE959D01013
BSE 15:15 | 20 Feb 13.50 -0.15
(-1.10%)
OPEN

13.15

HIGH

13.55

LOW

13.15

NSE 05:30 | 01 Jan Sovereign Diamonds Ltd
OPEN 13.15
PREVIOUS CLOSE 13.65
VOLUME 1650
52-Week high 16.58
52-Week low 6.75
P/E 6.52
Mkt Cap.(Rs cr) 8
Buy Price 13.11
Buy Qty 50.00
Sell Price 13.65
Sell Qty 50.00
OPEN 13.15
CLOSE 13.65
VOLUME 1650
52-Week high 16.58
52-Week low 6.75
P/E 6.52
Mkt Cap.(Rs cr) 8
Buy Price 13.11
Buy Qty 50.00
Sell Price 13.65
Sell Qty 50.00

Sovereign Diamonds Ltd. (SOVERDIAMONDS) - Auditors Report

Company auditors report

To the Members of SOVEREIGN DIAMONDS LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of SOVEREIGN DIAMONDSLIMITED ("the Company") which comprise the Balance Sheet as at March 312017 the Statement of Profit and Loss and Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The management and Board of Directors of the Company are responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (‘the act') with respect to thepreparation of these financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with rule 7 of Companies (Accounts)

Rules 2014. This responsibility includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error

Auditor's Responsibility

3. Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance 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 theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's management and Board of Directors as well as evaluatingtheoverallpresentationofthefinancial . statements

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Opinion

6. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 its profit and its cash flows for the year ended on that date

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure "A" statement on the matters Specified inparagraphs 3 and 4 of the Order to the extent applicable.

8. As required by section 143(3) of the Act we further report that:

a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c) the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d) in our opinion the aforesaid financial statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014

e) on the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate in Annexure "B"; and

g) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements as referred to in Note 26 to the financialstatements.

ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise

iii. There has not been an occasion in case of the Company during the year under reportto transfer any sums to the Investor Education and Protection Fund. The question of delayin transferring such sums does not arise

iv. The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016. Based on audit procedures and relying onthe management representation we report that the disclosures are in accordance with thebooks of accounts maintained by the Company.

Refer to Note 25 to the financial statements.

FOR J.D. ZATAKIA & COMPANY
CHARTERED ACCOUNTANTS
FIRM REGN. NO. 111777W
Sd/-
Date : 27th May 2017 J. D. ZATAKIA - PROPRIETOR
Place : Mumbai. MEMBERSHIP NO. 17669

ANNEXURE "A" TO THE AUDITORS' REPORT

Annexure referred to in paragraph 1 Our Report of even date to the members of SOVEREIGNDIAMONDS LIMITED on the accounts of the company for the year ended March 31 2017

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:

I. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As explained to us physical verification of the fixed assets was conducted bymanagement annually which in our opinion is reasonable looking to the size of theCompany and nature of it's business. According to the information and explanation given tous no material discrepancies were noticed on such verification.

c) According to the information and explanation given to us and on the basis ofexamination of the records the title deeds of immovable properties are held in the nameof the company

II. Inventories have been physically verified by the Management at regular intervals.In our opinion the frequency of such verification is reasonable. We are informed thatdiscrepancies noticed on such verification were not material as compared to the bookrecords. The discrepancies noticed on such verification have been properly dealt with inthe books of accounts.

III. The company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013.

IV. According to the information and explanation given to us the Company has not givenany loan guarantee made investment nor provided any security under of the provisions ofSection 185 and 186 of the Companies Act 2013 V. In our opinion and according to theinformation and explanations given to us the Company has not accepted any deposit duringthe year in terms of provision of section 73 to 76 or any other relevant provision of theCompanies Act 2013 and the rules framed there under According to the information andexplanations given to us no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

VI. The maintenance of cost records has not been prescribed by the Central Governmentunder section 148 (1) of the Companies Act 2013.

VII. a) The Company is regular in depositing undisputed statutory dues includingprovident fund income tax sales tax employees' state insurance custom duty and otherstatutory dues with appropriate authorities.

b) According to the information and explanations given to us no undisputed amountspayable in respect of income tax sales tax employees' state insurance custom duty andother statutory liabilities were in arrears as at the last day of the financial year for aperiod exceeding six months from the date they became payable.

VIII. According to the records of the Company examined by us and on the basis ofinformation and explanations given to us the Company has not defaulted in repayment ofdues to banks during the year. The company has not taken any loans or borrowings fromfinancial institution and government or by issue of debenture.

IX. According to the information and explanation given to us the term loan have beenapplied for the purpose for which they were obtained. No moneys are raised by way ofinitial public offer or further public offer.

X. On the basis of examination of books of account and other relevant records in thecourse of our audit and information and explanation given to us no fraud by the company oron the company by its officers or employees has been noticed or reported during the year.

XI. According to information and explanation given to us and based on our examinationof the records of the company the managerial remuneration has been paid / provided inaccordance with the requisite approval mandated by the provisions of Section 197 read withSchedule V of the Companies Act 2013.

XII. The Company is not a Nidhi Company accordingly the requirement of Clause 3 (xii)of the Order are not applicable.

XIII. According to the information and explanations given to us all transactions withthe related parties are in compliances with section 177 and 188 of Companies Act 2013 asapplicable and the details have been disclosed in the Financial Statements as required bythe applicable accounting standards.

XIV. The Company has not raised any money by preferential allotment or privateplacement of Shares or by issue of fully or partly Convertible debentures during the yearunder review accordingly clause 3(xiv) of the order is not applicable.

XV. According to information and explanation given to us and based on our examinationof the records of the company the company has not entered into non-cash transactions withdirectors or persons connected with him accordingly clause 3(xv) of the Order is notapplicable.

XVI The Company is not required to be registered under section 45 - IA of the ReserveBank of India Act 1934.

FOR J.D. ZATAKIA & COMPANY
CHARTERED ACCOUNTANTS
FIRM REGN. NO. 111777W
Sd/-
Date : 27th May 2017 J. D. ZATAKIA - PROPRIETOR
Place : Mumbai. MEMBERSHIP NO. 17669

ANNEXURE "B" TO THE AUDITORS' REPORT

(Referred to in paragraph 2 (f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of SOVEREIGNDIAMONDS LIMITED ("the Company") as of March 31 2017 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficientand appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the

Company has in all material respects an adequate internal financial controls systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 31 2017 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

FOR J.D. ZATAKIA & COMPANY
CHARTERED ACCOUNTANTS
FIRM REGN. NO. 111777W
Sd/-
Date : 27th May 2017 J. D. ZATAKIA - PROPRIETOR
Place : Mumbai. MEMBERSHIP NO. 17669