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Directors Report of Sovereign Diamonds Ltd.

Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the Forty First Annual Report together with the audited financial statements for the year ended 31st March, 2015. The Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL RESULTS (Rs. in lacs)

Year Ended Year Ended 31st March, 2015 31st March, 2014

Income from Operations 6,013.81 4,000.48

Other Income 3.44 18.95

Total Income 6,017.26 4,019.43

Expenditure 5,499.94 3,649.58

Interest 200.62 169.10

Depreciation 37.36 43.91

Total Expenditure 5,737.92 3,862.59

Profit( ) Loss(-) 279.33 156.84

Provision for Taxation 98.00 58.00

(Add) / Less : Deferred Tax (3.62) (0.85)

Short / (Excess) Provision of earlier Years — (2.04)

Net profit after tax 184.96 101.73

Balance brought forward from last year 294.19 202.46

Balance carried forward to the Balance Sheet 479.15 304.19

2. HIGHLIGHTS OF PERFORMANCE

* Total net sales for the year were Rs. 6,013.81 lacs as compared to Rs. 4,000.48 lacs in 2014, a growth of 50.32%

* Total profit before tax for the year was Rs. 279.33 lacs as compare to Rs. 156.84 lacs in 2014

3. BUSINESS OPERATIONS

During the last 12 months, the Company has made a great deal of changes.

* The Company has increased its total workforce to 100 people from 75 people. Some of these are contract workers and some them are fixed workers. The Company is controlling the output per worker and has almost cut any overtime expenses which otherwise puts any unnecessary load on the Company.

* The Company has worked in depth to cut its gold losses and has been very successful in bringing this loss down by almost 1% using better suction machines, complete vacuum cleaning of all carpets twice in a day in gold dust areas and increasing hand washing to collect the gold dust in central setting tanks.

* The Company has purchased some new machines like laser welders which increases its production and improve the quality of our product. The Company have also bought a laser marker for marking jewellery as all the clients are insisting to engrave diamond weights inside the pieces. Earlier this function was outsourced. With the use of laser maker, there is saving in costs and enhances security of diamonds as no piece has to leave factory for any reason.

* The Company has also purchased a new 3D printer. With the use of these 3D printers, all its designs and models are made in-house. This again leads to saving in costs and faster processing. Earlier this was also outsourced which used to result in leakage of designs.

* The Company has concentrated mainly on the domestic market and increased our sales considerably working with safe clients. The Company has increased its business marginally in the Middle East after exercising due caution by providing on time deliveries and receiving payments.

* The Company's cautious and hands on approach combined with its high quality products has helped us to grow well during this year and the Company is hopeful to continue this trend in the years to come.

* The Company is expanding its staff strength to 125 in the next few months.

4. DIVIDEND

Your Directors do not recommend any dividend for the year as the profits earned need to be ploughed back into the operations of the company and will be used for working capital requirements of the Company.

5. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2015 was Rs. 578.80 Lakhs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

6. FINANCE

Cash and cash equivalent as at 31st March, 2015 was Rs. 1,04,737/-. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

6.1 DEPOSITS

The Company has not accepted deposit from the public and shareholders falling within the ambit of Section 73 and 74 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

6.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

7. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to the Company.

8. BUSINESS RISK MANAGEMENT

The nature of business is manufacturing of Jewellery. The inheritant risk to the business of the company is 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

All the above risk has been discussed in the Management Discussion & Analysis Report. The price of Jewellery consist of Gold, Diamonds & Labour, out of this three, Gold and diamonds consist of 90% of the price of Jewellery. The Company has no control on the price of Gold and Diamonds and the same is available through Exchanges, Market and Banks. The nature of risk is dynamic of business and entrepreneurship. The Company has not formed Risk Management Committee and considered it as optional item as prescribed under Clause 49 of Listing Agreement.

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Company monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls.

10. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. The detail of the Whistle Blower Policy is explained in the Corporate Governance Report.

11. SUBSIDIARY COMPANIES

The Company has no Subsidiary Company.

12. DIRECTORS:

In terms of the Articles of Association of the Company, Mr. Ajay Gehani, Managing Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Pursuant to Section 149, 161(1) of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Deepika Gehani was appointed as a Woman Director of the Company at the Board meeting held on 30th May, 2015. In terms of provisions of Section 161(1) of the Act, Mrs. Deepika Gehani would hold office up to the date of the ensuing Annual General Meeting. The Company has received notices in writing from members along with a deposit of requisite amount under Section 160 of the Act proposing the candidature of Mrs. Deepika Gehani for the office of Director of the Company. The resolution no. 4 has been included in the notice for the same.

The Company proposes to appoint Mrs. Deepika Gehani as a Woman Director under Section 149 of the Act and Clause 49 of the Listing Agreement, liable to retire by rotation.

The present tenure of Mr. Ramesh Gehani as Executive Chairman will expire on 31st August, 2015. The Nomination and Remuneration Committee has recommended the re-appointment of Mr. Ramesh Gehani as Executive Chairman. The Board of Directors has decided to re-appoint him as Executive Chairman and the item no. 5 of notice is for the same.

The Company proposes to appoint Mrs. Deepika Gehani as Chief Financial Officer (CFO) with effect from 1st June, 2015 for a period of five years. The resolution no. 6 has been included in the notice for the same.

12.1 Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

12.2 Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

12.3 Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

13. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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 financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

14. RELATED PARTY TRANSACTIONS

During the year the company has not entered into any related party transactions except payment of remuneration and sitting fees to the directors.

15. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

16. AUDITORS

16.1 Statutory Auditors

The Company's Auditors, M/s. J. D. Zatakia & Co., Chartered Accountants, Mumbai who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

16.2 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 Company has appointed M/s P P Shah & Co., Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure A".

16.3 Qualifications in the Secretarial Report

1. As per section 203(1 )(ii), (iii) & 149, the Company is require to appoint Company Secretary & Chief Financial Officer. The Company has not appointed Company Secretary & Chief Financial Officer.

Management Response:

(i) The Company has appointed Mr. Ajay Gehani, Director Compliance Officer of the Company who looks after the compliance of Companies Act, 2013 and SEBI Act and rules made thereunder

(ii) The Company has availed the services of Practising Company Secretary for advising on compliance of Companies Act, 2013 and SEBI Act and rules made thereunder

(iii) The Company has appointed Mrs. Deepika A Gehani as Chief Financial Officer (CFO) of the Company with effect from 1st June, 2015.

(iv) The Volume and Scope of work for the Company Secretary is less and it is not a full time work and the job of Company Secretary is not attractive commensurate with the scope of work and salary.

2. As per section 138 of the Companies Act, 2013, the Company is required to appoint Internal Auditor. The Company has not appointed Internal Auditor.

Management Response:

(i) The size of operation of the Company is very small, it is not viable to appoint Internal Auditor but the Company has established the internal control system.

3. As per the various sections of the Companies Act and Listing Agreement, the Company is required to post various information, policies on the website of the Company. The Company has not posted any information, policies on the website of the Company.

Management Response:

(i) The Company is filling regularly all the information with BSE and all the information is available on the website of BSE

4. As per section 149 of the Companies Act, 2013 and clause 49 of Listing Agreement, the Company is required to appoint Woman Director. The Company has not appointed Woman Director.

Management Response:

(i) The Company has appointed Mrs. Deepika A Gehani as Woman Director at the Board Meeting held on 30th May, 2015.

17. ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.

18. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on corporate governance practices followed by the Company, together with a certificate from the Practicing Company Secretaries forms an integral part of this Report.

19. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure B".

20. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure C".

21. PARTICULARS OF EMPLOYEES

There is no employee in the Company drawing monthly remuneration of Rs.5,00,000/- per month or Rs.60,00,000/- per annum. Hence the Company is not required to disclose any information as per Rule, 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

22. REMUNERATION OF THE DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP)/ EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 (1) (i) of The Companies (Appointment and Remuneration) Rules, 2014 in respect of ratio of remuneration of each director to the median remuneration of the employees of the Company for the Financial Year are as follows:

Sr. Name Designation Remuneration Median Ratio No. of the Per Annum Remune (Remune Director (INR) ration ration Per of Annum Director (INR) to Median Remune ration)

1. Mr. Ramesh Executive 14,99,400 - - Gehani Chairman

2. Mr. Ajay Managing 29,98,800 - - Gehani Director

23. ACKNOWLEDGEMENTS

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

24. CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

For and on behalf of the Board of Directors

Ramesh Gehani Ajay Gehani (Executive Chairman) (Managing Director)

Mumbai Date: 30th May, 2015


Mar 31, 2014

The Members,

The Directors are pleased to present the Fortieth Annual Report and the Company''s audited accounts for the financial year ended 31st March, 2014.

A. FINANCIAL RESULTS

(Rs. in Lakhs)

Year Ended Year Ended 31st March, 31st March, 2014 2013

Income from Operations 4000.48 3417.54

Other Income 18.95 0.33

Total Income 4019.43 3417.86

Expenditure 3649.58 3113.04

Interest 169.10 141.57

Depreciation 43.91 43.11

Total Expenditure 3862.59 3297.72

profit( ) Loss(-) 156.84 120.14

Provision for Taxation 58.00 50.00

(Add) / Less : Deferred Tax (0.85) (3.52)

Short / (Excess) Provision of earlier Years (2.04) 0.0

Net profit after tax 101.73 73.66

Balance brought forward from last year 202.46 128.80

Balance carried forward to the Balance Sheet 304.19 202.46

B. DIVIDEND

Your Directors do not recommend any dividend for the year as the profits earned need to be ploughed back into the operations of the company.

C. WORKING OF THE COMPANY

During the year the company has achieved turnover of Rs. 4000.48 lacs as against Rs.3417.54 lacs in the previous year. The increase in turnover is due to increase in domestic sales and export sales of Rs. 219.23 lacs. The Company has already started selling jewellery in the Indian Jewellery Retail Market and is supplying to big jewellery stores in Metro cities. The Company has also started exporting to Middle East countries. This has resulted in higher turnover for the Company and in the current year is looking forward to maintain the growth momentum.

D. DIRECTORS

Mr. Ajay Gehani, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Ajay Gehani has been re-appointed as the Managing Director of the Company w.e.f 1st April, 2014 for a period of 3 years vide special resolution passed in the Extra Ordinary General Meeting of the Company held on 15th March, 2014.

In terms of the articles of association of the Company, section 149 (10) of the Companies Act, 2013 and revised clause 49 of Listing Agreement dealing with Corporate Governance norms, Mr. Mohanram Pai has completed 5 years term as Independent Directors as on 1st April, 2014. Mr. Rajesh Arora has completed 3 years as Independent Directors as on 1st April, 2014. The Company proposes to re-appoint them, as Independent Directors for a further period of 5 years till 2019. The Company has received requisite notices in writing from members proposing Mr. Mohanram Pai and Mr. Rajesh Sitaram Arora for appointment as Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both, under subsection 6 of section 149 of the Companies Act, 2013 and under clause 49 of the listing agreement with the stock exchanges.

E. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

The disclosures in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, (Referred to as the rules) are as follows:

A. Conservation of Energy:

The activity of the Company does not require large scale consumption of energy. Hence, the Company has not taken any energy conservation measures. There are no additional investments and proposals, for reduction of consumption of energy. The Company does not fall within the category of list of industries mentioned in Schedule forming part of the rules. Hence, no disclosures are required to be given in Form A as annexed to the rules.

B. Technology Absorption:

The Company carries out general Research and Development in the manufacture of Jewellery as per international standards, in developing new range of products, manufacturing process etc. The disclosures required to be given in Form B as annexed to the rules are as follows:

Form for Disclosure of Particulars with respect to absorption Research & Development (R & D):

Specific Areas in which R & D carried Manufacture of Jewellery out by the Company.

benefits derived as a result of the Helped in better quality output, with above R & D. improved productivity.

Future Plan of Action Development of new designs in Jewellery.

Expenditure on R & D: The Company carries out the R & D work in-house.

(a) Capital Nil

(b) Recurring Nil

(c) Total Nil

(d)Total R & D expenditure as a Nil percentage of Total Turnover

Technology absorption, adaptation and innovation

Efforts, in brief, made towards technology absorption, adaptation & innovation

We use the latest laser technology and all automatic casting machines in order to achieve a very high level of fnish and setting quality. This combined with mirror polish in our jewellery makes it one of the fnest collections in the country.

benefits derived as a result of above efforts

Due to this fnish we are able to work with the leading retailers and wholesalers in India and Europe and they have achieved tremendous success with our product line

Imported Technology The Company has not imported any technology.

F. FIXED DEPOSITS

The Company has not accepted any deposit from the public.

G. INFORMATION PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956.

Information in accordance with the section 217(2A) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 and forming parts of the Director''s Report for the year ended 31st March, 2014 is not given as no employee is in receipt of remuneration in excess of Rs.5,00,000/- p.m. or Rs. 60,00,000/- p.a.

H. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibilities Statement, it is hereby confirmed;

i) That in the preparation of the Annual Accounts for the financial year 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the Accounts for the financial year ended 31st March, 2014 on a going concern basis.

I. LISTING OF SHARES

The company''s shares are listed on the Bombay Stock Exchange and the Company has paid the listing fees for the same.

J. CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report and the Certifcate from the Practising Company Secretary confirming the compliance of conditions on Corporate Governance as stipulated in revised Clause 49 of the Listing Agreement with the Stock Exchanges is annexed hereto.

K. AUDITORS

M/s. J. D. Zatakia & Co., Chartered Accountants retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

M. ACKNOWLEDGMENT

The Board wishes to place on records its appreciation to all its Shareholders, Customers, Bankers, and Employees for their co-operation and contributions made by them at all levels.

By Order of the Board of Directors

For SOVEREIGN DIAMONDS LIMITED

Sd/- Sd/-

Place: Mumbai AJAY R. GEHANI RAMESH GEHANI

Date: 26th May, 2014 MANAGING DIRECTOR EXECUTIVE CHAIRMAN


Mar 31, 2013

To The Members,

The Directors present their Thirty- Ninth Annual Report together with the Audited Accounts for the year ended 31st March, 2013.

A. FINANCIAL RESULTS

(Rs. in Lakhs) Year Ended Year Ended 31st March, 2013 31st March, 2012

Income from Operations 3417.54 2689.93

Other Income 0.33 1.18

Total Income 3417.86 2691.11

Expenditure 3113.04 2467.75

Interest 141.57 118.13

Depreciation 43.11 33.60

Total Expenditure 3297.72 2619.48

Profit( ) Loss(-) 120.14 71.63

Provision for Taxation 50.00 26.00

(Add) / Less : Deferred Tax (3.52) (0.83)

Short / (Excess) Provision of earlier Years 0.0 (0.42)

Net profit after tax 73.66 46.88

Balance brought forward from last year 128.80 81.91

Balance carried forward to the Balance Sheet 202.46 128.80

B. DIVIDEND

Your Directors do not recommend any dividend for the year as the profits earned need to be ploughed back into the operations of the company.

C. WORKING OF THE COMPANY

During the year the company has achieved turnover of Rs. 3417.54 lacs as against Rs.2689.93 lacs in the previous year. The increase in turnover is due to increase in domestic sales. The Company has already started selling jewellery in the Indian Jewellary Retail Market and is supplying to big jewellery stores in Metro cities. This has resulted in higher turnover for the Company and in the current year the Company is looking forward to maintain the growth momentum.

D. DIRECTORS

Mr. Ramesh Gehani, Director retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

E. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

The disclosures in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, (Referred to as the rules) are as follows:

A. Conservation of Energy:

The activity of the Company does not require large scale consumption of energy. Hence, the Company has not taken any energy conservation measures. There are no additional investments and proposals, for reduction of consumption of energy. The Company does not fall within the category of list of industries mentioned in Schedule forming part of the rules. Hence, no disclosures are required to be given in Form A as annexed to the rules.

B. Technology Absorption:

The Company carries out general Research and Development in the manufacture of

Jewellery as per international standards, in developing new range of products, manufacturing process etc. The disclosures required to be given in Form B as annexed to the rules are as follows:

Form for Disclosure of Particulars with respect to absorption Research & Development (R & D): Specific Areas in which R & D Manufacture of Jewellery carried out by the Company.

Benefits derived as a result of Helped in better quality output, with the above R & D. improved productivity.

Future Plan of Action Development of new designs in Jewellery.

Expenditure on R & D: The Company carries out the R & D work

in-house.

(a) Capital Nil

(b) Recurring Nil

(c) Total Nil

(d) Total R & D expenditure as a percentage of Total Turnover NiL

Technology absorption, adaptation and innovation

Efforts, in brief, made towards We use the latest laser technology and technology absorption, adaptation all automatic casting machines in order to & innovation achieve a very high level of finish and setting quality. This combined with mirror polish in our jewellery makes it one of the finest collection in the country. Benefits derived as a result of Due to this finish we are able to work with above efforts the leading retailers and wholesalers in

India and Europe and they have achieved tremendous success with our product line Imported Technology The Company has not imported any technology.

C. Foreign Exchange Earning and Outgo: Rs. In lakhs

2012-2013 2011-2012

Foreign Exchange Earnings/Outgo:

Foreign Exchange Earned: 42.17 185.80

Foreign Exchange Outgo: 0.00 0.0

Travelling / Exhibition Charges 9.14 23.31

F. FIXED DEPOSITS

The Company has not accepted any deposit from the public.

G. INFORMATION PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956.

Information in accordance with the section 217(2A) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 and forming parts of the Director''s Report for the year ended 31st March, 2013 is not given as no employee is in receipt of remuneration in excess of Rs.5,00,000/- p.m. or Rs. 60,00,000/- p.a.

H. COMMENTS ON AUDIT REMARKS.

Company has taken group gratuity scheme policy with LIC. The Company is in the process of obtaining certificate for determining gratuity liability from Acturian.

I. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibilities Statement, it is hereby confirmed;

i) That in the preparation of the Annual Accounts for the financial year 31st March, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the Accounts for the financial year ended 31st March, 2013 on a going concern basis.

J. LISTING OF SHARES

The company''s shares are listed on the Bombay Stock Exchange and the Company has paid the listing fees for the same.

K. CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report and the Certificate from the Practising Company Secretary confirming the compliance of conditions on Corporate Governance as stipulated in revised Clause 49 of the Listing Agreement with the Stock Exchanges is annexed hereto.

L. AUDITORS

M/s. J. D. Zatakia & Co., Chartered Accountants retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made would be within the prescribed limits specified under Section 224(1B) of the Companies Act, 1956.

M. ACKNOWLEDGMENT

The Board wishes to place on records its appreciation to all its Shareholders, Customers, Bankers, and Employees for the co-operation and contributions made by them at all levels.

By Order of the Board of Directors

For SOVEREIGN DIAMONDS LIMITED

sd/- sd/-

Place: Mumbai AJAY R. GEHANI RAMESH GEHANI

Date: 25th May, 2013 MANAGING DIRECTOR EXECUTIVE CHAIRMAN


Mar 31, 2012

The Directors present their Thirty- Eighth Annual Report together with the Audited Accounts for the year ended 31st March, 2012

A. FINANCIAL RESULTS (Rs. in Lakhs)

Year Ended Year Ended 31st March, 31st March, 2012 2011

Income from Operations 2689.93 1935.97

Other Income 1.18 2.01

Total Income 2691.11 1937.98

Expenditure 2467.75 1817.98

Interest 118.13 58.39

Depreciation 33.60 28.89

Total Expenditure 2619.48 1905.26

Profit( ) Loss(-) 71.63 32.72

Provision for Taxation 26.00 15.00

(Add) / Less : Deferred Tax (0.83) (1.55)

Short / (Excess) Provision of earlier Years (0.42) (1.71)

Net profit after tax 46.88 20.98

Balance brought forward from last year 81.91 60.93

Balance carried forward to the Balance 128.79 81.91 Sheet

B. DIVIDEND

Your Directors do not recommend any dividend for the year as the profits earned need to be ploughed back into the operations of the company.

C. WORKING OF THE COMPANY

During the year the company has achieved turnover of Rs.2689.93 lacs as against Rs.1935.97 lacs in the previous year. The increase in turnover is due to fluctuation in Dollar rate. The Company is entering into the Indian Jewellery Retail Market and supplying to big Jewellery stores in Metro cities. This will results in higher turnover for the Company.

D. DIRECTORS

Mr. Ajay Gehani, Director retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

E. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

The disclosures in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, (Referred to as the rules) are as follows:

A. Conservation of Energy:

The activity of the Company does not require large scale consumption of energy.

Hence, the Company has not taken any energy conservation measures. There are no additional investments and proposals, for reduction of consumption of energy. The Company does not fall within the category of list of industries mentioned in Schedule forming part of the rules. Hence, no disclosures are required to be given in Form A as annexed to the rules.

B. Technology Absorption:

The Company carries out general Research and Development in the manufacture of Jewellery as per international standards, in developing new range of products, manufacturing process etc. The disclosures required to be given in Form B as annexed to the rules are as follows:

Form for Disclosure of Particulars with respect to absorption Research & Development (R & D):



Specific Areas in which R & D carried Manufacture of Jewellery out by the Company.

Benefits derived as a result of the Helped in better quality output, with above R & D. improved productivity.

Future Plan of Action Development of new designs in Jewellery.

Expenditure on R & D: The Company carries out the R & D work in-house.

(a) Capital Nil

(b) Recurring Nil

(c) Total Nil

(d) Total R & D expenditure as a Nil percentage of Total Turnover

Technology absorption, adaptation and innovation

Efforts, in brief, made towards We use the latest laser technology and technology absorption, adaptation & all automatic casting machines in order innovation to achieve a very high level of finish and setting quality. This combined with mirror polish in our jewellery makes it one of the finest collection in the country_

Benefits derived as a result of above Due to this finish we are able to work efforts with the leading retailers and wholesalers in India and Europe and they have achieved tremendous success with our product line

Imported Technology The Company has not imported any technology.

C. Foreign Exchange Earning and Outgo:

Rs. In lakhs

2011-2012 2010-2011

Foreign Exchange Earnings/Outgo:

Foreign Exchange Earned: 185.80 197.42

Foreign Exchange Outgo: 0.0 0.0

Travelling / Exhibition Charges 23.31 16.01

F. FIXED DEPOSITS

The Company has not accepted any deposit from the public.

G. INFORMATION PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956.

Information in accordance with the section 217(2A) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 and forming parts of the Director's Report for the year ended 31st March, 2012 is not given as no employee is in receipt of remuneration in excess of Rs.5,00,000/- p.m. or Rs. 60,00,000/- p.a.

H. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibilities Statement, it is hereby confirmed;

i) That in the preparation of the Annual Accounts for the financial year 31st March, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the Company for the year under review.

ii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the Accounts for the financial year ended 31st March, 2012 on a going concern basis.

I. AUDITORS QUALIFICATION:

The qualification in auditor's report has been dealt in the notes forming part of accounts which is self explanatory

J. LISTING OF SHARES

The company's shares are listed on the Bombay Stock Exchange and the Company has paid the listing fees for the same.

K. CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report and the Certificate from the Practicing Company Secretary confirming the compliance of conditions on Corporate Governance as stipulated in revised Clause 49 of the Listing Agreement with the Stock Exchanges is annexed hereto.

L. AUDITORS

M/s. J. D. Zatakia & Co., Chartered Accountants retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate from them to the effect that their re-appointment, if made would be within the prescribed limits specified under Section 224(1B) of the Companies Act, 1956.

By Order of the Board of Directors

For SOVEREIGN DIAMONDS LIMITED

Sd/- Sd/-

AJAY R. GEHANI RAMESH GEHANI

MANAGING DIRECTOR EXECUTIVE CHAIRMAN

Place: Mumbai

Date: 2nd August, 2012


Mar 31, 2010

The Directors present their Thirty-Sixth Annual Report together with the Audited Accounts for the year ended 31st March, 2010

A. FINANCIAL RESULTS

(Rs. in Lakhs)

Year Ended Year Ended 31st March, 2010 31st March, 2009

Income from Operations 1215.22 1707.30

Other Income 2.22 4.70

Total Income 1217.44 1712.00

Expenditure 1137.64 1624.67

Interest 45.83 55.06

Depreciation 31.67 31.28

Total Expenditure 1215.14 1711.01

Proft(+) Loss(-) 2.2 9 .99

Provision for Taxation 3.00 5.75

Fringe Benefit Tax 0.00 5.50

Add : Deferred Tax 2.95 3.06

Net profit after tax 2.24 -7.2

Less : Transfer to General Reserve - -

Less : Prior Year Income Tax - -

Balance brought forward from last year 58.69 65.83

Balance carried forward to the Balance Sheet 60.93 58.63





B. DIVIDEND

Your Directors do not recommend any dividend for the year as the profits earned need to be ploughed back into the operations of the company.

C. WORKING OF THE COMPANY

During the year the company has achieved turnover of Rs.1278.23 lacs as against Rs.1712.52 lacs in the previous year. The increase in turnover is due to fluctuation in Dollar rate. The Company is entering into the Indian Jewellery Retail Market and supplying to big jewellery stores in Metro cities. This will results in higher turnover for the Company.

D. DIRECTORS

Mr. Ajay Gehani, Director retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for re-appointment.

The present term of Mr. Ramesh Gehani and Mr. Ajay Gehani as Managing Director is expiring on 15th September, 2010. The Board of Directors proposed to re-appoint them for a period of 5 years and the necessary resolution has been incorporated in the notice.

E. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO

The disclosures in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, (Referred to as the rules) are as follows:

A. Conservation of Energy:

The activity of the Company does not require large scale consumption of energy. Hence, the Company has not taken any energy conservation measures. There are no additional investments and proposals, for reduction of consumption of energy. The Company does not fall within the category of list of industries mentioned in Schedule forming part of the rules. Hence, no disclosures are required to be given in Form A as annexed to the rules.

B. Technology Absorption:

The Company carries out general Research and Development in the manufacture of Jewellery as per international standards, in developing new range of products, manufacturing process etc. The disclosures required to be given in Form B as annexed to the rules are as follows:

Form for Disclosure of Particulars with respect to absorption Research & Development (R & D):

Specific Areas in which R & D Manufacture of Jewellery

carried out by the Company.

Benefits derived as a result of the Helped in better quality output, with improved

above R & D. productivity.

Future Plan of Action Development of new designs in Jewellery.

Expenditure on R & D: The Company carries out the R & D work in-house.



(a) Capital Nil

(b) Recurring Nil

(c) Total Nil

(d) Total R & D expenditure as a Nil

percentage of Total Tur over

Technology absorption, adaptation and innovation

Efforts, in brief, made towards technology absorption, adaptation & innovation We use the latest laser technology and all automatic casting machines in order to achieve a very high level of finish and setting quality. This combined with mirror polish in our jewellery makes it one of the finest collection in the country.

Benefits derived as a result of above efforts.

Due to this finish we are able to work with the leading retailers and wholesalers in India and Europe and they have achieved tremendous success with our product line.

Imported Technology

The Company has not imported any technology.

C. Foreign Exchange Earning and Outgo:

2009-2010 2008-2009

Foreign Exchange Earnings/Outgo:

Foreign Exchange Earned: 239.76 453.91

Foreign Exchange Outgo: 7.98 19.78

Travelling / Exhibition Charges 80.12 45.60



F. FIXED DEPOSITS

The Company has not accepted any deposit from the public.

G. INFORMATION PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956.

Information in accordance with the section 217(2A) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in report of Board of Directors) Rules, 1988 and forming parts of the Directors Report for the year ended 31st March, 2010 is not given as no employee is in receipt of remuneration in excess of Rs. 2,00,000/- p.m. or Rs. 24,00,000/- p.a.

H. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors Responsibilities Statement, it is hereby confirmed;

i) That in the preparation of the Annual Accounts for the financial year 31st March, 2010, the applicable accounting standards have been followed alongwith proper explanation relating to material departures.

ii) That the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the Accounts for the financial year ended 31st March, 2010 on a going concern basis.

I. LISTING OF SHARES

The companys shares are listed on the Bombay Stock Exchange and the Company has paid the listing fees for the same.

J. CORPORATE GOVERNANCE

A separate section on Corporate Governance is included in the Annual Report and the Certificate from the Practising Company Secretary confirming the compliance of conditions on Corporate Governance as stipulated in revised Clause 49 of the Listing Agreement with the Stock Exchanges is annexed hereto.

K. AUDITORS

M/s. J. D. Zatakia & Co., Chartered Accountants retire at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. The Company has received a certificate from them to the effect that their re- appointment, if made would be within the prescribed limits specified under Section 224(1B) of the Companies Act, 1956.



By Order of the Board of Directors

For SOVEREIGN DIAMONDS LIMITED

Registered Office :

11-A, Mahal Industrial Estate,

Mahakali Caves Road, Sd/-

Andheri (East), AJAY GEHANI

Mumbai - 400 093 MANAGING DIRECTOR

Place : Mumbai

Date : 29th July, 2010





 
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