sagar diamonds ltd share price Directors report

To

The Members

SAGAR DIAMONDS LIMITED

Your Directors have pleasure in presenting the 08th annual Report of the company together with the Audited Financial Statements for the year ended 31st March, 2023.

FINANCIAL RESULT AND PERFORMANCE:

(Rs. in Lakhs except EPS)

Particulars	31/03/2023	31/03/2022
Revenue from Operation	5,47,498.88	6,25,743.47
Other income	12,307.71	23,301.51
Profit Before Interest & Depreciation & Tax (EBITDA)	2,945.86	3,659.27
(-)Finance Cost	230.73	87.16
(-) Depreciation	111.21	70.64
Net Profit before tax & Exceptional items	2,603.92	3,501.47
(+)Exceptional Items	0.00	0.00
Net Profit Before tax	2,603.92	3,501.47
(-) Tax Expense	597.34	593.79
Net Profit for the year after tax	2,006.58	2,907.68
Earnings per share (Basic & Diluted) (In Rs.)	15.87	23.00

1. BUSINESS OVERVIEW

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

2. STATE OF THE COMPANYS AFFAIRS

Your company reported a turnover of Rs. 5,47,498.88 lakhs i.e., a 12.50% decrease over the previous financial year. The Company delivered an EBITDA (before exceptional items) of Rs. 2,945.86 lakhs with a decline of 19.50% (PY 3,659.27 lakhs ) and Profit before tax at Rs. 2,603.92 lakhs with a decrease of 25.63% (PY Rs. 3,501.47 lakhs). The Net Profit after Tax was recorded at Rs.2,006.58 lakhs against Rs. 2,907.68 lakhs in previous year. The EPS recorded at Rs.15.87 per share (PY Rs.23.00) a decline by 31%.

3. EXPORT

The Company has exported diamonds and Jewellery to Hong Kong. During the year under review, your Company has recorded export of Rs.4,06,965.62 lakhs against export revenue recorded of Rs. 4,83,997.04 lakhs in the previous year.

4. DIVIDEND

With a view to conserve the resources for the companys Business operations, your directors have deemed it prudent to not to recommend any dividend for the year ended 31st March, 2023.

5. TRANSFER TO RESERVE

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

6. SHARE CAPITAL

The Paid up equity share capital as on March 31, 2023 was Rs. 1264.378 lakhs divided into 1,26,43,780 equity shares of Rs. 10 each. During the year under review:

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

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

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

7. ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2023 in Form MGT - 7 in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, will be uploaded on the Companys website and the same can be accessed at https://www.sagardiamonds.com/investor-relations/reports.aspx

8. DETAILS OF SUBSIDIARY, ASSOCIATE AND JOINT VENTURE

As on 31st March, 2023, your Company does not have any Joint Ventures, Subsidiaries and Associates Company. Hence, statement containing salient features of the financial statements of the Companys subsidiaries/ Associate Companies and Joint Venture in Form AOC-1 is not applicable to your company.

9. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT

As per regulation 15 (2) of SEBI (Listing Obligation And Disclosure Requirement) Regulations, 2015, the compliance with the corporate governance provisions as specified in regulations 17, [17A,] 18, 19, 20, 21,22, 23, 24, [24A,] 25, 26, 27 and clauses (b) to (i) [and (t)] of sub-regulation (2) of regulation 46 and para C , D and E of Schedule V shall not apply, in respect of (a) The listed entity having paid up equity share capital not exceeding rupees ten crores and net worth not exceeding rupees twenty five crores, as on the last day of the previous financial year (b) The listed entity which has listed its specified securities on the SME Exchange.

The company falls within the ambit of aforesaid exemption (b), hence the compliance with the reporting of corporate governance is not applicable to the company. Therefore, Corporate Governance Report and Auditors Certificate on Corporate Governance is not provided.

Pursuant to Regulation 34(2)(e) of SEBI (Listing obligations and Disclosure Requirements) (LODR) Regulations, 2015, Management Discussion and Analysis Report forms an integral part of this Annual Report.

10. DEPOSITS

During the year under review, the Company has not accepted deposit falling within the ambit 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 in compliance with the Chapter V of the Act is not applicable.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companys Articles of Association, of Mr. Vaibhav Dipak Shah (DIN: 03302936) will retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for re-appointment.

Mr. Samir Gaonkar (DIN: 03100710) was appointed as an Additional Director (Non-executive) w.e.f 10th January, 2023 by the Board of Directors of the Company pursuant to Section 161 of the Act and the Articles of Association of the Company and he holds office only upto the date of ensuing Annual General Meeting and the company has received a notice in writing under Section 160 of the Act from a Member proposing her candidature for the office of a Director.

Ms. Tanuja Durvesh Parab (DIN: 10183217), Ms. Monica Mahesh Soni (DIN: 10183218), Ms. Fatima Fakruddin Shaikh (DIN: 10183232) were appointed an Additional Independent Directors w.e.f 25th May, 2023 by the Board of Directors of the Company pursuant to Section 161 of the Act and the Articles of Association of the Company and they hold office only upto the date of ensuing Annual General Meeting and the company has received notices in writing under Section 160 of the Act from Members proposing them for the office of Independent Directors for a term of five years from the original date of appointment i.e. 25thMay, 2023 upto 24th May, 2028, not liable to retire by rotation during their term.

The details of Director being recommended for appointment/reappointment as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained in the accompanying Notice convening the ensuing Annual General Meeting of the company.

During period under review following changes has been occurred in the Board of Director:

Name of Director/KMP	Designation	Date of Appointment	Date of Resignation
Ms. Bandana Singh	Independent Director	14/06/2019	23/09/2022
Mr. Shrikrishna Baburam Pandey	Independent Director	14/06/2019	23/09/2022
Mr. Manendra Pratap Singh	Independent Director	14/06/2019	23/09/2022
Mr. Saurin Rasiklal Shah	Non Executive Director	11/12/2020	10/12/2022
Mr. Dhaval Dipak Shah	Additional Director-Non Executive	11/11/2022	11/01/2023
Mr. Praveen Kumar Rai	Additional Director- Independent	24/12/2022	28/02/2023
Mr. Vichitra Narayan Pathak	Additional Director - Independent	24/12/2022	28/02/2023
Ms. Shilpa Agarwal	Additional Director - Independent	24/12/2022	27/02/2023
Mr. Samir Gaonkar	Additional Director-Non Executive	10/01/2023	--

During the year following persons have been designated as Key Managerial Personnel of your Company pursuant to Section 2 (51) and Section 203 of the Act, read with Rule 8 (5) (iii) of the Companies (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	10/01/2023
Mr. Chirag Lalit Dave	CFO	10/01/2023	03/09/2023
Ms. Pooja Jain	Company Secretary	01/08/2019	12/10/2022

* Mr. Vaibhav Shah has been re-appointed as Managing Director for period of five years w.e.f 08/07/2022 in the 06th AGM held on 30/09/2021 while his first date of appointment as Director from 15/07/2015.

12. DECLARATION FROM INDEPENDENT DIRECTORS

The Independent Directors of the Company have given the declaration to the Company that they meet the criteria of independence as provided in section 149(6) as well as under regulation 25 of (LODR) Regulation, 2015. There has been no change in the circumstances which may affect their status as Independent Director during the year.

13. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and Individual Directors pursuant to the provisions of the Companies Act, 2013 and the Corporate Governance requirements as prescribed by the SEBI Regulations. The evaluation framework for assessing the performance of Directors Comprises the following key 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 its performance.

d. Providing perspectives and feedback going beyond information provided by the management.

e. Commitment to shareholders and other stakeholder interests.

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

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

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

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

14. MEETING OF BOARD OF DIRECTORS

During the year, 12 (Twelve) Board Meetings were held. The intervening gap between the Meetings did not exceed the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of which are as follow:

Sr. NO. Date of Meeting	Board Strength as on date of Board Meeting	Directors Present as on date of Board Meeting
1. 24/05/2022	5	5
2. 25/05/2022	5	5
3. 08/07/2022	5	5
4. 08/08/2022	5	5
5. 16/08/2022	5	5
6. 03/09/2022	5	5
7. 15/09/2022	5	5
8. 11/11/2022	3	3
9. 14/11/2022	3	3
10. 24/12/2022	5	5
11. 10/01/2023	6	6
12. 28/02/2023	2	2

During F.Y 2022-23, Attendance of Directors at Board Meetings are given below:

Name of Director	Designation	Board Meeting Attendance	Last AGM Attendance on 30/09/2022
Mr. Vaibhav Dipak Shah	Managing Director	12/12	Yes
Mr. Saurin Rasiklal Shah	Non executive Director	9/9	Yes
Mr. Manendra Pratap Singh	Independent Director	7/7	No
Mr. Shrikrishna Baburam Pandey	Independent Director	7/7	No
Ms. Bandana Singh	Independent Director	7/7	No
Mr. Dhaval Dipak Shah	Additional Director-Non Executive	4/4	NA
Mr. Praveen Kumar Rai	Additional Director- Independent	2/2	NA
Mr. Vichitra Narayan Pathak	Additional Director - Independent	2/2	NA
Ms. Shilpa Agarwal	Additional Director - Independent	2/2	NA
Mr. Samir Gaonkar	Additional Director-Non Executive	2/2	NA

15.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 of Section 177 of the Companies Act, 2013.

During the financial year 2022-23, the Audit Committee met 4 (Four) times on 25/05/2022, 03/09/2022 and 14/11/2022 and 10/01/2023. The necessary quorum was present for all the meetings.

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

Name	Designation	Category	No. of Meetings Attended
Mr. Saurin Rasiklal Shah	Chairman	Non-executive Director	3/3
Mr. Manendra Pratap Singh	Member	Independent Director	2/2
Ms. Bandana Singh	Member	Independent Director	2/2
Mr. Vaibhav Shah	Member	Managing Director	2/2
Mr. Dhaval Dipak Shah	Member	Non-executive Director	2/2
Mr. Samir Gaonkar	Member	Non-executive Director	1/1

Audit Committee has been reconstituted accordingly when required due to resignation of directors.

All the recommendations of the Audit Committee have been accepted by the Board of Directors. The Chairman of the Audit Committee was present at the Annual General Meeting of the Company held on 30th September, 2022. The Minutes of all above stated meeting of the Audit Committee were noted at the Board Meeting.

Terms of reference and role of audit committee includes the matters specified under the companies act, 2013. Broad terms of reference includes; oversight of financial reporting process, review financial results and related information, approval to related party transactions, review internal financial controls, risk management, performance of statutory and internal auditors, audit process, relevant compliances, appointment and payments to auditors.

(b) Nomination And Remuneration Committee:

The Nomination and Remuneration Committee (NRC) of the Company is constituted in accordance with the provisions of Section 178 of the Companies Act, 2013.

During the Financial year 2022-23, 2 (Two) meetings of the Nomination and Remuneration Committee were held on 25/05/2022 and 03/09/2022.

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

Name	Designation	Category	No. of Meetings Attended
Mr. Saurin Rasiklal Shah	Chairman	Non-executive Director	2/2
Mr. Manendra Pratap Singh	Member	Independent Director	2/2
Ms. Bandana Singh	Member	Independent Director	2/2

Nomination and Remuneration has been reconstituted accordingly when required due to resignation of directors.

The Chairman of the NRC was present at the Annual General Meeting of the Company held on 30th September, 2022. The Minutes of Nomination and Remuneration Committee meeting were noted at the Board Meeting.

The terms of reference as laid by the board broadly include to recommend to the Board a remuneration policy relating to directors, key managerial personnel and other employees, formulation of the criteria for determining qualifications ,positive attributes and independence of a director, formulation of criteria for evaluation of independent Directors and the Board, devising a policy on Board diversity ,identify persons who are qualified to become directors and who be appointed in senior management in accordance with the 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 the provisions of 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 share holders of the Company including redressal of investor complaints such as transfer or credit of securities, non-receipt of dividend / notice / annual reports, etc. and all other shareholder related matters.

- Consider and approve issue of share certificates (including issue of renewed or duplicate share certificates), transfer and transmission of securities, etc.

During the Financial Year 2022-23, 2 (Two) meeting of the Stakeholders Relationship Committee were held on 25/05/2022 and 03/09/2022. Ms. Pooja Jain, Company Secretary was designated as Compliance Officer of the Company till date of her resignation i.e. 12/10/2022.

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

Name	Designation	Category	No. of Meetings Attended
Mr. Saurin Rasiklal Shah	Chairman	Non-executive Director	2/2
Mr. Manendra Pratap Singh	Member	Independent Director	2/2
Ms. Bandana Singh	Member	Independent Director	2/2

Stakeholders Relationship Committee has been reconstituted accordingly when required due to resignation of directors.

During the year, the Company has not received any complaints from the Shareholders of the Company. There were no outstanding complaints as on 31st March, 2023.

(d) Corporate Social Responsibility Committee:

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

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

During the Financial Year 2022-23, 2 (Two) meeting of the Corporate Social Responsibility Committee were held on 25/05/2022 and 03/09/2022.

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

Name	Designation	Category	No. of Meetings Attended
Mr. Saurin Rasiklal Shah	Chairman	Non-executive Director	2/2
Ms. Bandana Singh	Member	Independent Director	2/2
Mr. Manendra Pratap Singh	Member	Independent Director	2/2

Corporate Social Responsibility Committee has been reconstituted accordingly when required due to resignation of directors.

(e) Independent Directors Meeting

During the year under review, a separate meeting of the Independent Directors of the Company was held on 25/05/2022, without the presence of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole, performance of Chairperson of the Company and assessed the quality, quantity and timelines of flow of information between the Company Management and the Board in terms of Schedule IV of the Act. All the Independent Directors of the Company were present in the meeting.

16. POLICY ON DIRECTORS APPOINTMENT, REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS

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 including criteria for determining qualifications, positive attributes and other matters provided under sub section (3) of section 178 of the Companies Act 2013. The Companys Remuneration Policy for Directors, Key Managerial Personnel available on Companys website www.sagardiamonds.com

The Nomination and Remuneration Committee has laid down the criteria for Directors Appointment and Remuneration including criteria for determining qualification, positive attributes and Independence of Director. The following attribute/criteria for selection have been laid by the board on the recommendation of committee:

- The candidate should possess the positive attributes such as leadership, Entrepreneurship or such other attributes which in the opinion of the committee are in the interest of the Company.

- The candidate should be free from any disqualification as provided under sections 164 and 167 of Companies Act, 2013

- The candidate should meet the conditions of being independent as stipulated under the companies act, 2013.

- The appointment or re- appointment of a Director is made pursuant to an established procedure which includes assessment of managerial skills, professional behaviour, 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 per their terms and conditions which are approved by the Board after taking into Consideration the recommendations made by Nomination and Remuneration Committee.

17. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a whistle Blower Policy through which the Company encourages employees to bring to the attention of Senior Management, any unethical behavior and improper practices and wrongful conduct taking place in the Company. The brief details of such vigil mechanism is available on website of the company i.e. www.sagardiamonds.com.

18. CODE OF CONDUCT:

The Board of Directors of the Company has formulated and adopted Code of Conduct for Board of Directors and Senior Management Personnel. During the year, Board of Directors and Senior Management Personnel has complied with general duties, rules, acts and regulations. In this regard certificate from Managing Directors as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been received by the Board and the same is annexed as Annexure-1. Code of Conduct form Board of Directors and Senior Management Personnel is available on the Companys website www.sagardiamonds.com.

19. CFO CERTIFICATION:

In compliance with Regulation 17(8) of the Listing Regulations, a declaration by CFO was placed before the Board, certifying the accuracy of Financial Statements and the adequacy of internal controls pertaining to Financial Reporting for the year ended 31st March, 2023 is annexed as Annexure-1.

20. CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013, the Company has undertaken CSR activities, projects and programs as provided in the CSR policy of the Company and as identified under Schedule VII to the Companies Act, 2013.The Companys CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2023, 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 Social Responsibility Policy) Amendment Rules, 2021 dated 22nd January, 2021, the Board of Directors has amended the CSR policy of the Company. Corporate Social Responsibility Policy is placed on the Companys website www.sagardiamonds.com.

21. DIRECTORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained 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 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures; the annual accounts have been prepared in compliance with the provisions of the Companies Act, 2013;

b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are 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 of the Company for year ended on that date;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the 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 the Company and that such internal financial controls are adequate and are operating effectively;

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

22. AUDITORS

(a) Statutory Auditors:

M/s. Thakkar & Co., Chartered Accountants, Ahmedabad (Firm Registration No. 127202W) were appointed as the Statutory Auditors of the Company at the 07th Annual General Meeting of the Company held on 30th September, 2022 for a term of five consecutive years commencing from financial year 2022-

23 up to Financial Year 2026-27, from conclusion of the 07th Annual General Meeting of the Company till the conclusion of the 12th Annual General Meeting of the Company. However, M/s. Thakkar & Co., Chartered Accountants have resigned with effect from 28/02/2023 from the office of Statutory Auditor of the Company, resulting into a casual vacancy in the office of Statutory Auditor of the Company as envisaged by section 139(8) of the Companies Act, 2013.

The Board recommended before Members of the company at General Meeting held on 25/08/2023, M/s. AK Barman & Associates & Associates, Chartered Accountants (FRN: 316190E), as Statutory Auditors of the Company to fill the casual vacancy caused by the resignation of Thakkar & Co. Chartered Accountants (FRN No. 127202W), till the conclusion of the ensuing annual general meeting of the Company and to conduct the Statutory Audit for Financial Year 2022-23.

The Board has recommended to the members at ensuing Annual General Meeting for the appointment of M/s. Nitin Gami & Associates, Chartered Accountants (FRN: 332567E) as Statutory Auditor of the Company to hold office for a period of 5 (five) consecutive years (Financial year 2023-24 to Financial Year 2027-28) commencing from the conclusion of this 08th Annual General Meeting till the conclusion of 13th Annual General Meeting of the Company to be held in the year 2028. M/s. Nitin Gami & Associates, Chartered Accountants (FRN: 332567E) has confirmed their eligibility to act as the Statutory Auditors of the Company.

Explanation Or Comments On Qualifications, Reservations Or Adverse Remarks Or Disclaimers Made By The Auditors:

M/s. AK Barman & Associates, Chartered Accountants (FRN No. 316190E) have completed the Statutory Audit for period 2022-23 and submitted their Auditors Report for financial year 2022-23.

Members attention is invited to the observation made by the Auditors under "Qualified Opinion" appearing in Auditors Reports. " We draw attention to note 25 of the Statement, regarding the Managements contention about the recoverability of the Trade Receivables mentioned therein. We have not been able to substantiate the Managements contention regarding the carrying value of Trade Receivables aggregating to INR 7,56,123.47 lakh. Accordingly, we are unable to comment on the appropriateness of the carrying value of such Trade Receivables and their consequential impact on the financial results and the financial position of the Company as at and for the year ended March 31, 2023.

We also draw attention to show cause notice received by the Company from the Development Commissioner, Surat Special Economic Zone, Sachin regarding non-compliance with regard to overdue outstanding receivables, accordingly we are unable to comment on their consequential impact on the financial position of the Company as at and for the year ended March 31, 2023.

"The Board is of the opinion that It is not going to majorly impact financial position of the company. Considering nature of our industry, Post covid-19 situation and past experience, such delay / late recovery from receivables have been in earlier years also. No major write off has been happened in past. In the opinion of the Management, no allowance/ provision are required for above Trade receivables and these receivables are considered good and fully recoverable."

During the year under review, the Auditors had not reported any matter under Section 143(12) of the Companies Act, 2013, therefore no details is required to be disclosed under section 134(3)(ca) of the Act.

(b) Internal Auditors:

The Board of the Company has appointed M/s. N R Panchal & Co., Chartered Accountants as Internal Auditors of the Company for financial year 2022-23 and for Financial Year 2023-24.

(c) Cost Auditors:

During Financial year 2021-22, Provisions related to Cost Auditor is not applicable to the Company.

23. 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 Committee recommended and the Board of Directors appointed Ms. Manjula Poddar, Practising Company Secretary to conduct Secretarial Audit for the Financial Year 2022-23. The Report of the Secretarial Auditors is annexed as Annexure-3 in Form MR-3 to this Report.

Members attention is invited to the observation made by the Secretarial Auditors-

(i) The Company has not yet filed SDD Compliance Certificate of September and March 2023 Quarter ended and marked as SDD Non-Compliant by BSE.

(ii) Casual Vacancy of Statutory Auditor has not filled within time stipulated as per the Section 139(8)(i) of the Companies Act, 2013.

(iii) The Company has not filled the casual vacancy of Company Secretary within six months as required under Sec. 203(4) of The Companies Act, 2013 and rules there under.

(iv) The Company has not filled the casual vacancy of Independent Non-Executive Independent Directors within 3 months as per Schedule IV of Section 149(8). Hence Board and Committee Composition were not properly constituted for the period of 6 months.

(v) The Company has received show cause notice from the SEZ Development Authority, Surat, Special Economic Zone, Sachin regarding recovery of outstanding Trade Receivables.

The Board is of the opinion that;

a) In response to observations (i) the Company is in the process of purchasing the software for maintenance of SDD. The Company will start maintaining the SDD from Q3 FY 23-24 in the SDD software.

b) In response to observations (ii), (iii) and (iv), during year continuous change in Board due to resignation & appointment of directors have made delay in decision of appointing statutory auditor and proper board composition could not be made. The company is finding suitable candidate for post of company secretary and will ensure to comply.

c) In response to observations (v) It is not going to majorly impact financial position of the company. Considering nature of our industry, Post covid-19 situation and past experience, such delay / late recovery from receivables have been in earlier years also. No major write off has been happened in past. In the opinion of the Management, no allowance/ provision are required for above Trade receivables and these receivables are considered good and fully recoverable."

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE

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

25. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All related party transactions entered into during the financial year were on an Arm Length basis and in the ordinary course of business. There were no material related party transactions made by the company with related parties which may have potential conflict with the interest of the company at large. Details of Related party transactions are provided in note 28 to financial statements and The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of Companies Act, 2013 is disclosed in Form AOC-2 as Annexure-4 to this report. Related party transactions are placed before the audit committee and also before the board and for approval of shareholders wherever necessary in compliance with the provisions of the Act, listing agreement and policy of the company to related party transactions. The Company has not entered into Contracts / arrangement / transactions with related parties which are not at arms length basis.

26. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

The nature of business is manufacturing of Diamonds. Risk management is an ongoing process and embedded in the operating framework of the Company. The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Some of the risks faced by the Company are: a. Foreign Exchange Risk b. Growth Risk c. Stiff Competition d. Regulatory Risk e. Financial Risk f. Labour Risk g. Raw material price Risk. At present, there are no risks 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 under Regulation 21 of the SEBI (LODR) Regulations, 2015.

27. MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

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

28. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. The Companys internal control system is commensurate with its size, scale and complexities of its operations. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

29. COMPLIANCE WITH SECRETARIAL STANDARDS

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

30. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors/KMP and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors/KMP and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Directors and the designated employees have confirmed compliance with the Code. The same has been displayed at the companys website at www.sagardiamonds.com.

31. INSURANCE

The Companys building, plant and machineries, Stocks and other properties wherever necessary and to the extent required have been adequately insured.

32. LISTING OF SHARES AND LISTING FEES

The Equity Shares of your Company are listed and actively traded on the SME platform of BSE Limited. The Company has paid annual listing fees to the stock exchanges for the financial year 2023-24.

33. REMUNERATION AND PARTICULARS OF EMPLOYEES

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

34. INDUSTRIAL RELATIONS

The Company maintained healthy, cordial and harmonious industrial relations at all levels.

35. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed as Annexure- 6 to the Directors Report.

36. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT, 2013

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Your Directors further state that during the year under review, No compliant was received from any employee during F.Y 2022-23 and hence no complaint is outstanding as on 31st March, 2023 for redressal.

37. 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 passed by the Regulators or Courts or tribunals impacting the going concern status and your Companys operations in future.

38. GENERAL

d. There was no revision in the financial statements.

e. Neither the Managing Director nor the Whole-time Directors of the Company receive any 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 Insolvency and Bankruptcy Code, 2016.

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

39. ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the financial institutions, Government Authorities, customers, vendors, investors of the Company and the communities in which the Company operates, for their co-operation and valuable support extended to the Company during the year.

Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companys executives, staff and workers.

For and on behalf of the Board of Directors
For Sagar Diamonds Limited	For Sagar Diamonds Limited
Sd/-	Sd/-
(Vaibhav Dipak Shah)	(Samir Gaonkar )
Managing Director	Director
DIN NO. 03302936	DIN NO. 03100710
Date: 08th September, 2023
Place: Surat