We have audited the accompanying financial statements of SOVEREIGN DIAMONDS
LIMITED (“the Company”) which comprises the Balance Sheet as at March 31, 2025,
the Statement of Profit and Loss, (including Other Comprehensive Income), Statement
of changes in Equity and statement of cash flows for the year then ended, and notes to
the financial statements, including a summary of material accounting policies and other
explanatory information. (Hereinafter referred to as the “Financial Statements”)
In our opinion and to the best of our information and according to the explanations given to
us, the aforesaid Financial Statements give the information required by the Companies Act,
2013 (“the Act”) in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India including Indian Accounting Standards
prescribed under section 133 of the Act, (“Ind AS”) and other accounting principles generally
accepted in India, of the state of affairs of the Company as at March 31,2025, and its profit,
total comprehensive income, changes in equity and its cash flows for the year ended on that
date.
Basis for Opinion
We conducted our audit of the Financial Statements in accordance with the Standards on
Auditing (“SA”s) specified under section 143(10) of the Act. Our responsibilities under those
Standards are further described in the “Auditor's Responsibilities for the Audit of the Financial
Statements” section of our report. We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered Accountants of India (“ICAI”) together
with the ethical requirements that are relevant to our audit of the Financial Statements
under the provision of the Act and rules thereunder and we have fulfilled our other ethical
responsibilities in accordance with these requirements and ICAI's code of ethics. We believe
that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our
audit opinion on the Financial Statements.
Key Audit Matter
We have determined that there are no other key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditor’s Report Thereon
The Company's Management and Board of Directors are responsible for the other information.
The other information comprises the information included in Company's Annual Report but
does not include the financial Statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the Financial Statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the Financial Statements or our knowledge obtained during the course of our audit or
otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information; we are required to
report that fact. We have nothing to report in this regard.
Management’s and Board of Directors Responsibilities for Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated
in section 134(5) the Act with respect to the preparation of these Financial Statements that
give a true and fair view of the financial position, financial performance, including Other
Comprehensive Income, changes in equity and cash flows of the Company in accordance
with the accounting principles generally accepted in India, including the Ind AS specified under
133 of the Act. This responsibility also includes maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and application
of appropriate accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the Financial Statements
that give a true and fair view and are free from material misstatement, whether due to fraud
or error.
In preparing the Financial Statements, management and the Board of Directors are
responsible for assessing the Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the going concern basis of
accounting unless the Board of Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Company's Management and Board of Directors are also responsible for overseeing the
company's financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with SAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
(i) Identify and assess the risks of material misstatement of Financial Statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
(ii) Obtain an understanding of internal controls relevant to the audit in order to design
audit procedures that are appropriate in the circumstances. Under 143(3)(i) of the
Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial controls with reference to Financial Statements in place and
the operating effectiveness of such controls.
(iii) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the management and board of
directors.
(iv) Conclude on the appropriateness of management's and board of director's use of the
going concern basis of accounting in preparation of financial statement and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures in the Financial Statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
(v) Evaluate the overall presentation, structure and content of the Financial Statements,
including the disclosures, and whether the Financial Statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Financial Statements that,
individually or in aggregate, makes it probable that the economic decision of a
reasonably knowledgeable use of the Financial Statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning the scope of our
audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the Financial Statements.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by
the Central Government of India in terms of Section 143(11) of the Act, we give in the
“Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2) As required by Section 143(3) of the Act, based on our Audit, we report that:
a) We have sought and obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books except for the
matters stated in the paragraph 2(i)(vi) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.
c) The Balance Sheet, the Statement of Profit and Loss, including other comprehensive
income, Statement of Changes in Equity and the Statement of Cash Flow dealt
with by this report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Indian Accounting
Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st
March, 2025 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2025 from being appointed as a director in terms of
Section 164 (2) of the Act.
f) The modifications relating to the maintenance of accounts and other matters
connected therewith are as stated in the paragraph 2(b) above on reporting under
Section 143(3)(b) of the Act and paragraph 2(i)(vi) below on reporting under Rule
11(g) of the Companies (Audit and Auditors) Rules, 2014.
g) With respect to the adequacy of the internal financial controls with reference to
Financial Statements of the Company and the operating effectiveness of such
controls, refer to our separate Report in “Annexure B”.
h) With respect to the other matters to be included in the Auditors' Report in
accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations
given to us, the remuneration paid by the company to its directors during the year
is in accordance with the provision of section 197 of the Act.
i) With respect to the other matters to be included in the Auditor's Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and according to the explanations
given to us:
i. The Company has disclosed the impact of pending litigation on its financial
position in its Financial Statements. Refer Note 31 to Financial Statement.
ii. The Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses.
iii. There has not been an occasion in case of the Company during the year
under report to transfer any sums to the Investor Education and Protection
Fund. The question of delay in transferring such sums does not arise.
iv. (a) The Management has represented that, to the best of its knowledge
and belief, no funds have been advanced or loaned or invested (either
from borrowed funds or share premium or any other sources or kind of
funds) by the Company to or in any other persons or entity, including
foreign entity (“Intermediaries”), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall whether,
directly or indirectly lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Company (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like to or on
behalf of the Ultimate Beneficiaries;
(b) The Management has represented that, to the best of its knowledge and
belief, no funds (which are material either individually or in aggregate)
have been received by the Company from any person or entity, including
foreign entity (“Funding Parties”), with the understanding, whether
recorded in writing or otherwise, that the Company shall, directly or
indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party (“Ultimate
Beneficiaries”) or provide any guarantee, security or the like from or on
behalf of the Ultimate Beneficiaries; and
(c) Based on the audit procedures as considered reasonable and
appropriate in the circumstances, nothing has come to our notice that
has caused us to believe that the representations under iv(a) and iv(b)
above contain any material misstatement.
v. The company has not declared and paid dividend during the year and hence
compliance to section 123 is not required.
vi. Based on our examination, which included test checks, the company has
used accounting software for maintaining its books of accounts which has
a feature of recording audit trail (edit log) facility and the same has been
operating throughout the year for all relevant transactions recorded in
respective software and that audit trail was not enabled at the database level
to log any direct data changes. Further, during the course of our audit we
did not come across any instance of audit trail feature being tampered with.
Additionally, the audit trail has been preserved by the Company as per the
statutory requirements for record retention.
FOR J.D. ZATAKIA & COMPANY
CHARTERED ACCOUNTANTS
FIRM REGN. NO. 111777W
J. D. ZATAKIA - PROPRIETOR
Date : 27th May, 2025 MEMBERSHIP NO. 17669
Place : Mumbai UDIN: 25017669BMJABH7202
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