Directors Report of Sovereign Diamonds Ltd.

Mar 31, 2025

The Directors take pleasure in presenting the Fifty First Annual Report together with the
Audited Annual Financial Statements for the financial year ended 31^st March, 2025. The
Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL RESULTS:

Key highlights of financial results for Sovereign Diamonds Limited for the financial year
2024 - 25 are tabulated below:

(Rs. in Lakhs)

Particulars	Year Ended 31st March, 2025	Year Ended 31st March, 2024
Income from Operations	1,997.21	2,709.34
Other Income	149.41	133.04
Total Income	2,146.62	2,842.38
Expenditure	1,964.50	2,493.04
Interest	119.61	131.71
Depreciation	49.77	49.64
Total Expenditure	2,133.88	2,674.39
Net Profit Before Tax	12.73	167.99
Provision for Taxation	9.46	42.00
(Add) / Less : Deferred Tax	2.00	(12.01)
Short / (Excess) Provision of earlier Years	0.00	0.00
Net Profit After Tax	1.26	138.00
Other Comprehensive Income	0.76	(2.79)
Total Comprehensive Income	2.02	135.21
Balance brought forward from last year	1,013.35	877.56
Transfer to General Reserve	0.00	0.00
Balance carried forward to the Balance Sheet	1,030.69	1,013.35

There was no revision in the Financial Statements.

2. HIGHLIGHTS OF PERFORMANCE:

• Total turnover for the year was Rs. 1,997.21 Lakhs as compared to Rs. 2,709.34
Lakhs in 2023 - 24 i.e. decrease by 26.25%.

• Total profit before tax for the year was Rs. 12.73 Lakhs as compared to profit
before tax of Rs. 167.99 Lakhs in 2023 - 24 i.e. decrease by 92.43%.

3. BUSINESS OPERATIONS:

? The jewellery business model had changed drastically on account of gold prices
going so high. The proportion value of gold in an 18 carat product has risen from
25% - 30% to almost 60% - 65%. This has led to reduction in gross profit as
compared to gross profit in earlier times.

? Under such circumstances of high gold prices, the Company is focusing on seeking
orders on ‘cash on delivery'' or ‘cash in advance''. This will improve our profitability.

The Company has been reducing its expenses across all levels including finance
costs, salaries, general expenses, tools and consumables, etc.

? The Company is looking more business in coloured stones (precious stones), lab
grown diamonds, lab grown emeralds, rubies and pearls set in 14 carat or 9 carat
gold. The Company is also looking to make jewellery in 4 carat or 5 carat gold.
The Company believes that future will be in less man-power and cheaper raw
materials.

? The Company has reduced its bank borrowings from Rs. 11,13,79,291/- as on 31^st
March, 2024 to Rs. 8,86,01,985/- as on 31^s March, 2025.

There was no change in nature of business of your Company, during the year under
review.

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 your company and will be used for the
requirements of your Company.

5. TRANSFER TO RESERVES:

The Board of Directors has not recommended to transfer any amount to reserves.

6. DISCLOSURES UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT, 2013:

No material changes and commitments which could affect your Company''s financial
position have occurred between the end of the financial year of your Company i.e. 31^st
March, 2025 and date of this report i.e. 12^th August, 2025.

7. SHARE CAPITAL:

The paid up equity share capital as on 31^st March, 2025 was Rs. 578.80 lakhs. During
the financial year under review, your Company has not issued shares with differential
voting rights nor granted stock options nor sweat equity. There was no change in your
Company''s share capital during the year under review. The Promoter and Promoter
Group are holding 37,62,744 equity shares equivalent to 65.01% of the total issued and
paid-up share capital.

8. DIRECTORS:

8.1 Changes in Board of Directors:

Cessation of Directors:

? Mr. Jayeshkumar Gandhi (DIN: 01497163) ceased to be Independent Director of
the Company on account of his demise on 27^th May, 2024.

Appointment / Re-appointment of Directors:

The Board of Directors of the Company had appointed / re-appointed the following
persons on the Board of the Company:

? Mr. Narasinha Pal (DIN: 10568460) and Mr. Jayeshkumar Gandhi (DIN: 01497163)
were appointed as Additional Director(s) of the Company w.e.f. 1st April, 2024. Mr.
Narasinha Pal was further appointed as Independent Director of the Company for
a term of 5 years w.e.f. 1st April, 2024.

? Mr. Jigar Darji (DIN: 08536419) was appointed as Additional Director of the
Company w.e.f. 14th August, 2024. He was further appointed as an Independent
Director of the Company for a term of 5 years w.e.f. 14th August, 2024.

? Ms. Arundhati Mali (DIN: 08353618) was re-appointed as Whole Time Director and
Chief Financial Officer of the Company for a term of 5 years w.e.f. 1st June, 2024.

The members of the Company at its 50th Annual General Meeting held on 26th
September, 2024 has approved the appointment of Mr. Narasinha Pal and Mr. Jigar
Darji as an Independent Director(s) of the Company and the re-appointment of Mrs.
Arundhati Mali as Whole Time Director and Chief Financial Officer of the Company.

Approval of members proposed in 51st AGM:

? The Board of Directors of the Company had appointed Mr. Sumer Gehani (DIN:
10842049) as an Additional Director (Non Executive, Non Independent). In terms
of Section 161 of the Companies Act, 2013, Mr. Sumer Gehani (DIN: 10842049)
holds office up to the date of 51^st Annual General Meeting. The Company has
received notice in writing from a Member under Section 160 of the Act, signifying
his intention to propose the appointment of Mr. Sumer Gehani as a Director of
the Company. In terms of Section 161 of the Act, it is proposed to appoint him as
Director of the Company.

Necessary resolution for his appointment, has been proposed for approval of
members at item no. 3 of the Notice of 51^st Annual General Meeting.

8.2 Retirement by Rotation:

Pursuant to Section 152 (6) of the Companies Act, 2013 and in terms of the Articles of
Association of your Company, Mrs. Arundhati Mali (DIN No.: 08353618), Whole Time
Director & CFO, retires by rotation at the forthcoming Annual General Meeting and
being eligible, offers herself for re-appointment.

8.3 Declaration by Independent Directors:

Your Company has received declarations from all the Independent Directors of your
Company confirming that they meet with the criteria of independence as prescribed
both, under 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 said Regulations that they are not aware of any circumstance or situation,
which exist or may be reasonably anticipated, that could impair or impact their ability to
discharge their duties with an objective independent judgment and without any external
influence.

The Board is of the opinion that the Independent Directors of the Company possess
requisite qualifications, experience and expertise in the fields of finance, people
management, strategy, auditing, tax advisory services and they hold highest standards
of integrity.

Regarding proficiency, the Company has adopted requisite steps towards the inclusion
of the names of all Independent Directors in the data bank maintained with the Indian
Institute of Corporate Affairs, Manesar (‘IICA''). Accordingly, the Independent Directors
of the Company have registered themselves with the IICA for the said purpose. In
terms of Section 150 of the Act read with Rule 6 (4) of the Companies (Appointment
& Qualification of Directors) Rules, 2014, Mr. Jigar Darji is exempted from undertaking
online proficiency self-assessment test conducted by the IICA and Mr. Narasinha Pal
shall appear for the said online proficiency self-assessment test in due course.

8.4 Annual Board Evaluation:

The annual performance evaluation of the Independent Directors and Board Committees

i.e. Audit, Stakeholders Relationship and Nomination & Remuneration Committees was
carried by the entire Board and the annual performance evaluation of the Chairman,
Board as a whole, Non - Independent Directors was carried out by the Independent
Directors.

The annual performance evaluation was carried out in accordance with the criteria laid
down in the Nomination and Remuneration Policy of your Company and as mandated
under the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure
Requirements) Regulations, 2015, as amended from time to time.

8.5 Key Managerial Personnel:

The following persons are the 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 thereunder:

1. Mr. Ajay Geheni, Managing Director

2. Ms. Arundhati Mali, Whole Time Director & CFO

3. Mr. Akshay Jain, Company Secretary and Compliance Officer

None of the Key Managerial Personnel have resigned during the year under review.

8.6 Remuneration Policy:

The Board has in accordance with the provisions of Section 178 (3) of the
Companies Act, 2013, formulated the policy setting out the criteria for determining
qualifications, positive attributes, independence of a Director and policy relating to
remuneration for Directors, Key Managerial Personnel and Senior Management
Employees. The same has been posted on the website of the Company i.e.
https://www.sovereigndiamondsltd.com/investor-relations.

Disclosure under Part II, Section II, Para B (IV) of Schedule V to Companies Act-
2013:

All elements of remuneration package such as salary, benefits, bonuses,
stock options, pension, etc., of all the directors

(Rs. in lakhs)

Name of Director	Designation	Salary & Perquisites	Commission	Sitting Fees	Total
Mr. Ajay Gehani	Managing Director	36.00	-	-	36.00
Ms. Arundhati Mali	Whole Time Director & CFO	3.95		0.75	4.71
Mr. Narasinha Pal	Independent Director	-	-	0.75	0.75
Mr. Jigar Darji	Independent Director	-	-	0.60	0.60

? The Company does not pay any performance-linked incentives or sign-on amount
to Executive and Non-Executive Directors. There are no performance linked
criteria.

? Service Contract: Term of 5 years from the date of appointment.

? Notice Period & Severance Fees: Notice Period is 1 month; The Company does
not pay any severance fees to its Directors.

? The Company has not issued any stock options.

1.7 Board Meetings:

During the financial year your Company has held 4 (Four) Board Meetings which were

held on 30^th May, 2024, 14^th August, 2024, 14^th November, 2024 and 31^st January, 2025.

The maximum interval between any two meetings does not exceed 120 days. As per
Section 167 (1) (b), all the directors have attended at least one Board Meeting held
during the financial year.

9. PARTICULARS OF EMPLOYEES:

During the financial year, there was no employee in receipt of remuneration in excess of
limit as prescribed in the Rule 5 (2) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014. The prescribed Particulars of Employees as
required under Section 197 (12) of the Act read with Rule 5 (1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as
“Annexure A” and form part of this Report.

? HEADCOUNT:

The total no. of employees as on 31st March, 2025 is as follows:

Particulars	Nos.
Female	8
Male	27
Transgender	0
Total	35

10. 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 31^st
March, 2025, the applicable accounting standards have been followed along with
proper explanation relating to material departures, if any;

b) that such accounting policies have been selected and applied consistently and
judgment 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 your Company at the end of the
financial year and of the profit and loss of the company for that period;

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 your 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.

11. INTERNAL CONTROL SYSTEMS:

Your Company maintains an adequate and effective Internal Control System
commensurate with its size and complexity. We believe that these internal control
systems provide, amongst other things, a reasonable assurance that transactions are
executed with Management authorization and that they are recorded in all material
respects to permit preparation of financial statements in conformity with established
accounting principles and that the assets of your Company are adequately safeguarded
against significant misuse or loss.

12. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES.
JOINT VENTURES OR ASSOCIATE COMPANIES:

There are no companies which have become or ceased to be its Subsidiaries, Joint
Venture or Associate Companies during the financial year 2024 - 25.

13. DEPOSITS:

Your Company has not accepted deposit from the public and shareholders 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.

14. PARTICULARS OF LOANS. GUARANTEES. INVESTMENTS OR SECURITY:

The Company has not made any investments or given any guarantees or securities
against loans given under the provisions of Section 186 of the Companies Act, 2013.
The details of loans given are given in the Notes to the Annual Financial Statements
attached to this report.

15. RELATED PARTY TRANSACTIONS:

A Related Party Policy has been adopted by the Board of Directors to determine
the materiality of transactions with related parties and dealings with them. All
transactions with related parties are placed before the Audit Committee for approval.
The said policy may be referred to, at your Company''s official website at the web link
https://www.sovereigndiamondsltd.com/_files/ugd/587402_01dd7de932a44a2e91f750a22369ba1c.pdf

Further, the members may note that your Company has not entered into the following
kinds of related party transactions:

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

- Any Material contracts / arrangement / transactions.

16. 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 your Company.

17. 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”.

18. RISK MANAGEMENT:

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

a. Foreign Exchange Risk

b. Gold Price Risk

c. Stiff Competition

d. Labour Risk

The prices of Jewellery consist of Gold, Diamonds & Labour, out of this three, Gold and
diamonds consist of 90% of the price of Jewellery. Your Company has no control on the
price of Gold and Diamonds and the same is available through Exchanges, Market and
Banks. The said risk is favourable / unfavourable to your Company. The nature of risk
is dynamic of business and entrepreneurship. In the opinion of the Board, there are no
risks which shall 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 (Listing Obligation and Disclosure Requirement)
Regulations, 2015.

19. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Your Company has a vigil mechanism to deal with instance of fraud and
mismanagement, if any. In accordance with the Regulation 22 of the SEBI (Listing
Obligation and Disclosure Requirement) Regulations and pursuant to Section 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 place a mechanism of reporting illegal or unethical behavior. As per the Whistle
Blower Policy, the employees are free to report violations of laws, rules, regulations
or unethical conduct to their immediate superior. The confidentiality of those reporting
/ violations is maintained and they are not subjected to any discriminatory practice.
Details of the Whistle Blower Policy have been disclosed on your Company''s website at
https://www.sovereigndiamondsltd.com/_files/ugd/587402_d8991c4591dc47beb2460f412d1ed2da.pdf

20. 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 your Company and its future operations.

21. AUDITORS:

21.1 Statutory Auditors:

The members of the Company at its 48^th Annual General Meeting held on 8^th September,
2022 had approved the appointment of M/s. J. D. Zatakia & Co., Chartered Accountants
as the statutory auditors of the Company for a term of 5 years. They shall hold the
office of statutory auditors from the conclusion of 48^th Annual General Meeting until the
conclusion of the 53^rd Annual General Meeting.

In view of the amendment to Section 139 of the Companies Act, 2013, the Company
is not required to ratify the re-appointment of the Statutory Auditor at every Annual
General Meeting. Hence, the item of ratification of re-appointment of Statutory Auditor
is not considered in this Annual General Meeting. In view of the same M/s J. D. Zatakia
& Co., Chartered Accountants will continue to act as Statutory Auditors of the Company
for the financial year 2025 - 26.

21.2 Statutory Auditors’ Observations:

The audit report given by the statutory auditors on the annual financial statements of
your Company is part of the Annual Report. There are no qualification, reservation or
adverse remark made by the statutory auditors in their Audit 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
has appointed M/s. P. C. Shah & Co., Practicing Company Secretaries as Secretarial
Auditors for conducting Secretarial Audit of your Company for the financial year ended
31^st March, 2025.

The report of the Secretarial Auditor is attached as “Annexure C”. The Secretarial
Audit Report does not contain any qualification, reservation or adverse remark except
provided at point 21.4 below.

21.4 Qualifications in Secretarial Audit Report:

A. Composition of Nomination and Remuneration Committee:

In respect of the composition of the Nomination and Remuneration Committee, we
observe as follows:

As per Section 178 of the Companies Act, 2013, the composition of Nomination
and Remuneration Committee shall be as follows:

178 (1): “The Board of the Directors of every listed company and such other class
or classes of companies, as may be prescribed shall constitute the Nomination
and Remuneration Committee consisting of three or more non-executive directors
out of which not less than one half shall be independent directors:

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 not chair such Committee.”

The Nomination and Remuneration Committee of the Company comprises of two
Independent Directors and one Executive Director. In this regard, the Management
has given the following reply:

? “The Company has four Directors, out of them two are Executive and two
are Independent Directors. Accordingly, the composition of the Board is such
that the Nomination 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. Narasinha Pal, Independent Director acts as the Chairman of the
Nomination and Remuneration Committee. The Company does not convene
the meeting of Nomination and Remuneration Committee unless Mr.
Narasinha Pal and Mr. Jigar Darji, Independent Directors of the Company
and members of Nomination and Remuneration Committee are present in
the said meeting. This ensures that the Chairmanship and majority decision
making vests with the Independent Directors.

? Further, the role of Mr. Ajay Gehani as a member of the Committee is very
limited. He is only filling up the requirement of 3^rd member as required under
Section 178 of the Companies Act, 2013 as there is no option. He does not
participate in the affairs of the Committee which are related to remuneration,
performance evaluation of Executive Directors and other such matters.

? As the Committee does not meet without the presence of 2 Independent
Directors and since the Chairman is also an Independent Director, hence the
voting and governance of the Committee remains independent. Accordingly,
with the present composition of Nomination and Remuneration Committee,
it has been ensured that majority remains with Independent Directors and
accordingly, the spirit of Corporate Governance is achieved.”

22. REPORTING OF FRAUDS BY AUDITORS:

During the financial year under review, neither the statutory auditors nor the secretarial
auditors have reported to the Audit Committee of the Board, under Section 143 (12)
of the Act, any instances of fraud committed against your Company by its officers or
employees, the details of which would need to be mentioned in this Report.

23. COST RECORDS:

The provisions of Section 148 of the Companies Act, 2013 and Companies (Cost
Records and Audit) Rules, 2014 (hereinafter referred to as ‘Rules'') in respect of
maintenance and 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
General Meeting, which have mandatory application during the year under review.

25. ANNUAL RETURN:

Pursuant to sub-section 3 (a) of section 134 and sub-section (3) of section 92
of the Companies Act, 2013 the Annual Return for the financial year ended
31st March, 2025 in Form MGT 7 is available on the Company''s website at
https://www.sovereigndiamondsltd.com/investor-relations.

26. GREEN INITIATIVES:

The Ministry of Corporate Affairs vide its circular no. 17 / 2020 dated 13^th April,
2020, circular no. 20 / 2020 dated 5^th May, 2020 and circular No. 09/2024 dated
19^th September, 2024 and SEBI vide its circular no. SEBI/HO/CFD/CMD1/CIR/P/2020/79
dated 12^th May, 2020 and no. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2024/133 dated
3^rd October, 2024 has dispensed with the requirement of sending hard copy of full
annual report to the shareholders.

Electronic copies of the annual report for the financial year 2024 - 25 and notice of the
51^st Annual General Meeting (AGM) are sent to all members whose email addresses
are registered with your Company / Depository Participant(s). Members who have not
registered their email address can do so by following the steps as mentioned in the
notes of notice of 51^st Annual General Meeting. Alternatively, they are requested to
download the copy of the Annual Report from the website of the Company i.e. www.
sovereigndiamondsltd.com or from the website of BSE Limited i.e. www.bseindia.com
or write to the Company at [e-mail] or [e-mail].
Your Company provides e-voting facility to all its members to enable them to cast their
votes electronically on all resolutions set forth in the Notice. This is pursuant to the
Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management
and Administration) Amendment Rules, 2015.

27. 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 Annual
Report.

28. CORPORATE GOVERNANCE:

As per Regulation 15 (2) of the SEBI (LODR) Regulations, 2015, the provisions of
Corporate Governance are non-mandatory to the following class of Companies:
a. Companies having Paid-up Equity Share Capital not exceeding Rs. 10 crores and
Net worth not exceeding Rs. 25 Crores, as on the last day of the previous financial
year;

Provided that where the provisions of Regulation 27 becomes applicable to a
company at a later date, such company shall comply with the requirements of
Regulation 27 within six months 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-
ITP Platforms.

The Paid-up Share Capital of your Company is Rs. 5.78 crores as on 31^st March, 2024
and networth of the Company is Rs. 16.78 crores. Accordingly, the paid-up capital
and net worh is below the prescribed limit for mandatory applicability of Corporate
Governance clause as per Regulation 15 (2) (a) of the SEBI (LODR) Regulations, 2015.
Your Company has decided not to opt for compliance of Regulation 27 for the financial
year 2024 - 25.

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

Your Company firmly believes in providing a safe, supportive and friendly workplace
environment - a workplace where our values come to life through the supporting
behaviors. Positive workplace environment and a great employee experience are
integral part of our culture. Your Company believes in providing and ensuring a
workplace free from discrimination and harassment based on gender.

Your Company educates its employees as to what may constitute sexual harassment
and in the event of any occurrence of an incident constituting sexual harassment, your
Company provides the mechanism to seek recourse and redressal to the concerned
individual subjected to sexual harassment.

Your Company has a Sexual Harassment Prevention and Grievance Handling Policy
in place to provide clarity around the process to raise such a grievance and how the
grievance will be investigated and resolved. An Internal Complaints Committee has been
constituted in line with the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.

The status of no. of complaints of sexual harassment are shown below:

No. complaint raised and pending as on 1st April, 2024	0
No. of complaints of sexual harassment received in the year	0
No. of complaints disposed off during the year	0
No. of complaints pending at the end of the financial year ended 31st March, 2025	0
No. of cases pending for more than 90 days	0

30. COMPLIANCE OF MATERNITY BENEFIT ACT, 1961:

During the financial year 2024 - 25, the Company has complied with respect to the
compliance of the provisions relating to the Maternity Benefit Act, 1961.

31. INSOLVENCY AND BANKRUPTCY CODE:

No application has ever been filed against the Company under the Insolvency and
Bankruptcy Code, 2016.

32. ONE TIME SETTLEMENT WITH BANKS:

The Company has not made any settlement with banks or financial institutions.

33. LISTING WITH STOCK EXCHANGE:

Your Company is listed with BSE Limited and your Company has duly paid the listing
fees to the Exchange.

34. AGREEMENTS BINDING LISTED ENTITIES:

Pursuant to Regulation 30A of the SEBI (Listing Obligation and Disclosure Requirement)
Regulations, 2015, during the financial year, no agreement has been entered or
executed by the shareholders, promoters, promoter group entities, related parties,
directors, key managerial personnel and employees of the Company or its subsidiaries
among themselves or with the Company or with a third party, solely or jointly, which,
either directly or indirectly or potentially or whose purpose and effect is to, impact the
management or control of the Company or impose any restriction or create any liability
upon the Company.

35. 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 your Company viz.
customers, members, 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 your Company for their unstinted commitment and
continued contribution to your Company.

36. CAUTIONARY STATEMENT:

Statements in the Board''s Report describing your 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.

For and on behalf of the Board
For Sovereign Diamonds Limited

Ajay Gehani Arundhati Mali

^{Place: Mumbai} Managing Director Whole Time Director & CFO

Date: 12th August, 2025 DIN: 00062989 DIN: 08353618

---

Mar 31, 2024

The Directors take pleasure in presenting the Fiftieth Annual Report together with the Audited Annual Financial Statements for the financial year ended 31^st March, 2024. The Management Discussion and Analysis has also been incorporated into this report.

1. FINANCIAL RESULTS:

Key highlights of financial results for Sovereign Diamonds Limited for the financial year 2023 - 24 are tabulated below:

(Rs. in Lakhs)

Particulars	Year Ended 31st March, 2024	Year Ended 31st March, 2023
Income from Operations	2,709.34	2,780.73
Other Income	133.04	126.09
Total Income	2842.38	2,906.82
Expenditure	2493.04	2,551.02
Interest	131.71	113.71
Depreciation	49.64	49.30
Total Expenditure	2674.39	2714.04
Net Profit Before Tax	167.99	192.78
Provision for Taxation	42.00	48.00
(Add) / Less : Deferred Tax	(12.01)	3.67
Short / (Excess) Provision of earlier Years	0.00	0.00
Net Profit After Tax	138.00	141.11
Other Comprehensive Income	(2.79)	(0.28)
Total Comprehensive Income	135.21	140.83
Balance brought forward from last year	877.56	736.73
Transfer to General Reserve	0.00	0.00
Balance carried forward to the Balance Sheet	1,013.35	877.56

There was no revision in the Financial Statements.

2. HIGHLIGHTS OF PERFORMANCE:

• Total turnover for the year was Rs. 2,709.34 Lakhs as compared to Rs. 2,780.73 Lakhs in 2022 - 23 i.e. decrease by 2.57 %.

• Total profit before tax for the year was Rs. 138.01 Lakhs as compared to profit before tax of Rs. 192.78 Lakhs in 2022 - 23 i.e. decrease by 28.37%.

3. BUSINESS OPERATIONS:

Generally, world markets were still recovering from economic issues everywhere. The Ukraine war added to Europe''s problems and all basic essential items prices went up very much. The Middle east - Israel War also added to the Worlds uncertainties, and all this together increased international prices of Gold. Your Company chose to reduce our exposure to these volatile markets. Our business in the last 12 months has been from domestic markets where your Company feels to have a stronger hold over the clients and their preferences. We feel India is safe and with our quality being accepted nicely by retailers and many direct clients. The year was affected by high gold rates in the domestic market. This led to many good retailers curtailing their purchases and recycle many of their current inventories. As of 31^st March 2024 - Gold was approx. Rs. 73,000 for 10 grams. This is very high. We continued our efforts to minimize our gold losses by better recovery methods.

Lab grown diamonds too posed a major threat to the diamond trade. This year, we saw lab diamonds prices come down rapidly by 30 - 40% - especially in the larger sizes. This affected the solitaires market very much. Many customers moved towards purchasing this product as now the price difference between natural and lab grown diamonds is huge. This will continue to pose a threat to our industry as foreign markets are rapidly accepting these products. In USA, today over 50% jewellery sold is set with lab grown diamonds. This is slowly spreading to Europe as well.

In 2023-24, interest rates were raised by our banks 2-3 times. This has surely affected our finance costs and profitability. However, we feel our business model will sustain this increase and we will also try as we will continue to reduce our bank borrowings by paying back monthly towards the principal. Your Company has managed to curtail its bank finance usage to totally just approx. Rs. 1130 Lakhs. Last year this usage was approx. Rs. 1217 Lakh. From this loan, your company has repaid almost the entire Covid Moratorium loan on time. This was done mainly to keep finance costs lower.

There was no change in nature of business of your Company, during the year under review.

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 your company and will be used for the requirements of your Company.

5. TRANSFER TO RESERVES:

The Board of Directors has not recommended transfer of any amount to reserves.

6. DISCLOSURES UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT, 2013:

No material changes and commitments which could affect your Company''s financial position have occurred between the end of the financial year of your Company i.e. 31 ^st March, 2024 and date of this report i.e. 30^th May, 2024.

7. SHARE CAPITAL:

The paid up equity share capital as on 31^st March, 2024 was Rs. 578.80 lakhs. During the financial year under review, your Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. There was no change in your Company''s share capital during the year under review. The Promoter and Promoter Group are holding 37,62,744 equity shares equivalent to 65.01% of the total issued and paid-up share capital.

8. DIRECTORS:

8.1 Changes in Board of Directors:

Cessation of Directors:

? Mr. Mohanram Pai (DIN: 00007198) and Mr. Rajesh Arora (03605776) ceased to be Independent Director(s) of the Company on account of completion of their term on 31^st March, 2024.

? Mr. Jayeshkumar Gandhi (DIN: 01497163) ceased to be Independent Director of the Company on account of his demise on 27^th May, 2024.

The Board places on record its appreciation for the dedicated efforts contributed by Mr. Mohanram Pai and Mr. Rajesh Arora during their tenure as Independent Directors of the Company.

Appointment / Re-appointment of Directors:

The Board of Directors of the Company had appointed / re-appointed the following persons on the Board of the Company:

? Mr. Narasinha Pal (DIN: 10568460) and Mr. Jayeshkumar Gandhi (DIN: 01497163) were appointed as Additional Director(s) of the Company w.e.f. 1st April, 2024. They were further appointed as Independent Directors of the Company for a term of 5 years w.e.f. 1st April, 2024.

? Mr. Jigar Darji (DIN: 08536419) was appointed as Additional Director of the Company w.e.f. 14th August, 2024. He was further appointed as an Independent Director of the Company for a term of 5 years w.e.f. 14th August, 2024.

? Ms. Arundhati Mali (DIN: 08353618) was re-appointed as Whole Time Director and Chief Financial Officer of the Company for a term of 5 years w.e.f. 1st June, 2024.

Approval of members proposed in 50th AGM:

? In terms of Section 161 of the Companies Act, 2013, Mr. Narasinha Pal and Mr. Jigar Darji holds office up to the date of 50^th Annual General Meeting. The Company has received notice in writing from a Member under Section 160 of the Act, proposing their candidature for the office of Director of the Company. In terms of Section 161 of the Act, it is proposed to appoint them as Directors of the Company.

Further, in compliance with the provisions of Section 152 and 149 read with Schedule IV to the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, it is proposed to appoint Mr. Narasinha Pal as Independent Director for a term of 5 (five) years commencing from 1^st April, 2024 up to 31^st March, 2029 (both days inclusive) and Mr. Jigar Darji as Independent Director for a term of 5 (five) years commencing from 14^th August, 2024 upto 13^th August, 2029.

Necessary resolutions for their appointments, has been proposed for approval of members at item no. 3 and 4 of the Notice of 50^th Annual General Meeting, respectively.

? In terms of Section 196 and 197 read with Schedule V of the Act and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, approval of the members for re-appointment of Ms. Arundhati Mali as Whole Time Director and Chief Financial Officer of the Company for a term of 3 years w.e.f. 1⁵¹ June, 2024 has been proposed for approval of members at item no. 5 of the Notice of 50^th Annual General Meeting.

8.2 Retirement by Rotation:

Pursuant to Section 152 (6) of the Companies Act, 2013 and in terms of the Articles of Association of your Company, Mr. Ajay Gehani (DIN No.: 00062989), Managing Director, retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

8.3 Declaration by Independent Directors:

Your Company has received declarations from all the Independent Directors of your Company confirming that they meet with the criteria of independence as prescribed both, under 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 said Regulations that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of finance, people management, strategy, auditing, tax advisory services and they hold highest standards of integrity.

Regarding proficiency, the Company has adopted requisite steps towards the inclusion of the names of all Independent Directors in the data bank maintained with the Indian Institute of Corporate Affairs, Manesar (‘IICA''). Accordingly, the Independent Directors of the Company have registered themselves with the IICA for the said purpose. In terms 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 upto 31^st March, 2024 are exempted from undertaking online proficiency self-assessment test conducted by the IICA.

8.4 Annual Board Evaluation:

The annual performance evaluation of the Independent Directors and Board Committees

i.e. Audit, Stakeholders Relationship and Nomination & Remuneration Committees was carried by the entire Board and the annual performance evaluation of the Chairman, Board as a whole, Non - Independent Directors was carried out by the Independent Directors.

The annual performance evaluation was carried out in accordance with the criteria laid down in the Nomination and Remuneration Policy of your Company and as mandated under the Companies Act, 2013 and the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, as amended from time to time.

8.5 Key Managerial Personnel:

The following persons are the 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 thereunder:

1. Mr. Ajay Geheni, Managing Director

2. Ms. Arundhati Mali, Whole Time Director & CFO

3. Mr. Akshay Jain, Company Secretary and Compliance Officer

None of the Key Managerial Personnel have resigned during the year under review.

None of the Directors have attained the age of 75 years except Mr. Mohanram Pai. In terms of Regulation 17 (1) (c) of SEBI (LODR) Regulations, 2015, the approval of the members for his re-appointment by way of special resolution has been taken at the 45^th Annual General Meeting of the Company held on 16^th August, 2019. Mr. Mohanram Pai has ceased to be an Independent Director of the Company on account of completion of his term on 31^st March, 2024.

8.6 Remuneration Policy:

The Board has in accordance with the provisions of Section 178 (3) of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management Employees. The same has been posted on the website of the Company i.e. https://www.sovereigndiamondsltd.com/investor-relations.

Disclosure under Part II, Section II, Para B (IV) of Schedule V to Companies Act, 2013:

? All elements of remuneration package such as salary, benefits, bonuses, stock options, pension, etc., of all the directors

(Rs. in Lakhs)

Name of Director	Designation	Salary & Perquisites	Commission	Sitting Fees	Total
Mr. Ajay Gehani	Managing Director	36.00	-	-	36.00
Ms. Arundhati Mali	Whole Time Director & CFO	3.96		0.38	4.34
Mr. Mohanram Pai*	Independent Director	-	-	0.38	0.38
Mr. Rajesh Arora*	Independent Director	-	-	0.38	0.38

Ceased to be Independent Director on account of completion of term on 31^s March, 2024.

? The Company does not pay any performance-linked incentives or sign-on amount to Executive and Non-Executive Directors. There are no performance linked criteria.

? Service Contract: Term of 5 years from the date of appointment.

? Notice Period & Severance Fees: Notice Period is 1 month; The Company does not pay any severance fees to its Directors.

? The Company has not issued any stock options.

8.7 Board Meetings:

During the financial year your Company has held 5 (Five) Board Meetings which were held on 27^th May, 2023, 11^th August, 2023, 10^th November, 2023, 14^th February, 2024 and 30^th March, 2024. The maximum interval between any two meetings does not exceed 120 days. As per Section 167 (1) (b), all the directors have attended at least one Board Meeting held during the financial year.

9. PARTICULARS OF EMPLOYEES:

During the financial year, there was no employee in receipt of remuneration in excess of limit as prescribed in the Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The prescribed Particulars of Employees as required under Section 197 (12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as “Annexure A” and form part of this Report.

10. 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 31^st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies have been selected and applied consistently and judgment 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 your Company at the end of the financial year and of the profit and loss of the company for that period;

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 your 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.

11. INTERNAL CONTROL SYSTEMS:

Your Company maintains an adequate and effective Internal Control System commensurate with its size and complexity. We believe that these internal control systems provide, amongst other things, a reasonable assurance that transactions are executed with Management authorization and that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles and that the assets of your Company are adequately safeguarded against significant misuse or loss.

12. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES. JOINT VENTURES OR ASSOCIATE COMPANIES:

There are no companies which have become or ceased to be its Subsidiaries, Joint Venture or Associate Companies during the financial year 2023 - 24.

13. DEPOSITS:

Your Company has not accepted deposit from the public and shareholders 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.

14. PARTICULARS OF LOANS. GUARANTEES. INVESTMENTS OR SECURITY:

The Company has not made any investments or given any guarantees or securities against loans given under the provisions of Section 186 of the Companies Act, 2013. The details of loans given are given in the Notes to the Annual Financial Statements attached to this report.

15. RELATED PARTY TRANSACTIONS:

A Related Party Policy has been adopted by the Board of Directors at its meeting held on 13^th August, 2014 for determining the materiality of transactions with related parties and dealings with them. All transactions with related parties are placed before the Audit Committee for approval. The said policy may be referred to, at your Company''s official website at the web link https://www.sovereigndiamondsltd.com/_files/ugd/587402_01dd7de932a44a2e91f750a22369ba1c.pdf

Further, the members may note that your Company has not entered into the following kinds of related party transactions:

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

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

16. 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 your Company.

17. 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”.

18. RISK MANAGEMENT:

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

a. Foreign Exchange Risk

b. Gold Price Risk

c. Stiff Competition

d. Labour Risk

The prices of Jewellery consist of Gold, Diamonds & Labour, out of this three, Gold and diamonds consist of 90% of the price of Jewellery. Your Company has no control on the price of Gold and Diamonds and the same is available through Exchanges, Market and Banks. The said risk is favourable / unfavourable to your Company. The nature of risk is dynamic of business and entrepreneurship. In the opinion of the Board, there are no risks which shall 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 (Listing Obligation and Disclosure Requirement) Regulations, 2015.

19. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Your Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. In accordance with the Regulation 22 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations and pursuant to Section 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 place a mechanism of reporting illegal or unethical behavior. As per the Whistle Blower Policy, the employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate superior. The confidentiality of those reporting / violations is maintained and they are not subjected to any discriminatory practice. Details of the Whistle Blower Policy have been disclosed on your Company''s website at https://www.sovereigndiamondsltd.com/_files/ugd/587402_d8991c4591dc47beb2460f412d1ed2da.pdf

20. 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 your Company and its future operations.

21. AUDITORS:

21.1 Statutory Auditors:

The members of the Company at its 48^th Annual General Meeting held on 8^th September, 2022 had approved the appointment of M/s. J. D. Zatakia & Co., Chartered Accountants as the statutory auditors of the Company for a term of 5 years. They shall hold the office of statutory auditors from the conclusion of 48^th Annual General Meeting until the conclusion of the 53^rd Annual General Meeting.

In view of the amendment to Section 139 of the Companies Act, 2013, the Company is not required to ratify the re-appointment of the Statutory Auditor at every Annual General Meeting. Hence, the item of ratification of re-appointment of Statutory Auditor is not considered in this Annual General Meeting. In view of the same M/s J. D. Zatakia & Co., Chartered Accountants will continue to act as Statutory Auditors of the Company for the financial year 2024 - 25.

21.2 Statutory Auditors’ Observations:

The audit report given by the statutory auditors on the annual financial statements of your Company is part of the Annual Report. There are no qualification, reservation or adverse remark made by the statutory auditors in their Audit 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 has appointed M/s. P. C. Shah & Co., Practicing Company Secretaries as Secretarial Auditors for conducting Secretarial Audit of your Company for the financial year ended 31^st March, 2024.

The report of the Secretarial Auditor is attached as “Annexure C”. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark except provided at point 21.4 below.

21.4 Qualifications in Secretarial Audit Report

A. Composition of Nomination and Remuneration Committee:

In respect of the composition of the Nomination and Remuneration Committee, we observe as follows:

As per Section 178 of the Companies Act, 2013, the composition of Nomination and Remuneration Committee shall be as follows:

178 (1): “The Board of the Directors of every listed company and such other class or classes of companies, as may be prescribed shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive directors out of which not less than one half shall be independent directors:

Provided that the chairperson of the company (whether executive or nonexecutive) may be appointed as a member of the Nomination and Remuneration Committee but shall not chair such Committee.”

The Nomination and Remuneration Committee of the Company comprises of two Independent Directors and one Executive Director. In this regard, the Management has given the following reply:

? “The Company has four Directors, out of them two are Executive and two are Independent Directors. Accordingly, the composition of the Board is such that the Nomination 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 and Remuneration Committee. The Company does not convene the meeting of Nomination and Remuneration Committee unless Mr. Mohanram Pai and Mr. Rajesh Arora, Independent Directors of the Company and members of Nomination and Remuneration Committee are present in the said meeting. This ensures that the Chairmanship and majority decision making vests with the Independent Directors.

? Further, the role of Mr. Ajay Gehani as a member of the Committee is very limited. He is only filling up the requirement of 3^rd member as required under Section 178 of the Companies Act, 2013 as there is no option. He does not participate in the affairs of the Committee which are related to remuneration, performance evaluation of Executive Directors and other such matters.

? As the Committee does not meet without the presence of 2 Independent Directors and since the Chairman is also an Independent Director, hence the voting and governance of the Committee remains independent. Accordingly, with the present composition of Nomination and Remuneration Committee, it has been ensured that majority remains with Independent Directors and accordingly, the spirit of Corporate Governance is achieved.”

22. REPORTING OF FRAUDS BY AUDITORS:

During the financial year under review, neither the statutory auditors nor the secretarial auditors have reported to the Audit Committee of the Board, under Section 143 (12) of the Act, any instances of fraud committed against your Company by its officers or employees, the details of which would need to be mentioned in this Report.

23. COST RECORDS:

The provisions of Section 148 of the Companies Act, 2013 and Companies (Cost Records and Audit) Rules, 2014 (hereinafter referred to as ‘Rules'') in respect of maintenance and 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 General Meeting, which have mandatory application during the year under review.

25. EXTRACT OF ANNUAL RETURN:

Pursuant to sub-section 3 (a) of section 134 and sub-section (3) of section 92 of the Companies Act, 2013 the Annual Return for the financial year ended 31st March, 2024 in Form MGT 7 is available on the Company''s website at https://www.sovereigndiamondsltd.com/investor-relations.

26. GREEN INITIATIVES:

In view of Covid 19 pandemic, the Ministry of Corporate Affairs vide its circular no. 17 / 2020 dated 13^th April, 2020, circular no. 20 / 2020 dated 5^th May, 2020 and circular No. 10/2022 dated 28^th December, 2022 and SEBI vide its circular no. SEBI/HO/CFD/CMD1/ CIR/P/2020/79 dated 12^th May, 2020 and no. SEBI/HO/CFD/PoD-2/P/CIR/2023/167 dated 7th October, 2023 has dispensed with the requirement of sending hard copy of full annual report to the shareholders.

Electronic copies of the annual report for the financial year 2023 - 24 and notice of the 50^th Annual General Meeting (AGM) are sent to all members whose email addresses are registered with your Company / Depository Participant(s). Members who have not

registered their email address can do so by following the steps as mentioned in the notes of notice of 50^th Annual General Meeting. Alternatively, they are requested to download the copy of the Annual Report from the website of the Company i.e. www. sovereigndiamondsltd.com or from the website of BSE Limited i.e. www.bseindia.com or write to the Company at [e-mail] or [e-mail]. Your Company provides e-voting facility to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to the Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015.

27. 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 Annual Report.

28. CORPORATE GOVERNANCE:

As per Regulation 15 (2) of the SEBI (LODR) Regulations, 2015, the provisions of Corporate Governance are non-mandatory to the following class of Companies:

a. Companies having Paid-up Equity Share Capital not exceeding Rs. 10 crores and Net worth not exceeding Rs. 25 Crores, as on the last day of the previous financial year;

Provided that where the provisions of Regulation 27 becomes applicable to a company at a later date, such company shall comply with the requirements of Regulation 27 within six months 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-ITP Platforms.

The Paid-up Share Capital of your Company is Rs. 5.78 crores as on 31^st March, 2023 and networth of the Company is Rs. 15.53 crores. Accordingly, the paid-up capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance clause as per Regulation 15 (2) (a) of the SEBI (LODR) Regulations, 2015. Your Company has decided not to opt for compliance of Regulation 27 for the financial year 2023 - 24.

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

Your Company firmly believes in providing a safe, supportive and friendly workplace environment - a workplace where our values come to life through the supporting behaviors. Positive workplace environment and a great employee experience are integral part of our culture. Your Company believes in providing and ensuring a workplace free from discrimination and harassment based on gender.

Your Company educates its employees as to what may constitute sexual harassment and in the event of any occurrence of an incident constituting sexual harassment, your Company provides the mechanism to seek recourse and redressal to the concerned individual subjected to sexual harassment.

Your Company has a Sexual Harassment Prevention and Grievance Handling Policy in place to provide clarity around the process to raise such a grievance and how the grievance will be investigated and resolved. An Internal Complaints Committee has been constituted in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No complaint was raised and pending as on 1^st April, 2023 and no complaint has been raised during the financial year ended 31^st March, 2024.

30. INSOLVENCY AND BANKRUPTCY CODE:

No application has ever been filed against the Company under the Insolvency and Bankruptcy Code, 2016.

31. ONE TIME SETTLEMENT WITH BANKS:

The Company has not made any settlement with banks or financial institutions.

32. LISTING WITH STOCK EXCHANGE:

Your Company is listed with BSE Limited and your Company has duly paid the listing fees to the Exchange.

33. AGREEMENTS BINDING LISTED ENTITIES:

Pursuant to Regulation 30A of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, during the financial year, no agreement has been entered or executed by the shareholders, promoters, promoter group entities, related parties, directors, key managerial personnel and employees of the Company or its subsidiaries among themselves or with the Company or with a third party, solely or jointly, which, either directly or indirectly or potentially or whose purpose and effect is to, impact the management or control of the Company or impose any restriction or create any liability upon the Company.

34. 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 your Company viz. customers, members, 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 your Company for their unstinted commitment and continued contribution to your Company.

35. CAUTIONARY STATEMENT:

Statements in the Board''s Report describing your 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.

For and on behalf of the Board of Directors For Sovereign Diamonds Limited

Ajay Gehani Arundhati Mali

Place: Mumbai Managing Director Whole Time Director & CFO

Date: 14th August, 2024 DIN: 00062989 DIN: 08353618

---

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, 2011

The Members,

The Directors present their Thirty-Seventh Annual Report together with the Audited Accounts for the year ended 31st March, 2011

A. FINANCIAL RESULTS

(Rs. in Lakhs)

Year Ended Year Ended 31st March, 31st March, 2011 2010

Income from Operations 1950.14 1215.22

Other Income 4.34 2.22

Total Income 1954.48 1217.44

Expenditure 1836.23 1137.64

Interest 56.64 45.83

Depreciation 28.89 31.67

Total Expenditure 1921.76 1215.14

Profit( ) Loss(-) 32.72 2.29

Provision for Taxation 15.00 3.00

Add / Less : Deferred Tax 1.55 2.95

Net profit after tax 19.27 2.24

Less : Transfer to General Reserve - -

Add : Prior Year Income Tax 1.71 -

Balance brought forward from last year 60.93 58.69

Balance carried forward to the Balance 81.91 60.93 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. 1950.14 lacs as against Rs. 1215.22 lacs in the previous year. The increase in turnover is due to fluctuation in Dollar rate. The Company is entering into the Indian Jewellary Retail Market and supplying to big jewellery stores in Metro cities. This will results in higher turnover for the Company.

D. DIRECTORS

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

Mr. Rajesh Arora has been appointed as an Additional Director under Article 116 of the Articles of Association of the Company on 13-08-2011 and he holds the office upto the date of this Annual General Meeting. The Company has received a notice from a shareholder in writing signifying his intention to appoint him as Director of the Company. The term of his office is liable to retire by rotation.

Mr. Vijay Kalantri has resigned as Director of the Company w.e.f. 13-08-2011. The Board recorded its appreciation for the valuable contribution made by him during his tenure as Director

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 efforts 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:

Rs. In lakhs 2010-2011 2009-2010

Foreign Exchange Earnings/Outgo:

Foreign Exchange Earned: 197.42 239.76

Foreign Exchange Outgo: 0.0 7.98 Travelling / Exhibition Charges 16.01 80.12

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, 2011 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, 2011, 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, 2011 on a going concern basis.

I. AUDITORS QUALIFICATION:

The qualification in auditors 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 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.

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 : 30th August, 2011

---

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