The Members,

The Directors have pleasure in presenting the Twenty Sixth Annual Report together with the Audited Financial Statements of the Company for the financial year ended 31st March, 2018

^{1 FINANCIAL SUMMARY} (Rs. in lakhs)

2. State of Company's Affairs:

The Company is on growth path with reinforced belief into its manufacturing capabilities.The Company achieved a total turnover of Rs. 2626.49 lakhs for the year ended 31st March, 2018 as compared to Rs. 1157.49 lakhs in the previous year with the increase of 126.91%. The profit after tax during the year ended 31st March, 2018is Rs. 113.25 lakhs whereas the profit after tax for the previous year ended 31st March, 2017 stood at Rs. 23.56 lakhs.

3. UTILIZATION OF PROCEEDS OUT OF PREFERENTIAL ISSUE:

During the year, the Company had issued 90,91,600 warrants under Preferential Issue to Promoter/ Promoter Group and Non-Promoters, convertible into Equity Shares. During the year, 50,46,300 warrants has also been converted into Equity shares in first tranche. From the proceeds of Preferential issue to the tune of Rs. 757.20 Lakhs, the Company could augment the working Capital for expansion of its business operations and has also set up new factory for manufacturing of Gold, Coloured precious stone studded & Diamond Jewellery with emphasis on Diamond Jewellery for enhancement of its manufacturing capabilities.

4. FUTURE OUTLOOK:

The Company at present is dealing in colored precious stone studded jewellery. The collection includes varied range of Gemstone Necklace Set, Earrings and Pendants.After the end of the financial year, the Company has also started manufacturing the products on its own by setting up of its in-house manufacturing unit with the total manufacturing capacity of 15 kgs. per month out of the proceeds of further issue of capital by way of issue of warrants convertible into Equity shares. This would enable the Company to lower its overall processing and jobwork charges and the cost of production as a whole. In view of the latest industry trends for branded jewellery with modern designs, the Company has introduced fresh range of products with creative and light weight jewellery along with uncut and flat diamond jewellery. The Company has also started export of its speciality jewellery and completed the first export after the end of the reporting period.

5. DIVIDEND:

In order to conserve resources for further expansion of the Company's business, your Directors have opined to not recommend any dividend for the year 2017-18.

6. RESERVES:

Amount to be carried forward to the reserves is Rs. 113.25 Lakhs being profit for the year.

7. SHARE CAPITAL:

As on the financial year ended 31st March, 2018, the paid up share capital of the Company is Rs. 8,01,20,100/- divided into 80,12,010 Equity shares of Rs. 10/- each. During the year under review, the Company has allotted 50,46,300 new Equity shares upon conversion of warrants issued under Preferential Issue @Rs.12.50 Per share.

8. LISTING AGREEMENT:

The shares of your Company are listed at BSE Ltd. The Company has duly complied with all the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time except for the 2,10,000 shares issued under Preferential issue and the same are pending for listing due to disclosure requirements.

9. CORPORATE GOVERNANCE

The Corporate Governance Principles implemented by the Company seeks to protect, recognize and facilitate shareholder srights and ensure timely and accurate disclosures to them. Your Company has been constantly reviewing and benchmarking itself with well-established standards of Corporate Governance besides strictly complying with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to the extent applicable.

It is to be noted that pursuant to Regulation 15 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the compliance with the Corporate Governance provisions as specified in Regulation 17 to 27, clauses (b) to (i) of Regulation 46(2) and para C, D and E of Schedule V does not apply to your Company as its paid-up share capital does not exceed Rs. 10 Crores and net worth does not exceed Rs. 25 Crores, as on the last day of previous financial year ended 31st March, 2018. However, the Board of Directors and the management of the Company believe that the compliance of law should be in true letter and spirit and that the Company's legacy of fair, transparent and ethical governance practices shall be maintained.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Rules, 2015, the Board of Directors of your Company is duly constituted with an optimum combination of executive and non-executive directors. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year.

Mr. Ritesh Kumar Sanghi retires by rotation at the ensuing Annual General Meeting and being eligible, offershimself for re-appointment. His profile is given elsewhere in the report. Your Directors recommend his re-appointment.

During the period under review, Ms. Shreya Mangal had resigned as the Company Secretary and Compliance Officer of the Company. Further, Mr. Ashish Kumar Gupta, has been appointed as Company Secretary and Compliance Officer of the Company w.e.f. 11th January, 2018.

11. NUMBER OF MEETINGS OF THE BOARD:

i) i) The Board Meeting is duly called and convened by giving proper notice to all the directors of the Company. The Board is also authorized to pass any resolution of urgent nature by circulation subject to the compliance of provisions of Companies Act, 2013.

ii) The Agenda for the meeting is prepared in consultation with the Managing Director keeping in view all the matters including operational matters to be discussed by the Board.

iii) Notice of the Board Meeting and the notes to agenda are sent to all the Directors of the Company in advance

iv) Any sensitive matter may be discussed at the meeting without prior intimation to directors in exceptional circumstances.

v) Nine (9) Board meetings were held during the year and the gap between two meetings did not exceed one hundred twenty days. The dates on which the said meetings were held are:

25.05.2017, 31.07.2017, 14.08.2017, 28.08.2017, 16.10.2017, 14.12.2017, 11.01.2018, 13.02.2018 and 14.03.2018. The attendance of each director at the Board Meetings is as follows:

The necessary quorum was present for all the meetings.

12. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act,2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015.

The terms and conditions for appointment of independent directors are available on the website of the Company at www.narbadajewellery.com.

The Independent Directors of the Company have convened a meeting on 11th January, 2018, exclusively without the presence of non-independent Directors and other members of management, for the evaluation of the Board.

13. BOARD EVALUATION:

The Board of Directors of the Company, upon recommendation of Nomination and Remuneration Committee, have laid down the criteria for performance evaluation of Board, its Committees and the individual Board Members, including Independent Directors pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015.

The evaluation of the Board and its committees were based on the criteria covering various assessment parameters like structure and composition, frequency & duration of meetings, its processes and procedures, effectiveness of the Board/ committees, its financial reporting process under various regulations and/ or terms of reference of the committees etc. The criteria for evaluation of performance of the individual Directors included various parameters viz. attendance &participation during the meetings, their active contribution and discussions on important matters, understanding of the Company among others. The performance evaluation of Independent Directors was done by the entire Board and in the evaluation the Director who was subject to evaluation did not participate.

The Board Evaluation Policy specifying the manner and process of evaluation of the performance of the Board is updated on the website of the Company at www.narbadajewellery.com.

14. MANAGERIAL REMUNERATION

No remuneration is paid to the Managing Director or the Whole-time Directors of the Company. The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration) Rules, 2014 and Companies (Particulars of Employees) Rules 1975, in respect of employees of the Company and Directors is furnished hereunder:

i) Median remuneration of the Company for all its employees is Rs. 38,566/- for the Financial Year 2017-18.

ii) Details of percentage increase in the remuneration of each Director and CFO and Company Secretary in the Financial Year 2017-18 are as follows:

*For part of the Financial Year

iii) Percentage increase in the median remuneration of all employees in the financial year 2017-18:

Number of permanent employee on the rolls of the Company as on 31st March, 2018 are 52.

13. Familiarization Programme for Independent Directors:

The Company briefs its new Independent Directors on their roles, rights as Independent Director and nature of the industry in which the Company operates, etc. Familiarization Programme for the Independent Directors provides them an opportunity to familiarize with the Company, its management and its operations so as to gain a clear understanding of their responsibilities and contribute significantly towards the growth of the Company.

The Company’s Policy for familiarization of Independent Directors is updated at the website of the Company at www.narbadajewellery.com

15. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Company briefs its Independent Directors on their roles, rights as Independent Director and nature of the industry in which the Company operates, etc. Familiarization Programme for the Independent Directors provides them an opportunity to familiarize with the Company, its management and its operations so as to gain a clear understanding of their responsibilities and contribute significantly towards the growth of the Company.

The Company's Policy for familiarization of Independent Directors is updated at the website of the Company at www.narbadajewellery.com

16. COMMITTEES OF THE BOARD:

The Board has constituted three committees at present:

- Audit committee;

- Nomination and Remuneration committee;

- Stakeholders Relationship committee,

The Committees of the Board meet at regular intervals and have the requisite subject expertise to handle and resolve matters expediently. The Board oversees the functioning of the Committees. Detailed terms of reference, composition, meetings and other information of each of the Committees of the Board is detailed here in below:

16A. AUDIT COMMITTEE:

The constitution of Audit Committee of the Board is incompliance with the provisions of Section 177 of the Companies Act, 2013, Regulation 18 of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015. The details of the members of the Audit Committee and their attendance in the Committee meetings are as under:

Four (4) Audit committee meetings were held during the year and the gap between two meetings did not exceed one hundred twenty days. The dates on which the said meetings were held are as follows: 25.05.2017, 28.08.2017, 14.12.2017 and 13.02.2018.The necessary quorum was present for all the meetings.

The terms of reference of the Audit Committee are broadly given under:

- The recommendations for appointment, remuneration and terms of appointment of auditors of the Company;

- Review and monitor the auditor's independence and performance, and effectiveness of audit process

- Examination of the financial statement and the auditors' report thereon;

- Approval or any subsequent modification of transaction of the company with related parties;

- Scrutiny of inter-corporate loans and investments;

- Valuation of undertakings or assets of the Company, wherever it is necessary;

- Evaluation of internal financial controls and risk management systems;

- Monitoring the end use of funds raised through public offers and related matters;

- Review the functioning of the whistle blower mechanism;

- Approval of transactions with related parties.

16B. NOMINATION AND REMUNERATION COMMITTEE:

The constitution of Nomination and Remuneration Committee is in compliance with the requirements of provisions of Section 178 of the Companies Act, 2013, Regulation 19 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.

The Nominations and Remuneration Committee constituted by the Company is responsible for looking into the remuneration payable to the Whole-time Directors and other Employees of the Company. The Committee also approves the Remuneration Policy for employees other than Whole-time Directors of the Company, as may be recommended to it. The Company has formulated a policy on Nomination and Remuneration of directors in accordance with Section 178 (3) of the Companies Act, 2013 and same is available on website of the Company www.narbadajewellery.com .

The Nomination and Remuneration Committee of the Company as at 31.03.2018 comprises of three directors, all of them being non-executive independent directors:

During the year under review, one meeting of the Committee was held on 11.01.2018, for formulation and evaluation of performance of Independent Directors and for assessment and recommendation for the appointment of Company Secretary and Compliance Officer of the Company. Requisite quorum was present for the meeting.

16C. STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Committee ensures cordial investor relations and oversees the mechanism for redressal of investors' grievances. The Committee specifically looks into redressing shareholders'/investors' complaints/ grievances pertaining to share transfers, non-receipts of annual reports and other related complaints

The composition of the Stakeholders' Relationship Committee and the details of meetings attended by its members are given below:

The meetings of the stakeholders' relationship committee were held on 10.04.2017, 08.05.2017, 20.05.2017, 10.06.2017, 20.07.2017, 31.07.2017, 10.08.2017, 31.08.2017, 20.09.2017, 28.09.2017, 12.10.2017, 20.11.2017, 30.12.2017, 11.01.2018, 10.03.2018 and 30.03.2018 during the year, mainly for approval of share transfers, transmission and issue of duplicate share certificates.

17. CONSITUTION OF INTERNAL COMPLAINTS COMMITTEE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your management is concerned about the safety of women workforce and has constituted an Internal Complaints Committee under Sexual Harrassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013. During the financial year 2017-18 there was no such instances reported.

18. CODE OF CONDUCT:

In compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 and the Companies Act, 2013, the Company has framed and adopted a Code of Conduct. The Code is applicable to the members of the Board, the executive officers, the members of the management one level below the executive directors, including all functional heads of the Company. The Code is available on the website of the Company - www.narbadajewellery.com. All members of the Board, the executive officers and senior financial officers have affirmed compliance to the Code as on March 31, 2018

20. VIGIL MECHANISM:

In accordance with Section 179(9) & (10) of the Companies Act, 2013, the Company has adopted vigil mechanism for directors and employees, to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company's code of conduct and ethics. The Vigil Mechanism/ Whistle Blower policy is available on the Company's website www.narbadajewellery.com

18. AUDITORS:

A. Statutory Auditors:

The Company had appointed M/s D.V. Aditya & Co., Chartered Accountants, (Firm Reg. No. 000044S, M. No. 022646), Hyderabad , as Statutory Auditors of the Company at the 25th Annual General Meeting of the Company, to hold office till the conclusion of the 30th Annual General Meeting to be held in the calendar year 2022.

B. Secretarial Auditor:

In terms of Section 204 of the Companies Act, 2013 and rules made there under, Shri Ajay S. Shrivastava, Practicing Company Secretary, Hyderabad (ICSI Membership No. 3489 ; CP No.: 3479)has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as "Annexure I" to this report.

C. Internal Auditors:

The Company has appointed M/s Krishna and Suresh, Chartered Accountant, Hyderabad (Firm Registration No- 001461S) as its Internal Auditor. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas.

22. RISK MANAGEMENT:

Risk Management framework of your Company encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the external and operational controls risks to achieve our key business objectives. The Board seeks to minimize the adverse impact of the risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage.

23. EXTRACTS OF ANNUAL RETURN:

Pursuant to the provisions of section 92(3) oftheCompaniesAct,2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form MGT-9 is attached as a part of this Annual Report as "Annexure II".

24. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

25. MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no material changes between the date of balance sheet and the date of this report that would affect the financial position of the company.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis report for the year ended 31st March, 2018 are attached, which forms part of the Annual Report.

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

A. Conservation of Energy

The disclosure of particulars with respect to conservation of energy pursuant to Section 134 (3) (m) of the Companies Act, 2013 read with rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable as our business is not specified in the Schedule . However, the Company makes its best efforts to conserve energy in a more efficient and effective manner.

B. Technology Absorption

The Company has not carried out any specific research and development activities. Accordingly, the information related to technology absorption, adaptation and innovation is reported to be NIL.

C. Foreign Exchange Earnings and Outgo

During the financial year 2017-18, there were NIL Foreign Exchange Earnings & Outgo.

28. CORPORATE SOCIAL RESPONSIBILITY:

As the Company's net worth does not exceed Rs. 500 Crores or Company's turnover does not exceed Rs. 1000 Crores or the Company's net profit does not exceed Rs. 5 Crores for any financial year, the provisions of Section 135 of the Companies Act, 2013 regarding Corporate Social Responsibility (CSR) are not applicable.

29. DIRECTORS' RESPONSIBILITY STATEMENT:

Your Directors would like to inform the members that the Audited Financial Statements for the year ended 31stMarch, 2018 are in full conformity with the requirement of the Act and they believe that the financial statements reflect fairly the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations. M/s D.V. Aditya & Co., Chartered Accountants, Statutory Auditors of the Company, have audited the Financial Statements of the Company and issued their report thereon. Pursuant to the requirement of Section 134(5) of the Companies Act, 2013, your Directors further confirm that:

i) i) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and Loss of the Company for that period;

iii) The Directors have taken proper and sufficient care 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;

iv) The Directors have prepared the annual accounts on a going concern basis.

v) The directors in case of listed company have laid down internal financial controls to be followed by the company and such controls are adequate and are operating effectively.

vi) The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

30. PARTICULARS OF EMPLOYEES:

There are no employees drawing remuneration equal or more than the limits specified in Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

31. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

There are no subsidiaries/ Associate Companies and/ or joint ventures to the Company as on the date of this report.

32. DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

33. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The Company has not given any loan or guarantee or security or made any investment during the financial year in terms of Section 186 of the Companies Act, 2013.

34. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 is disclosed in Form AOC-2 as "Annexure III" to this report.

35. ACKNOWLEDGMENT:

Your Directors thank all the employees, customers, vendors, investors and other stakeholders of the Company for their continuous support. The Directors also wish to place on record its appreciation of Banks, Central and Local Governments and regulatory authorities for their guidance and support.

Date: 14.08.2018

Place: -6-291/4/B, 2^nd Floor,

Hyderguda,

Hyderabad- 500029 For and on behalf of Board of Directors

Sd/- Sd/-

(Sanjay Kumar Sanghi) (Ritesh Kumar Sanghi)

Managing Director Director

DIN: 00629693 DIN: 00628033