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Sagar Diamonds Ltd.

BSE: 540715 Sector: Consumer
NSE: N.A. ISIN Code: INE146Y01013
BSE 00:00 | 29 Jul 29.70 -1.55
(-4.96%)
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NSE 05:30 | 01 Jan Sagar Diamonds Ltd
OPEN 29.70
PREVIOUS CLOSE 31.25
VOLUME 3000
52-Week high 31.25
52-Week low 5.50
P/E 4.24
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 29.70
CLOSE 31.25
VOLUME 3000
52-Week high 31.25
52-Week low 5.50
P/E 4.24
Mkt Cap.(Rs cr) 38
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sagar Diamonds Ltd. (SAGARDIAMONDS) - Director Report

Company director report

To

The Members

SAGAR DIAMONDS LIMITED

Your Directors have pleasure in presenting the 05th annual Report of thecompany together with the Audited Financial Statements for the year ended 31stMarch 2020.

FINANCIAL RESULT AND PERFORMANCE:

(Rs. in Lakhs except EPS)
Particulars 31/03/2020 31/03/2019
Revenue from Operation 197049.07 173155.76
Other income 0.57 0.37
Profit Before Interest & Depreciation 977.28 777.56
(-)Finance Cost 38.17 18.90
(-) Depreciation 18.98 11.80
Net Profit before tax & Exceptional items 920.13 746.85
(+)Exceptional Items 0.00 0.00
Net Profit Before tax 920.13 746.85
(-) Tax Expense 173.68 168.75
Net Profit for the year after tax 746.45 578.10
Earnings per share (Basic & Diluted) (In Rs.) 5.90 4.57

1. BUSINESS OVERVIEW

Your Company is engaged in the business of manufacturing sale and trading of diamondand Jewellery and operates in different geographical areas i.e. domestic sales and exportsales.

2. IMPACT OF COVID-19 PANDEMIC

During the last month of the year under review COVID-19 pandemic developed rapidlyinto a global crisis forcing governments to enforce lockdowns. Due to the spread ofCOVID-19 and in accordance with the various initiatives and directions of both Central andState Government(s) from time to time including Janata curfew and subsequent nationwidelock down the operations of the Company were suspended from March 22 2020. After the endof third lockdown on May 17 2020 the Company gradually started its business operationswith minimum workforce combined with work from home policy. Hence Company's sales andfinancials were adversely affected for the first quarter of 2020-21. The company believesthe pandemic has not altered the fundamentals of the business significantly nor itsviability. At the close of accounting year on March 31 2020 the company had a strongbalance sheet and a cash position. However the impact assessment of COVID-19 is acontinuing process given the uncertainties associated with its nature and duration andaccordingly the impact may be different from estimated as at the date of approval of thesefinancials and reports. The Company will continue to monitor any material changes tofuture economic conditions.

3. STATE OF THE COMPANY'S AFFAIRS

During the year under review your Company has recorded its net revenue from operationsas Rs.197049.07 lakhs against revenue recorded of Rs.173155.76 lakhs in the previousyear. The EBIDT recorded at Rs. 977.28 lakhs against last year's figure of Rs.777.56lakhs. Net profit after tax is recorded at Rs. 746.45 lakhs against previous year netprofit of Rs. 578.10 lakhs.

4. EXPORT

The Company has exported diamonds and Jewellery to Hong Kong. During the year underreview your Company has recorded export of Rs. 157627.77 lakhs against export revenuerecorded of Rs. 110966.04 lakhs in the previous year.

5. DIVIDEND

With a view to conserve the resources for the company's Business operations yourdirectors have deemed it prudent to not to recommend any dividend for the year ended 31stMarch 2020.

6. TRANSFER TO RESERVE

During the year under review no amount from profit was transferred to General Reserve.

7. SHARE CAPITAL

The Paid up equity share capital as on March 31 2020 was Rs. 1264.378 lakhs dividedinto 12643780 equity shares of Rs. 10 each. During the year under review the Companyhas neither issued any shares/convertible warrant nor has granted any stock options andnor sweat equity.

8. EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3) (a) of the Companies Act 2013 an extract of theannual return in the prescribed format is annexed as Annexure- 1 to the Director's Report.

9. DETAILS OF SUBSIDIARY ASSOCIATE AND JOINT VENTURE

As on 31st March 2020 your Company does not have any Joint Ventures Subsidiaries andAssociates Company. Hence statement containing salient features of the financialstatements of the Company's subsidiaries/ Associate Companies and Joint Venture in FormAOC-1 is not applicable to your company.

10. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per regulation 15 of SEBI (Listing Obligation And Disclosure Requirement)Regulations 2015 the compliance with the requirements of corporate governance shall notapply in respect of (a) The listed entity having paid up equity share capital notexceeding rupees ten crores and net worth not exceeding rupees twenty five crores as onthe last day of the previous financial year (b) The listed entity which has listed itsspecified securities on the SME Exchange.

The company falls within the ambit of aforesaid exemption (b) hence the compliancewith the reporting of corporate governance is not applicable to the company. ThereforeCorporate Governance Report and Auditor's Certificate on Corporate Governance is notprovided.

Pursuant to Regulation 34(2)(e) of SEBI (Listing obligations and DisclosureRequirements) (LODR) Regulations 2015 Management Discussion and Analysis Report forms anintegral part of this Annual Report.

11. FIXED DEPOSITS

During the year under review the company has not accepted any deposits within themeaning of section 73 of the Companies Act 2013 and the rules made there under.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association of Mr. Vaibhav Dipak Shah (DIN: 03302936) will retireby rotation at the ensuing Annual General Meeting and being eligible has offered himselffor re-appointment.

During the year following changes has been occurred in the Board of Director and KMP:

Name of Director/KMP Designation Date of Appointment in current Designation Date of Resignation
Mr. Harshal Agarwal Company Secretary 18/06/2018 17/05/2019
Ms. Pooja Jain Company Secretary 01/08/2019 N.A
Ms. Namrata Dattatray Tembe Independent Director 08/07/2017 14/06/2019
Mr.Shahid Hussain Shaikh Independent Director 08/07/2017 14/06/2019
Mr. Manendra Pratap Singh Independent Director 14/06/2019 N.A
Mr. Shrikrishna Baburam Pandey Independent Director 14/06/2019 N.A
Ms. Bandana Singh Independent Director 14/06/2019 N.A

13. DECLARATION FROM INDEPENDENT DIRECTORS

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.

14. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and the Corporate Governance requirements as prescribed by the SEBI Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc.

The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as the composition of Committeeseffectiveness of Committee meetings etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of theIndividual Directors on the basis of the criteria such as the contribution of theIndividual Director to the Board and Committee meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.

In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the Board Meeting that followed the meeting of theIndependent Directors at which the performance of the Board its Committees andIndividual Directors was also discussed. Performance evaluation of Independent Directorswas done by the entire board excluding the Independent Director being evaluated.

15. MEETING OF BOARD OF DIRECTORS

During the year 11 (Eleven) Board Meetings were held. The intervening gap between theMeetings did not exceed the period prescribed under the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations. 2015. The details of whichare as follow:

Sr. NO.

Date of Meeting

Board Strength as on date of Board Meeting Directors Present as on date of Board Meeting
1.

01/04/2019

4 4
2. 17/05/2019

4

4
3. 30/05/2019

4

4
4. 14/06/2019

5

5
5. 30/06/2019

5

5
6. 15/07/2019

5

5
7. 01/08/2019

5

5
8. 29/08/2019

5

5
9. 14/11/2019

5

5
10. 06/01/2020

5

5
11. 20/03/2020

5

5

 

During F.Y 2019-20 Attendance ot Directors at Board Meetings are given below:
Name of Director Designation Board Meeting Attendance Last AGM Attendance on 30/09/2019
Vaibhav Dipak Shah Managing Director 11/11 Yes
Rahil Hiteshbhai Chovatia Non-executive Director 11/11 Yes
Manendra Pratap Singh Independent Director 8/8 Yes
Shrikrishna Baburam Pandey Independent Director 8/8 Yes
Bandana Singh Independent Director 8/8 Yes
*Shahid Hussain Gulam Nabi Shaikh Independent Director 3/3 No
*Namrata Dattatray Tembe Independent Director 3/3 No

* Mr. Shahid Hussain Gulam Nabi Shaikh and Ms. Namrata Dattatray Tembe resigned frompost of Independent Director with effect from 14/06/2019 and Mr. Manendra Pratap SinghMr. Shrikrishna Baburam Pandey and Ms. Bandana Singh appointed as Independent Directorwith effect from 14/06/2019.

16.DETAILS PERTAINING TO THE CONSTITUTION AND COMPOSITION OF THE BOARD COMMITTEES

(a) Audit Committee:

The Audit Committee of the Company is constituted in accordance with the provisions ofRegulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 read with Section 177 of the Companies Act 2013.

During the financial year 2019-20 the Audit Committee met 6 (Six) times on 30/05/201901/08/2019 29/08/2019 14/11/2019 06/01/2020 and 20/03/2020 and the gap between twomeetings did not exceed one hundred and twenty days. The necessary quorum was present forall the meetings.

The details of composition of the Committee and their attendance at the meetings duringyear are

Name Designation Category No. of Meetings Attended
Mr. Manendra Pratap Singh Chairman Independent Director 5/5
Ms. Bandana Singh Member Independent Director 5/5
Mr. Rahil Hiteshbhai Chovatia Member Non-executive Director 6/6

It is to be noted that during period under review Audit committee has beenreconstituted on account of resignation of Independent director named Mr. Shahid HussainGulam Nabi Shaikh and Ms. Namrata Dattatray Tembe w.e.f 14/06/2019 and to fill the vacancyfor post of Independent Director Mr. Manendra Pratap Singh Mr. Shrikrishna BaburamPandey and Ms. Bandana Singh appointed as Independent Director of the Company witheffect from 14/06/2019.

All the recommendations of the Audit Committee have been accepted by the Board ofDirectors. The Chairman of the Audit Committee was present at the Annual General Meetingof the Company held on 30th September 2019. The Minutes of all above stated meeting ofthe Audit Committee were noted at the Board Meeting.

The details of composition of the Committee and their attendance at the meetings duringyear are

Name Designation Category No. of Meetings Attended
Mr. Manendra Pratap Singh Chairman Independent Director 3/3
Ms. Bandana Singh Member Independent Director 3/3
Mr. Rahil Hiteshbhai Chovatia Member Non-executive Director 4/4

It is to be noted that during period under review the Stakeholders' Relationshipcommittee has been reconstituted on account of resignation of Independent director namedMr. Shahid Hussain Gulam Nabi Shaikh and Ms. Namrata Dattatray Tembe w.e.f 14/06/2019 andto fill the vacancy for post of Independent Director Mr. Manendra Pratap Singh Mr.Shrikrishna Baburam Pandey and Ms. Bandana Singh appointed as Independent Director ofthe Company with effect from 14/06/2019.

During the year the Company has not received any complaints from the Shareholders ofthe Company. There were no outstanding complaints as on 31st March 2020.

(d) Corporate Social Responsibility Committee:

The Corporate Social Responsibility Committee of the Company is constituted inaccordance with the provisions of Section 135 of the Companies Act 2013.

The terms of reference of the Committee inter-alia includes to formulate andrecommend to the Board a Corporate Social Responsibility Policy which shall indicate theactivities to be undertaken by the Company as specified in Schedule VII of the CompaniesAct 2013; to recommend the amount of expenditure to be incurred on CSR activities and tomonitor the implementation of the projects programs and activities undertaken by theCompany there under from time to time.

During the Financial Year 2019-20 2 (Two) meeting of the Corporate SocialResponsibility Committee were held on 01/08/2019 and 20/03/2020.

The details of composition of the Committee and their attendance at the meetings duringyear are

Name Designation Category No. of Meetings Attended
Mr. Rahil Hiteshbhai Chovatia Chairman Non-executive Director 2/2
Mr. Vaibhav Dipak Shah Member Managing Director 2/2
Mr. Manendra Pratap Singh Member Independent Director 2/2

17. POLICY ON DIRECTOR'S APPOINTMENT REMUNERATION INCLUDING CRITERIA FORDETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR AND OTHERMATTERS

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration including criteria for determining qualifications positive attributes andother matters provided under sub section (3) of section 178 of the Companies Act 2013. TheCompany's Remuneration Policy for Directors Key Managerial Personnel available onCompany's website www.sagardiamonds.com

The Nomination and Remuneration Committee has laid down the criteria for DirectorsAppointment and Remuneration including criteria for determining qualification positiveattributes and Independence of Director. The following attribute/criteria for selectionhave been laid by the board on the recommendation of committee:

> The candidate should possess the positive attributes such as leadershipEntrepreneurship or such other attributes which in the opinion of the committee are in theinterest of the Company.

> The candidate should be free from any disqualification as provided undersections 164 and 167 of Companies Act 2013

> The candidate should meet the conditions of being independent as stipulatedunder the companies act 2013.

> The appointment or re- appointment of a Director is made pursuant to anestablished procedure which includes assessment of managerial skills technical skills andother professional behaviour requirements 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 recommendationsmade by Nomination and Remuneration Committee.

18. 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 behavior andimproper practices and wrongful conduct taking place in the Company. The brief details ofsuch vigil mechanism is available on website of the company i.e. www.sagardiamonds.com.

19. CODE OF CONDUCT:

The Board of Directors of the Company has formulated and adopted Code of Conduct forBoard of Directors and Senior Management Personnel. During the year Board of Directorsand Senior Management Personnel has complied with general duties rules acts andregulations. In this regard certificate from Managing Directors as required under ScheduleV of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 has beenreceived by the Board and the same is annexed as Annexure-2. Code of Conduct form Board ofDirectors and Senior Management Personnel is available on the Company's websitewww.sagardiamonds.com

20. CFO CERTIFICATION:

In compliance with Regulation 17(8) of the Listing Regulations a declaration by CFOwas placed before the Board certifying the accuracy of Financial Statements and theadequacy of internal controls pertaining to Financial Reporting for the year ended 31stMarch 2020 is annexed as Annexure-2.

21. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Policy is placed on the Company's websitewww.sagardiamonds.com As per the Companies (Corporate Social Responsibility Policy) Rules2014 Annual Report on CSR activities is annexed as Annexure-3.

22. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act 2013 that:

a) in the preparation of the annual accounts for the financial year ended 31stMarch 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures; the annual accounts have been prepared incompliance with the provisions of the Companies Act 2013;

b) the directors have 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 year ended on that date;

c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis; and

e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;

f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

23. AUDITORS

(a) Statutory Auditors:

M/s. C P Jaria & Co Chartered Accountant (FRN No. 104058W) were appointed as theStatutory Auditors of the Company at the 03rd Annual General Meeting of the Company heldon 29th September 2018 for a term of five consecutive years commencing from financialyear 2018-19 up to Financial Year 2022-23 from conclusion of the 03rd Annual GeneralMeeting of the Company till the conclusion of the 08th Annual General Meeting of theCompany.

The Auditor's Reports for the Financial Year 2019-20 do not contain any qualificationreservation adverse remark or disclaimer. Notes to Accounts and Auditors remarks in theirreport are self-explanatory and do not call for any further comments.

During the year under review the Auditors had not reported any matter under Section143(12) of the Companies Act 2013 therefore no details is required to be disclosed undersection 134(3)(ca) of the Act.

(b) Internal Auditors:

The Board of the Company has appointed Bipin Jain Chartered Accountants as InternalAuditors of the Company for financial year 2019-20.

(c) Cost Auditors:

During Financial year 2019-20 Provisions related to Cost Auditor is not applicable tothe Company.

24. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Audit Committeerecommended and the Board of Directors appointed Mr. Anmol Jha Practising CompanySecretary to conduct Secretarial Audit for the Financial Year 2019-20. The Report of theSecretarial Auditors is annexed as Annexure-4 in Form MR-3 to this Report. There is nosecretarial audit qualification for the year under review.

25. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE

Loans Guarantees and Investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.

26. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All related party transactions entered into during the financial year were on an 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 transactionsare placed 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.

27. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The nature of business is manufacturing of Jewellery & Diamonds. The inheritantrisks to the business of your Company are as follows:

a. Foreign Exchange Risk

b. Gold Price Risk

c. Stiff Competition

d. Government Policy on import of gold

e. Risk elements in business transactions

f. Labour Risk

The prices of Jewellery consist of Gold Diamonds & Labour out of this three Goldand diamonds consist of 90% of the price of Jewellery. Your Company has no control on theprice of Gold and Diamonds and the same is available through Exchanges Market and Banks.The said risk shall results in favourable / un-favourable to your Company. The nature ofrisk is dynamic of business and entrepreneurship.

Your Company has not formed Risk Management Committee as it is not applicable underRegulation 21 of the SEBI (LODR) Regulations 2015.

28. MATERIAL CHANGES AND COMMITMENTS. IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT

There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year and the date of thisReport.

29. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference tofinancial statements. The Company's internal control system is commensurate with its sizescale and complexities of its operations. During the year such controls were tested andno reportable material weaknesses in the design or operation were observed.

30. INSURANCE

The Company's building plant and machineries Stocks and other properties wherevernecessary and to the extent required have been adequately insured.

31. LISTING OF SHARES AND LISTING FEES

The Equity Shares of your Company are listed and actively traded on the SME platform ofBSE Limited. The Company has paid annual listing fees to the stock exchanges for thefinancial year 2020-21.

32. REMUNERATION AND PARTICULARS OF EMPLOYEES

The Company has no employee who is in receipt of remuneration of Rs. 850000/- permonth or Rs. 10200000/- per annum during any part of the year.

The information required under Section 197 of the Companies Act 2013 read with Rule5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is annexed as Annexure -5 to the Director's Report.

33. INDUSTRIAL RELATIONS

The Company maintained healthy cordial and harmonious industrial relations at alllevels.

34. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO

As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 the particulars relating to conservation of energytechnology absorption and foreign exchange earnings and outgo is annexed as Annexure- 6 tothe Director's Report.

35. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 All employees (permanent contractual temporarytrainees) are covered under this policy. Your Directors further state that during the yearunder review No compliant was received from any employee during F.Y 2019-20 and hence nocomplaint is outstanding as on 31st March 2020 for redressal.

36. DETAILS OF SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the year under review there are not any significant or material orders passedby the Regulators oi Courts or tribunals impacting the going concern status and yourCompany's operations in future.

37. ACKNOWLEDGMENT

Your Directors take this opportunity to thank the financial institutions GovernmentAuthorities customers vendors investors of the Company and the communities in which theCompany operates fo their co-operation and valuable support extended to the Companyduring the year.

Your Directors also wish to place on record their deep sense of appreciation for thecommitted services by the Company's executives staff and workers.

For and on behalf of the Board of Directors For Sagar Diamonds Limited For Sagar Diamonds Limited
Sd/- Sd/-
(Vaibhav Dipak Shah) (Rahil Hiteshbhai Chovatia)
Managing Director Director
Date: 01/09/2020 Place: Surat

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