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Sagar Diamonds Ltd.

BSE: 540715 Sector: Consumer
NSE: N.A. ISIN Code: INE146Y01013
BSE 00:00 | 03 Oct 38.45 1.75
(4.77%)
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NSE 05:30 | 01 Jan Sagar Diamonds Ltd
OPEN 39.45
PREVIOUS CLOSE 36.70
VOLUME 6000
52-Week high 68.90
52-Week low 21.65
P/E 1.67
Mkt Cap.(Rs cr) 49
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 39.45
CLOSE 36.70
VOLUME 6000
52-Week high 68.90
52-Week low 21.65
P/E 1.67
Mkt Cap.(Rs cr) 49
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 06th annual Report of thecompany together with the Audited Financial Statements for the year ended 31stMarch 2021.

FINANCIAL RESULT AND PERFORMANCE:

(Rs. in Lakhs except EPS)

Particulars 31/03/2021 31/03/2020*
Revenue from Operation 283518.79 197049.07
Other income 20.42 0.57
Profit Before Interest & Depreciation 1205.74 1004.16
(-)Finance Cost 77.00 65.06
(-) Depreciation 24.96 18.98
Net Profit before tax & Exceptional items 1103.78 920.13
(+)Exceptional Items 0.00 0.00
Net Profit Before tax 1103.78 920.13
(-) Tax Expense 217.93 173.68
Net Profit for the year after tax 885.85 746.45
Earnings per share (Basic & Diluted) (In Rs.) 7.01 5.90

*Previous year's Figures have been regrouped/rearranged wherever necessary.

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

The unprecedented Covid 19 pandemic seriously impacted the general economy since March2020 followed by total lockdown for major part of Q1 of F.Y 2020-21. Your Company startedmanufacturing unit in a limited way towards the end of May 2020. Your Company drew upbusiness contingency plans covering all the functions of the company during the lockdownperiod and bounced back from July 2020 onwards both in production and sales. The F.Y2020-21 ended in a positive note even though the second wave of Covid-19 pandemic startedhitting some parts of the country from mid/late March 2021 but this did not materiallyimpact the Company's performance. Against the backdrop of the turbulence period yourCompany showed an remarkable performance for the reported year with an all-time high NetSales of Rs. 283518.79 lakhs a growth of 43.88% from Rs. 197049.07 lakhs of theprevious year.

3. STATE OF THE COMPANY'S AFFAIRS

In spite of various constraints discussed above the Company delivered an all-time highEBITDA (before exceptional items) of Rs. 1205.74 lakhs with a growth of 20% (PY 1004.16lakhs) and Profit before tax at Rs. 1103.78 lakhs with a growth of 19.95% (PY Rs. 920.13lakhs). The Net Profit after Tax was higher at Rs.885.85 lakhs (PY Rs.746.45 lakhs). TheEPS recorded at Rs.7.01 (PY Rs.5.90) a growth of 18.68%.

4. EXPORT

The Company has exported diamonds and Jewellery to Hong Kong and Dubai. During the yearunder review your Company has recorded export of Rs. 186826.43 lakhs against exportrevenue recorded of Rs. 157627.77 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 2021.

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 2021 was Rs. 1264.378 lakhs dividedinto 12643780 equity shares of Rs. 10 each. During the year under review:

a. The Company has not issued any equity shares with differential rights as todividend voting or otherwise.

b. The Company has not issued any shares (including sweat equity shares) to employeesof the Company or its subsidiary under any scheme.

c. There is no change in the Share Capital Structure of the Company during the yearunder review.

8. ANNUAL RETURN

The Annual Return of the Company as on 31st March 2021 in Form MGT-7 inaccordance with Section 92(3) of the Act read with the Companies (Management andAdministration) Rules 2014 will be uploaded on the Company's website and the same can beaccessed at www.sagardiamonds.com.

9. DETAILS OF SUBSIDIARY ASSOCIATE AND JOINT VENTURE

As on 31st March 2021 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. DEPOSITS

During the year under review the Company has not accepted deposit falling within theambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014. Hence the requirement for furnishing details of deposits which are not incompliance with the Chapter V of the Act is not applicable.

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.

The details of Director being recommended for appointment/reappointment as requiredunder the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 arecontained in the accompanying Notice convening the ensuing Annual General Meeting of thecompany.

In accordance with the provisions of Section 161 of the Companies Act 2013 and theCompany's Articles of Association Mr. Saurin Rasiklal Shah (DIN: 05329991) was appointedas an Additional Director to hold office effective from December 11 2020 up to the dateof the ensuing Annual General Meeting. In terms of Section 160 of the Act the Company hasreceived notice in writing from a member proposing the candidature of Mr. Saurin RasiklalShah as Non-Executive Director of the Company liable to retire by rotation under Section152 of the Act in ensuing Annual General Meeting of the Company.

Mr. Vaibhav Shah was appointed as Managing Director of the company for period of fiveyears effective from July 08 2017 and his present term of office expires on July 072022. The Board on recommendation of Nomination and Remuneration committee consideredthe re-appointment of Mr. Vaibhav Dipak Shah as Managing Director of the Company forfurther term of 5 years i.e from July 08 2022 till July 07 2027 upon the terms andconditions as decided from time to time in ensuing Annual General Meeting.

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
Saurin Rasiklal Shah Additional Director-Non Executive 11/12/2020 --
Rahil Hiteshbhai Chovatia Director 29/05/2017 02/08/2021

The following persons have been designated as Key Managerial Personnel of your Companypursuant to Section 2 (51) and Section 203 of the Act read with Rule 8 (5) (iii) of theCompanies (Accounts) Rules 2014 framed there under:

Name of KMP Designation Date of Appointment in current Designation Date of Resignation
Mr. Vaibhav Dipak Shah Managing Director 08/07/2017 -
Mr. Vaibhav Dipak Shah CFO 13/12/2018 -
Ms. Pooja Jain Company Secretary 01/08/2019 -

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. Theevaluation framework for assessing the performance of Directors Comprises the followingkey areas:

a. Attendance of Board Meeting and Board Committee Meetings.

b. Quality of Contribution to Board deliberations.

c. Strategic perspectives or inputs regarding future growth of Company and itsperformance.

d. Providing perspectives and feedback going beyond information provided by themanagement.

e. Commitment to shareholders and other stakeholder interests.

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 8 (Eight) 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. 21/05/2020 5 5
2. 31/07/2020 5 5
3. 01/09/2020 5 5
4. 09/09/2020 5 5
5. 13/11/2020 5 5
6. 11/12/2020 6 6
7. 12/02/2021 6 6
8. 30/03/2021 6 6

During F.Y 2020-21 Attendance of Directors at Board Meetings are given below:

Name of Director Designation Board Meeting Attendance Last AGM Attendance on 30/09/2020
Vaibhav Dipak Shah Managing Director & CFO 8/8 Yes
Rahil Hiteshbhai Chovatia Non-executive Director 8/8 Yes
Manendra Pratap Singh Independent Director 8/8 Yes
Shrikrishna Baburam Pandey Independent Director 8/8 Yes
Bandana Singh Independent Director 8/8 Yes
Saurin Rasiklal Shah Additional Director-Non executive 3/3 No

* Mr. Rahil Hiteshbhai Chovatia resigned from post of Director with effect from02/08/2021 and Mr. Saurin Rasiklal Shah appointed as Additional Director with effect from11/12/2020.

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 2020-21 the Audit Committee met 6 (Six) times on 21/05/202031/07/2020 01/09/2020 13/11/2020 11/12/2020 and 30/03/2021 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 6/6
Ms. Bandana Singh Member Independent Director 6/6
Mr. Rahil Hiteshbhai Chovatia Member Non-executive Director 6/6

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 2020. The Minutes of all above stated meeting ofthe Audit Committee were noted at the Board Meeting.

Terms of reference and role of audit committee includes the matters specified under thecompanies act 2013 and Listing Regulations. Broad terms of reference includes; oversightof financial reporting process review financial results and related information approvalto related party transactions review internal financial controls risk managementperformance of statutory and internal auditors audit process relevant compliancesappointment and payments to auditors.

(b) Nomination And Remuneration Committee:

The Nomination and Remuneration Committee (NRC) of the Company is constituted inaccordance with the provisions of Regulation 19 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 read with Section 178 of the Companies Act2013.

During the Financial year 2020-21 5 (Five) meetings of the Nomination and RemunerationCommittee were held on 21/05/2020 31/07/2020 01/09/2020 11/12/2020 and 30/03/2021.

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 5/5

The Chairman of the NRC was present at the Annual General Meeting of the Company heldon 30th September 2020. The Minutes of Nomination and Remuneration Committee meeting werenoted at the Board Meeting.

The terms of reference as laid by the board broadly include to recommend to the Board aremuneration policy relating to directors key managerial personnel and other employeesformulation of the criteria for determining qualifications positive attributes andindependence of a director formulation of criteria for evaluation of independentDirectors and the Board devising a policy on Board diversity identify persons who arequalified to become directors and who be appointed in senior management in accordance withthe criteria laid down and recommend to the board their appointment and removal.

(c) Stakeholders' Relationship Committee:

The Stakeholders' Relationship Committee is constituted in accordance with theprovisions of Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 read with Section 178 of the Companies Act 2013.

The broad terms of reference of the Stakeholders' Relationship Committee are as under:

> Consider and resolve the grievances of shareholders of the Company includingredressal of investor complaints such as transfer or credit of securities non-receipt ofdividend/notice/annual reports etc. and all other shareholder related matters.

> Consider and approve issue of share certificates (including issue of renewed orduplicate share certificates) transfer and transmission of securities etc.

During the Financial Year 2020-21 4 (Four) meeting of the Stakeholders' RelationshipCommittee were held on 21/05/2020 31/07/2020 11/12/2020 and 30/03/2021. Ms. Pooja JainCompany Secretary is designated as Compliance Officer of the Company.

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 4/4
Ms. Bandana Singh Member Independent Director 4/4
Mr. Rahil Hiteshbhai Chovatia Member Non-executive Director 4/4

During the year the Company has not received any complaints from the Shareholders ofthe Company. There were no outstanding complaints as on 31st March 2021.

(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 2020-21 2 (Two) meeting of the Corporate SocialResponsibility Committee were held on 01/09/2020 and 30/03/2021.

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

(e) Independent Directors Meeting

During the year under review a separate meeting of the Independent Directors of theCompany was held on 21/05/2020 without the presence of Non-Independent Directors andmembers of the Management. The Independent Directors reviewed the performance ofNon-Independent Directors and the Board as a whole performance of Chairperson of theCompany and assessed the quality quantity and timelines of flow of information betweenthe Company Management and the Board in terms of Schedule IV of the Act. All theIndependent Directors of the Company were present in the meeting.

17. POLICY ON DIRECTOR'S APPOINTMENT REMUNERATION INCLUDING CRITERIA FOR DETERMININGQUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS

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 under sections164 and 167 of Companies Act 2013

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

> The appointment or re- appointment of a Director is made pursuant to anestablished procedure which includes assessment of managerial skills professionalbehaviour technical skills and other 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 into Considerationthe recommendations made 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-1. Code of Conduct formBoard of Directors 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 2021 is annexed as Annexure-1.

21. CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act 2013 the Company has undertakenCSR activities projects and programs as provided in the CSR policy of the Company and asidentified under Schedule VII to the Companies Act 2013.The Company's CSR Policystatement and annual report on the CSR activities undertaken during the financial yearended 31st March 2021 in accordance with Section 135 of the Act and Companies(Corporate Social Responsibility Policy)Rules 2014 is annexed as Annexure-2.

In order to incorporate the amendments notified through the Companies (Corporate SocialResponsibility Policy) Amendment Rules 2021 dated 22nd January 2021 the Board ofDirectors has amended the CSR policy of the Company. Corporate Social ResponsibilityPolicy is placed on the Company's website www.sagardiamonds.com.

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 2021 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 themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for year ended on that date;

c) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets 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 theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

23. AUDITORS

 

(a) Statutory Auditors:

M/s. C. P. Jaria & Co Chartered Accountants Surat (FRN No. 104058W) wereappointed as the Statutory Auditors of the Company at the 03rd Annual General Meeting ofthe Company held on 29th September 2018 for a term of five consecutive years commencingfrom financial year 2018-19 up to Financial Year 2022-23 from conclusion of the 03rdAnnual General Meeting of the Company till the conclusion of the 08th Annual GeneralMeeting of the Company. However M/s. C. P. Jaria & Co Chartered Accountants videtheir letter dated 20th August 2021 have resigned from the office of Statutory Auditor ofthe Company resulting into a casual vacancy in the office of Statutory Auditor of theCompany as envisaged by section 139(8) of the Companies Act 2013.

The Board has recommended to the members for the appointment of M/s. G B & Co.Chartered Accountants Ahmedabad (Firm Registration No. 139110W) as the StatutoryAuditors of the Company:

a) to fill the casual vacancy caused by the resignation of M/s. C. P. Jaria & CoChartered Accountants and to hold the office of the Statutory Auditors upto the conclusionof ensuing Annual General Meeting: and

b) for a period of five consecutive years (Financial Year 2021-22 to Financial Year2025-26) from the conclusion of the 06th Annual General Meeting till the conclusion of11th Annual General Meeting of the Company to be held in the year 2026.

M/s. G B & Co. Chartered Accountants Ahmedabad (Firm Registration No. 139110W)has confirmed their eligibility to act as the Statutory Auditors of the Company.

M/s. C. P. Jaria & Co Chartered Accountants Surat (FRN No. 104058W) havecompleted the Statutory Audit for period 2020-21 and submitted their Auditors Report forthe financial year 2020-21 to the members which does not contain any Qualification oradverse remark. The observation made in the Auditors Report read together with relevantnotes thereon are self-explanatory and hence do not call for any further comments underSection 134 of the Companies Act 2013.

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 2020-21.

(c) Cost Auditors:

During Financial year 2020-21 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 2020-21. The Report of theSecretarial Auditors is annexed as Annexure-3 in Form MR-3 to this Report. There isno secretarial 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. The Company has not entered into the following kinds ofrelated party transactions:

- Contracts/arrangement/transactions which are not at arms' length basis

- Any Material contracts/arrangement/transactions [as per Regulation 23 of the SEBI(LODR) Regulations 2015]

27. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The nature of business is manufacturing of Diamonds. Risk management is an ongoingprocess and embedded in the operating framework of the Company. The Company has in place amechanism to identify assess monitor and mitigate various risks to key businessobjectives. Major risks identified by the businesses and functions are systematicallyaddressed through mitigating actions on a continuing basis. Some of the risks faced by theCompany are: a. Foreign Exchange Risk b. Growth Risk c. Stiff Competition d. RegulatoryRisk e. Financial Risk f. Labour Risk g. Raw material price Risk. At present there are norisks which in the opinion of the Board threaten the existence of the Company.

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. COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review the Company has duly complied with the applicableprovisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) andGeneral Meetings (SS-2) issued by the Institute of Company Secretaries of India.

31. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires preclearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. All Directors and the designated employees have confirmedcompliance with the Code. The same has been displayed at the company's website atwww.sagardiamonds.com.

32. INSURANCE

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

33. 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 2021-22.

34. 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 -4 to the Director's Report.

35. INDUSTRIAL RELATIONS

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

36. 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- 5to the Director's Report.

37. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND 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 2020-21 and hence nocomplaint is outstanding as on 31st March 2021 for redressal.

38. 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 or Courts or tribunals impacting the going concern status and yourCompany's operations in future.

39. GENERAL

d. There was no revision in the financial statements.

e. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

f. There has been no change in the nature of business of the Company.

g. There is no proceeding initiated/ pending against the Company under the Insolvencyand Bankruptcy Code 2016.

h. There was no instance of onetime settlement with any Bank or Financial Institution.

40. ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the financial institutions GovernmentAuthorities customers vendors investors of the Company and the communities in which theCompany operates for 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

Sd/-

(Vaibhav Dipak Shah)

Managing Director & CFO

Date: August 30 2021

Place: Surat.

.