The Members of SAGAR DIAMONDS LIMITED
The directors of your company have pleasure in presenting the Third Annual Report alongwith the Audited Statement of accounts for the year ended on 31st March 2018
The financial results of your Company's working are as under:
| ||(Rs.in lacs) ||(Rs.in lacs) |
| ||31/03/2018 ||31/03/2017 |
|Total Revenue ||9421.73 ||999.89 |
|Profit before Tax and exceptional items ||257.85 ||50.01 |
|Add: Exceptional item ||0.00 ||0.00 |
|Profit before Tax ||257.85 ||50.01 |
|Less: Provision for taxation ||20.41 ||15.99 |
|Less: Deferred tax ||3.09 ||0.00 |
|Less : Earlier year income tax ||0.00 ||0.00 |
|Profit after Income Tax ||234.35 ||34.02 |
|Add: Surplus from Previous years ||0.00 ||(0.18) |
|Profit available for appropriation ||2618.91 ||33.84 |
|Balance as per Balance Sheet ||2618.91 ||33.84 |
The net profit before exceptional items and taxes is Rs. 257.85 lacs (Previous YearRs.50.01 lacs).After provision for taxation & deferred tax the net profit after taxesresulted into the profit for the year at Rs. 234.35 lacs (Previous Year Rs.34.02 lacs).
The company is initiating series of innovation and improvement of product quality tosustain the competition and to further the prospects of the company.
The company has a stable Effluent Treatment system and is a "Zero Discharge"company thereby taking a pathbreaking step towards being an Environment friendly companycommitted towards cleaner environment.
The company has not accepted any deposit from public within the meaning of section 73to 76 of the Companies Act 2013 and the rules framed thereunder.
STATEMENT OF DECLARATION BY INDEPENDENT DIRECTOR: (Section 134)
The Independent Directors of the Company have given the declaration to the Company thatthey meet the criteria of independence as provided in section 149(6) as well as underregulation 25 of (LODR) Regulation 2015. There has been no change in the circumstanceswhich may affect their status as Independent Director during the year.
COMPANY'S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHERDETAILS:
The Nomination and Remuneration Committee has laid down the criteria forDirectorsAppointment and Remuneration including criteria for determining qualificationpositiveattributes and Independence of Director. The following attribute/criteria forselection have been laid by the board on the recommendation of committee:
? The candidate should possess the positive attributes such asleadershipEntrepreneurship or such other attributes which in the opinion of the committeeare in the interest of the Company.
? The candidate should be free from any disqualification as provided under sections 164and 167 of Companies Act 2013 ? The candidate should meet the conditions of beingindependent as stipulated under the companies act 2013 ? The appointment or re-appointment of a Director is made pursuant to an established procedure which includesassessment of managerial skills professional behaviour technical skills and otherrequirements as may be required by the post.
? The Executive and Whole-time Directors of the Company are paid remuneration as pertheir terms and conditions which are approved by the Board after taking intoConsiderationthe recommendations made by Nomination and Remuneration Committee.
DIRECTORS& KEY MANAGERIAL PERSONNEL (KMP)
The director Shri Vaibhav Dipak Shah was appointed as a managing Director of thecompany for a period of 5 years with effect from 8th July2017. He is liable toretire by rotation and being eligible offers himself for re-appointment. Your directorsrecommend his reappointment as director of the company.
Ms. Namrata Dattatray Tembe & Mr.Shahid Hussain Shaikh were appointed asindependent additional director in the meeting of the board of directors held on 29thMay 2017 for a tenure of 5 years and they are regularized by the approval of shareholdersin Extra Ordinary Meeting dated 08.07.2017. They meet the criteria of independence as laiddown u/s 149 of the Companies Act 2013 Listing agreement and SEBI (Listing &Disclosure Requirements) Regulations 2015.The Company has received declaration from theindependent directors confirming that they meet the criteria of independence as laid downu/s 149 of the Companies Act 2013 Listing agreement and SEBI (Listing & DisclosureRequirements) Regulations 2015.
Mr.Rahil Hiteshbhai Chovatia was appointed as non-executive director non-independentadditional director in the meeting of the board of directors held on 29thMay2017 and he is regularized by the approval of shareholders in extra ordinary generalmeeting dated 08.07.2017.
As on date Vaibhav Dipak Shah Managing Director and Mr.Rahil Hiteshbhai chovatia isthe non-executive whole-time director of the company. Mr.Sachin Ashok Dhobale is the ChiefFinancial Officer of the company w.e.f 29.05.2017.Mr. Kaushik Vagad has resigned from thepost of Company secretary and Compliance officer of the Company w.e.f. 31.03.2018 and inhis place Mr. Harshal Agrawal was appointed as the Company Secretary and ComplianceOfficer of the Company w.e.f. 18.06.2018 as required under Section 203 of the CompaniesAct 2013.
Details of the directors appointment / reappointment are given in the notice of AGM.Further details of director including remuneration remuneration policy criteria forqualification & independence Board and committee meeting and other details are givenin corporate governance report which is integrated part of this board report.
Company has not declared any dividend during the year and decides to plough back thefunds in the development of the company.
AUDITORS & AUDITORS REPORT Statutory Auditor:
M/s.V.P.AGRAWAL & Co Chartered Accountants are Statutory Auditors of the Company.But the auditors have resigned due to their pre-occupation in other assignments. The AuditCommittee and the Board of Directors have placed on record their appreciation for theprofessional services rendered by them during their association with the Company.
Accordingly the Board recommends the appointment M/s. C.P.Jaria & Co.having firmregistration no 104058W as statutory auditors in the casual vacancy caused by the saidresignation. The said appointment shall be placed for shareholders' approval at theensuing Annual General Meeting.
Pursuant to the provision of section 138 of the Companies Act 2013 and theCompanies(Accounts) Rules 2014 the Company has appointed M/s Ravindra Dhakar &Associates. Chartered Accountants Surat as an Internal Auditor of the Company for theFinancial Year 2018-19.
Pursuant to the provisions of section 201 of Companies Act 2013 Ms Heena Agrawalpracticing company secretaries was appointed to undertake the secretarial audit for theyear ended on 31/03/2018.The secretarial audit report in annexed hereto as annexure -III.There is no qualification reservation or adverse remark in the secretarial reportsubmitted by the Secretarial auditor.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of the knowledge and belief your directors make following statements interms of section 134(3)(c) of the Companies Act 2013.
1. In the preparation of the annual accounts for the year ended on 31st March 2018the applicable accounting standards have been followed along with proper explanationwherever required and there is no material departures from the same.
2. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the company for the aforesaid period.
3. The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
4. The directors have prepared the annual accounts on a going concern basis and
5. The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Management Discussion & Analysis
Pursuant to Regulation 34(2)(e) of SEBI (Listing obligations and DisclosureRequirements) (LODR) Regulations 2015 Management Discussion and Analysis Report isannexed hereto as Annexure -I
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an anti-harassment policy in line with the requirements of theSexual Harassment of women at workplace (Prevention Prohibition And Redressal) Act 2013.Internal Complaint Committee has been set up to redress complaints received regularly andare monitored by women line supervisors who directly report to the chairman of thecommittee.
The company has complied with the applicable mandatory requirements of SEBI (LODR)Regulations 2015.
The several regulations of the SEBI (LODR) Regulations 2015 are not applicable to thecompany. As per regulation 15 of SEBI (LODR) regulations2015 the compliance with therequirements of corporate governance provisions as specified in regulation 27 shall notapply in respect of
(a) The listed entity having paid up equity share capital not exceeding rupees tencrore and net worth not exceeding rupees twenty five crore as on the last day of theprevious financial year
(b) The listed entity which has listed its specified securities on the SME Exchange
The company falls within the ambit of aforesaid exemption (b) hence the compliancewith the requirements of corporate governance as specified in regulation 27 is notapplicable to the company. However Company has made disclosures voluntarily in relation toseveral of these regulations.
Your Company has been practicing the principles of good corporate governance over theyears. The Board of directors support the broad principles of corporate governance. Inaddition to the basic governance issues the board lays strong emphasis on transparencyaccountability and integrity.
The company got listed on SME Platform of BSE Ltd on 26th September 2017 .During the fiscal 2017-18 the Paid-up share capital of the company increased fromRs.100000 to Rs.1264 37800.
During the year Company has purchased business of M/s Sagar Gems through the BusinessTransfer Agreement executed between the Company and Mr. Vaibhav Dipak Shah proprietor ofM/s Sagar Gems & 5921860 equity shares having face value of Rs. 10/- at Par eachalloted for consideration other than cash to Mr. Vaibhav Dipak Shah proprietor of M/sSagar Gems upon acquisition of the said proprietorship firm by executing the BusinessTransfer Agreement.
CORPORATE SOCIAL RESPOSIBILITY
Corporate Social responsibility Committee & its policy is not applicable to thecompany in view of the fact that the Company has not crossed the threshold limitprescribed under section 135 of the Companies Act 2013
RELATED PARTY TRANSACTION
All related party transactions entered into during the financial year were on ArmLength basis and in the ordinary course of business and there were no material relatedparty transactions made by the company during the financial year under review. There wereno material related party transactions made by the company with key managerial personwhich may have potential conflict with the interest of the company at large related partytransactions are provided in notes to financial statements. Related party transactions areplaced before the audit committee and also before the board wherever necessary incompliance with the provisions of the Act listing agreement and policy of the company torelated party transactions.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a whistle Blower Policy through which the Company encouragesemployees to bring to the attention of Senior Management any unethical behaviour andimproper practices and wrongful conduct taking place in the Company. The brief details ofsuch vigil mechanism forms part of the Corporate Governance Report and is available onwww.sagardiamonds.com
EXTRACT OF ANNUAL RETURN
Extract of Annual return in MGT-9 is annexed to this report as annexure II.
LOANS GURANTEE AND INVESTMENT
The Company has not given any Loan or Guarantee or security or made any investmentduring the financial year.
INTERNAL FINANCIAL CONTROL SYSTEM
As per the provisions of the Companies Act the directors have the responsibility forensuring that the company has proper internal financial control system to provide withresources assurance regarding adequacies and operative effectiveness of control to enablethe director to meet there responsibility. Company has in place sound system to ensure forsafe guarding of the assets detection of fraud and error reliable financial informationand accuracy of accounting records etc. The accounts are subject to internal audit andinternal check and control is also reviewed from time to time and significant observationand action thereon presented to audit committee.
The company has in place a mechanism to indentify assess monitor and mitigatedifferent risk of business. The major relevant risk include increase in price of inputmaterials market risk oversight in estimation and other's major areas in risk managementincludes internal audit process of estimation contract management and timely decisionmaking process. The company has risk management committee to ascertain and minimize therisk.
PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO.
A) Conservation Of Energy:
With regard to the particulars as prescribed under Section 134(3)(m) of the Act readwith Rule 8 of the Companies (Accounts) Rules 2014 the company is in the process offinding ways of controlling and reducing energy consumption as a commitment to GlobalEnvironment; this will cover office facilities communications and transport.
B) Technology Absorption Adoption And Innovation:
The Company continuously makes efforts towards research and developmental activitiesand has been constantly active in harnessing and tapping the latest and best technology inthe industry.
C) Foreign Exchange Earnings And Outgo:
Further during the year under review the Foreign Exchange Earnings Rs.107.92 lacs.
PARTICULARS OF EMPLOYEES
Pursuant to Rule 5 (2) of Companies (Appointment and Remuneration of ManagerialPersonnel Rules 2014) amendment dated 30.06.2016 name of Top ten employees in terms ofremuneration are as follows:
1. Mr. Sachin Dhobale
2. Mr. Kaushik Vegad
3. Mr. Hiren Trivedi
4. Mr. Montu Gandhi
5. Mr. Tejas Kumar Patel
6. Mr. Pravinbhai Rathod
7. Mr. Deben Santosh Das
8. Mr. Rahul Halpat
9. Mr. Suken Das
As required under section 197 of the Companies Act2013 and Companies (Appointment andrecommendation of managerial personnel) Rules there is no employee who was in receipt ofremuneration of not less than Rs.6000000/- during the year ended 31st March2018 or notless than Rs.500000/- per month during any part of the said year.
The directors place on record their appreciation for co-operation and support extendedby the bankers financial institutions customers and suppliers of the company. Thedirectors also wish to place on record their sincere appreciation of the devoted andefficient services rendered by the workers staff and executives of the company.
| ||For and on behalf of the Board |
| ||Sd/- |
|Place: Surat ||(Vaibhav Dipak Shah) |
|Date: 06thSeptember2018 ||Managing Director |