TO THE MEMBERS OF
SOVEREIGN DIAMONDS LIMITED
The Directors present the Forty Seventh Annual Report together with the AuditedFinancial Statements for the year ended 31st March 2021. The ManagementDiscussion and Analysis has also been incorporated into this report.
1. FINANCIAL RESULTS
Key highlights of financial results for Sovereign Diamonds Limited for the financialyear 2020 21 are tabulated below:
(Rs. in Lakhs)
|Particulars ||Year Ended 31st March 2021 ||Year Ended 31st March 2020 |
|Income from Operations ||1496.65 ||3243.68 |
|Other Income ||63.02 ||47.95 |
|Total Income ||1559.67 ||3291.63 |
|Expenditure ||1564.32 ||3118.78 |
|Interest ||96.48 ||119.53 |
|Depreciation ||45.14 ||45.92 |
|Total Expenditure ||1705.94 ||3284.22 |
|Net Profit Before Tax ||(146.27) ||7.40 |
|Provision for Taxation ||0.00 ||2.96 |
|(Add) / Less : Deferred Tax ||2.60 ||0.87 |
|Short / (Excess) Provision of earlier Years ||0.00 ||0.00 |
|Net ProfitAfter Tax ||(148.87) ||3.57 |
|Other Comprehensive Income ||1.41 ||0.48 |
|Total Comprehensive Income ||(147.46) ||4.05 |
|Balance brought forward from last year ||751.69 ||747.63 |
|Transfer to General Reserve ||0.00 ||0.00 |
|Balance carried forward to the Balance Sheet ||604.22 ||751.69 |
There was no revision in the Financial Statements.
2. HIGHLIGHTS OF PERFORMANCE
Total net sales for the year were Rs. 1496.64 Lakhs as compared to Rs. 3243.68 Lakhs in2019-20.
TotalProfit/ Loss before tax for the year was Rs. (148.87) Lakhs as compared to Rs.7.40 Lakhs in 2019-20.
Company has suffered Loss towards Return of Finished Goods from Retailers.
Company has availed Credit facilities for Rs. 2.30 Crores under GECL.
Company has reduced its Employee Strength from 52 employees to 32 employees.
The Sundry Creditors has been reduced from 6.51 Crores to 1.34 Crores.
Operation of your Company was affected due to Lockdown and Covid 19. The operation ofyour Company during first two Quarters of wave of Covid 19 and Lockdown. During the periodof Lockdown the Retail Sales was drastically reduced.
3. TRANSFER TO RESERVES
The Board of Directors has not recommended transfer of any amount to reserves.
Your Directors do not recommend any dividend for the year as the profits earned need tobe ploughed back into the operations of your company and will be used for workingrequirements of your Company.
5. BUSINESS OPERATIONS
Due to COVID 19 the liquidity crisis was very high due to lower sales and highoperating expenses and the working capital cycle was badly effected. The strength of thebalance sheet is due to reduction in sundry creditors sundry debtors and less borrowingfrom the bank. The Retail market was badly affected due to Covid 19 and closer of Retailstores but Export market was good.
Operation of the Company was affected due to lock down and COVID 19. The operations ofthe Company during 1st quarter and 2nd quarter of the current yearare affected due to 2nd wave of COVID 19 and lockdown. During the period oflockdown the retails sales have drastically reduced.
6. DISCLOSURES UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT 2013
No material changes and commitments which could affect your Companys financialposition have occurred between the end of the financial year of your Company i.e. 31stMarch 2021 and date of this report i.e. 26th June 2021.
7. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2021 was Rs. 578.80Lakhs. During the year under review your Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity. There was no change in yourCompanys share capital during the year under review. The Promoter and Promoter Groupare holding 3762744 shares equivalent to 65.01% of the total Issued and Paid-up ShareCapital.
8.1 Retirement by Rotation
Pursuant to Section 152 (6) of the Companies Act 2013 and in terms of the Articles ofAssociation of your Company Mr. Ajay Gehani (DIN: 00062989) Chairman and ManagingDirector retires by rotation at the forthcoming Annual General Meeting. Being eligiblehe offers himself for re-appointment.
8.2 Declaration by Independent Directors
Your Company has received declarations from all the Independent Directors of yourCompany confirming that they meet with the criteria of independence as prescribed bothunder Sub-Section 6 of Section 149 of the Companies Act 2013 and under Regulation 16 (1)(b) of the SEBI (LODR) Regulations 2015 and pursuant to Regulation 25 of the saidRegulations that they are not aware of any circumstance or situation which exist or maybe reasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgment and without any external influence.
The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience and expertise in the fields of finance peoplemanagement strategy auditing tax advisory services and they hold highest standards ofintegrity.
Regarding proficiency the Company has adopted requisite steps towards the inclusion ofthe names of all Independent Directors in the data bank maintained with the IndianInstitute of Corporate Affairs Manesar (IICA). Accordingly the IndependentDirectors of the Company have registered themselves with the IICA for the said purpose. Interms of Section 150 of the Act read with Rule 6 (4) of the Companies (Appointment &Qualification of Directors) Rules 2014 all the Directors of the Company are exemptedfrom undertaking online proficiency self-assessment test conducted by the IICA
8.3 Annual Board Evaluation
The annual performance evaluation of the Independent Directors and Board Committeesi.e. Audit Stakeholders Relationship and Nomination & Remuneration Committees wascarried by the entire Board and the annual performance evaluation of the Chairman Boardas a whole Non Independent Directors was carried out by the Independent Directors.
The annual performance evaluation was carried out in accordance with the criteria laiddown in the Nomination and Remuneration Policy of your Company and as mandated under theCompanies Act 2013 and the SEBI (LODR) Regulations 2015 as amended from time to time.
8.4 Key Managerial Personnel
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 thereunder:
1. Mr. Ajay Geheni Managing Director
2. Mrs. Arundhati Mali Director CFO
3. Mr. Akshay Jain Company Secretary and Compliance
*Appointed w.e.f. 04th May 2021
None of the Key Managerial Personnel have resigned during the year under review. Noneof the Directors have attained the age of 75 years except Mr. Kundapur Mohanram Pai. Interms of Regulation 17 (1) (c) of SEBI (LODR) Regulations 2015 the approval of themembers for his re-appointment by way of special resolution has been taken at the 45thAnnual General Meeting of the Company held on 16th August 2019.
8.5 Remuneration Policy
The Board has in accordance with the provisions of Section 178 (3) of the CompaniesAct 2013 formulated the policy setting out the criteria for determining qualificationspositive attributes independence of a Director and policy relating to remuneration forDirectors Key Managerial Personnel and Senior Management Employees.
8.6 Board Meetings
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year your Company has held 5 (Five) Board Meetings which were held on 08thJune 2020; 27th June 2020; 05th September 2020; 07thNovember 2020 and 06th February 2021. The maximum interval between any twomeetings exceeded 120 days on account of COVID 19. However the said requirement wasrelaxed by the Ministry of Corporate Affairs and Securities and Exchange Board of Indiafor the financial year 2020 21. As per Section 167 (1) (b) all the directors haveattended atleast one Board Meeting held during the financial year.
9. PARTICULARS OF EMPLOYEES
During the year there was no employee in receipt of remuneration in excess of limit asprescribed in the Rule 5 (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The prescribed Particulars of Employees as required under Section197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached as "Annexure A" and formpart of this Report.
10. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the Annual Financial Statements for the year ended 31stMarch 2021 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in Note 4 of the Notes to the FinancialStatements have been selected and applied consistently and judgement and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of your Company as at 31st March 2021 and of the loss of yourCompany for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of your Company and for preventing and detecting fraud and otherirregularities;
d) that the Annual Financial Statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
11. INTERNAL CONTROL SYSTEMS
Your Company maintains an adequate and effective Internal Control System commensuratewith its size and complexity. We believe that these internal control systems provideamong other things a reasonable assurance that transactions are executed with Managementauthorization and that they are recorded in all material respects to permit preparation offinancial statements in conformity with established accounting principles and that theassets of your Company are adequately safeguarded against significant misuse or loss.
12. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURES ORASSOCIATE COMPANIES
There are no companies which have become or ceased to be its Subsidiaries JointVenture or Associate Companies during the financial year 2020 21
Your Company has not accepted deposit from the public and shareholders falling withinthe ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014. Hence the requirement for furnishing details of deposits which arenot in compliance with the Chapter V of the Act is not applicable.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 read with the Companies (Meetings of Board and itsPowers) Rules 2014 are given in the Notes to the Financial Statements.
15. RELATED PARTY TRANSACTIONS
A Related Party Policy has been adopted by the Board of Directors at its meeting heldon 13th August 2014 for determining the materiality of transactions withrelated parties and dealings with them. All transactions with related parties are placedbefore the Audit Committee for approval.
Further the members may note that your Company has not entered into the followingkinds of related party transactions:
Contracts / arrangement / transactions which are not at arms length basis
Any Material contracts / arrangement / transactions [as per Regulation 23 of theSEBI (LODR) Regulations 2015]
16. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The criteria prescribed for the applicability of Corporate Social Responsibility underSection 135 of the Companies Act 2013 is not applicable to your Company.
17. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureB".
18. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The nature of business is manufacturing of Jewellery. The inheritant risks to thebusiness 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 / unfavourable 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.
19. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. In accordance with the Regulation 22 of the SEBI (LODR) Regulations and pursuant toSection 177 (9) read with Rule 7 of the Companies (Meetings of Board and its Powers)Rules 2014 of the Companies Act 2013 your company has adopted a Whistle Blower Policy.Your Company promotes ethical behavior in all its business activities and has put in placea mechanism of reporting illegal or unethical behavior. As per the Whistle Blower Policythe employees are free to report violations of laws rules regulations or unethicalconduct to their immediate superior. The confidentiality of those reporting / violationsis maintained and they are not subjected to any discriminatory practice.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of your Company and its future operations.
21. AUDITORS 21.1 Statutory Auditors
M/s. Pulindra Patel & Co. Chartered Accountants were appointed as StatutoryAuditors of the Company for a period of 5 (Five) years from 2017 18 to 2021 22 at the 43rd Annual General Meeting held on 29th July 2017. Inview of the amendment to Section 139 of the Companies Act 2013 the Company is notrequired to ratify the reappointment of the Statutory Auditor at every Annual GeneralMeeting. Hence the item of ratification of re-appointment of Statutory Auditor is notconsidered in this Annual General Meeting.
The Auditors have furnished a declaration confirming their eligibility under Section
141 of the Companies Act 2013 and the Rules framed thereunder to continue to act asstatutory auditors and confirming their independence as well as their arms lengthrelationship with your Company as well as declaring that they have not taken up anyprohibited non-audit assignments for your Company. The Audit Committee reviews theindependence of the Auditors and the effectiveness of the Audit process. The Auditorsattend the Annual General Meeting of your Company.
21.2 Statutory Auditors Observations
The Report given by the Auditors on the financial statements of your Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
21.3 Secretarial Audit
In terms of the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s. P. P. Shah & Co. Practicing Company Secretaries as SecretarialAuditors for conducting Secretarial Audit of your Company for the financial year ended 31stMarch 2021.
The report of the Secretarial Auditor is attached as "Annexure C". TheSecretarial Audit Report does not contain any qualification reservation or adverse remarkexcept provided at point 21.4 below.
21.4 Qualifications in Secretarial Audit Report
A. Appointment of Company Secretary:
As per Section 203(1)(ii) the Company is required to appoint Company Secretary.Further as per Regulation 6 (1) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company is required to appoint a Company Secretary as itsCompliance Officer. The Company has not appointed Company Secretary during thefinancial year ended 31st March 2021.Consequently the Audited Annual FinancialStatements for the financial year ended 31st March 2020 were not signed byCompany Secretary as required under Section 134 of the Companies Act 2013.
The Company had received notices from BSE Limited imposing fine in respect of nonappointment of Company Secretary as Compliance Officer during the financial year ended31st March 2021 in terms of Regulation 6 (1) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
In this regard the management of the Company has provided the following reply:
(i) The Company has appointed Mr. Ajay Gehani Managing Director as Compliance Officerof the Company who looks after the compliance of the Companies Act 2013 and the SEBI Actand rules made thereunder.
(ii) The Company has availed the services of Practicing Company Secretary for advisingon compliance of the Companies Act 2013 and the SEBI Act and rules made thereunder.
(iii) The Volume and Scope of work for the Company Secretary is less and it is not afull time work and the job of Company Secretary is not attractive commensurate with thescope of work and salary.
(iv) The Company had replied to BSE Limited to waive the fine imposed by them inrespect of non-appointment of Company Secretary. The matter is pending with BSE Limited.
(v) The Company has regularized the compliance by appointing Mr. Akshay Jain asCompany Secretary and Compliance Officer of the Company w.e.f. 4th May 2021.
B. Website Posting:
As per the various sections of the Companies Act 2013 the SEBI (LODR) Regulations2015 and Secretarial Standard 2 the Company is required to post variousinformation / policies on the website of the Company. The Company has not posted anyinformation / policies on the website of the Company. In this regard the management ofthe Company has provided the following reply:
(i) The Company is filing regularly all the information with BSE Limited and all theinformation is available on the website of BSE Limited.
C. Composition of Nomination and Remuneration Committee:
In respect of the composition of the Nomination and Remuneration Committee we observeas follows: As per Section 178 of the Companies Act 2013 the composition of Nominationand Remuneration Committee shall be as follows: 178 (1): "The Board of the Directorsof every listed company and such other class or classes of companies as may be prescribedshall constitute the Nomination and Remuneration Committee consisting of three or morenon-executive directors out of which not less than one half shall be independentdirectors:
Provided that the chairperson of the company (whether executive or non-executive)may be appointed as a member of the Nomination and Remuneration Committee but shall notchair such Committee."
The Nomination and Remuneration Committee of the Company comprises of two IndependentDirectors and one Executive Director. In this regard the Management has given thefollowing reply:
"The Company has four Directors out of them two are Executive and two areIndependent Directors. Accordingly the composition of the Board is such that theNomination and Remuneration Committee cannot comprise of three Non-Executive Directors.Hence Mr. Ajay Gehani Executive Director is one of the member of the Committee.
Mr. Mohanram Pai Independent Director acts as the Chairman of the Nomination andRemuneration Committee. The Company does not convene the meeting of Nomination andRemuneration Committee unless Mr. Mohanram Pai and Mr. Rajesh Arora Independent Directorsof the Company and members of Nomination and Remuneration Committee are present in thesaid meeting. This ensures that the Chairmanship and majority decision making vests withthe Independent Directors.
Further the role of Mr. Ajay Gehani as a member of the Committee is very limited. Heis only filling up the requirement of 3rd member as required under Section 178of the Companies Act 2013 as there is no option. He does not participate in the affairsof the Committee which are related to remuneration performance evaluation of ExecutiveDirectors and other such matters.
As the Committee does not meet without the presence of 2 Independent Directors andsince the Chairman is also an Independent Director hence the voting and governance of theCommittee remains independent. Accordingly with the present composition of Nomination andRemuneration Committee it has been ensured that majority remains with IndependentDirectors and accordingly the spirit of Corporate Governance is achieved."
D. Appointment of Internal Auditor:
As per Section 138 of the Act the Company is required to appoint an Internal Auditor. TheCompany has not appointed Internal Auditor. In this regard the management of theCompany has provided the following reply: (i) The size of operation of the Company is verysmall accordingly it is not viable to appoint Internal Auditor but the Company hasestablished the internal control system.
E. Non Payment of Listing Fees:
As per Section 14 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the listed entity shall pay all such fees or charges as applicable tothe recognised stock exchange(s) in the manner specified by the Board or the recognisedstock exchange(s). Accordingly the Company is required to pay annual listing fees to BSELimited where the shares of the Company are listed on an annual basis. The Company hasnot paid annual listing fees to BSE Limited for the financial year 2020 21.
The Company has received notices from BSE Limited for non-payment of listing fees. Inthis regard the management of the Company has provided the following reply:
(i) The Company could not pay the listing fees due to COVID-19 effect and severefinancial crisis.
(ii) The jewellery factory of the Company was closed for 4 months in the beginning of2020 21. The sales have been impacted and so does the recovery cycle and paymentcycle.
(iii) In the last 6 months there was a good improvement in business environment andthe liquidity is also improving. In the circumstances the Company has requested them toprovide some more time to pay the same.
22. REPORTING OF FRAUDS BY AUDITORS
During the financial year 2019 20 the statutory auditors have reported to the Audit
Committee of the Board under Section 143 (12) of the Act the following instance offraud committed against your Company by one of its employee the details of which aregiven below: "While verifying the physical stock on 5th July 2019 themanagement realized shortage of Gold as compared to stock as per books. The managementsuspected an old employee of the Company who misappropriated certain quantity of stock. Anold employee also confessed before management his misappropriation of Gold. The managementlodged police complaint against old employee.
The loss arising on account of this misappropriation is estimated at 900 gms of goldvalue about Rs.3000000/-. The same has been charged to Profit and Loss Account duringthe year. The Case is Before Honarable Metropolitan Magistrate Court No. 22 at Andheri -Compliant No. 131/2019."
23. COST RECORDS
The provisions of Section 148 of the Companies Act 2013 and Companies (Cost Recordsand Audit) Rules 2014 (hereinafter referred to as Rules) in respect ofmaintenance an audit of cost records are not applicable to Company.
24. COMPLIANCE OF SECRETARIAL STANDARDS
The Board of Directors affirms that your Company has complied with the applicable
Secretarial Standards (SS) issued by the Institute of Companies Secretaries of India(SS1 and SS2) respectively relating to Meetings of the Board its Committees and GeneralMeeting which have mandatory application during the year under review.
25. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 (3) of the Companies Act 2013 read with Rule12 of the Companies (Management and Administration) Rules 2014 the extract of the AnnualReturn in Form MGT 9 of your Company for the financial year ended 31 st March2021 is annexed herewith as "Annexure D".
26. HUMAN RESOURCES
The relations of the employees of your Company have been cordial during the year.Employees are considered to be team members being one of the most critical resources inthe business which maximize the effectiveness of the Organization. Human resources buildthe Enterprise and the sense of belonging would inculcate the spirit of dedication andloyalty amongst them towards strengthening your Companys Polices and Systems. YourCompany maintains healthy cordial and harmonious relations with all personnel and therebyenhancing the contributory value of the Human Resources.
27. ENVIRONMENT AND SAFETY
Your Company is conscious of the importance of environmentally clean and safeoperations. Your Companys policy requires conduct of operations in such a manner soas to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.
28. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.Accordingly your Companys operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.
29. GREEN INITIATIVES
In view of Covid 19 pandemic the Ministry of Corporate Affairs vide its circular no.17 / 2020 dated 13th April 2020 circular no. 20 / 2020 dated 5thMay 2020 and circular No. 02/2021 dated 13th January 2021 and SEBI vide itscircular bearing reference no. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated 12th May2020 and no. SEBI/HO/CFD/ CMD2/CIRIP/2021 /11 dated 15th January 2021 hasdispensed with the requirement of sending hard copy of full annual report to theshareholders.
Electronic copies of the Annual Report 2020-21 and Notice of the 47th AnnualGeneral Meeting are sent to all members whose email addresses are registered with yourCompany / Depository Participant(s). Members who have not registered their email addresscan do so by following the steps as mentioned in the notes of notice of 47thAnnual General Meeting. Alternatively they are requested to download the copy of theAnnual Report from the website of BSE Limited i.e. www.bseindia.com or write to theCompany at firstname.lastname@example.org.
Your Company provides e-voting facility to all its members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice. This is pursuant to theSection 108 of the Companies Act 2013 and Rule 20 of the Companies (Management andAdministration) Amendment Rules 2015.
30. MANAGEMENT DISCUSSION AND ANALYSIS
As required under the Schedule V (B) of the SEBI (LODR) Regulations 2015 report on"Management Discussion and Analysis" is attached and forms part of this AnnualReport.
31. CORPORATE GOVERNANCE
As per Regulation 15(2) of the SEBI (LODR) Regulations 2015 the provisions ofCorporate Governance are non-mandatory to the following class of Companies:
a. Companies having Paid-up Equity Share Capital not exceeding Rs. 10 Crore and Networth not exceeding Rs. 25 Crore as on the last day of the previous financial year;Provided that where the provisions of Regulation 27 becomes applicable to a company at alater date such company shall comply with the requirements of Regulation 27 within sixmonths from the date on which the provisions became applicable to the company.
b. Companies whose equity share capital is listed exclusively on the SME and SME-ITPPlatforms.
The Paid-up Share Capital of your Company is Rs. 5.79 Crores as on 31stMarch 2021. The Reserve and Surplus is Rs. 7.00 Crores. Accordingly the Paid-up Capitaland Net Worth is below the prescribed limit for mandatory applicability of CorporateGovernance clause as per Regulation 15(2)(a) of the SEBI (LODR) Regulations 2015. YourCompany has decided not to opt for compliance of Regulation 27 for the time being. Theletter for the same has been filed with BSE on 26th June 2021.
32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
Your Company firmly believes in providing a safe supportive and friendly workplaceenvironment a workplace where our values come to life through the supportingbehaviors. Positive workplace environment and a great employee experience are integralpart of our culture. Your Company believes in providing and ensuring a workplace free fromdiscrimination and harassment based on gender.
Your Company educates its employees as to what may constitute sexual harassment and inthe event of any occurrence of an incident constituting sexual harassment your Companyprovides the mechanism to seek recourse and redressal to the concerned individualsubjected to sexual harassment.
Your Company has a Sexual Harassment Prevention and Grievance Handling Policy in placeto provide clarity around the process to raise such a grievance and how the grievance willbe investigated and resolved. An Internal Complaints Committee has been constituted inline with the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
No complaint was raised and pending as on 01st April 2020 and no complainthas been raised during the financial year ended 31 st March 2021.
33. MD AND CFO CERTIFICATION
Certificate from Mr. Ajay R. Gehani Chairman and Managing Director and Mrs. ArundhatiR. Mali Director and CFO pursuant to provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 for the year under review was placed beforethe Board of Directors of your Company at its meeting held on 26th June 2021.
The certificate is attached and form part of this Report.
34. CERTIFICATION FROM COMPANY SECRETARY IN PRACTICE
Mr. Pradip Shah of M/s. P. P. Shah & Co. Practicing Company Secretaries hasissued a certificate as required under the SEBI (LODR) Regulations 2015 confirming thatnone of the Directors on the Board of your Company have been debarred or disqualified frombeing appointed or continuing as Director of companies by the SEBI / Ministry of CorporateAffairs or any such statutory Authority. The certificate is attached and form part of thisReport.
35. ANNUAL SECRETARIAL COMPLIANCE REPORT
Your Company has availed the exemption for compliance of Corporate Governance clause asper Regulation 15(2)(a) of the SEBI (LODR) Regulations 2015. As per Regulation 24A yourCompany requires to take Annual Secretarial Compliance Report from Practicing CompanySecretary which shall cover a broad check on compliance with applicable SEBI Regulationsand circulars/ guidelines issued thereunder on annual basis.
Exemption as per Regulation 15 (2) (a) includes Regulation 24A. Hence obtaining AnnualSecretarial Compliance Report from Practicing Company Secretary is not applicable to yourCompany.
36. INDIAN ACCOUNTING STANDARDS (IND-AS)
Your Company has followed the relevant Accounting Standards notified by the Companies(Indian Accounting Standards) Rules 2015 while preparing its Standalone FinancialStatements.
37. CAPITAL EXPENDITURE
Capital Expenditure during the year towards Tangible & Intangible Assets amountedto Rs. 102.81 Lakhs which was spent on Plant & Machinery Furniture and FixtureOffice Equipment Vehicle and Computers.
38. FEES PAID TO STATUTORY AUDITORS
During the year ended 31st March 2021 your Company has paid a sum of Rs.2.07 Lakhs to the Statutory Auditor.
39. INSOLVENCY AND BANKRUPTCY CODE
No application has ever been filed against the Company under the Insolvency andBankruptcy Code 2016.
40. ONE TIME SETTLEMENT WITH BANKS
The Company has not made any settlement with banks or financial institutions.
41. PLEDGE OF SHARES
None of the equity shares of the Directors / Promoters of your Company are pledged withany banks or financial institutions.
42. LISTING WITH STOCK EXCHANGES
Your Company is listed with BSE Limited and your Company has duly paid the listing feesto the Exchange.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of your Company viz. customersmembers vendors banks and other business partners for the excellent support receivedfrom them during the year. The Directors place on record their sincere appreciation to allemployees of your Company for their unstinted commitment and continued contribution toyour Company.
44. CAUTIONARY STATEMENT
Statements in the Boards Report describing your Companys objectivesexpectations or forecasts may be forward-looking within the meaning of applicablesecurities laws and regulations. Actual results may differ materially from those expressedin the statement.
| ||For and on behalf of the Board of Directors |
| ||For Sovereign Diamonds Limited |
| ||Sd/- ||Sd/- |
| ||Ajay Gehani ||Arundhati Mali |
|Place: Mumbai ||Chairman & Managing Director ||Director & CFO |
|Date: 26th June 2021 ||DIN: 00062989 ||DIN: 08353618 |