TARA JEWELS LIMITED CIN: L52393MH2001PLC131252 Regd. Office: Plot No. 122, th15 Road, Near IDBI Bank, M.I.D.C, Andheri (E), Mumbai – 400 093
ATTENDANCE SLIP (14th Annual General Meeting of the Company, to be held on Tuesday, September 29, 2015 at 03.00 p.m. at Tribune-I, 6th Floor, Hotel Tunga International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093)
Full Name of the Member (in BLOCK LETTERS)
Regd. Folio No...... DP ID No......
Client ID No...... No. of Share(s) held......
Full Name of the Proxy (in BLOCK LETTERS)......
Member’s/Proxy’s Signature......
ELECTRONIC VOTING PARTICULARS
EVEN(E VOTING EVENT NUMBER) USER ID PASSWORD
Note: Please fill up this attendance slip and hand it over at the entrance of the meeting hall. Members are requested to bring their copy of the Annual Report to the meeting.
FORM NO.MGT-11 PROXY FORM TARA JEWELS LIMITED CIN: L52393MH2001PLC131252 Regd. Office Plot: No. 122, 15th Road, Near IDBI Bank, M.I.D.C, Andheri (E), Mumbai – 400 093 [Pursuant to the provisions of Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014]
Name of the Member(s) E-mail Id: Folio No./*Client ID Registered Address *DP ID
I/We, being the holder/s of ______equity shares of Tara Jewels Limited, hereby appoint:
1) ______of ______having e-mail id ______or failing him 2) ______of ______having e-mail id ______or failing him 3) ______of ______having e-mail id ______and whose signature(s) are appended below as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 14th Annual General Meeting of the Company, to be held on Tuesday, September 29, 2015 at 03.00 p.m. at Tribune-I, 6th Floor, Hotel Tunga International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093 and at any adjournment thereof in respect of such resolutions as are indicated below:
**I wish my above Proxy to vote in the manner as indicated in the box below: Particulars For Against 1. Consider and adopt Standalone and Consolidated Audited Financial Statements, Report of Board of Directors and Auditors 2. Appointment of Mr. Rajeev Sheth (DIN : 00266460) as a Director, liable to retire by rotation 3. Ratification of appointment of M/s. C.B. Chhajed & Co., Chartered Accountants, Mumbai, (Firm Registration No. 101796 W) as the Statutory Auditors to hold office till the conclusion of the Annual General Meeting to be held for financial year 2016-2017 4. Appointment of Mr. Ravindran M.P.(DIN:07188069) as a Director, liable to retire by rotation 5. Approval of appointment of Mr. Ravindran M.P (DIN: 07188069) as a Whole-Time Director of the Company 6. Approval of payment of Commission to the Non-Executive Directors 7. Re-appointment of Mr. Rajeev Sheth as Chairman and Managing Director of the Company for a period of Five years effective from October 1, 2015 *Applicable for investors holding shares in electronic form. ** This is optional
Affix One Rupee Revenue Stamp Signed this _____ day of ______, 2015
______Signature of the Proxy holder(s): Signature of Shareholder
Note: This Form of Proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting. Design to Desire
TARA JEWELS LIMITED ANNUAL REPORT 2014 - 15 TARA JEWELS LIMITED Design to Desire We are amongst the largest, most modern manufacturers in the jewellery business today. We exhibit the highest form of excellence in design and manufacturing capabilities, to produce custom and mass-produced jewellery of the highest quality. This reputation allows us to participate in all segments of the market – be it affordable jewellery that appeals to the Gen-Y, or big ticket one-offs bought for special occasions.
With most of our business in exports today, we have a long history of successfully servicing the global markets. We understand the needs of global consumers and serve diverse markets and brands across multiple continents. We are also making steady progress into the large and lucrative Indian retail market.
More recently, we started on a journey that places value creation as a top priority. This requires us to optimise our cost structures; to produce even more attractive products; to further enhance the appeal of our brands; and to find innovative ways to reach our consumers. Through the sum of these multiple actions, we wish to further bolster our bottom line and ROE. Our perseverance towards this goal is what will make us an enduring company. An enterprise that consistently creates wealth for its share-owners.
Annual Report 14 - 15 1 Corporate Information
Board of Directors Registrar and Share Manufacturing Plants Mr. Rajeev Sheth Transfer Agents a. Plot No. 122, 15th Road, Near Chairman and Managing Director Link Intime India Pvt. Limited, Idbi Bank, M.I.D.C, Andheri (East), Mr. Sanjay Sethi C-13, Pannalal Silk Mills Compound, Mumbai- 400093 Executive Director (Finance) L.B.S Marg, Bhandup (West), Mr. Ravindran M. P. Mumbai- 400078 b. Plot No. 29(P), & 30 (P), Sub Plot Executive Director A, Seepz Sez, Andheri (East), Mr. Nikkhil Vaidya Mumbai- 400096 Independent Director Bankers Mr. Rakesh Kalra • State Bank of India c. Unit No. Gj-7, Sdf Vii, Seepz Sez, Independent Director • Punjab National Bank Andheri (East), Mumbai- 400096 Mr. Rajiv Jain • Union Bank of India Independent Director • State Bank of Patiala Mr. Shanti Saroop Khindria • Central Bank of India Independent Director • Bank of India Ms. Fern Mallis Independent Director • Axis Bank Mr. Francois Arpels • IDBI Bank Independent Director • Exim Bank Mr. Mariano De la Torre • Corporation Bank Nominee Director • Canara Bank • Vijaya Bank Company Secretary & Compliance Officer Registered Office Ms. Nivedita Nayak Plot No. 122, 15th Road, Near IDBI Bank, M.I.D.C, Andheri (East), Statutory Auditors Mumbai- 400093 M/S C. B Chhajed & Co, Chartered Accountants, Corporate Office DGP House, Ground Floor, 88-C, Plot No. 29 (P), & 30 (P), Sub Plot A, Old Prabhadevi Road, SEEPZ SEZ, Andheri (East), Mumbai- 400025 Mumbai- 400096
Internal Auditors CIN NO: L52393MH2001PLC131252 BDO INDIA LLP, Level 9, The Ruby, Senapati Bapat Road, Dadar (West), Mumbai- 400028
2 TARA JEWELS LIMITED WHAT’S INSIDE
We have been a pioneer in Tara Jewels - At a Glance ...... 04 “jewellery manufacturing with Presence - Across the Value Chain...... 06 known patented technologies Our Mission...... 08 which have revolutionised Our Values...... 08 Our Vision...... 09 jewellery manufacturing to Our Exquisite Branded Jewellery Collection...... 10 maximise productivity. Our Spectacular Journey...... 12 Our Esteemed Clientele...... 14 Presence Across Retailing Models...... 15 Chairman’s Statement...... 16 Board Of Directors...... 18 Management Team...... 20 Financial Performance...... 22 Operational Highlights...... 23 Awards & Accolades...... 24 Made to be Desired, Designed to Delight...... 26 To Better Service our Discerning Customers...... 28 Fortifying Our Leadership Position Through Tie-ups...... 30 Management Discussion & Analysis...... 32 Board’s Report...... 46 Corporate Governance Report...... 66 Independent Auditors’ Report...... 84 Annexure to the Independent Auditors’ Report...... 86 Balance Sheet...... 88 Statement of Profit and Loss...... 89 Cash Flow Statement...... 90 Significant Accounting Policies...... 91 Notes on Accounts...... 94 Consolidated Independent Auditor’s Report...... 112 Consolidated Balance Sheet...... 114 Consolidated Statement of Profit and Loss...... 115 Consolidated Cash Flow Statement...... 116 Significant Accounting Policies...... 117 Notes on Accounts...... 118 Notice...... 136
Annual Report 14 - 15 3 TARA JEWELS - AT A GLANCE
We are an integrated player in the jewellery industry with experience ranging from Designing to Manufacturing and Retailing of jewellery with a portfolio of products that includes studded gold, platinum 8 and silver jewellery. Brands Promoted Internationally We have been a pioneer in jewellery manufacturing with known patented technologies which have revolutionised jewellery manufacturing to maximise productivity. We currently operate in owned stores across Metros, 40 Tier I, Tier II and Tier III cities in India. We have a Designers range of over 55,000 designs catering to a diverse audience across 20 countries in five continents.
We are one of the world’s few manufacturers with an indigenously developed manufacturing capability in precision - oriented jewellery.
Channels in Play
Brick & Mortar Shop in Shop E-Commerce Retail Partner Model
4 TARA JEWELS LIMITED 20 years Experience in 11 Jewellery Industry Shop-in-Shop 08 Offices across the 19 Globe Format Stores
INCOME MIX
Export: 90%
Domestic: 10%
1,000 27 Craftsmen Indian Cities 40 11 Designers States in India
` 6,010 ` 9,690 ` 3,680 Million Million Million (International Retail) Combined Order Confirmed Order Book Framework Order Book of International Book Business
Annual Report 14 - 15 5 Presence - across the Value Chain
Manufacturing Designing
Branding
Retailing
Over 55,000 Internationally SAP Designs acclaimed implemented celebrity across all Units designers
Presence in Long standing 8 Over relationship Offices across 20 Countries with Leading the Globe across Global Retailers 5 Continents
Sold through 40+ Designers 3 12,000 stores Manufacturing worldwide 1,000+ Units Craftsmen
6 TARA JEWELS LIMITED GLOBAL PRESENCE Canada U. K. Europe Russia
China
U. S. A. India
Promoted over 8 Australia brands globally South Africa across 7,000 doors worldwide New Zealand
What Differentiates Us
Strong Presence across leadership all retailing background in models manufacturing and branding
Experienced Global supplier to large branding global retailers initiatives
High precision Asset light jewellery jewellery retail manufacturing model in India technology
Annual Report 14 - 15 7 TARAOur JMissionEWELS - AT A GLANCE
To delight our customers, stakeholders and We are an integrated player in the jewellery industryemployees with experience through ranging from Designing to Manufacturing and Retailing of jewelleryexcellence with a portfolio in serviceof products thatand includes studded gold, platinum and silver jewellery.design, transparent and clear communication, accountable commitments and assured rewards.
Our Values
• Exceed Expectations – Always over deliver. • “Service before Self” – Remain customer centric. Educate & Respect the customer. • Clear and effective communication – Minimize the gap between reality and perception, through transparency and clarity. Channels in Play • Reliable and sustainable – Through responsible sourcing, consistent delivery, product quality and service. Brick• & Delight Mortar – CustomerShop in delight, Shop employeeE-Comm delighterce Retail Partner Model and stake holder delight. • Honour and pride in everything we do.
8 TARA JEWELS LIMITED OUR VISION
To be the preferred jeweller to the world
Annual Report 14 - 15 9 OUR EXQUISITE BRANDED JEWELLERY COLLECTION
Designing of jewellery is our forte. Our contemporary, stunning and light weight jewellery is the result of an impeccable craftsmanship, which bestows an impression of a rare and everlasting grace. Every piece of our collection tells a unique story of uniqueness and elegance. We create art that evokes, and is not just an expression of beauty or a creative visual.
The Monique Lhuillier Collection • Being sold through one of the largest online retailers • Considering sale through high-end jewellery chain stores
Facets by Michael Beaudry • Being sold through Broadcast Television Network and high-end jewellery chain stores
HeaRtEssence • Being sold in specialty jewellery stores in United States
10 TARA JEWELS LIMITED The ZacPosen Collection • Being sold by one of the largest online retailers and high-end jewellery chain stores
ZACZacPosen – Fashion jewellery
TrulyZacPosen – Bridal jewellery
The Angel Sanchez Collection • Being considered by one of the largest specialty fine jewellery companies in United States
Cherished Hearts • Being sold by one of the biggest mid-range departmental stores in United States
Heart2Heart • Being sold by one of the largest departmental store in United States
Annual Report 14 - 15 11 SEEPZ, Mumbai manufacturing facility at Incorporated a 12 2001 Journey Our Specta States wholesaler inUnited investment from alarge Acquired strategic
2003 Became DTCSightholder cular 2005 States wholesaler inUnited business ofalarge Acquired go-ahead
2006 China manufacturing facility at Set upanew Business inIndia Launched Retailing TARA LIMITED JEWELS 2007
2008 Annu • •
2009 Heart2Heart initiative fashion branded co- Walmart’s Launched UK) Group, Signet of (Part Samuels H. with Hearts’ ‘Candy and Love’ of ‘Facets labels Launched alRepo r strategic investor Swarovski joins as t 14- 15
2012 • • branded Jewellery Lhuillier Monique Launched branded Jewellery Beaudry Michael Launched • •
Lhuillier, ZacPosen with Michael Beaudry, Monique intobrandedExpanded jewellery Michael Beaudry Jewellery withZacPosen and Co-branded Bridal andFashion 2013
2014 jeweller in United States largest the of one by considered Sanchez, Angel Collection, Jewellery Our
2015 13 OUR ESTEEMED CLIENTELE
Largest Departmental No. 1 Specialty No. 2 in Specialty Retail Store in US Jeweller in US Jewellery chain in US
No. 1 Off-mall No. 1 Upper No. 1 Destination Jeweller Middle Market Jeweller Specialty Jeweller in US in US in UK
No. Online One of the biggest Specialty Retailer Specialty Retailer of Mid-Range of fine Jewellery Diamond Jewellery Department Store in US
Leading Broadcast Leading Regional Leading Jeweller Television Network in US Departmental Store in South Africa in South Africa
14 TARA JEWELS LIMITED Presence across Retailing Models
Exclusive StoreS 19 Stores across 11 Indian States Departmental Store Shop-in-Shop Partnered with leading 11 Outlets in players in USA, UK and Shoppers Stop South Africa
Television Presence Specialty Jeweller Tied-up with one Family Jewellers with of the leading decades of TV commerce experience in fine platform retailers Online jewellery – QVC Partnered with leading global online jewellery player and one of India’s leading online player
Annual Report 14 - 15 15 CHAIRMAN’S STATEMENT
We are in the process of consolidating our domestic business by bringing it under the same umbrella as our international business. This will help us ensure seamless trade and cost optimisation, and give us the chance to utilise our vast international experience in the domestic market.
Rajeev Sheth Chairman & Managing Director
Dear Shareholders, our customers and to maintain our volumes in the branded, hallmarked already strong global reputation. jewellery, and also to create “made to order” jewellery as one-offs FY2015 will be remembered without compromising quality. for being an eventful and We remain vigilant of maintaining our buoyant year. We progressed design excellence and manufacturing on our growth journey through prowess. Our technology skill-sets Our international business has seen customer-centric innovation in and domain expertise of 1,000 substantial growth over the years, our products and services. In sync plus craftsmen, singles us out as with the world’s largest jewellery with our vision for “being the one of the few domestic jewellery retailers continuing to repose their preferred jeweller to the world”, companies with a vast distribution faith in us by placing repeat orders. we are focused on improving the network covering the international Our business model for serving both desirability and recognition of our market. With a rich product line domestic and international markets brands. We remained committed serving multi price-points, we remains intact. While we have a to crafting the finest jewellery for have proven our ability to produce proven strong global focus, we are
Being the Preferred Jeweller to the World
16 TARA JEWELS LIMITED not leaving any stones unturned New Brands, Newer Catering to Gen-Y in ensuring our success within the Geographies E-commerce is gradually domestic retail business. We aim to strengthen the emotional establishing itself as a true connect and loyalty of our alternative mode of consumption. In line with this trend, we How we Performed customers towards our brand. The Company’s focus to sell branded entered into tie-ups with leading In FY2015, we have been able to cater and co-branded products, has e-commerce platforms, such as to a variety of customer preferences proven to be well worthwhile. Amazon, Snapdeal during the year. well and strengthen our global We continue to increase our With online jewellery sales clocking brand presence and accessibility. presence in international markets 25-30% upwards year-on-year, we While improving the quality of our through reputed jewellery chains wish to ensure that we have the service, we delivered a higher level in the continents of Africa, North best e-strategies in play. of satisfaction to our customers. Even America, Europe and Australasia. In though our domestic retail business FY2015, we launched our exclusive Our past successes guide us faced regulatory challenges in India, collection of branded bridal and to strive even further. Going we recorded net consolidate sales of fashion jewellery internationally, forward, we will continue to adopt ` 1,735.30 crore in FY2015. Our Net some of which included Monique pragmatic and sound strategies, Profit stood marginally lower at ` 43.6 Lhullier, Heart to Heart, Angel strengthen our competitive edge crore vis-à-vis ` 50.38 crore earlier, Sanchez, and Zac Posen. In the and further enhance our leadership whereas our EBITDA grew nominally future, we mean to expand our position in the market. We take this to ` 158.6 crore, compared to ` 157.6 portfolio with branded products, opportunity to express our sincere crore in FY2014. Given the tough which will comprise a larger share of thanks and deep appreciation to market conditions faced within the our revenue. industry, these were commendable our share owners, employees and results. Going forward, our healthy customers for their support. order book of ` 9,690 million bodes Asset light Expansion well for FY2016. Our shop-in-shop and brick & Best Regards, mortar format stores continue to Leveraging Volume do well. We are also conserving our capital by introducing an Rajeev Sheth Increase asset-light franchise model. Our Chairman & Managing Director The branded segment in our strategy towards this model will international business, making help us expand our reach and up a large part of our revenue deliver improved returns to our pie,maintains a steady traction in shareholders. We are also in the order volumes. Our healthy order process of consolidating our pipeline is fortified by signs of domestic business by bringing it positive consumer sentiments helped under the same umbrella as our by the rise in household income and international business. This will the economic recovery in key global help us ensure seamless trade markets. Responding to the growing and cost optimisation, and give demand in diamond studded us the chance to utilise our vast branded jewellery, our product mix international experience in the is gradually shifting from gold to domestic market. These changes, diamond based jewellery. we believe, will give us additional growth drivers.
Annual Report 14 - 15 17 Board of Directors
1. Mr. Rajeev Sheth Chairman & Managing Director Mr. Rajeev Sheth is the Chairman and Managing Director of our Company. He holds a graduate degree in Commerce from Mumbai University. He also holds a Diploma in Gemology from Gemological Institute of America. He has approximately 33 years of experience in the jewellery 1. 2. business. He started his career by promoting Rose International and thereafter became the Promoter and Managing Director of Intergold India Limited from 1989 to 1999. He has set up one of India’s first diamond jewellery retail chain, currently called Orra, and has received an award for being the largest exporter for 12 years.
2. Mr. Sanjay Sethi Executive Director (Finance) Mr. Sanjay Sethi is the Executive Director (Finance) at 3. 4. the Company. He is a Chartered Accountant and all- India ranker with 10th rank in the merit list. He is also a Cost Accountant by profession and Post Graduate from Delhi School of Economics, University of Delhi in First Division. He has been the recipient of the University Merit Scholarship for Post-Graduation Studies. He is responsible for overall planning and control of finance function. He has more than 25 years of experience with various organisations, including start-ups and global organisations in India and abroad. 5. 6. 3. Mr. Ravindran M. P. Executive Director & COO Mr. Ravindran M. P. is the Executive Director and COO of the Company. He holds a Post Graduate degree in Computer Science and Masters in Business Administration in Systems Management from Mumbai University. He is in charge of customer service, trading and outsourcing operations in our Company. He has approximately 24 years of experience in the areas of jewellery and engineering. 7. 8. Prior to joining the Company, he was working with RB Jewellery Corporation.
4. Ms. Fern Mallis Non-Executive Independent Director Ms. Fern Mallis is a Non-Executive Independent Director. She holds a Bachelors Degree of Fine Arts from the University of Buffalo. Ms. Mallis has more than 4 decades of experience in architecture, design and fashion industries. She has worked with Conde Nast Publications 9. 10.
18 TARA JEWELS LIMITED (Mademoiselle Magazine), Fashion Director Gimbel´s East 8. Mr. Rakesh Kalra Department Store and Pres Fern Mallis Public Relations. Non-Executive Independent Director She was the Senior Vice President of International Design Center, New York, the Executive Director of Council of Mr. Rakesh Kalra is a Non-Executive Independent Fashion Designers of America from 1991 to 2001 and the Director of the Company. He holds a Graduate Degree in Senior Vice President of IMG Fashion from 2001 to 2010. Mechanical Engineering from Birla Institute of Technology and Science, Pilani. He has approximately 33 years of experience in the automobile industry. He has worked 5. Mr. François Arpels with Bharat Electronics Limited, Bangalore and Eicher Motors Limited. He joined Mahindra Navistar Automotives Non-Executive Independent Director Limited, a joint venture company promoted by Mahindra & Mr. François Arpels is the Non-Executive Independent Mahindra and International Truck and Engine Corporation Director of our Company. He started his career 27 years of United States of America in 2006 as a Chief Executive ago as a shareholder and member of the Executive Officer and was soon re-designated as the Managing Committee of Van Cleef & Arpels. He was earlier on the Director of the company. board of international investment bank Bryan Garnier & Co. He has been advising owners and executive management of businesses, family offices and institutional investors 9. Mr. Shanti Saroop Khindria about the same. Non-Executive Independent Director Mr. Shanti Saroop Khindria is a Non-Executive Independent Director of the Company. He holds a Graduate Degree in 6. Mr. Nikkhil Vaidya Law from Kent University. He has 3 decades of experience Non-Executive Independent Director in the legal profession. He is the founder of Lexindia, a Mr. Nikkhil Vaidya is a practicing Chartered Accountant law firm with offices in London, Paris and New Delhi. He with over 28 years of experience in managing overall is admitted as a Solicitor in England and Wales, Solicitor Finance Function, Strategic Planning, Budgeting & MIS, Incorporated Law Society, Mumbai and Avocat à la Cour de Statutory Compliances, Taxation, Systems Implementation Paris. His practice areas are company, commercial, litigation, and Process Improvements. He has worked with joint ventures, telecommunications, infrastructure, and various MNCs and foreign banks such as BNP Paribas, technology transfers. He has published books titled Mashreqbank Plc, Ciba Geigy Ltd, CCI, Bennett Coleman & ‘Khindria on Business law: 2003: An Indian Perspective’ and Co, Ltd, besides heading the Direct Tax division of Deloitte ‘Foreign Direct Investment in India’. Haskins & Sells, Hyderabad. 10. Mr. Mariano de la Torre 7. Mr. Rajiv Lochan Jain Nominee Director - Non Executive Non Non-Executive Independent Director Independent Mr. Rajiv Lochan Jain is a Non-Executive Independent Mr. Mariano de la Torre is a Nominee Director - Non Director of the Company. He holds a Graduate Degree Executive Non Independent. He has more than 12 years in Chemical Engineering from the Indian Institute of of experience in private equity, M & A, and corporate Technology, Kharagpur, and the Master of Business development with emphasis on financial, credit, Administration from the Whittemore School of Business commercial and strategic analysis, investment decisions, and Economics. He has approximately 38 years of restructurings, and deal execution across a range of experience in the fast moving consumer goods, chemical industries (luxury goods, retail, healthcare, business services and finance industries. He was a member of the board and telecom) and geographies (Europe, Latin America, and of ICI India Limited for over 12 years and was also the Emerging Markets). Managing Director of the Company for over six years. He was the Chairman of both ICI’s Research Company in India and the joint venture company of ICI and Orica, Australia.
Annual Report 14 - 15 19 MANAGEMENT TEAM
Mr. Tateos Tateossian Mr. Chander Gurnani Senior Vice President – Operations General Manager - Finance Mr. Tateos Tateossian is the group Senior Vice President Mr. Chander Gurnani is the General Manager-Finance. – Operations. He holds Bachelor’s Degree in Electronics He is a qualified Chartered Accountant, responsible for Engineering from Kliment Ohridski, Bulgaria. He joined the managing finance and tax matters of the Company. He Company on July 13, 2009. He is responsible for planning, has approximately 15 years of experience in the field of production and quality assurance. He has approximately 38 accounts and finance. years of experience in the field of jewellery manufacturing. Mr. Pravin Patil Mr. Sajid Salim Sakarwalla General Manager - Human Resources Vice President – Diamond Procurement and Administration Mr. Sajid Salim Sakarwalla is the Vice President – Diamond Mr. Pravin Patil is the General Manager-Human Resources Procurement. A Graduate Diamond from Gemological and Administration. He holds a Master’s Degree in Labour Institute of America, he is also certified as an Accredited Studies and Graduation in Law from Mumbai University. Jewellery Professional from GIA. He holds a Graduation He is responsible for human resources and administrative Degree in Commerce from Mumbai University and a division of the Company. Mr. Patil has approximately 23 Masters Degree in Management Studies (MMS-Finance) years of experience in the area of human resource and from Narsee Monjee Institute of Management Studies, administration in hospitality and jewellery industry. Mumbai University. He joined the Company on October 11, 2002 and is in charge of the overall diamond division. Mr. Vishal Adhyapak General Manager - Information Technology Ms. Aarti Sheth Cooper Mr. Vishal Adhyapak is the General Manager-Information Vice President - Business Development Technology of the Company. He holds a Diploma in (Exports Division) Mechanical Engineering from Mumbai University. He is in Ms. Aarti Sheth Cooper is the Vice President - Business charge of information technology division of the Company. Development (exports division) of our Company. She holds He has approximately 14 years of experience in the field. a Bachelor of Science degree in International Business and Marketing from Drexel University; Masters of Science degree in international employment relations; and Human Mrs. Nivedita Nayak Resource Management from London School of Economics. Company Secretary and Compliance Officer She is responsible for overall sales review, business Mrs. Nivedita Nayak is the Company Secretary and development and strategic alliances management of the Compliance Officer. She is Associate member of the institutional retail clients in U.S. She also plays an active role Institute of Company Secretaries of India. She also holds in managing product development for all the US markets. degree in Bachelor of Law and Bachelor of Commerce from Mumbai University. She is responsible for handling Mr. Jayendra Rane all the Company Secretarial and Legal matters. She has experience of around five years in the field of General Manager Accounts Secretarial and Legal. Mr. Jayendra Rane, is the General Manager Accounts. He is a qualified Chartered Accountant and Certified Public Accountant. He has approximately 25 years of experience in accounts and finance in pharmaceuticals, chemicals and jewellery industry.
20 TARA JEWELS LIMITED Retail Business: Australasian, United Kingdom and South African markets. He has approximately 31 of experience in the field of Ms. Sunayana Vora mail order, direct marketing and the jewellery industry in Vice President - Sales manufacturing and retail. Ms. Sunayana Vora is the Vice President - Sales of the Company. She holds a Graduate Degree in Commerce from Subsidiary Company: Mumbai University. She is responsible for sales and product development for the retail division. She has approximately Fabrikant Tara International llc 18 years of experience in the area of jewellery product development and sales. Nilesh J. Agashiwala Mr. Yogesh Sharma Chief Financial Officer General Manager - Materials Nilesh J. Agashiwala joined Fabrikant-Tara International LLC, Mr. Yogesh Sharma is the General Manager- Materials of Tara’s USA division, as their Chief Financial Officer in 2015. our company. He holds a Bachelor’s Degree in Industrial Mr. Agashiwala has over 25 years of experience working Engineering from Pune University and a Diploma in with variety of companies, including jewelry wholesaler, Marketing Management from Welingkar Institute, Mumbai. private equity, public accounting firms. Mr. Agashiwala He has also completed a certificate course in ISO 9000 holds a bachelors degree in Finance and Economics from quality systems. He is responsible for materials, inventory the University of Mumbai, India, and is currently pursuing and supply chain management. Mr. Sharma has over his CPA designation. 22 years of experience in the jewellery and automotive industry sectors. Ms. Ambica Singh Chief Operating Officer International Business: Ms. Ambica Singh is the Chief Operating Officer of our subsidiary Fabrikant Tara International LLC. She has over Mr. Jeffrey Shlakman 28 years of experience in increasingly responsible roles President - Merchandising and Product within the jewellery industry. As the Chief Operating Development Officer, Ambica is responsible for the overall leadership of the FTI office and its performance and staff, along with Mr. Jeffrey Shlakman is the President-Merchandising key productivity areas such as inventory control, dilution and product development of our Company. He holds a monitoring and identifying efficiencies and savings. Degree in Architecture and graduated from The Cooper Union. He is responsible for providing creative direction to the design and merchandising team. He also has direct Mr. Stuart Marcus sales responsibilities. He has approximately 33 years of Vice President - Sales experience in diamond and jewellery manufacturing business. Mr. Stuart Marcus is the Vice President-Sales of our Subsidiary Fabrikant-Tara International LLC. He holds a Bachelor of Arts degree in Marketing from the Mr. Leonard Meyer Northeastern University, Boston. He is responsible for President - Sales diamond fashion and bridal sales to many of our accounts. Mr. Leonard Meyer is the President-Sales for South Africa, He has over 30 years of experience in jewellery and four Australia and United Kingdom region. He holds an Honours years in table top merchandise. degree in Economics from University of Cape Town, South Africa. He is responsible for sales and marketing in the
Annual Report 14 - 15 21 FINANCIAL PERFORMANCE
Net Sales (` Crore) EBIDTA (` Crore)
1735.30 157.6 158.6 1635.45 1695.40 153.4 1399.09 131.7
FY2012 FY2013 FY2014 FY2015 FY2012 FY2013 FY2014 FY2015
roce (%) Earning per share (`)
35.73
29.84 22% 20% 20.48 16% 17.73 14%
FY2012 FY2013 FY2014 FY2015 FY2012 FY2013 FY2014 FY2015
Profit after tax (` Crore) Book value per share (in `)
73.67
237 53.89 219 50.38 201 43.6 154
FY2012 FY2013 FY2014 FY2015 FY2012 FY2013 FY2014 FY2015
22 TARA JEWELS LIMITED operational highlights
Expanded into the branded Bridal and Fashion Jewellery segment by launching Monique Lhuillier and Zac Posen jewellery brands in the international markets. These brands are being sold through one of the largest online retailers and high-end jewellery chain stores.
Also launched the Brand Angel Sanchez in the U.S. market with the largest jewellery retailer in the world.
Forayed into online sales in the domestic market through tie-ups with Amazon, Snapdeal and other leading online selling platforms.
Signed a manufacturing Term Sheet with Sterling Jewellers Inc., the largest jewellery retailer in U.S., giving Tara Jewels Limited the status of being the “Exclusive Supplier of Choice” for the manufacture of the Brand “Angel Sanchez”.
Annual Report 14 - 15 23 awards & accolades
INTERNATIONAL BUSINESS
• Global Supplier of the Year – Twice Awarded by Walmart • Overall Excellence Award– Second highest exporter in the category of studded precious metal jewellery exports in EPZ, by The Gem and Jewellery Export Promotion Council in year 2007, 2008 and 2009 • Conferred with “Star Trading House” status – By the Ministry of Commerce & Industry and have been the highest exporter in gems and jewellery sector for the years FY2009 and FY2010
Highest Export Highest Export Highest Export Performance Award Performance Award Performance Award for 2009 - 2010 for 2008 - 2009 for 2007- 2008
Highest Net Foreign Second Highest Net Foreign Second Highest Net Foreign Exchange Earner Award Exchange Earner Award for Exchange Earner Award for for 2009-2010 2008-2009 2007-2008
24 TARA JEWELS LIMITED The second highest The second highest The “Global Supplier exporter of studded exporter of studded of the Year” Award jewellery for the year jewellery for the year for 2007 from 2008 - 2009 2007 - 2008 Walmart.
Awarded “LUXURY Nominated for the The Best Store Design of RETAILER OF THE YEAR” Best 360 Marketing the Year - Single Brand at the Star Retailer of the Year 2012 category at the ET Retail Awards 2013 Awards 2013
Awarded “Print Campaign of the Year 2012”
Annual Report 14 - 15 25 Made to be Desired, Designed to Delight Experienced designing, manufacturing excellence, and efficient logistics are our key market differentiators. While also being masters of volume production, we are artisans of high-grade, customised jewellery for special occasions. Our quality and consistency are second to none, making us highly appreciated by global branded jewellery retailers. Our well thought-out manufacturing SOPs aid us in catering to orders of all sizes with equal ease and finesse.
We pride ourselves in understanding the psyche of our customers by focusing on their 90% tastes and appealing fashion trends. of our As cross spectrum trend setters, we deliver what customers desire. We jewellery is continue to earn wide acclaim and exported recognition for our design expertise, showcasing our unmatched prowess in innovative jewellery designing. With a portfolio of 55,000 designs and by creating 5,000 new 2.5 designs every year, we offer the lakh units of best value for money. Our service and product offerings are relevant jewellery produced to today's global tastes. each year
With almost 90% of our jewellery being exported, we are the only domestic jewellery company that is largely exposed to the international market. Our distribution network for retailing jewellery in the global market is unparalleled. We are highly accessible through our extensive distribution network and strong logistics support. Our vast manufacturing infrastructure is capable of manufacturing 2.5 lakh units of jewellery each month. Our technology skill-sets and the domain expertise of our 1,000 plus karigars makes our quality unique.
26 TARA JEWELS LIMITED 5,000 new designs added every year
Each piece of jewellery is tested volumes of work in addition to subtle sensitivity and sensual in-house to arrive at varied making “one-of-a-kind”, customised showmanship. What also stands feedback before being executed jewellery made to order. Our us apart from the rest is our in our designs. unparalleled speed to deliver these 35-40-strong global design team customised products is yet another located in Hong Kong, USA and differentiating factor. India. We recognise trends early on At Tara, manufacturing of each and embody them into our designs. piece of jewellery is about the Our fusion and modern jewellery is meticulous procedures, involving We have a knack for identifying appreciated for its clean cuts and state of the art technology and good design. Our intricate international style, enabling every dedicated research, to achieve designs and light jewellery have cadre of women to make their own perfection. Our manufacturing an enduring appeal. Our unique signature statement. SOPs are as intricate and unique as combination of exquisite and our designs. Our vast skill-sets give aesthetically-designed pieces us the capability to produce large of jewellery is awash with
portfolio of 55,000 designs
Annual Report 14 - 15 27 To Better Service our Discerning Customers We wish to be the world’s preferred jeweller by servicing our loyal customers to the best of our ability and beyond. We are scaling our various brands to greater heights by increasing access to the varied global customer preferences. We wish to cater to them through all channels – brick & mortar, shop-in-shop and the online retailing segment.
As the buying pattern of jewellery is changing, our customers believe in the purchase of wearable 25-30% gold jewellery, rather than only buying jewellery as a form of year on year growth investment. We cater to our in Online Sales discerning customers through the conventional Brick & Mortar stores and shop-in-shop stores. We serve the entire value chain with an extensive range of jewellery through 19 full service stores and 11outlets in Shoppers Stop across 27 cities in Northern, Central, and Western India. Our asset-light expansion plan will strengthen our global and domestic footprint. These low-cost outlets are in line with our business strategy, aiming to deliver accelerated returns to our shareholders.
Showcasing stupendous variety and classic designs, our shop-in- shop and Brick & Mortar stores are a visual treat for our customers. In keeping with the traditional yet modern look, a designer wall has been created inside each showroom, giving our customers a glimpse of what is new. We offer personalised attention and
28 TARA JEWELS LIMITED 27 Cities in Northern, Central, and Western India
service to each customer to-platform” for online jewellery We are in the process of consolidating through a customer-friendly shoppers and earn incremental our domestic business by bringing ambience, ensuring an unique sales. Our objective is to replicate it under the same umbrella as our buying experience. the comfort, convenience and international business. With this, we brilliance associated with shopping are ensuring seamless trade and in our large-format showrooms. consistent approach across all our Being in tune with changing The deep data analytics and online markets. This approach is not only consumer behaviour, we are also cataloguing assistance provided by helping us with cost optimisation, reaching out to our new-age our online channel partners further but is also enabling us to utilise our and Gen-Y consumers by making refines the online experience. With vast international experience in the jewellery available online in the online jewellery sales clocking 25- domestic market too. domestic market. We have tied up 30% year on year growth, we wish with leading e-Commerce channel to leverage this platform optimally. partners, such as Amazon and Snapdeal, as we wish to be the “go-
Asset-light expansion plan
Brick & Mortar stores and Shop-in-Shop outlets
Reaching out to new-age and Gen-Y consumers online
Annual Report 14 - 15 29 Fortifying our leadership position THROUGH tie-ups We are strengthening our position in the international jewellery market. Our tie-ups with a fantastic list of leading branded jewellery retailers make us the preferred supplier to these international chains across the world and opens up various new market segments.
India is today the outsourcing hub for jewellery designing and manufacturing for global jewellery retail participants. A major chunk of our revenues comes from exports of diamond and diamond-studded jewellery to large international retailers. We have strategic tie-ups with reputed international chains such as Walmart, JC Penny, Signet, Kay, Zales, Jared and Blue Nile, among various others. We have promoted Promoted 8 brands globally through 7,000 doors worldwide. We launched our Monique Lhuillier and Zac 8 Brands Posen collection in United States during FY2015. In FY2016, we globally through will be launching other signature collection, catering to the likes of our customers. 7,000 Doors worldwide
30 TARA JEWELS LIMITED Strategic tie-ups with Reputed International Chains
Our curated online collection occasions. These are either sold ranges from daily-wear jewellery through one of the largest online such as light weight necklace retailers or through high-end sets, rings, pendants, earrings and jewellery chain stores. Being a bangles, to fashion and bridal preferred supplier to these chains jewellery. The jewellery is designed provides many advantages such and manufactured with diamonds as de-risking our portfolio and of 0.5-2.00 carats studded in assuring timely receivables. platinum or 18K gold.
The collection also includes occasion-related exclusive designs targeting young consumers looking for chic gifting options for special
Annual Report 14 - 15 31 Management Discussion & Analysis
An upward shift of growth in Macro-Economic Scenario Gross Domestic Product (GDP) of Global Economy The global economy grew at a slightly faster pace in 2014, the developed economies from as a modest revival in the euro zone and a pick-up in India 1.8% to 2.2% and with developing helped offset slowdowns in China and Japan. Growth picked up, albeit marginally, from 2.5% to 2.6%, mainly economies accelerating from 4.8% driven by momentum in United States and U.K. It is seen to 5.4% is predicted by 2017. shifting upwards to an average of 3.3% between 2015 and 2017, brought about by an upward shift of growth in Gross Domestic Product (GDP) of the developed economies from 1.8% to 2.2% and with developing economies accelerating from 4.8% to 5.4%. The combined gross domestic output of the Group of 20 largest economies, which accounts for 90% of the global economic output, expanded 3.4% in 2014, up slightly from 3.2% in 2013, aided by a return to growth in the Eurozone.
Global growth is forecast to rise moderately to 3.5% in 2015 and 3.7% in 2016, the net positive being a sharp decline in oil prices. The International Monetary Fund (IMF) projects growth in emerging markets and developing economies to remain broadly stable at 4.3% in 2015 and increase to 4.7% in 2016. Moving ahead, across nations, the mandate to Governments is to control inflation, improve fiscal prudence and sustainable growth, with concerted efforts being on job creation through public and private investments.
Receding Levels of Inflation and Current Account GDP Growth in India - ACTUAL and PROJECTED (%) Deficit and Strengthening Rupee
60.5 61.5 54.4 51.8 8.6% 8.9% 45.0 45.3 10.0% 7.3% 7.5% 7.5% 6.7% 6.9% 11.2% 10.4% 8.0% 5.1% 9.5% 9.5% 6.0% 6.5% 6.8% 4.0% 4.2% 4.7% 2.8.% 2.7% 2.0% 1.7% 1.3% 0.0% FY10 FY11 FY12 FY13 FY14 FY15 FY16P FY17P FY10 FY11 FY12 FY13 FY14 FY15 GDP Growth Rate (%) CPI Inflation CAD (% of GDP) Exchange Rate (Rs/USD)
Source: RBI, IMF Source: RBI, India Budget Document
32 TARA JEWELS LIMITED Indian Economy The Indian economy is one of the largest economies in the world with a GDP at current prices of ` 127 trillion for FY2014-15. India continues to be one of the most promising economies to sustain a strong growth in its GDP. The current growth in GDP, as per the new series, places it at 7.4% for FY2015 as against a revised past trend of 5.1% Gems & Jewellery Sector and 6.9% in FY2013 and FY2014, respectively. We foresee Global Overview an upward trend in economic growth in FY2016. Brighter prospects in India owe mainly to the fact that the economy The global market for Gems & Jewellery (G&J) today is over stands largely relieved of the vulnerabilities associated US$ 100 billion with jewellery manufacturing dominated by with an economic slowdown, persistent inflation, elevated a handful of countries such as India, Italy, China, Thailand fiscal deficit, slackening domestic demand, external and the USA. It is one of the fastest growing industries account imbalances, and the oscillating value of the rupee accounting for a large chunk of India’s total merchandise in financial year 2012 and financial year 2013. During exports during FY2015. There were several economic issues FY2015, the Indian economy stood up to the challenges of including the downturn in China, the political and terrorist consumer inflation, weakening of Indian rupee, widening unrest in Middle East, declining European market and the current account and fiscal deficits and an unstable global suffering Russian Ruble, which had a direct and adverse environment. It is now on a firm path of a revival with a impact on the G&J exports that witnessed a downward wave of optimism. trend. However, the foresight and agility of the industry helped survive in these trying times, owing to significant The strong uptick in GDP growth was accompanied by a actions taken towards divesting in the USA and UAE to receding inflation – at 5.1% in January 2015, considerably boost export trade from India. Regionally, Asia Pacific lower than double-digit figures in 2013. Current account holds the largest jewellery market in the world with more deficit and fiscal deficit, the prime causes of concern in than half of the share being contributed by India and 2013, are now within manageable levels. The Reserve China alone. India and China are also the two largest gold Bank of India (RBI) projects an improvement in investment consumers in the world followed by the Middle Eastern climate with better governance, transparent, effective and region. Other countries in Asia Pacific such as Thailand efficient regulatory and legal regimes, improvement in and Vietnam are also large consumers of gold and thereby technical efficiency, institutional improvements, improved driving the regional growth of the market. India and China labour mobility, and other such reforms. A boost is also together account for almost 60% of jewellery demand and expected from lower policy rates and stable commodity around 50% of total bar and coin demand of the world. prices, with India becoming an attractive destination among peers. Irrespective of differences in the estimation Indian Overview – Gems & method, the consensus is that GDP will maintain an Jewellery Industry upward movement by a minimum of 100 basis points The Gems & Jewellery Industry is the back bone of the year-on-year, if Government spending and policy initiatives Indian economy and one of the major contributors remain on track. With a high growth potential, India is seen towards the export-led growth. The industry has gained as a bright spot in the global economic landscape. (Source: global popularity because of its talented craftsmen, RBI’s Annual Report 2013-2014) superior practices in cutting and polishing fine diamonds and precious stones and cost-efficiencies. The two major segments of the Indian gems & jewellery industry are: Gold jewellery (80% of the jewellery market) and Diamonds (20% of the jewellery market). India is one of the world’s
Annual Report 14 - 15 33 Management Discussion & Analysis
With fast-changing consumer preferences and aggressive retail expansion by organised jewellery Domestic Jewellery - Industry Structure: retailers, the market share of The Gems & Jewellery Industry has been a significant organised players has increased to contributor towards the growth of the Indian economy, accounting for around 6% - 7% of India’s GDP (Source: around 20% in 2014 – up from sub IBEF). The industry is export oriented and labour intensive, thereby playing a significant role in employment 5% a decade ago. generation and foreign exchange inflows. The industry currently provides employment to around 2.5 million largest manufacturers of cut and polished diamond with people. The Gems & Jewellery Skill Council of India aims to an aggregate contribution of approximately 60% of the train, skill and enhance 4.07 million people by 2022 with world’s supply in terms of value and 80% in terms of the aim of meeting the demand for skilled manpower. volume. The industry contributes more than 14% towards the total export in India and provides employment to 1.3 Currently, the jewellery market is majorly constituted by million people directly and indirectly. unorganised players which account for around 80% of the total market share. However, in the recent past, there has been an increasing consumer preference for branded and INDIAN GOLD JEWELLERY: NET GOLD IMPORT TRENDS hallmarked jewellery with better quality and designs. With fast-changing consumer preferences and aggressive retail expansion by organised jewellery retailers, the market share 352 124.2% 114.0% of organised players has increased to around 20% in 2014
256 268 – up from sub 5% a decade ago. Furthermore, considering 228 223 60.5 202 204 the vast untapped jewellery demand potential of non- 130.1% 153 63.1% metro cities, there is a huge scope for organised jewellery 17.5% 114 127 8.8% 91 retailers with superior brand, product quality, designs and -2.5% innovative marketing initiatives to undertake aggressive -49.2% -59.2% -52.6% -55.5% -42.6% geographic expansion across India. The organised jewellery Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 retailers are expected to continue to grow faster than the Net Imports of Gold (Tonnes) ToY Growth% unorganised players, thereby gaining incremental market share. (Source: CRISIL) Source: WGC Data, ICRA Note: Figures are for Calendar Year India is currently the second-largest gold jewellery market in the world, next only to China. The domestic jewellery Domestic Jewellery Market (` Billion) segment has a market size of around ` 2,535 billion in 2014, largely dominated by gold jewellery which accounted 1% 1% 1% for around 79% of the total share in 2014. The domestic 18% 19% 20% industry displayed an improved performance in 2014, driven by resilient jewellery demand which grew 8% YoY 2,365 2,465 2,535 to reach 662.1 tonnes in 2014. This was despite various government measures introduced to restrict gold imports, 81% 80% 79% being in place for most of the year. Domestic jewellery demand was sustained by wedding and festival-related 2012 2013 2014 purchases which increased 19% YoY to account for 179.1 tonnes in 4Q of 2014. While the domestic jewellery Silver, Platinum, others Diamond Gold demand has been sustained, there was a decline in Source: Equity Communications Report investment demand for gold which decreased 50% YoY to Note: Figures are for Calendar Year
34 TARA JEWELS LIMITED 180.6 tonnes in 2014. This sharp decline was largely driven by negative gold price expectation trends and record purchasing levels seen in 2013. While the demand for coins and bars was healthy during festivals and auspicious occasions, the overall investment demand remained muted.
The domestic Gems and Jewellery Industry had a market size of ` 251,000 crore (US$ 40.45 billion) in 2013, and has the potential to grow to ` 500,000-530,000 crore (US$ 80.59-85.43 billion) by 2018, according to a study by the Gems & Jewellery Export Promotion Council (GJEPC), a leading industry body. The study projects the market to organised jewellery retail (`. Million) double in the next five years. The growth will be driven by a healthy business environment and investor friendly policies. India is deemed to be the hub of the global jewellery market due to its low costs and availability of high-skilled labour. It plays a significant role in the Indian 812 economy, contributing around 6-7% of India’s GDP. It is one of the fastest growing sectors, and extremely 620 export-oriented and labour intensive. The Government has declared the Gems & Jewellery sector as a focus area for export promotion, based on its potential for growth 204 and value addition. The Government has undertaken various measures to promote investments and upgrade technology and skills to promote Brand India in the 2009-10 2012-13 2015-16 international jewellery market.
Increasing share of organised jewellery retail segment (%) The domestic Gems and Jewellery Industry had a
14% 21% 28% market size of `. 251,000 crore and has the potential to grow 79% 72% 86% to ` 500,000-530,000 crore (US$ 80.59-85.43 billion)
2012 2013 2014 by 2018.
Unorganised Jewellery Retail Organised Jewellery Retail
Annual Report 14 - 15 35 Management Discussion & Analysis
Regulatory Scenario: In view of high current account deficit which almost doubled from 2.7% in FY2011 to 4.7% in FY2013, the Indian Government and the Reserve Bank of India (RBI) tightened the gold import norms through a series of regulatory changes as listed in the below table.
Month Regulation Details Jan-13 Hike of import duty on gold Import duty on gold increased to 6% from 4% May-13 Disallowance of Gold Metal Loan Disallowance of gold metal loan requiring the organised retailers to pay cash on upfront basis to buy gold May-13 Ban on import of gold on Financial institutions and trading houses were not allowed to consignment basis import gold on a consignment basis Jul-13 80:20 rule For every 100 kg of gold imported, 20 kg has to be exported Aug-13 Hike of import duty on gold Import duty on gold hiked further to 10% Aug-13 Restriction on imports of gold coins Import of gold coins banned Sep-13 Hike of import duty on gold Import duty on gold jewellery raised to 15% May-14 Reinstatement of Gold Metal Loan Gold metal loan allowed, however imports will still be governed by 80:20 rule Nov-14 Removal of 80:20 rule Removal of all the restrictions on gold imports Feb-15 Domestic gold monetisation scheme Allow the domestic depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account
As the Government imposed several restrictions on gold Significant Industry Growth Drivers: imports into India, it resulted in significant reduction in With the opening up of branded retail in jewellery the gold imports through official channels, leading to a spike trend seems to have evolved whereby increasing number in spot gold prices. The price premium for domestic of individuals are opting for branded jewellery. The change gold increased from ` 20-30/gm to more than ` 250/gm. in trend is driven by a number of factors such as brand Higher gold price premiums, disallowance of gold metal consciousness, choice of designs, consciousness towards loan leading to higher working capital costs, and subdued hallmarking and certifications of gold and diamond along consumer sentiments impacted business performance of with a growth in urbanization and increase in disposable several jewellery retailers. Going forward, with the easing income. Below are the key growth drivers: of the regulatory environment with removal of 80:20 rule and allowance of gold metal loan, stable gold prices Secure Investment Avenue and improving consumer discretionary sentiments, the Gold is still a popular tool for investment among Indians demand for gold is expected to improve in 2015-16. CRISIL as it acts as an effective hedge against inflation and can estimates India’s gold jewellery demand to pick up by 14% also act as a medium of exchange in times of economic in volume terms and 7% in value terms in 2015-16. uncertainties. The status of gold as a popular investment vehicle is expected to continue driving growth for the industry.
36 TARA JEWELS LIMITED Going forward, with the easing of the regulatory environment with removal of 80:20 rule and allowance of gold metal loan, stable gold prices and improving consumer discretionary sentiments, the demand for gold is expected to improve in 2015-16. Emergence of E-commerce With increasing acceptance of online retail, buyers are more comfortable buying even high-ticket items online, Rising Per Capita Income and Affluence as has been evident with the success of Caratlane & Blue India’s per capita GDP at current market price is expected Stone portals selling jewellery. The total online retail to almost double reaching close to ` 1.9 lakh by FY2020 market in India is expected to reach US$6 billion in 2015, (Source: DNB). Another major driver is the emergence of a as per Gartner estimates, and will further treble to reach a strong middle class, more than one-third of the population size of US$22 billion by 2018, as per CLSA estimates. The is likely to reach the ‘aspire’ class (annual income of US$ online jewellery market in India is still in its nascent stage, 7.4k – US$ 18.5K) by 2020, compared to 20% in 2010 and as Indian consumers prefer to touch and feel the jewellery 9% in 2000. Also the number of affluent households in before buying, but the change in consumer behaviour India is expected to increase from 5% in 2010 to 13% by is happening fast. Online retailing offers advantages 2020 (Source: India Retail Report 2013). Rising affluence and such as convenience of buying within the comforts of purchasing power will fuel strong demand for jewellery in an individual’s home and provides other incentives such the future. as giving them enough time to decide and not making it obligatory for customers to purchase at their very first Rise in Number of Working Women visit. The offline brands recognize the potential this new channel has to offer and are now actively looking at With a large number of women force now financially developing an online presence. independent and increasingly getting employed at middle and senior management positions, the demand Government Initiatives for jewellery, especially fashion jewellery, will escalate going forward. The RBI has liberalised gold import norms. With this, star and premier export houses can import the commodity, Easing of Working Capital Funding Issues while banks and nominated agencies can offer gold for domestic use as loans to bullion traders and jewellers. Also, Withdrawal of the 80:20 rule and reinstatement of gold India has signed a Memorandum of Understanding (MoU) metal loan is a huge positive for the industry. The gold with Russia to source data on diamond trade between metal loan will help lower borrowing costs and would also the two countries. India is the top global processor of provide efficient price-risk hedging mechanism. In terms diamonds, while Russia is the largest rough diamond of supply, imports over the medium term are expected producer. The Government is planning to establish a to reach the levels witnessed prior to the curbs, largely special zone with tax benefits for diamond import and replacing sourcing of gold through the unofficial channels. trading in Mumbai, in an effort to develop the city as a rival This has already resulted in normalisation of gold price to Antwerp and Dubai, which are currently the top trading premiums and will have a positive impact on the working hubs for diamond. In another significant development, capital requirements of the organised jewellery segment. the Gems and Jewellery Skill Council of India is planning Increasing Share of Studded Jewellery to train over four million persons till 2022 as the sector is facing shortage of skilled manpower. The council aims India has traditionally been a gold jewellery market with to train, skill and enhance 4.07 million people by 2022. a preference for the conventional yellow metal heavy The council will tie-up with the existing training institutes gold jewellery. However, now with increasing consumer including Gemological Institute of America (GIA) and preference for diamond-studded and gems-studded gold Indian Gemological Institute (IGI), along with setting up of jewellery, the jewellery retailers are quickly adapting their new institutes in major diamond cutting and processing product mix. As the studded jewellery attract higher gross centres, Gems & Jewellery Export Promotion Council margins, rising share of studded jewellery would help (GJEPC) said in a statement here. the jewellery retailers to improve their overall operating margins over a medium to long-term period.
Annual Report 14 - 15 37 Management Discussion & Analysis
Key Thrust Areas for Industry The industry’s thrust area in alignment with the ‘Make in India’ campaign mainly includes implementation of the much-awaited turnover taxation system for Indian further boost sales. Also, the relaxation of restrictions of diamond Industry and implementation of Special Notified gold import is likely to provide a fillip to the industry. The Zone in Bharat Diamond Bourse to facilitate smooth improvement in availability along with the reintroduction movement of rough diamonds on consignment basis of low cost gold metal loans and likely stabilisation of gold by RBI approved overseas diamond miners in the first prices at lower levels is expected to drive volume growth year. In the mid-term, the Gems & Jewellery Export for jewellers over short to medium term. The demand for Promotion Council (GJEPC) will champion the mission jewellery is expected to be significantly supported by the to further industry growth and strongly establish India recent positive developments in the industry. as a global diamond trading hub. This includes skill and talent development, working with the Government to Company Overview commission exploration programmes and surveys to We are operating in the Branded Jewellery segment of the ascertain availability of rough diamonds and colored jewellery value chain through our diversified product mix gemstones in India. The Government may spearhead of studded jewellery and diamond studded jewellery. We initiatives to legalize current mining activity through an operate across various channels such as: Brick & Mortar, appropriate licensing framework and develop a regulatory Shop in Shop, E-Commerce, and the Retail Partner Model. framework for new mining and exploration. Our basket includes products of Gold, Platinum, Pristinium and Silver. Business Outlook India’s gold jewellery industry is expected to record a International Retail: sustainable growth of about 8% - 10% over the medium- We export our products to key branded jewellery markets to-long term, based on various industry estimates. Growth of United States, Canada, Europe, South Africa, Russia, will be primarily driven by the rising penetration of the Australia, New Zealand and China. We promote a total of organised jewellery segment, aggressive expansion of 8 brands globally, across 7,000 doors worldwide across organised jewellery retailers, increasing penetration in different segments and geographies. We have a combined Tier 2 & 3 markets, and improving consumer sentiments. order book of ` 9,690 million in the international market, The recent easing of regulatory measures by the which includes framework orders of ` 6,010 million government has led to an improvement in gold availability. and confirmed orders of ` 3,680 million. Our significant Furthermore, reinstatement of low-cost gold metal dependence on the international business has enabled loan has also helped create a favourable environment. the Company to register growth despite turmoil in the According to a FICCI report on the Indian Gems & Jewellery domestic market. industry, the domestic jewellery market has the potential to ` ` ` grow from 2,535 billion in 2014 to 5,000 - . 5,300 billion We have strategic tie-ups with large global branded by 2018. jewellery retailers such as: WalMart Inc, JC Penny, Zale, Kay, Jared, Ernest Jones, Sterns, American Swiss, Blue Nile, In the coming years, growth in the industry would be H. Samuel, and Helzberg, among others. In the branded highly contributed with the development of the large category, we co-brand our merchandise with reputed retailers/brands. Established brands are guiding the retailers to enhance brand recognition and repeat orders. organised market and are opening opportunities to grow. Some of our branded jewellery in the international markets Increasing penetration of organised players provides are: Monique Lhuihullier Collection, Facets by Michael variety in terms of products and designs. These players Beaudry, Heart Essence, The Zac Posen Collection, The are also offering financing schemes to consumers to Angel Sanchez Collection, Cherished Hearts
38 TARA JEWELS LIMITED We have a strong retail presence in the market through our wide distribution network of 30 format stores spread across 27 cities in 11 States in India.
and Heart2Heart. We have also launched a unique across the suburban areas of metro cities, mini metros jewellery collection ‘Anisa’, which includes a range of and Tier 1, 2 and 3 cities. We have a scalable format of rings and earrings. small full-service stores of 1,000 sq. ft. area designed by Fitch, an international brand & design consultancy. Our India Retail: jewellery displayed on browse walls, collection walls and consultation tables reduces the inventory requirement We are an integrated player in the Jewellery Industry with and results in limited operating cost. We are present in over 16 years of experience in manufacturing, exporting, the affordable luxury segment with our jewellery ranging designing and retailing of jewellery. We operate in the in the average ticket size of ` 50,000. In our strategy to retail market through our wide distribution network of 30 reach out to new-age customers, we have established a format stores spread across 27 cities in 11 states in India. significant presence on reputed online portals such as We have a total of 11 shop-in-shop format outlets at the Amazon and Snapdeal. Shopper’s Stop departmental store. Our presence spans Segmental Break-up* FY2015 Sales: ` 17,063 Million India Retail 12%
International Business 88%
FY2015 Gross Profit^: ` 2,645 Million India Retail 19%
International Business 81%
*- Excluding Bullion & Others ^- Gross Profit=Sales - ( Consumption+Direct Expenses)
Annual Report 14 - 15 39 Management Discussion & Analysis
Services Offered Our Core Advantages At Tara Jewels, each jewellery purchase marks the onset • Three manufacturing units of a lifelong relationship with our customers. We offer a • 40 designers and 1,000 craftsmen plethora of exclusive services as below: • SAP implemented across all units a. personalised Jewellery • High precision jewellery manufacturing The Company has the inherent advantage of technology manufacturing jewellery in-house and customers are a • Fully automated jewellery casting plant vital part in designing jewellery. Customer personalisation has been of utmost importance to Tara Jewels and for • State-of-the-art technology this personalisation process, the Company has more than • Laser lithography 50,000 designs available in its inventory. The Company has • Microscopic precision setting a unique process which enables customers to view the wax settings of the jewellery personalised by them. Seeing • Machine made bands the making of their precious possession is what satisfies • Invisible settings customers at Tara. This wax setting process has helped the • Machined graving customers to touch and feel the piece before placing their final order. Tara also customises jewellery as per the various • CAD/CAM local Indian festivals like Rakshabandhan, Ganesh Chaturthi and Diwali. Our Key Strengths b. recycling of Jewellery Integrated core strength: designing to manufacturing Recycling of jewellery is another service that the company skills & technologies offers to their clients. Now their customers can refresh their collection by melting their jewellery and create and entirely International experience new piece of design out of it. State-of-the-art infrastructure Reputed responsible and ethical player c. customised Jewellery Unique Made to Order (MTO) capability We are present in the high-value and high-margin business of customisation which constitutes 30% of our Indian retail Price competitiveness business. We follow a mantra of “design your own, unique Customer centric work culture piece and watch us create it according to your budget Consultative sales approach and taste” as jewellery is tailored to a customer’s need. The computer-aided designs are shown to a customer, the Fair exchange & Buyback policies resin prototype is made, wax replica is provided, and once Repair cell in all stores approved, the final product is delivered. We have trained staff offering complimentary cleaning and polishing of Leveraging Market Opportunities jewellery to make it look sparkling and new at all times. • Unorganised to organised movement d. purity Testing • Multi-channel growth Gold purity check is done for free in the showrooms. • Growing Diamond jewellery market Jewellery buying can be a major investment and testing • Presence in 2 tier and 3 tier cities its purity is crucial for anyone involved in buying or selling gold. • Associate as a major diamond supplier to retailers to leverage design & manufacturing capability
40 TARA JEWELS LIMITED Our 3 manufacturing units supported by 40 designers and 1,000 craftsman always ensure that our jewellery is cast and manufactured in a fully automated casting process and state-of-the-art technology in high-precision setting.
Our Distribution Network International Business India Retail Direct selling of studded jewellery to global retailers 11 Shop-in-shop format outlets in Shoppers Stop Co-brand merchandise to increase brand recognition 19 Operational Stores Online presence on leading online portals Presence in High-end of the Value Chain
Our Presence in The Value Chain
High - End Luxury Jewellery Branded Jewellery Jewellery Job Work Rough Diamonds Processed Diamonds Tara Jewels’ Presence
Majority Indian Exporters
Parameters Indian Export Industry Where we are positioned Products Dominated by Diamond processing & Diamond studded jewellery, studded jewellery polishing, followed by Gold Jewellery Customers Wholesalers Large Retailers - Wal-Mart Inc, JC Penny, Zale, Ernest Jones, H. Samuel, Helzberg etc. Branding Co-brand merchandise to increase brand recognition & repeat orders
Annual Report 14 - 15 41 Management Discussion & Analysis
Our Presence Global Presence
Canada U. K. Europe Russia
China
U. S. A. India
Australia South Africa New Zealand
42 TARA JEWELS LIMITED India Presence (Own Stores and Shop-in-Shop Format Outlets) State City Location CHATTISGARH Raipur Shoppers Stop, City Centre Rajouri Garden DELHI Delhi Shoppers Stop, Rajouri Garden Margao Pajifiond GOA Panjim 18th June Road Baroda Jethalpur Raod GUJARAT Rajkot Dr. Yagnik Road Bhopal SS Shoppers Stop, DB Mall Madhya Gwalior Sarafa Bazaar Pradesh Indore SS Shoppers Stop, AB Road Jabalpur Gorakhpur Road Jalgaon Band Street Mauza-Jaripatka Nagpur Chhindwara Road Pune Laxmi Road Solapur VIP Road MAHARASHTRA Shoppers Stop, Prozone Aurangabad SS Mall Andheri Mumbai Kurla Vashi SS Shoppers Stop, Alpha One Amritsar SS Mall PUNJAB Bhatinda Dhobi Bazaar Jalandhar SS Shoppers Stop, MBD Mall Ludhiana Feroze Gandhi Market CHANDIGARH Chandigarh SS Shoppers Stop Ajmer Churi Bazar RAJASTHAN Shoppers Stop, World Jaipur SS Trade Park Allahabad Civil Lines UTTAR Lucknow Gole Market PRADESH Shoppers Stop - Great India Noida SS Palace UTTARAKHAND Dehradun Rajpur Road
Annual Report 14 - 15 43 Management Discussion & Analysis
Asset Light Expansion Model – Awards & Accolades Domestic Retail International: Shop-In-Shop: - Global Supplier of the Year: Twice Awarded by WalMart We have an asset light model of expanding our business. - Overall Excellence Award: Second-highest exporter Currently, our network spans across 30 stores over 27 in the category of studded precious metal jewellery cities in 11 states. These include 11 Shop-in-Shop format exports in EPZ, by The Gem and Jewellery Export outlets at Shoppers Stop spread. We have a scalable Promotion Council in the year 2007, 2008 and 2009. format of small full-service stores of 1,000 sq. ft. area, with jewellery displayed on browse walls, collection walls and - Conferred with the status of a “Star Trading House” by consultation tables, limiting the operating cost. We are the Ministry of Commerce & Industry and have been spread across the suburban areas of metro cities, mini the highest exporter in gems and jewellery sector for metros and Tier I –III cities. the years FY2009 and FY2010.
Online: Domestic In order to reach out to the Gen Y segment, we have - Awarded “LUXURY RETAILER OF THE YEAR” at the Star established a presence in online retail. We have tied up Retailer Awards 2013 with leading online portals such as Amazon and Snapdeal - The Best Store Design of the Year – Single Brand to launch our online collection online in the domestic retail category at the ET Retail Awards 2013 segment. The advantages of this expansion model are: - Nominated for the Best 360 Marketing of the year 2012 - No establishment and limited operating cost - Print Campaign of the Year 2012 - Easily adapt to the changing buying behaviour - Widespread penetration & Amazon’s strong logistic Research & Development capabilities The Company has adopted a series of steps towards energy conservation. These are aimed at achieving optimum Business Strategy for FY2016 energy and power cost reduction. Detailed and strategic • To focus on creating a reputation of best quality & efforts are also being implemented towards optimum design retailer in domestic retail arena, to become technology absorption. The key objective behind this is improvisation of productivity. Further details on steps taken a preferred source for “Value for Money” innovative for energy conservation and technology absorption are products mentioned in our Board Report, appearing in the following • To create an extensive reach through multi- sections of this Annual Report. channel approach to acquire market share • To increase focus on asset light models to increase Internal Controls and Compliance profitability and minimise need for excessive Framework capital infusion The Company has an Internal Control System, commensurate with size, scale and complexity of its • To make extensive use of MTO route with nimble operations. The internal financial controls are adequate SCM to reduce channel inventory and are operating effectively so as to ensure orderly and • To rely on Innovative Digital Marketing and efficient conduct of business operations. The Company Consumer Engagement Model to enhance brand has appointed M/s BDO India LLP as Internal Auditors of awareness the Company. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal
44 TARA JEWELS LIMITED We have been conferred as the “Star Trading House” by the Ministry of Commerce & Industry and have been the highest exporter in gems and jewellery sector for the years FY2009 and FY2010.
audit. The internal auditors carry out audit, covering inter Training & Development alia, monitoring and evaluating the efficacy and adequacy Our in-house employee referral plays a key role in of internal control systems in the Company, its compliance developing the workforce. At Tara, we ensure that every with operating systems, accounting procedures and vacant position, either new or replacement is filled policies at all locations and submit their periodical internal with the right candidate. Our well-designed Employee audit reports to the Audit Committee. Based on the Induction Programme gives every new employee an internal audit report and review by the Audit Committee, objective view of the Company. It helps them learn about process owners undertake necessary actions in their the organisational culture and work ethic, gain the right respective areas. The internal auditors have expressed that information on policies and procedures of operation and the internal control system in the Company is robust and better integrate into the workplace. Our annual refresher effective. The Board has also put in place requisite legal training program helps reinstate policies and procedures. compliance framework to ensure compliance of all the It also provides guidance to enhance soft skills of the applicable laws and that such systems are adequate and employees. This is in addition to conducting team building operating effectively. and team management exercises for employee motivation and development. Human Resources Tara Jewels believes their employees to be an integral Cautionary Statement part of their growth and accomplishment story. The Statements made in this Annual Report describing the Company ensures that it contributes to the development Company’s objectives, projections, estimates, expectations of its employees by fostering the adequate skill set among may be “forward looking statements” within the meaning them. The Company periodically organises In-House of applicable securities laws and regulations. Actual results training sessions to upgrade their knowledge base. The could differ from those express or implied. Important performance rewarding programme built by the Company, factors that could make a difference to the Company’s keeps its employees well motivated. The above measures operations include conditions affecting demand supply ensure that the attrition rate of the Company remains and price conditions in the domestic and overseas well below industry standards. As of March 31, 2015 the markets in which the Company operates changes in the company had a strength of 1,421 employees. government regulations, tax laws, other statutes and other incidental factors. Key Areas of Focus At Tara Jewels, the employer-employee relationship is strengthened by measuring job satisfaction, performance appraisals, career planning, employee engagement and resolving workplace conflicts. We ensure fair employment practices, safe working conditions and a general satisfaction on the job in order to boost productivity, and ultimately, profitability of the Company. Workplace safety is also an important factor. We aim to provide a safe working environment for the employees. In our endeavour towards workplace safety, we impart training and create awareness amongst the employees to ensure zero accident facility. Compliance with statutory labour and employment laws is a critical HR function. All our policies are designed in a manner that there is no likelihood of deviating from statutory compliances.
Annual Report 14 - 15 45 Board’s Report
To The Members, Tara Jewels Limited Your Directors take pleasure in presenting their 14th Annual Report on the business and operations of the Company together with audited financial statements for the year ended March 31, 2015.
FINANCIAL RESULTS (` in Crore) Particulars Standalone Consolidated FY 2014-15 FY 2013-14 FY 2014-15 FY 2013-14 Total Income 1418.94 1422.12 1740.59 1700.78 Less: Expenditure 1345.21 1339.01 1648.24 1602.91 Profit Before Tax and Depreciation 73.73 83.11 92.35 97.87 Less: Depreciation 27.07 20.69 28.09 21.51 Profit Before Tax 46.66 62.42 64.26 76.36 Less: Tax 17.46 22.98 20.61 25.99 Net Profit After Tax 29.20 39.44 43.65 50.37 Earnings Per Share (EPS) 11.86 16.03 17.73 20.48
PERFORMANCE REVIEW Standalone: During the year under review, the Company earned a total revenue of `1418.94 crores against `1422.12 crores of the Previous Year. The net Profit after Tax achieved by the Company for the year under review was` 29.20 crores against the Profit After Tax of` 39.44 crores achieved by the Company in the previous Financial Year ended. Consolidated: During the year under review, the Company earned a total revenue of `1740.59 crores against `1700.78 crores of the Previous Year. The net Profit after Tax achieved by the Company for the year under review was ` 43.65 crores against the Profit After Tax of ` 50.37 crores achieved by the Company in the previous Financial Year ended.
OPERATIONS HIGHLIGHTS zz Expanded into the branded Bridal and Fashion Jewellery segment by launching Monique Lhuillier, and Zac Posen jewellery brands in the international markets. These brands are being sold through one of the largest online retailers and through high-end jewellery chain stores. zz Also Launched the Brand Angel Sanchez in the U.S Market with the largest jewellery retailer in the world. zz Forayed into online sales in the domestic market through tie-ups with Amazon, Snapdeal, and other online selling platforms. zz Signed a manufacturing Term Sheet with Sterling Jewellers Inc the largest jewellery retailer in U.S.A giving Tara Jewels the status of “ Exclusive Supplier of Choice for the manufacture of the Brand “Angel Sanchez”.
MANAGEMENT DISCUSSION AND ANALYSIS As per Clause 49 of the Listing Agreement entered into with Stock Exchanges, a detailed Management Discussion and Analysis Report is presented in a separate section of part of this annual report.
DIVIDEND & RESERVES The Company has achieved a Profit after tax of ` 29.20 crores and consolidated Profit after tax of Rs. 43.65 crores. Further, with a view of conserving the profits of the Company for future expansion of the business, the Directors do not recommend dividend on the Equity Share Capital of the Company for the Financial Year ended 2014-2015.
SHARE CAPITAL The paid up share capital of the Company as on March 31, 2015 stood at `246,228,500/- .During the year under review the Company has not issued shares with differential voting rights nor has granted any stock option or sweat equity except issue of 305000 convertible warrants to Bennett, Coleman & Company Limited on preferential allotment basis on April 2, 2014 with each warrant convertible into one equity share on or before October 1, 2015. As on March 31, 2015 none of the Directors of the Company hold instruments convertible into equity share of the Company.
46 TARA JEWELS LIMITED Board’s Report
EMPLOYEE’S STOCK OPTION SCHEME Particulars of Employee Stock Options are given in Annexure A to this report.
SUBSIDIARY COMPANIES AND THEIR PERFORMANCE / FINANCIAL POSITION The Subsidiaries and Step down Subsidiaries of the Company as on March 31, 2015 are as follows:
Tara (Hong Kong) Limited Tara Jewels Holdings Inc Fabrikant Tara International, LLC Tara China Jewelry Limited
In accordance with Section 129 (3) of the Companies Act, 2013 and Accounting Standard (AS) 21, the Company has prepared the Consolidated Financial Statements of the Company and all its subsidiaries, which forms part of this Annual Report.
The Company does not have any material subsidiary with whom the transaction entered into individually or taken together with previous transaction during the financial year, exceed ten percent of the annual consolidated turnover of the Company as per the last audited financial statements of the Company except the transaction entered with Fabrikant Tara International LLC. The statement in form AOC-2 (Annexure D) is attached to this report.
The Statement in form AOC-1(Annexure B) containing salient features of the financial statements of Company’s Subsidiaries is attached to this report.
DIRECTORS a. The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. The Board consists of 10 members, 3 of whom are executive or whole-time directors, and 6 are independent directors and 1 is Non Independent Director. The Board periodically evaluates the need for change in its composition and size.
Declaration by Independent Directors The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/ she meets the criteria of Independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.
The following changes have taken place in the Board of Directors/Key Managerial Personnel of the Company during the year 2014-15: SR NAME DESIGNATION APPOINTMENT RESIGNATION DATE OF APPOINTMENT/ NO RESIGNATION 1 Mr. Amol Raje Company Secretary NA YES April 4, 2014 2 Ms. Nalini Rajan Executive Director (Finance) NA YES July 1, 2014 3 Mr. Sanjay Sethi Executive Director (Finance) YES NA July 1, 2014 4 Mr. Sandro Brodbeck Nominee Director NA YES November 12, 2014 5 Ms. Jayshree Soni Company Secretary Yes YES Appointed w.e.f. May 26, 2014 / Resigned w.e.f. December 02, 2014 6 Ms. Nivedita Nayak Company Secretary YES NA December 22, 2014 7 Mr. Vikram Raizada Executive Director(Sales) NA YES January 2, 2015 8 Mr. Mariano De la Torre Nominee Director YES NA February 10, 2015 9 Mr. Ravindran M.P Executive Director YES NA May 25, 2015 b. Board / Committee Meetings During the year under review, meetings of the Board / Committee took place, details of which have been provided in the Corporate Governance Report that forms part of the Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.
Board Meeting dates are finalized in consultation with all directors and agenda papers backed up by comprehensive notes and detailed background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions.
Annual Report 14 - 15 47 Board’s Report
A detailed presentation is also made to apprise the Board of important developments in industry, segments, business operations, marketing, products etc. c. Familization Programme with Independent Directors Pursuant to provisions of Clause 49 (II) (B) (7) (b) of the Listing Agreement, during the year under review the Company prepared and pursued the Familiarization Programme for Independent Directors as hosted on Company’s website at www.tarajewels.in. (weblink:wwwtarajewels.in/ investorrelations/corporategovernance/policies.) d. Performance Evaluation Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.
The Performance Evaluation of the Directors, the Board and its Committees was carried out based on the criteria /manner recommended by the Nomination & Remuneration Committee and approved by the Board of Directors. Further details in respect of the criteria of evaluation has been provided in the Corporate Governance Report.
The performance evaluation of the Independent Directors was also carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who reviewed the performance of the Secretarial Department. Your directors express their satisfaction with the evaluation process. e. Policy for Selection, Appointment and Remuneration of Directors/Key Managerial Personnel/Senior Management Personnel including Criteria for their performance evaluation The Company has adopted a policy titled as “Nomination & Remuneration Policy” which interalia includes Company’s policy on Board Diversity, selection, appointment and remuneration of directors/Key Managerial Personnel/Senior Management Personnel, criteria for determining qualifications, positive attributes, independence of a director and criteria for performance evaluation of the Directors.
The Nomination & Remuneration Policy as approved by the Board is uploaded on the Company’s website www.tarajewels.in and details of criteria laid down and the Remuneration Policy are given in the Corporate Governance Report.
AUDIT COMMITTEE a. Pursuant to the provisions of Sections 177 (8) of the Companies Act, 2013,read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013, the Audit Committee consists of the following Members as under: S. No. Name Designation 1 Mr. Nikkhil Vaidya Chairman (Independent Director) 2 Mr. Rakesh Kalra Member (Independent Director) 3 Mr. Sanjay Sethi Member (Whole-Time Director)
During the year 2014-15, there were no instances, where the Board of Directors did not accept the recommendations of the Audit Committee.
VIGIL MECHANISM The Company has established a vigil mechanism and oversees through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided to any one complainant to have direct access to the Chairman of the Audit Committee via e-mail ID [email protected]. The Vigil Mechanism Policy of the Company is placed on Company’s website i.e. www.tarajewels.in. (weblink:wwwtarajewels.in/investorrelations/corporategovernance/policies.)
AUDITORS a. Statutory Auditors M/s C.B Chajjed and Co, Chartered Accountants, have been appointed as Statutory Auditor of the Company for a period of three years at the Annual General Meeting of the Company held on September 18, 2014. However, the appointment of Statutory Auditors needs to be ratified every year by the shareholders in the Annual General Meeting of the Company. M/s C.B Chajjed and Co, Chartered Accountants, have intimated their consent and eligibility for continuation of their appointment as the Statutory Auditors of the Company for the Financial Year 2015-16.On the recommendation of the Audit Committee, the Board proposes the ratification of their appointment and to fix their remuneration by the members at the ensuing Annual General Meeting of the Company.
48 TARA JEWELS LIMITED Board’s Report
Auditors’ Report There is no adverse remark or disclaimer, qualification or reservation in the Auditors’ Report b. Secretarial Auditor Mr.S.Anantha Rama Subramanian (CP1925)., Practicing Company Secretary, was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules made thereunder.
The Secretarial Audit report for Financial year 2014-15 forms part of Annual Report as Annexure C to the Board’s Report.
With respect to the observation of the Secretarial Auditor, the Board replies hereunder:-
Observation: Non-filing of E-Form-MGT10 i.e., Return to be filed with Ministry of Corporate Affairs, whenever there is an increase or decrease of two percent or more in the shareholding of the Promoters and top ten shareholders within 15 days of such change by the Company.
Board’s Reply: The Company files E-Form-MGT10 whenever there is a change of 2% or more calculated on the paid up share capital of the Company. c. Cost Auditor Cost Auditor is not required for the Company since it is located in a SEZ Zone, as per the circular issued by the Ministry in this regard.
INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK The Company has an Internal Control System, commensurate with size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations.
The Company has appointed M/s BDO India LLP as Internal Auditors of the Company. The Audit Committee in consultation with the internal auditors formulates the scope, functioning, periodicity and methodology for conducting the internal audit. The internal auditors carry out audit, covering inter alia, monitoring and evaluating the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations and submit their periodical internal audit reports to the Audit Committee. Based on the internal audit report and review by the Audit Committee, process owners undertake necessary actions in their respective areas. The internal auditors have expressed that the internal control system in the Company is robust and effective.
The Board has also put in place requisite legal compliance framework to ensure compliance of all the applicable laws and that such systems are adequate and operating effectively.
RISK MANAGEMENT The Board of Directors has constituted Risk Management Committee consisting of Directors and Non-Director Members. The Board based on the recommendations of the Risk Management Committee has also adopted “Risk Management Policy” of the Company which is hosted on Company’s website at www.tarajewels.in
The Committee through its Risk Council shall assess critical and non-critical risks, viz., Strategic, Operational, Financial, Regulatory etc. Your Company continues to attach a high degree of importance to this area and shall ensure that necessary Risk Mitigation Process is in place for each identified risk area at all times.
RELATED PARTY TRANSACTIONS All the transactions with related parties are in the ordinary course of business and on arm’s length basis; and there are no material related party transactions or arrangement, except the transactions entered by the Company with Fabrikant Tara International LLC (Wholly Owned Subsidiary).
The disclosure in from AOC-2 (Annexure D) is attached to this report. All the Related Party Transactions entered during the year under review are set out under Note 40 to the Financial Statements.
The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at www.tarajewels.in. www. tarajewels.in. (weblink:wwwtarajewels.in/investorrelations/corporategovernance/policies.)
None of the Directors has any pecuniary relationships or transactions vis-à-vis the Company except by way of remuneration paid to the Managing Director and sitting fees and Commission paid to other Non-Executive Directors.
Annual Report 14 - 15 49 Board’s Report
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES Information as required under Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. Details are as follows: Name Designation Remuneration Nature of Qualification/ Date of Age of Last Employment Percentage Whether any Employee Employment Experience Commencement of Employee held before of shares is a relative of any Employment joining the held director or manager of company the Company Mr. Rajeev Sheth Chairman and ` 17,116,400/- Contractual Around 33 years Since Incorporation 57 Intergold India 58.95% NIL Managing Director Mr. Sanjay Sethi Executive Director (Finance) ` 6,426,780/- Contractual Around 25 years As a CFO w.e.f. March 50 Bhatia Group as NIL NIL and CFO 1, 2014 Group CFO As Executive Director w.e.f. July 1, 2014 Mr. Vikram Raizada Executive Director (Sales) ` 9,890,852/- Resigned w.e.f. NA N.A NA NA NIL NIL January 2, 2015
However the information required under section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not being sent along with this Report to the Members of the Company as per the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before the 14th Annual General Meeting during the business hours on working days.
LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements.
CORPORATE SOCIAL RESPONSIBILITY Pursuant to the provisions of Section 135 of the Act, read with CSR Rules, the Company has constituted CSR Committee and formulated CSR Policy.
A Board level committee have been constituted consisting of the following members: Name Designation Mr. Rajeev Sheth Chairman and Member Mr. Ravindran M.P Member Ms. Fern Mallis Member
Initiative Taken: The Company has not made any expenditure on CSR as the Company is still in the process of identifying the eligible project. The Company intends to contribute the money for CSR activities as soon as theproject is identified.
DEPOSITS During the year 2014-15, the Company did not accept any deposit from public.
SIGNIFICANT AND MATERIAL ORDERS There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.
EXTRACT OF ANNUAL RETURN The extract of the Annual Return pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 prepared in form MGT 9 is annexed herewith as Annexure E.
DIRECTORS’ RESPONSIBILITY STATEMENT The financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘the Act’), read with Rule 7 of the Companies (Accounts) Rules, 2014, the
50 TARA JEWELS LIMITED Board’s Report
provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards.
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) and 134 (5) of the Companies Act, 2013: a) in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period; c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors have laid down internal financial controls, to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement entered into with the stock exchanges, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company’s Auditors confirming compliance is set out separately under Corporate Governance Report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The Company is giving due consideration for the conservation of energy and all efforts are being made to properly utilize the energy resources.
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 F.
DISCLOSURE UNDER SECTION 134 (3) (l) OF THE COMPANIES ACT, 2013 Except as disclosed elsewhere in this report, there have been no material changes and commitments which can affect the financial position of the Company occurred between the end of the financial year of the Company and date of this report.
HUMAN RESOURCE Your Company firmly believes that employees are the most valuable assets and key players of business success and sustained growth. Various employee benefits, recreational and team building programs are conducted to enhance employee skills, motivation as also to foster team spirit. Company also conducts in house training programsto develop leadership as well as technical/functional capabilities in order to meet future talent requirements. Industrial relations were cordial throughout the year.
POLICY ON PREVENTION OF SEXUAL HARASSMENT The Company has a policy on prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Harassment, Redressal)Act, 2013. The Committee has been set up to redress complaints received regarding Sexual Harassment. All Employees (permanent, contractual, temporary, trainees) are covered under this policy.
During the year 2014-2015 no complaints were received regarding sexual harassment.
APPRECIATION Your Directors place on record their sincere thanks and appreciation for the confidence reposed and continued support extended by Central and State Governments, Bankers, Customers, Suppliers and Shareholders. Your Board would like to place on record its sincere appreciation to the employees for the dedicated efforts and contribution in playing a very significant part in the Company’s operations.
For and on behalf of the Board of Directors
Place : Mumbai RAJEEV SHETH Date : August 13, 2015 Chairman & Managing Director (DIN: 00266460)
Annual Report 14 - 15 51 Annexure - A to Board’s Report
Employee’s Stock Option Plan
The company implemented ESOP scheme as approved by the shareholders of the company. Details of the options granted under the plan are as under: ESOP Scheme Grant Date No of Options Exercise Price ` Vesting Period ESOP 2010 - Grant A 02.09.2010 442,571 333 02.09.2010 to 01.09.2014 ESOP 2010 - Grant B 02.09.2010 66,454 20 02.09.2010 ESOP 2013 - Grant C 25.07.2013 242,956 230 25.07.2013 to 25.07.2017
The options are granted at an exercise price. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of Rs.10/- each. The options have vesting periods as stated above in accordance with the vesting schedule as per the said plans.
The particulars of options granted and lapsed under the plan are as below: Particulars Year ended March 31, 2015 Year ended March 31, 2014 Grant B Grant C Grant B Grant C Options outstanding as at the beginning of the year - 242,956 49,841 - Add: Options granted during the year - - - 242,956 Less: Options lapsed during the year - 131,278 4,473 - Less: Options exercised during the year - - 45,368 - Less: Options Surrendered during the year - - - - Options outstanding as at the end of the year - 111,678 - 242,956
The Company has followed the intrinsic value-based method of accounting for stock options based on Guidance Note on Accounting for Employee Share -based Payments, issued by the Institute of Chartered Accountants of India. Had the compensation cost for the Company’s stock based compensation plans been determined in the manner consistent with the fair value approach as described in the said Guidance Note, (a) the Company’s netincome would be lower by Rs.231,911 (previous year : Rs. 940,488), and (b) earnings per share as reported would be lower as indicated below: (Amount in `) Particulars Year ended Year ended March 31, 2015 March 31, 2014 Net profit after tax, as reported 436,554,624 503,773,032 Less: Total stock-based employee compensation expense determined under fair value based method 231,911 940,448 Adjusted net profit after tax 436,322,713 502,832,584 Basic earning per share - As reported 17.73 20.48 - Adjusted 17.72 20.44 Diluted earning per share - As reported 17.73 20.48 - Adjusted 17.72 20.44
The fair value of option is estimated on the date of grant based on the following assumptions: Particulars ESOP 2013 Grant C dated 25.07.2013 Dividend yield (%) 0.00% Expected life (years) 4.00 Yrs Risk free interest rate(%) 9.10% Volatility (%) 46.10%
52 TARA JEWELS LIMITED Annexure -B to Board’s Report AOC 1
Salient Features of Financial Statements of Subsidiary / Associates / Joint Ventures as per Companies Act , 2013
Part “A”: Subsidiaries (Amount in `) 1. Sl. No. I II III 2. Name of the subsidiary Tara Jewels Tara (Hong Kong) Tara China Holdings, Inc. * Limited Jewelry Limited ** 3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period N.A. N.A. N.A. 4. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. USD*** USD*** USD*** 5. Share capital 113,299,500 464,117 4,134,035 6. Reserves & surplus 143,044,067 298,554,276 2,681,700 7. Total assets 1,443,260,144 1,562,749,862 24,488,898 8. Total Liabilities 1,186,916,577 1,263,731,469 17,673,163 9. Investments - 4,135,007 - 10. Turnover 3,751,930,957 4,355,169,042 22,356,868 11. Profit before taxation 38,693,808 124,539,641 1,655,244 12. Provision for taxation 10,833,390 20,637,237 - 13. Profit after taxation 27,860,418 103,902,404 1,655,244 14. Proposed Dividend - - - 15. % of shareholding 100 100 100
* Based on Consolidated figures with Fabricant-Tara International LLC ** Wholly owned subsidiary of Tara (Hong Kong) Limited. *** Exchange rate as at end of the year USD 1 = Rs.62.59.
Note : Tara Jewels Honduras, Sociedad de Responsabilidad Limitada , the wholly owned subsidiary of Tara Jewels Holdings, Inc. got dissolved on August 29, 2013.
Part “B”: Associates and Joint Ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures is not aaplicable to the company since, there are no associates or joint ventures of the Company.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 13.08.2015 Company Secretary [ACS:24590]
Annual Report 14 - 15 53 Annexure-C to Board’s Report
FORM NO MR-3
SECRETARIAL AUDIT REPORT [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014] For the Financial Year ended : March 31, 2015 To, The Members Tara Jewels Limited Plot No.-122, 15th Road Near IDBI Bank, M.I.D.C. Andheri (East) Mumbai – 400 093
I have conducted the Secretarial Audit of the Compliance of Applicable Statutory provisions and the adherence to good corporate practices by Tara Jewels Limited (hereinafter called ‘the Company’). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the Corporate Conducts/Statutory Compliances and expressing my opinion thereon.
Based on my verification of the Company’s, books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on March 31, 2015, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I further report that compliance with applicable laws is the responsibility of the Company and our report constitutes an independent opinion. Our report is neither an assurance for future viability of the Company nor a confirmation of efficient management by the company.
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2015 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment (There were no instances of Foreign Direct Investment and Overseas Direct Investments made during the year. However, the Company has complied with the requirements of filing returns on annual basis, with respect to the Foreign Direct Investments and Overseas Direct Investment relating to the earlier period, and there were no External Commercial Borrowing, hence, compliance requirements for the same are (‘Not Applicable’ for the year under review and);
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- (a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; (c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (Not Applicable for the year under review); d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not Applicable for the year under review) and (f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client (Not Applicable for the year under review); (g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations 2009; (Not Applicable for the year under review) and (h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not Applicable for the year under review). vi. Other laws applicable specifically to the Company viz.: a) Water (Prevention and control of Pollution) Act, 1974 and the rules made thereunder; b) Air (Prevention and control of Pollution) Act, 1981 and the rules made thereunder; c) Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008; and d) Environment (Protection) Act, 1986 and the rules made thereunder.
54 TARA JEWELS LIMITED Annexure-C to Board’s Report MR-3
I have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India; (Not Applicable for the year under review); and
(ii) The Listing Agreements entered into by the Company with BSE Limited and the National Stock Exchange of India Limited.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:
Non-filing of E-Form-MGT10 i.e., Return to be filed with Ministry of Corporate Affairs, whenever there is an increase or decrease of two percent or more in the shareholding of the Promoters and top ten shareholders within 15 days of such change by the Company.
With respect to delay in filings of E-forms with the Ministry of Corporate Affairs, the Company paid the additional fee and complied with the requirements.
i further report that:- Based on the information provided by the Company, its officers and authorized representatives during the conduct of the audit, and also on the review of compliance reports by the respective Department Heads / Company Secretary / CEO / KMP taken on record by the Board of Directors of the Company, in my opinion, adequate systems and processes and control mechanism exist in the Company to monitor and ensure compliance with applicable general laws like labour laws, competition law, environmental laws and all other applicable laws, rules, regulations and guidelines. The Company has responded to compliance requirements, notices for demands, claims, penalties etc. levied, by various statutory / regulatory authorities and initiated actions for corrective measures and compliance thereof.
I further report that the compliance by the Company of applicable financial laws, like direct and indirect tax laws, and Labour Law Compliances have not been reviewed in this Audit since the same have been subject to review by statutory financial audit and other designated professionals;
i further report that The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice along with agenda was given seven days in advance to all directors to schedule the Board Meetings, and detailed notes on agenda were generally sent in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members’ views, if any, are captured and recorded as part of the minutes.
I further report that during the audit period there were no events viz.: (i) Public/Right/sweat equity shares (except the issue of 3,05,000 convertible warrants to Bennett Coleman & Company Limited on a preferential allotment basis on 2nd April, 2014 convertible on or before 01st October, 2015); (ii) Redemption / Buy-back of securities; (iii) Major decisions taken by the members pursuant to Section 180 of the Companies Act, 2013, except approval for the borrowing exceeding the aggregate of the paid-up share capital and free reserves and creation of Charges on the assets of the Company; (iv) Merger / amalgamation / reconstruction, etc; and (v) Foreign technical collaborations; or such other specific events / actions in pursuance of the above referred laws, rules, regulations, guidelines, etc., having any bearing on the Company’s affairs.
For S. Anantha & Co., Company Secretaries
S. Anantha Rama Subramanian Proprietor Place: Mumbai FCS: 4443 Date: August 13, 2015 CP No.: 1925
Annual Report 14 - 15 55 Annexure - D to Board’s Report AOC 2
Disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto.[Pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014]. 1 No contracts or arrangements or transactions were entered into by the Company with related parties during the year ended March 31, 2015, which were not at arm’s length basis.
2 Details of material contracts or arrangement or transactions at arm’s length basis
SR. Name of the releated Party Nature of Duration of Salient terms of Date of approval Amount No. and nature of relationship contracts/ the contracts/ the contracts or by the Audit paid as arrangements/ arrangements/ the arrangements Committee/ advances transactions transactions or transactions Board including the value 1 Fabrikant Tara International Sale of Goods Ongoing transactional net 06, February,2014 Nil LLC.U.S.A (Wholly owned margin method subsidiary of Tara Jewels Rs.2,391,741,949/- Holding Inc., a wholly owned subsidiary) 2 Tara (Hong Kong) Ltd. Hong Sale of Goods Ongoing transactional net 06, February,2014 Nil Kong (Wholly owned margin method Rs. subsidiary) 983,959,630/- 3 Fabrikant Tara International Purchase of Ongoing transactional net 06, February,2014 Nil LLC.U.S.A (Wholly owned Goods margin method Rs. subsidiary of Tara Jewels 448,490,802/- Holding Inc., a wholly owned subsidiary) 4 Tara (Hong Kong) Ltd. Hong Purchase of Ongoing transactional net 06, February,2014 Nil Kong (Wholly owned Goods margin method Rs. subsidiary) 284,571,547/- 5 Tara (Hong Kong) Ltd. Hong Labour Charges Ongoing transactional net 06, February,2014 Nil Kong (Wholly owned Paid margin method Rs. subsidiary) 233,189/- 6 Tara (Hong Kong) Ltd. Hong Purchase of Ongoing transactional net 06, February,2014 Nil Kong (Wholly owned Fixed Assets margin method Rs. subsidiary) 4,629,789/- 7 Fabrikant Tara International Labour Charges Ongoing transactional net 06, February,2014 Nil LLC.U.S.A (Wholly owned Received margin method Rs. subsidiary of Tara Jewels 5,368,942/- Holding Inc., a wholly owned subsidiary)
56 TARA JEWELS LIMITED Annexure-E to Board’s Report MGT 9
I REGISTRATION & OTHER DETAILS: i CIN L52393MH2001PLC131252 ii Registration Date 16-Mar-01 iii Name of the Company Tara Jewels Limited
iv Category of the Company Company Limited by shares/Indian Non-Government Company v Address of the Registered office & contact details Address : Plot No.122, 15th Road, Near IDBI Bank, MIDC Town / City : Andheri (East, Mumbai- 400093 State : Maharashtra Country Name : India Telephone (with STD Code) : 022-66774444 Fax Number : 022-66774464 Email Address : [email protected] Website, if any: www.tarajewels.in vi Whether listed company YES vii Name and Address of Registrar & Transfer Agents ( RTA ):- Name of RTA: LINK INTIME INDIA PVT LIMITED Address : C-13, Pannalal Silk Mills Compound, L.B.S Marg, Town / City : Bhandup (West), Mumbai- 400078 State : Maharashtra Pin Code: 400078 Telephone : 022-25946970 Fax Number : 022-25946969 Email Address : [email protected]
II. pRINCIPAL BUSINESS ACTIVITY OF THE company All the business activities contributing 10 % or more of the total turnover of the company shall be stated:- Sl. Name and Description of main products / NIC Code of the Product / service % to total turnover of the No. services company 1 Jewellery 321 100%
III. paRTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES - S. NAME AND ADDRESS OF THE COMPANY CIN/GLN HOLDING/ % of shares held Applicable No. SUBSIDIARY / Section ASSOCIATE 1 Tara Jewels Holdings Inc N.A Subsidiary 100% 2(87) 2 Fabrikant Tara International LLC N.A Subsidiary 100% 2(87) 3 Tara Hong Kong Limited N.A Subsidiary 100% 2(87) 4 Tara China Jewelry Limited N.A Subsidiary 100% 2(87)
Annual Report 14 - 15 57 Annexure-E to Board’s Report MGT 9
IV. sHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i. category-wise Share Holding Category of No. of Shares held at the beginning of the year i.e No. of Shares held at the end of the year i.e % Change Shareholders As on March 31, 2014 As on March 31, 2015 during the year Demat Physical Total % of Total Demat Physical Total % of Total Shares Shares A. Promoter s (1) Indian a) Individual/ HUF 14726398 0 14726398 59.81% 14726398 0 14726398 59.81% 0% b) Central Govt 0 0 0 0% 0 0 0 0% 0% c) State Govt(s) 0 0 0 0% 0 0 0 0% 0% d) Bodies Corp. 33600 0 33600 0.14% 33600 0 33600 0.14% 0% e) Banks / FI 0 0 0 0% 0 0 0 0% 0% f) Any other 0 0 0 0% 0 0 0 0% 0%
(2) Foreign a) NRI - Individual/ 0 0 0 0% 0 0 0 0% 0% b) Other - Individual/ 0 0 0 0% 0 0 0 0% 0% c) Bodies Corp. 0 0 0 0% 0 0 0 0% 0% d) Banks / FI 0 0 0 0% 0 0 0 0% 0% e) Any Others 0 0 0 0% 0 0 0 0% 0% Total shareholding of Promoter (A) 14759998 0 14759998 59.94% 14759998 0 14759998 59.94% 0%
B. Public Shareholding 1. Institutions a) Mutual Funds 2919292 0 2919292 11.86% 2762103 0 2762103 11.22% (0.64)% b) Banks / FI 798740 0 798740 3.24% 571872 0 571872 2.32% (0.92)% c) Central Govt 0 0 0 0% 0 0 0 0% 0% d) State Govt(s) 0 0 0 0% 0 0 0 0% 0% e) Venture Capital Funds 0 0 0 0% 0 0 0 0% 0% f) Insurance Companies 0 0 0 0% 0 0 0 0% 0% g) FIIs 0 0 0 0% 0 0 0 0% 0% h) Foreign Venture Capital Funds 0 0 0 0% 0 0 0 0% 0% i) Others (specify) Foreign Institutional Investor 2329787 0 2329787 9.46% 2061696 0 2061696 8.37% (1.09)% Sub-total (B)(1):- 6047819 0 6047819 24.56% 5395671 0 5395671 21.91% (2.65)%
2. Non-Institutions a) Bodies Corp. 743750 0 743750 3.02% 421338 0 421338 1.71% (1.31)% i) Indian
58 TARA JEWELS LIMITED Annexure-E to Board’s Report MGT 9
Category of No. of Shares held at the beginning of the year No. of Shares held at the end of the year i.e % Change Shareholders i.e As on March 31, 2014 As on March 31, 2015 during the year Demat Physical Total % of Total Demat Physical Total % of Total Shares Shares ii) Overseas b) Individuals i) Individual shareholders holding 768715 2 768717 3.12% 1141528 2 1141530 4.64% 1.52% nominal share capital upto Rs. 1 lakh ii) Individual shareholders holding 227396 0 227396 0.92% 544718 196521 741239 3.01% 2.09% nominal share capital in excess of Rs 1 lakh c) Others (specify) Clearing Member 31759 0 31759 0.13% 54655 0 54655 0.22% 0.09% Foreign Portfolio Investor (Corporate) 0 0 0 0% 266248 0 266248 1.08% 1.08% Non Resident Indian (Repat) 7362 0 7362 0.03% 35394 0 35394 0.14% 0.11% Non Resident Indian (Non Repat) 613 0 613 0% 3477 0 3477 0.01% 0.01% Foreign Companies 1996521 0 1996521 8.11% 1800000 0 1800000 7.31% (0.8)% Directors/Relatives 38915 0 38915 0.16% 3300 0 3300 0.01% (0.15)% Sub-total (B)(2):- 3815031 2 3815033 15.49% 4270658 196523 4467181 18.14% 2.65%
Total Public Shareholding (B)=(B) 9862850 2 9862852 40.06% 9666329 196523 9862852 40.06% 0% (1)+ (B)(2)
C. Shares held by Custodian for 0 0 0 0% 0 0 0% 0% GDRs & ADRs
Grand Total (A+B+C) 24622848 2 24622850 100% 24426327 196523 24622850 100% 0% ii shareholding of Promoters Sl Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % change in No. share holding during the year No. of % of total % of Shares No. of % of total %of Shares Shares Shares Pledged / Shares Shares Pledged / of the encumbered of the encumbered company to total company to total shares shares 1 Mr. Rajeev Sheth 14482893 58.82% NIL 14482893 58.82% NIL NIL 2 Ms. Aarti Sheth 114440 0.46% NIL 114440 0.46% NIL NIL 3 Ms. Divya Sheth 114440 0.46% NIL 114440 0.46% NIL NIL 4 Divya Jewels International Limited 33600 0.14% NIL 33600 0.14% NIL NIL 5 Purnima Rajeev Sheth 14625 0.06% NIL 14625 0.06% NIL NIL TOTAL 14759998 59.94% NIL 14759998 59.94% NIL NIL
Annual Report 14 - 15 59 Annexure-E to Board’s Report MGT 9
iii change in Promoters’ Shareholding ( please specify, if there is no change) Sl. No. I - Mr.Rajeev Sheth Shareholding at the beginning of Cumulative Shareholding during the year the year No. of shares % of total shares No. of shares % of total shares of the company of the company Mr. Rajeev Sheth 14482893 58.82% Increase Date Reason for Increase April 6, 2015 MARKET PURCHASE 32000 * 0.13% 14514893 58.95% Decrease Date Reason for Decrease
*Details are given only in respect of those Promoters, whose holdings have changed. The above changes in Mr. Rajeev Sheth Shares are on account of purchase of 32000 shares from market on April 6, 2015. iv shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
Top 10 Shareholders Shareholding at the beginning of Cumulative Shareholding during the year the year No. of shares % of total shares No. of shares % of total shares of the company of the company 1. IDFC Premier Equity Fund 2162500 8.78% 2162500 8.78% 2.CRYSTALON FINANZ AG 1800000 7.31% 1800000 7.31% 3.COPTHALL MAURITIUS INVESTMENT LIMITED 724637 2.94% 724637 2.94% 4.HSBC GLOBAL INVESTMENT FUNDS A/C HSBC GIF 657440 2.67% 657440 2.67% MAURITIUS LIMITED Less Market Sale: 40800 0.17% 616640 2.50% Less Market Sale: 5304 0.02% 611336 2.48% 5. a) ICICI PRUDENTIAL FMCG FUND 329780 1.34% 329780 1.34% b) ICICI PRUDENTIAL BALANCED FUND 269823 1.10% 269823 1.10% 6.AXIS BANK LIMITED 798740 3.24% 798740 3.24% Less Market Sale: 80000 0.32% 718740 2.92% Less Market Sale: 12100 0.05% 706640 2.87% Less Market Sale: 3900 0.02% 702740 2.85% Less Market Sale: 100740 0.41% 602000 2.44% Less Market Sale: 30128 0.12% 571872 2.32% 7.DB INTERNATIONAL (ASIA) LTD 556348 2.26% 556348 2.26% 8.HSBC INDIAN EQUITY MOTHER FUND 266248 1.08% 266248 1.08% 9.FABRIKANT H K TRADING LIMITED 196521 0.80% 196521 0.80% 10.ANUJ ANANTRAI SHETH 0 0 0 0 Add Market Purchase: 185000 0.75% 185000 0.75%
60 TARA JEWELS LIMITED Annexure-E to Board’s Report MGT 9
v shareholding of Directors and Key Managerial Personnel: Shareholding of each Directors and each Key Shareholding at the beginning of Cumulative Shareholding during Managerial the year the year No. of shares % of total shares No. of shares % of total of the company shares of the company 1. Mr. Rajeev Sheth, Chairman and Managing Director 14482893 58.82% Add Market Purchase 32000 * 0.13% 14514893 58.95% 2. Mr. Sanjay Sethi, Director (Finance)and CFO NIL NIL 3. Mr. Nikkhil Vaidya, Independent Director NIL NIL 4. Mr. Rajiv Jain, Independent Director 300 300 0.001% 5. Mr. Rakesh Kalra, Independent Director NIL NIL 6. Mr. Shanti Saroop Khindria, Independent Director NIL NIL 7. Mr. Francois Arpels, Independent Director NIL NIL 8. Ms. Fern Mallis, Independent Director NIL NIL 9. Mr. Mariano De La Torre, Nominee Director NIL NIL 10. Ms. Nivedita Nayak, Company Secretary NIL NIL 11. Mr. Ravindran M.P # NIL NIL
*The above changes in Mr. Rajeev Sheth Shares are on account purchase of 32000 shares from market on April 6, 2015. #Appointed as Whole Time Director w. e. f. May 25, 2015
V INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment (Amount in `) Secured Loans Unsecured Deposits Total Indebtness including Loans Deposits Indebtedness at the beginning of the financial year i) Principal Amount 2,808,238,490 67,793,171 2,876,031,661 ii) Interest due but not paid - iii) Interest accrued but not due 594,296 594,296 Total (i+ii+iii) 2,808,832,786 67,793,171 - 2,876,625,957 Change in Indebtedness during the financial year · Addition 259,621,512 - 259,621,512 · Reduction (67,793,171) (67,793,171) Net Change 259,621,512 (67,793,171) - 191,828,341 Indebtedness at the end of the financial year
i) Principal Amount 3,068,100,264 - 3,068,100,264 ii) Interest due but not paid - iii) Interest accrued but not due 354,034 354,034 Total (i+ii+iii) 3,068,454,298 - - 3,068,454,298
Annual Report 14 - 15 61 Annexure-E to Board’s Report MGT 9
Vi. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEl A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Sr. No. Particulars of Name of MD/WTD/ Total Amount Remuneration Manager Mr. Rajeev Sheth Ms.Nalini Rajan Mr. Vikram Mr. Sanjay Raizada Sethi 1 Gross salary (a) Salary as per 12,000,000 2,249,100 9,890,852 4,820,400 28,960,352 provisions contained in section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites 26,646 - - - 26,646 u/s 17(2) Income-tax Act, 1961
(c) Profits in lieu of salary - - - - - under section 17(3) Income tax Act, 1961 2 Stock Option - - - - - 3 Sweat Equity - - - - - 4 Commission 5,089,754 - - - 5,089,754 - as % of profit 1% - - - 1% - others, specify… 5 Others, please specify - - - - - Total (A) 17,116,400 2,249,100 9,890,852 4,820,400 34,076,752 Ceiling as per the Act Rs. 51,327,869/- (being 10% of the net profits of the Company calculated as per Section 198 of the companies Act, 2013)
62 TARA JEWELS LIMITED Annexure-E to Board’s Report MGT 9
B. Remuneration to other directors: Particulars of Remuneration Name of Directors Total Amount Ms. Fern Mallis Mr. Nikhil Mr. Rakesh Mr. Shanti Mr. Rajiv Mr. Francois Vaidya Kalra Saroop Jain Arpels Khindria 3. Independent Directors 560,000 640,000 620,000 560,000 580,000 560,000 3,520,000
· Fee for attending board / committee meetings · Commission · Others, please specify Total (1) 560,000 640,000 620,000 560,000 580,000 560,000 3,520,000
4. Other Non-Executive Directors ------
· Fee for attending board / committee meetings · Commission · Others, please specify Total (2) ------Total (B)=(1+2) 560,000.00 640,000.00 620,000.00 560,000.00 580,000.00 560,000.00 3,520,000.00 Total Managerial Remuneration Overall Ceiling as per the Act Rs. 5,132,788/- (being 1% of the net profits of the Company calculated as per Section 198 of the companies Act, 2013)
c. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD Particulars of Remuneration CFO Company Secretary Total Gross salary (a) Salary as per provisions contained in section 17(1) of the 1,606,380 787,383 6,728,081 Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - - (c) Profits in lieu of salary under section 17(3) Incometax Act, 1961 ------Commission - - - - as % of profit - - - - others, specify… - - - Others, please specify - - - Total 1,606,380 787,383 6,728,081
Annual Report 14 - 15 63 Annexure-E to Board’s Report MGT 9
VII. pENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: TYPE Section of the Brief Details of Penalty/ Authority Appeal made, if Companies Description Punishment/ (RD/NCLT/ any (give details) Act Compounding COURT) fees imposed
A. COMPANY Penalty Punishment NONE Compounding B. DIRECTORS Penalty Punishment NONE Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment NONE Compounding
64 TARA JEWELS LIMITED Annexure-F to Board’s Report
Information as per Section 134 (3) (m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 (“Rules”) for the year ended March 31, 2015 is as follows: A) consERVATION OF ENERGY: i) Steps taken or impact on conservation of energy: The Company has adopted various innovative measures to reduce waste and to achieve optimum utilization of energy, resulting in reduction of power cost. The major steps taken during the year 2014-15 towards conservation of energy together with its impact is as given below: a) We have replaced the entire luminous lamp with lead lamp where we can save 60% of the energy which is used for lighting. b) We have installed one Air washing unit near the Dust collector where the air is being resurculated, by doing this we are getting an input of washed cool air, so the cost of air condition will come down. c) We have converted the heat discharge of an incinerator to an alternate furnace to dry the sludge for refinery purpose 100% elimination of usage of 24 KW Muffle furnace every single day. ii) Steps taken by the company for utilising alternate sources of energy: We have organized a detailed Audit about effective usage of Solar Energy in factory operational area which can be executed upon receipt of Audit Report. iii) Capital Investment on energy conservation equipments: We have spent around INR 20000000 as capital investment. (ROI period only one year) B) tECHNOLOGY ABSORPTION: i) The efforts made towards Technology Absorption: Your Company continues to take consistent efforts towards Technology Absorption and Research & Development. The major steps taken during the year 2014-15 on Technology Absorption and Research & Development are as follows: As a result of research towards improvisation of productivity and perfection we have installed the following Machines: a) Electro Polishing Machines b) Fully Automatic Wax injector c) New Platinum Casting Machine d) CNC and Continues Casting Machine e) High Speed Laser Welding and Marketing Machines ii) The benefits derived like product improvement, cost reduction, product development or import substitution together with future action plan is as follows: The benefits of new technology absorption is given below: a) New electro polishing Machine: one machine can replace 30 workman and can provide good polishing effect on those areas where the manual polishing tools cannot be reached. b) Fully automated wax injector: increases productivity and good quality waxes to get excellent casting result. c) New platinum Casting Machine: Fully automated vaccum pressure casting machine or platinum casting machine increases the lot size from 250 gram to 1 kg and get “0” porosity and excellent quality of casting. d) Continous Casting machine and latest Version of CNC machine which is helping us to make holo machine made jewellery and Miracle Plate with Excellent Quality. e) High Speed Laser marking and welding machines which helps us to increase the productivity in post casting area. iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year): a) the details of technology imported; 1. OTEC media polishing Machine: this media polishing machine helps us to polish the jewellery in high quality without manpower. 2. Fully automatic wax injector: this helps us with high productivity in less manpower. 3. Electro polishing, this machine helps us to those area where the manual polishing tools cannot be reached and can provide very good polishing effect. 4. High speed laser stamping and welding: this high speed laser welding and stamping machine help us to increase the productivity in post casting area. b) the year of import; 1. 2007 2. 2014 3. 2013 4. 2014 c) Whether the technology has been fully absorbed: All the above technology are fully absorbed. iv) the expenditure incurred on Research and Development: INR 20000000 C) FOREIGN EXCHANGE USED AND EARNED: The details of Foreign Exchange used and earned during the year are as follows: (Amount in `) Earned Rs. 11,806,211,099/- Used Rs. 219,686,290/-
Annual Report 14 - 15 65 Corporate Governance Report
A. Company’s Philosophy on Corporate Governance Your Company adheres to best practices in Corporate Governance based on certain key principles, including fairness and integrity, transparency and disclosure, accountability, equal treatment to all the shareholders and social responsibility. Corporate Governance extends beyond corporate laws. Its fundamental objective is not merely to fulfil legal requirements, but also the institution of and adherence to systems and procedures, ensuring the commitment of the Board of Directors in managing the Company’s affairs in a transparent manner to maximise the long-term value of the shareholders at large.
Your Company has adopted an appropriate Corporate Governance framework to ensure timely and accurate disclosure of all material matters, including financial position, performance, ownership and governance.
Your Company’s policies and practices relating to the Corporate Governance are discussed in the following sections:
B. Board of Directors
(i) Board Membership Criteria The members of the Board of Directors of your Company are expected to possess the required expertise, skill and experience to effectively manage and direct your Company to attain its organisational goals. They are expected to be persons with vision, leadership qualities, proven competence and integrity, and with a strategic bent of mind.
Each member of the Board of Directors of your Company is expected to ensure that his/her personal interest does not run in conflict with your Company’s interests. Moreover, each member is expected to use his/her professional judgement to maintain both the substance and appearance of independence and objectivity.
(ii) Composition of the Board The Board of Directors of your Company has an optimum combination of Executive and Non-executive Directors to have a balanced Board Structure. The Board has ten Directors, and except the Chairman & Managing Director and Two Whole-Time Directors, all other Seven Directors are Non-executive. Out of the Seven Non-executive Directors, Six are Independent Directors. The Chairman of the Board of Directors of your Company is a Non-Independent Director.
The composition of the Board of Directors of your Company as on March 31, 2015, along with the other Directorships held by each of the Directors is brought out in the following tables:
Name of Director Position Relationship No. of other No. of other No. of other Board with other Directorships# Board Committee(s) of Directors Committee(s) of which which he / she is a he / she is a Chairman * Member * Mr. Rajeev Sheth (DIN: 00266460) Chairman & Managing Director None 2 NIL NIL Mr. Sanjay Sethi (DIN: 01152580) @ Executive Director - Finance None NIL NIL NIL Mr. Rajiv Lochan Jain (DIN: 00161022) Non-executive & Independent Director None 1 2 NIL Mr. Rakesh Kalra (DIN: 00780354) Non-executive & Independent Director None 5 3 1 Mr. Nikkhil Vaidya (DIN: 02942549) Non-executive & Independent Director None 1 NIL NIL Ms. Fern Mallis (DIN: 03270532) Non-executive & Independent Director None NIL NIL NIL Mr. Shanti Saroop Khindria (DIN: 03271292) Non-executive & Independent Director None NIL NIL NIL Mr. Francois Arpels (DIN: 03533590) Non-executive & Independent Director None NIL NIL NIL Mr. Mariano Fernando de la Torre (DIN: 07087405) @ Non-executive & Non-Independent Director None NIL NIL NIL Mr. Sandro Brodbeck (DIN: 06492798) $ Non-executive & Non-Independent Director None NIL NIL NIL Mr. Vikram Raizada (DIN: 03196436) $ Executive Director & CEO (Retail) None NIL NIL NIL Ms. Nalini Rajan (DIN: 02922199) $ Executive Director (Finance) None NIL NIL NIL Mr. Ravindran M. P (DIN: 07188069) @ Executive Director None NIL NIL NIL
# Excludes Directorships Foreign Companies and Section 8 Companies. * Includes only Audit Committee and Stakeholders’ Relationship Committee.
66 TARA JEWELS LIMITED Corporate Governance Report
$ Mr. Sandro Brodbeck resigned as Executive Director w.e.f. 12th November 2014, Mr. Vikram Raizada resigned as Executive Director (Sales) w.e.f. 02nd January, 2015 and Ms. Nalini Rajan resigned as Executive Director (Finance) w.e.f. July 1, 2014. @ Mr. Sanjay Sethi is appointed as Director (Finance) of the Company w.e.f. July 1, 2014, Mr. Mariano De la Torre is appointed as Nominee Director of Company w.e.f. February 10, 2015 and Mr. Ravindran M.P is appointed as Whole Time Director of the Company w.e.f. May 25, 2015.
(iii) Board Meetings / Annual General Meeting During the year 2014-15, the Board of Directors of your Company met 4 times on May 28, 2014, August 12, 2014, November 12, 2014 and February 10, 2015.
The previous Annual General Meeting was held on September 18, 2014.
The Details regarding the attendance of Directors at the Board Meetings and the Annual General Meeting held during 2014-15 are presented in the following table: Director No. of Board Meetings Whether Last AGM Attended (Yes/No) Held Attended Mr. Rajeev Sheth 4 4 YES Mr.Vikram Raizada $ 4 3 YES Mr. Sanjay Sethi * 4 3 YES Ms. Nalini Rajan $ 4 1 NO Mr.Sandro Brodbeck $ 4 2 NO Ms. Fern Mallis 4 2 NO Mr. Nikkhil Vaidya 4 4 YES Mr. Rajiv Lochan Jain 4 4 YES Mr. Rakesh Kalra 4 4 NO Mr. Shanti Saroop Khindria 4 3 NO Mr. Francois Arpels 4 3 NO Mr. Mariano De la Torre * 4 1 NA Mr. Ravindran M.P* 4 NA NA
$ Mr. Sandro Brodbeck resigned as Director w.e.f. 12th November 2014, Mr. Vikram Raizada resigned as Executive Director (Sales) w.e.f. 02nd January, 2015 and Ms. Nalini Rajan resigned as Executive Director (Finance) w.e.f. July 1, 2014. * Mr. Sanjay Sethi was appointed as Director (Finance) of the Company w.e.f. July1, 2014, Mr. Mariano De la Torre was appointed as Nominee Director of Company w.e.f. February 10, 2015. * Mr. Ravindran M.P was appointed as Whole Time Director w.e.f. May 25, 2015, hence, during the Financial Year 2014-15 his attendance is shown as N.A
(iv) Membership Term and Retirement Policy According to your Company’s Articles of Association, at every Annual General Meeting, one-third of the Directors for the time being are liable to retire by rotation or, if their number is not three or a multiple of three, then the number nearest to one-third, shall retire from office.
The Directors to retire by rotation at every Annual General Meeting shall be those who have been longest in office since their last appointment. However, as between persons who became Director on the same day and those who are to retire shall (unless they otherwise agree among themselves) be determined by lot. A retiring Director shall be eligible for re-appointment.
(v) Code of Conduct Your Company’s Board of Directors has prescribed a Code of Conduct for all Board Members and the Company’s Senior Management. The Code of Conduct is available on your Company’s website, www.tarajewels.in.
All the Board Members and the Senior Management personnel of your Company have affirmed their compliance with the Code of Conduct for the year ended March 31, 2015. A declaration to this effect signed by the Managing Director is given at the end of this report.
(vi) Code of Conduct for Prohibition of Insider Trading In accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board has approved and adopted a code of conduct governing
Annual Report 14 - 15 67 Corporate Governance Report
all the directors, senior management and other employees of the Company. The Company Secretary of the Company is the Compliance Officer in respect of compliance of the code.
(vii) Profile of Directors under Clause 49 VIII (E) of Listing Agreement In compliance with Clause 49 VIII (E) of the Listing Agreement, brief resume, expertise and details of other directorship, membership in committees of Directors of other Companies and shareholding in the Company of the Directors proposed to be re-appointed / appointed are attached along with this report.
C. Board Committees
In compliance with both the mandatory and non-mandatory requirements under Clause 49 of the Listing Agreement and the applicable laws, your Company’s Board of Directors constituted the following Committees: (i) Audit Committee (ii) Nomination and Remuneration Committee (iii) Stakeholders’ Relationship Committee (iv) Finance Committee (v) Allotment Committee (vi) Compensation Committee (vii) Management & Administration Committee (viii) Corporate Social Responsibility Committee (ix) Risk Management Committee
The Chairman of the Board, in consultation with the Company Secretary and the respective Chairman of these Committees, determines the frequency of the meetings of these Committees. The recommendations of the Committees are submitted to the Board for approval. The Board of Directors has also adopted the following policies in line with the Listing Agreement and the Companies Act, 2013 for the effective and defined functioning of the respective Committees of the Board: a) Whistle Blower Policy (Vigil mechanism) b) Internal Financial Control Policy; c) Related Party transaction Policy; d) Risk Management Policy; e) Corporate Social Responsibility Policy f) Nomination and Remuneration Policy g) Disclosure Policy (h) Audit Committee Mechanism (i) Familiarization Programme for Independent Directors. (j) Insider Trading Code, 2015 (k) Code of Conduct for the Members of Board & Senior Management Personnel
(i) Audit Committee The Audit Committee of the Board of Directors of your Company consists of the following Members as on March 31, 2015: 1. Mr. Nikkhil Vaidya- Chairman and Member 2. Mr. Rakesh Kalra- Member 3. Ms. Nalini Rajan- Member upto July 1, 2014 4. Mr. Sanjay Sethi- Member from July 1, 2014
The Company Secretary of the Company acts as the Secretary of the Committee.
The Company’s Audit Committee met four times during 2014-15 on May 27, 2014, August 11, 2014, November 12, 2014 and February 10, 2015.
The following table presents the details of attendance at the Audit Committee meetings held during 2014-15: Members No. of Meetings Attended Mr. Nikkhil Vaidya 4 Mr. Rakesh Kalra 4 Ms. Nalini Rajan 1 Mr. Sanjay Sethi 3
68 TARA JEWELS LIMITED Corporate Governance Report
The Chairman of the Audit Committee was present at the Company’s Previous Annual General Meeting held on September 18, 2014.
The composition, role, terms of reference as well as powers of the Audit Committee are in accordance with the provisions of Clause 49 of the Listing Agreement and Section 177 of the Companies Act, 2013.
The brief terms of reference of the Audit Committee are as follows: Inter alia, include overseeing of the Company’s financial reporting process, reviewing the financial statements with the Management, recommending appointment/ reappointment of auditors, fixation of audit fees, reviewing the adequacy of internal audit function, holding periodic discussions with auditors about their scope and adequacy of internal control systems, discussing on any significant findings made by Internal Auditor and following it up with action. The Committee also reviews information prescribed under Clause 49(III)(E) of the Listing Agreement.
The detailed terms of reference of Audit Committee are available on your Company’s website, www.tarajewels.co.in.
(ii) Nomination and Remuneration Committee
The Nomination and Remuneration Committee of the Board of Directors of your Company consists of the following Members as on March 31, 2015: 1. Mr. Rakesh Kalra- Chairman 2. Mr. Nikkhil Vaidya- Member 3. Mr. Rajiv Jain- Member
The Company Secretary of the Company acts as the Secretary of the Committee.
The Company’s Nomination and Remuneration Committee met two times during the year 2014-15 viz. May 28, 2014 and November 12, 2014.
The following table presents the details of attendance at the Nomination and Remuneration Committee meetings held during 2014-15: Members No. of Meetings Attended Mr. Rakesh Kalra 2 Mr. Nikkhil Vaidya 2 Mr. Rajiv Jain 2
The terms of reference of the Nomination and Remuneration Committee are as follows:
Inter alia, to review the overall compensation policy, service agreements and other employment conditions of the managing/ whole time Directors, decide on overall compensation policy for non-executive Directors.
Remuneration Policy The remuneration of Executive Director/s is decided by the Board of Directors or Remuneration Committee of the Board of Directors as per the Company’s remuneration policy within the overall ceiling approved by shareholders.
Remuneration paid to Non-executive Directors The Independent Directors of your Company are paid sitting fees. Your Company pays sitting fees of Rs. 20,000/- per meeting to the Independent Directors for attending the meetings of the Board and of Audit Committee Meetings of the Board.
Details of Remuneration for the Financial Year 2014-15
Non-Executive Directors Name of the Director Commission (Rs.) Sitting Fees (Rs.) Mr. Nikkhil Vaidya Rs. 5,00,000/- Rs.1,40,000/- Mr. Rakesh Kalra Rs. 5,00,000/- Rs. 1,20,000/- Mr. Rajiv Jain Rs. 5,00,000/- Rs. 80,000/- Mr. Shanti Saroop Khindria Rs. 5,00,000/- Rs. 60,000/- Mr. Francois Arpels Rs. 5,00,000/- Rs. 60,000/- Ms. Fern Mallis Rs. 5,00,000/- Rs. 60,000/- Mr. Sandro Brodbeck upto November 12, 2014 NIL NIL Mr. Mariano De La Torre from February 10, 2015 NIL NIL
Annual Report 14 - 15 69 Corporate Governance Report
Executive / Whole--Time Director Name of Director Period of Appointment Remuneration (including Commission) Mr. Rajeev Sheth, Chairman and Managing Director 5 years Rs. 17,116,400/- Mr. Sanjay Sethi, Executive Director from July 1, 2014 5 years w.e.f. July 1, 2014 Rs. 4,820,400/- Mr. Vikram Raizada, Director (Sales) upto January 2, 2015 Resigned w.e.f. January 2, 2015 Rs. 9,890,852/- Ms. Nalini Rajan, Director (Finance) upto July 1, 2015 Resigned w.e.f. July 1, 2014 Rs. 2,249,100/- Mr. Ravindran M.P, Executive Director 5 years w.e.f. May 25, 2015 NA
None of the Directors are entitled to any benefit upon termination of their association with your Company.
(iii) Stakeholder’s Relationship Committee The Stakeholders Relationship Committee of the Board of Directors of your Company consists of the following Members as on March 31, 2015: 1. Mr. Rajiv Jain- Chairman and Member 2. Mr. Sanjay Sethi- Member 3. Mr. Vikram Raizada- Member upto January 2, 2015
The Company Secretary of the Company acts as the Secretary of the Committee.
The Company’s Stakeholders Committee met four times during 2014-15 on May 28, 2014, August 12, 2014, November 12, 2014 and February 10, 2015.
The following table presents the details of attendance at the Stakeholders Relationship Committee meetings held during 2014-15: Members No. of Meetings Attended Mr. Rajiv Jain 4 Mr. Sanjay Sethi 4 Mr. Vikram Raizada NIL
* Mr. Ravindran M.P is inducted as Member of this Committee w.e.f. May 25, 2015.
The Company has not received any complaints from the investors / shareholders during the financial year ended March 31, 2015.
The terms of reference of the Stakeholder’s Relationship Committee is as follows:
Inter alia to look into redressal of shareholders and investor complaints, e.g. transfer of shares, non-receipt of balance sheet/ annual report, non- receipt of declared dividend, interest, notices etc.; formulation of procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from shareholders from time to time;
The Securities and Exchange Board of India (SEBI) has commenced processing of investor complaints in a centralised web-based complaints redress system - ‘SCORES’. The salient features of this system are: zz Centralised database of all complaints
zz Online movement of complaints to the concerned listed companies
zz Online upload of Action Taken Reports (ATRs) by the concerned companies
zz Online viewing by investors of actions taken on the complaint and its current status
All complaints pertaining to companies will be electronically sent through SCORES at www.scores.gov.in. The companies are required to view the complaints pending against them and submit ATRs, along with supporting documents, electronically in SCORES. Failure on the part of the Company to update the ATR in SCORES will be treated as its non-redressal of investor complaints.
Your Company has been registered on SCORES and makes every effort to resolve all investor complaints received through SCORES or otherwise within the statutory time limit from the receipt of the complaint.
No shares issued pursuant to the public issue of your Company remains unclaimed and are lying in the escrow account. No shares were issued in physical form in the public issue of the Company. These declarations are made pursuant to Clauses 5A.I and 5A.II of the Listing Agreement.
70 TARA JEWELS LIMITED Corporate Governance Report
(iv) Finance Committee The Company’s Board of Directors formed a Finance Committee to look after the routine financial requirements of the Company like opening and closing of bank accounts, borrowing funds up to the limits prescribed by the Board, making investments, etc.
The Finance Committee of the Board of Directors of your Company consists of the following Members as on March 31, 2015: 1. Mr. Rajeev Sheth- Chairman; 2. Ms. Nalini Rajan- Member upto July 1, 2014; 3. Mr. Sanjay Sethi- Member from July 1, 2014; and 4. Mr. Vikram Raizada- Member upto January 2, 2015. *
The Company Secretary of the Company acts as the Secretary of the Committee.
The Company’s Finance Committee met Nine times during 2014-15 on April 23, 2014, May 23, 2014, June 20, 2014, July 16, 2014, August 27, 2014, September 30, 2014, November 12, 2014, January 21, 2015 and February 10, 2015.
The following table presents the details of attendance at the Finance Committee meetings held during 2014-15: Members No. of Meetings Attended Mr. Rajeev Sheth 9 Mr. Sanjay Sethi 6 Mr. Vikram Raizada 7 Ms. Nalini Rajan 3
* Mr. Ravindran M.P is inducted as Member of this Committee w.e.f. May 25, 2015.
The terms of reference of the Finance Committee are as follows: 1. Exercise all powers to borrow moneys (otherwise than on debentures) within the limits sanctioned by the Board and do all necessary acts and deeds connected therewith. 2. Borrow monies by way of loan and / or issuing and allotting Bonds / Notes denominated in one or more foreign currencies in international markets, for the purpose of refinancing the existing debt, capital expenditure, general corporate purposes including working capital requirements and possible strategic investments within the limits approved by the Board. 3. To authorize opening, operation, changing of authorized signatories of the Company with respect to all Bank Accounts maintained by the Company, authorization for e-banking banking account/transaction and closing any bank account. 4. To open and close Demat accounts of the Company for holding securities/ investments owned by the Company. The Members of the Finance Committee will be empowered to make appropriate changes in authorized signatories of the Company for operation of demat accounts. 5. Giving of guarantees / providing corporate guarantee/ providing performance guarantee/ issuing letters of comfort / providing securities within the limits approved by the Board. 6. To authorize officers of the Company for entering into forex transactions and hedging as per approved policy of the Company; 7. Approve opening and operation of Investment Management Accounts with Foreign Banks and appoint them as Agents, establishment of representative / sales offices in or outside India etc. 8. To delegate powers, make changes, in the authorized signatories of the Company with all matters related to Central Excise Act & Rules framed there under, Customs Act & Rules framed there under, Central and State Sales Tax/Value Added Tax & Rules framed there under, Foreign Trade (Development & Regulation) Act & Rules framed there under, the Employees’ Provident Funds and Miscellaneous Provisions Act & Rules framed there under, the Payment of Gratuity Act & Rules framed there under, the Employees’ State Insurance Act & Rules framed there under, issue related to Director General Foreign Trade (DGFT), Foreign Trade Policy & Rules framed there under, Superannuation Scheme or any other authorisation of similar nature; 9. To authorize officers of the Company for entering into general contracts, agreements with relation to operations with Statutory/Regulatory Bodies viz., Electricity Boards, Ports, Railways, Pollution Control Boards, Town & Country Planning Authorities, Municipal Corporations, Panchayats, any other Local Bodies or any other similar bodies/authorities. 10. Exercise all powers to invest the funds of the Company within limits specified by the Board. 11. To delegate powers, constitute committees of authorized officials for the purposes of investing surplus funds temporarily not required for the business of the Company and any other matters incidental thereto. 12. Exercise powers to make loans on behalf on the Company within the limits sanctioned by the Board.
Annual Report 14 - 15 71 Corporate Governance Report
13. Authorize one or more employees of the Company /Group u/s 113 of the Companies Act, 2013 to attend and vote at the meetings of subsidiary, associate Company or any other Company where the Company is a shareholder/debenture-holder, meetings of creditors and meetings convened by the orders of the Court. 14. Carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification as may be applicable. 15. Other transactions or financial issues that the Board may desire to have them reviewed by the Finance Committee. 16. Delegate authorities from time to time to the Executives / Authorised persons to implement the decisions of the Committee. 17. Regularly review and make recommendations to the Board about changes to the charter of the Committee.
(v) Allotment Committee The Company’s Board of Directors formed an Allotment Committee in February, 2013 to allot shares of the Company, especially pursuant to the ESOP Schemes of the Company.
The Allotment Committee of the Board of Directors of your Company consists of the following Members as on March 31, 2015: 1. Mr. Rajeev Sheth- Chairman; 2. Mr. Sanjay Sethi- Member;and 3. Mr. Vikram Raizada- Member upto January 2, 2015.
* Mr. Ravindran M.P is inducted as Member of this Committee w.e.f. May 25, 2015.
The Company Secretary of the Company acts as the Secretary of the Committee.
No Allotment Committee Meeting was held during the year.
(vi) Compensation Committee The Company’s Board of Directors formed a Compensation Committee in May 2013 to administer ESOP Scheme 2013.
The Compensation Committee of the Board of Directors of your Company consists of the following Members as on March 31, 2015: Mr. Rajeev Sheth- Chairman Mr. Nikkhil Vaidya- Member Mr. Rakesh Kalra- Member Ms. Nalini Rajan- Member upto July 1, 2014 Mr. Sanjay Sethi- Member from July 1, 2014 Mr. Pravin Patil- GM, Human Resources and Administration
The Company Secretary of the Company acts as the Secretary of the Committee.
No Compensation Committee Meeting was held during the year.
(vii) Management and Administrative Committee
The Company’s Board of Directors formed a Management and Administrative Committee in November, 2012 to look into the day-to-day affairs and businesses of routine nature of the Company.
The Management and Administrative Committee of the Board of Directors of your Company consist of the following Members as on March 31, 2015: 1. Mr. Rajeev Sheth- Chairman 2. Ms. Nalini Rajan- Member upto July 1, 2014 3. Mr. Sanjay Sethi- Member from July 1, 2014 4. Mr. Vikram Raizada- Member upto January 2, 2015* * Mr. Ravindran M.P is inducted as Member of this Committee w.e.f. May 25, 2015.
The Company’s Management and Administration Committee met 9 (Nine) times during 2014-15 on April 2, 2014, June 16, 2014, July 23, 2014, August 6, 2014, August 14, 2014, August 21, 2014, October 30, 2014, November 12, 2014 and February 10, 2015.
The Company Secretary of the Company acts as the Secretary of the Committee.
72 TARA JEWELS LIMITED Corporate Governance Report
The following table presents the details of attendance at the Finance Committee meetings held during 2014-15: Members No. of Meetings Attended Mr. Rajeev Sheth 9 Ms. Nalini Rajan 2 Mr. Sanjay Sethi 7 Mr.Vikram Raizada 8
The terms of reference of the Management and Administrative are as follows: 1. To attend to legal and such other administrative matters of the Company; 2. to incorporate subsidiary companies, enter into joint ventures Indian or Foreign, and also to execute Joint venture agreements, Shareholders Agreements, Memorandum of Understanding and such other documents as may be required to form Joint Venture; and to invest in, provide loan, and / or to provide corporate guarantee, security and also to provide financial and such other assistance to such subsidiary companies, joint ventures and other persons including not limited to body corporate, units, mutual funds, individuals, trust, etc. as may be required from time to time, within the maximum ceiling of Rs.100 crores; 3. to take on lease Land and/ or Building in relation to and for the purpose of carrying on the business of the Company, Subsidiary Companies/Joint Ventures of the Company; to purchase/take on lease Plant and Machinery to be utilized on the Company’s Subsidiary Companies/Joint Ventures; 4. to apply for registration/ license of/for the Company with/from various authorities of any state or Centre including but not limited to Provident Fund Authorities, Pollution Control Board/Authorities, Labour Department Drug and Cosmetic Department, Sales Tax authorities, Income Tax authorities, Shops and Establishment authorities, Customs and Central Excise authorities, the Director General of Foreign Trade and any other local, private or semi-government bodies and to do or perform all acts and deeds relating to such matters; 5. to apply, in the name of and for the Company for telephone, telex, internet, fax and other telecommunication and electrical/electronic connections and to do all matters relating to such applications; 6. to purchase motor vehicles and other machineries and capital items in the name of the Company for carrying out the business of the Company, either on self-finance or Hire purchase and to authorize officials of the Company to sign documents for registration of motor vehicles and to do all acts and things for the transfer of any such motor vehicles; 7. to authorise employee(s) or others to execute, for and on behalf of the Company, agreements, applications, deeds, documents and any other writings in connection with the business of the Company and, if required, to issue Power of Attorney in favour of such persons for this purpose; 8. to appoint / authorise employee(s), advocates, consultants or others to represent the Company before any Court, Tribunal, Consumer Redressal Forum or any Statutory or other Authority on any matter relating to the operations of the Company or with which the Company is in any way connected or concerned or to represent the Company generally or for any specific purpose or purposes and, if required, issue Power of Attorney in favour of such persons for the purpose; 9. to authorize persons to represent the Company at General Meetings of any Company or cooperative society of which the Company is a shareholder/member; 10. to fix the dates for Closure of the Company’s Register of Members and Transfer Books of Shares and/or fixing Record Dates; 11. inform the Board about the compliance to with applicable laws, adequacy of risk management and internal controls; 12. to authorize affixation of common seal on such documents as may be required. 13. to authorize the closure of non-functioning showrooms / projects of the Company situated at various cities in India.
(viii) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE: The Board has constituted a Corporate Social Responsibility (CSR) Committee consisting of the following members as on March 31, 2015: Mr. Rajeev Sheth Chairman Ms. Fern Mallis Member Mr. Vikram Raizada Member upto January 2, 2015 Mr. Ravindran M.P Member w.e.f. May 25, 2015
The CSR Policy of the Company is prepared by Committee and approved by the Board and is also placed on the website of the company www. tarajewels.in as per section 135 (5) of the Companies Act, 2013. Initiatives with respect to it have been described in the Board’s Report.
(ix) RISK MANAGEMENT COMMITTEE: The Board has constituted a Risk Management Committee consisting of following members as on March 31, 2015:
Annual Report 14 - 15 73 Corporate Governance Report
Mr. Sanjay Sethi Chairman Mr. Nikkhil Vaidya Member Mr. Rakesh Kalra Member The Committee Shall zz Ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management. zz To establish a framework for the company’s risk management process and to ensure its implementation. zz To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices. zz To assure business growth with financial stability
No Risk Management Committee Meeting was held during the year.
Meeting of Independent Directors The separate meeting of Independent Directors of the Company as per the requirements of Schedule IV of the Companies Act, 2013 and Clause 49 (II) B 6 of the Listing Agreement was held on February 10, 2015, without the attendance of Non-Independent Directors and the members of the management, inter alia, to discuss the following: 1. Review the performance of Non independent Directors and the Board of Directors as a whole; 2. Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non Executive Directors. 3. Assess the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. All the independent Directors were present at the meeting.
Performance Evaluation of Directors The Nomination and Remuneration Committee lays down the criteria for performance evaluation of Independent Directors and other Directors, Board of Directors and Committees of the Board of Directors pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc.
Familiarisation Programme for Independent Director The details of familiarisation Programme conducted for Independent Director have been uploaded on website of Company which is www.tarajewels.in (weblink:www.tarajewels.in/investorrelations/corporategovernance/policies)
D. General Body Meetings: a) Details of your Company’s last three Annual General Meetings are presented in the following table: Nature of Meeting Date Time Venue Details of Special Resolution(s) passed 13th Annual General Meeting September 18, 2014 03.00 pm Tribune-I, 6th Floor, Hotel Tunga NIL International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093 12th Annual General Meeting September 04, 2013 03.00 pm Hotel Tunga Paradise, P-16, Near Appointment of Ms. Aarti Sheth SEEPZ, MIDC, Central Road, Andheri for place of profit u/s. 314 (1B) of (East), Mumbai – 400072 the Companies Act, 1956. 11th Annual General Meeting July 20, 2012 11.00 am Registered Office of the Company NIL
There was no Extraordinary General Meeting held during the year.
Details of resolutions passed through Postal Ballot during the year 2014-15: Pursuant to Section 110 of the Companies Act, 2013, read with Rule 22 of the Companies (Management and Administration) Rules, 2014, the Board of Directors of the Company had accorded its approval to conduct a Postal Ballot to seek the consent of the Company’s members for the following:
74 TARA JEWELS LIMITED Corporate Governance Report
1) Special Resolution for Adoption of new set of Articles of Association of the Company containing regulations in line with Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 58 16128457 99.98 B Votes against the Resolution 8 2474 0.02 C Total valid votes (A+B) 66 16130931 100.00 D Invalid Votes 5 568 0.00 TOTAL (C+D) 71 16131499 100.00
2) Special Resolution for Increase in Borrowing Powers of the Company pursuant to section 180(1)(c) of the Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 53 16128218 99.98 B Votes against the Resolution 12 2574 0.02 C Total valid votes (A+B) 65 16130792 100.00 D Invalid Votes 6 640 0.00 TOTAL (C+D) 71 16131432 100.00
3) Special Resolution for Creation of Mortgage/Charge/Pledge on the assets of the Company pursuant to section 180 (1)(a) of the Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 53 16127662 99.98 B Votes against the Resolution 12 3192 0.02 C Total valid votes (A+B) 65 16130854 100.00 D Invalid Votes 6 640 0.00 TOTAL (C+D) 71 16131494 100.00
4) Special Resolution for Issue of Non-Convertible Debentures on a Private Placement Basis pursuant to provisions of section 42, 71, 179 of the Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 59 16128832 99.98 B Votes against the Resolution 7 2114 0.02 C Total valid votes (A+B) 66 16130946 100.00 D Invalid Votes 5 568 0.00 TOTAL (C+D) 71 16131514 100.00
5) Special Resolution for Alteration of incidental objects in the memorandum of association of the company to permit acceptance of deposits pursuant to provisions of section 13 and other applicable provisions of the Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
Annual Report 14 - 15 75 Corporate Governance Report
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 55 16128503 99.98 B Votes against the Resolution 10 2304 0.02 C Total valid votes (A+B) 65 16130807 100.00 D Invalid Votes 5 568 0.00 TOTAL (C+D) 70 16131375 100.00
6) Special Resolution for Acceptance of deposits from members under section 73 (2) of the Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 58 15251231 94.54 B Votes against the Resolution 9 879782 5.46 C Total valid votes (A+B) 67 16131013 100.00 D Invalid Votes 5 568 0.00 TOTAL (C+D) 72 16131581 100.00
7) Special Resolution for Acceptance of deposits from public under section 76 of the Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 53 15249913 94.54 B Votes against the Resolution 13 880946 5.46 C Total valid votes (A+B) 66 16130859 100.00 D Invalid Votes 5 640 0.00 TOTAL (C+D) 71 16131499 100.00
8) Special Resolution for Approval of related party transactions pursuant to section 188 of the Companies Act, 2013 as specified in Notice dated January 7, 2015 read with explanatory statement attached thereto.
The details of the voting pattern are as under: Sr. No. Particulars No. of Postal Ballot Forms (51)*/ E-Votes (21) No. of Equity % to Total Shares Votes A Votes in favour of the Resolution 52 16122611 99.95 B Votes against the Resolution 14 8320 0.05 C Total valid votes (A+B) 66 16130931 100.00 D Invalid Votes 5 568 0.00 TOTAL (C+D) 71 16131499 100.00
S. Anantha Rama Subramanian, Practicing Company Secretary (CP No.:1925) was appointed as the Scrutiniser for conducting the Postal Ballot process in a fair and transparent manner. His duty also included receiving and scrutinising the completed Postal Ballot Forms from the members. On submission of the report on the voting through postal ballot by scrutiniser, the above resolutions were declared by the Chairman of the Board on February 16, 2015, as duly passed by the requisite majority of the members of the Company voting by Postal Ballot. E. Disclosures
(i) Related Party Transactions There have been no materially significant related party transactions, pecuniary transactions or relationships between your Company and the Directors, management, subsidiary or relatives, except transactions entered with wholly owned subsidiary Fabrikant Tara International LLC. The other transactions with related parties are disclosed in note no.40
76 TARA JEWELS LIMITED Corporate Governance Report
(ii) Details of Non-Compliance There has been no non-compliance of any legal requirements nor have there been any strictures imposed by any Stock Exchange or SEBI or any statutory authority on any matter related to Capital Markets during the last three years.
(iii) Corporate Governance Report Your Company has complied with all the mandatory requirements of Clause 49 of the Listing Agreement and has also complied with the non- mandatory requirements relating to having unqualified Financial Statements.
(iv) Whistle Blower Policy The Company has implemented the Whistle Blower Policy and is also placed on the website of the company i.e. www.tarajewels.co.in (weblink:www.tarajewels.in/investorrelations/corporategovernance/policies)
(v) Management Discussion and Analysis Report
The Management Discussion and Analysis Report forms a part of the Annual Report and includes various matters specified under Clause 49 of the Listing Agreement.
(vi) Certificate on Corporate Governance The Practicing Company Secretary’s certificate, with respect to compliance with Clause 49 of the Listing Agreement relating to Corporate Governance, has been annexed to the Directors’ Report and will be sent to the Stock Exchanges at the time of filing the Company’s Annual Report.
(vii) CEO / CFO Certification A certificate from the Managing Director and the Chief Financial Officer, on the Financial Statements and other matters of the Company for the Financial Year ended March 31, 2015, was placed before the Board. This certificate is given at the end of this report.
(viii) Risk Management The Company has laid down procedures to inform Board Members about the Risk Assessment and minimisation procedure, which are periodically reviewed by the Board.
(ix) Reconciliation of Share Capital Audit As stipulated by SEBI, a Reconciliation of Share Capital Audit is carried out by an independent Practicing Company Secretary on quarterly basis to confirm reconciliation of the issued and listed capital, shares held in dematerialised and physical mode and the status of the register of members.
(x) Accounting Treatment: No treatment different from that prescribed in an Accounting Standards has been followed by the Company.
F. Means of Communication 1. The Company’s corporate website, www.tarajewels.in, consists of Investor Relations section, which provides comprehensive information to the Shareholders. 2. Quarterly and Annual Financial results are published in leading English and Marathi daily newspapers. The said results are also made available on the Company’s website, www.tarajewels.in. 3. The Company’s Annual Report is e-mailed/dispatched to all the Shareholders of the Company and also made available on the Company’s website, www.tarajewels.in. 4. The Company’s Shareholding Pattern is filed on a quarterly basis with the Stock Exchanges and also displayed on the Company’s website, www.tarajewels.in. 5. Press Releases and Corporate Presentations are also displayed on the Company’s website, www.tarajewels.in.
G. General Shareholders’ Information 1. Annual General Meeting Date, Time and Venue September 29, 2015 at 3.00 p.m at Tribune- I, 6th Floor, Hotel Tunga International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093. 2. Financial Year
Annual Report 14 - 15 77 Corporate Governance Report
Quarterly results will be declared as per the following tentative schedule: zz Financial reporting for the quarter ending First Fortnight of August, 2015 June 30, 2015 zz Financial reporting for the half year ending First Fortnight of November, 2015 September 30, 2015 zz Financial reporting for the quarter ending First Fortnight of February, 2016 December 31, 2015 zz Financial reporting for the year ending Last Fortnight of May, 2016 March 31, 2016 3. Dates of Book Closure Wednesday September 23, 2015 to Tuesday September 29, 2015 (both days inclusive) 4. Listing on Stock Exchanges Your Company’s shares are listed on: zz BSE Ltd. (BSE) Floor 27, P. J. Towers, Dalal Street, Mumbai – 400 001
zz The National Stock Exchange of India Ltd. (NSE), Exchange Plaza, Bandra- Kurla Complex, Bandra (E) Mumbai – 400 051
Your Company has paid the annual listing fee for the financial year 2015-16 to both the Exchanges. 5. Stock Code BSE Ltd.: 534756; the National Stock Exchange of India Ltd.: TARAJEWELS - EQ; ISIN: INE799L01016 6. Registrars and Transfer Agents Link Intime India Pvt. Ltd. (Unit: Tara Jewels Ltd.) C-13 Pannalal Silk Mills Compound, L.B.S Marg, Bhandup West, Mumbai 400078 Tel. : +91-22-2594 6970 Fax: +91-22-2594 6969 E-mail: [email protected] 7. Share Transfer System The Board has delegated the power of Share Transfer to the Shareholders’ Grievance Committee of the Board of Directors. 8. Address for Correspondence The Company Secretary TARA JEWELS LIMITED Plot 29(P) & 30(P), Sub Plot ‘A’, SEEPZ, SEZ, Andheri East, Mumbai 400096 Tel : 022-6677 4444 [email protected] 9. Dematerialisation of Shares and Liquidity 99.20 % shares of your Company are held in the electronic mode as on March 31, 2015 10. Investor Complaints to be addressed to Registrars and Transfer Agents or the Company Secretary, at the addresses mentioned as above 11. Outstanding GDRs/ ADRs/ Warrants or any The Company has not issued any GDRs/ADRs/Warrants. 3,05,000 outstanding Convertible Instruments, Conversion Date and likely convertible warrants, as on March 31, 2015. impact on equity 12. Plant Locations Plot No. 29(P) & 30(P), Sub-Plot ‘A’, SEEPZ SEZ Andheri (E), Mumbai – 400096. Unit No. GJ-7, SDF VII, SEEPZ SEZ Andheri (E), Mumbai – 400096. Plot No.122, 15th Road, Near IDBI Bank, MIDC, Andheri (E), Mumbai – 400093.
H. Green Initiative Your Company is concerned about the environment and utilises natural resources in a sustainable way. The Ministry of Corporate Affairs (MCA), Government of India, through its Circular Nos. 17/2011 and 18/2011, dated April 21, 2011 and April 29, 2011, respectively, has allowed companies to send official documents to their shareholders electronically as a part of its green initiatives in corporate governance.
78 TARA JEWELS LIMITED Corporate Governance Report
Recognising the spirit of the circular issued by the MCA, we henceforth propose to send documents like the Notice convening the general meetings, Financial Statements, Directors’ Report, Auditor’s Report and others to the email address provided by you with the relevant depositories.
We request you to update your email address with your depository participant to ensure that the Annual Report and other documents reach you on your preferred email.
I. Market Price Data for 2014-15 The market price data, i.e. monthly high and low prices of the Company’s shares on BSE & NSE are given below: Month BSE NSE High Price (Rs.) Low Price (Rs.) High Price (Rs.) Low Price (Rs.) April, 2014 115.75 99.00 116.30 97.95 May, 2014 120.00 81.20 119.00 91.00 June, 2014 130.00 92.00 130.55 90.65 July, 2014 117.00 91.85 116.50 91.25 August, 2014 98.00 84.10 96.50 83.00 September, 2014 122.00 83.70 117.70 86.40 October, 2014 107.00 93.00 102.25 91.00 November, 2014 104.15 86.00 104.00 86.05 December, 2014 106.50 70.20 103.60 75.05 January, 2015 89.00 76.55 89.00 76.95 February, 2015 85.00 72.10 86.00 76.10 March, 2015 78.20 50.00 79.25 50.00
J. Shareholding pattern, as on March 31, 2015 Sr. No. Category of Shareholders No. of No. of Shares Percentage (%) Shareholders 1 Promoter and Promoter Group 5 14759998 59.94% 2 Foreign Institutional Investors 5 2061696 8.37% 3 Individuals 4057 1882769 7.65% 4 Bodies Corporate 110 421338 1.71% 5 Mutual Funds/UTI 3 2762103 11.22% 6 Financial Institutions/Banks 1 571872 2.32% 7 Clearing Members 48 54655 0.22% 8 Non-resident Indians 47 35394 0.14% 9 Directors 2 3300 0.01% 10 Non-residents (Non repatriable) 7 3477 0.01% 11 Foreign Companies 1 1800000 7.31% 12 Foreign Portfolio Investor( Corporate) 1 266248 1.08% TOTAL 4287 24622850 100%
Annual Report 14 - 15 79 Corporate Governance Report
K. Distribution of Shareholding, as on March 31, 2015 Sr. No. Category No. of Total No. of Shares Percentage (%) (Share) Shareholders Shareholders (%) 1 1 – 500 3805 88.74% 538886 2.19% 2 501 - 1000 232 5.41% 187020 0.76% 3 1001 - 2000 116 2.71% 171683 0.70% 4 2001 - 3000 39 0.91% 100668 0.41% 5 3001 - 4000 22 0.51% 77249 0.31% 6 4001 - 5000 17 0.40% 79546 0.32% 7 5001 - 10000 20 0.47% 146480 0.59% 8 10001 & Above 37 0.86% 23321318 94.71% Total 4288 100% 24622850 100%
L. Share price movement of the shares on BSE & NSE during FY 2014-15
For and on behalf of Board of Directors
Rajeev Sheth Mumbai, August 13, 2015 Chairman and Managing Director DIN: 00266460
80 TARA JEWELS LIMITED Corporate Governance Report
CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) ON FINANCIAL STATEMENTS OF THE COMPANY: (Pursuant to Clause 49(IX) of the Listing Agreement)
We, Rajeev Sheth, Chairman & Managing Director and Sanjay Sethi, CFO, of Tara Jewels Limited, certify that:
We have reviewed the financial statements and the cash flow statement for the year ended st31 March, 2015 and that to the best of our knowledge and belief:
These statements do not contain any materially untrue statement nor omit any material fact nor contain statements that might be misleading and These statements together present a true and fair view of the Company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulations.
There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year, which are fraudulent, illegal or in violation of the Company’s code of conduct;
We accept responsibility for establishing and maintaining internal controls, we have evaluated the effectiveness of the internal control systems of the Company and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps that we have taken or propose to take to rectify the identified deficiencies; and
We have indicated to the auditors and the Audit Committee that:
a) there were no significant changes in internal control over financial reporting during the year; b) there were no significant changes in the accounting policies during the year; and c) there were no instances of fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system over financial reporting.
Rajeev Sheth Sanjay Sethi Chairman & Managing Director Chief Financial Officer DIN: 00266460 DIN: 01152580
Mumbai, August 13, 2015
Annual Report 14 - 15 81 Corporate Governance Report
DECLARATION PURSUANT TO CLAUSE 49(II)(E) OF THE LISTING AGREEMENT
In accordance with clause 49(II)(E) of the Listing Agreement with the Stock Exchanges, I hereby declare that Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct as applicable to them for the year ended March 31, 2015.
For TARA JEWELS LIMITED
- RAJEEV SHETH CHAIRMAN AND MANAGING DIERCTOR DIN: 00266460
Mumbai, August 13, 2015
82 TARA JEWELS LIMITED Corporate Governance Report
To The Members of TARA JEWELS LIMITED
Corporate Governance Certificate
We have examined the compliance of conditions of Corporate Governance by TARA JEWELS LIMITED (“Company”) for the year ended March 31, 2015, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges in India.
We have conducted our examination on the basis of the relevant records and documents maintained by the Company and furnished to us for the purpose of the review and the information and explanations given to us by the Company during the course of such review.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has in all material respects complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.
For S. ANANTHA & Co., Company Secretaries
Date: August 13, 2015 S. Anantha Rama Subramanian Place: Mumbai Proprietor C.P. No. 1925
Annual Report 14 - 15 83 Independent Auditor’s Report to the members of Tara Jewels Limited
Report on the Standalone Financial Statements We have audited the accompanying standalone financial statements of Tara Jewels Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 judgements 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.
Auditor’s Responsibility Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”) issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required bySection143(3) of the Act, we report, to the extent applicable, 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 purpose of our audit; b in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
84 TARA JEWELS LIMITED c the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account; d in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014; e on the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164 (2) of the Act. f 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 litigations on its financial position in its financial statements – Refer Note 26 to the financial statements; ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
For C. B. Chhajed& Co. Chartered Accountants (Firm RegnNo : 101796W)
Place : Mumbai C. B. Chhajed Dated : 25.05.2015 (Partner) Membership No : 009447
Annual Report 14 - 15 85 Annexure to the Independent Auditor’s Report [Referred to in paragraph 1 of ”Report on other legal and regulatory requirements” of our report of even date] to the members of Tara Jewels Limited
1 a The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
b. The fixed assets of the Company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion,the frequency of verification is reasonable.
2 a The inventory has been physically verified by the management during the year.In our opinion, thefrequency of verification is reasonable.
b In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
c On the basis of our examination of the inventory records, in our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
3 In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, clauses (iii) (a) and (iii)(b) of paragraph 3 of the Order are not applicable to the Company for the year.
4 In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.
5 According to the information and explanations given to us, the Company has not accepted any deposits from the public. Accordingly clause (v) of paragraph 3 of the order is not applicable to the company.
6 The Central Government of India has not prescribed the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company. Accordingly, clause (vi) of paragraph 3 of the Order are not applicable to the Company for the year.
7 a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including sales-tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues as applicable with the appropriate authorities except for provident fund, employees state insurance and income tax wherein the company has made delayed payment.
According to information and explanation given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.
b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales-tax, wealth tax, excise duty and cess which have not been deposited on account of any dispute. The income-tax, customs duty and service tax dues which have not been deposited on account of disputed matters pending before appropriate authoruty are as under : Name of the Statute Nature of Dues Amount (`) Period to which Forum where the the amount relates dispute is pending Customs Act, 1962 Custom Duty 377,133 1996-1997 Additional Commissioner of Customs, Mumbai Customs Act, 1962 Custom Duty 1,418,430 1997-1998 Additional Tribunal of Customs Customs Act, 1962 Custom Duty 105,000 2004-2005 Additional Tribunal of Customs Income Tax Act, 1961 Income Tax 37,765,000 2001-2011 CIT Appeals, IT Tribunal and High court Finance Act, 1994 Service Tax 6,723,389 2006-2008 Joint Commissioner of Service Tax
c) According to the information and explanations given to us and the records of the Company examined by us, there is no amount required to be transferred to investor education and protection fund. Accordingly clause (vii)(c) of paragraph 3 of the order is not applicable to the company.
86 TARA JEWELS LIMITED 8 The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year. Accordingly clause (viii) of paragraph 3 of the order is not applicable to the company.
9 According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institutions or banks.
10 In our opinion and according to the information and explanations given to us,the terms and conditions of the corporate guarantees aggregating to approximately `1,157,915,000/- given by the Company, for loans taken by its subsidiary from banks during the year, are not prejudicial to the interest of the Company.
11 In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.
12 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.
For C. B. Chhajed& Co. Chartered Accountants (Firm RegnNo : 101796W)
Place : Mumbai C. B. Chhajed Dated : 25.05.2015 (Partner) Membership No : 009447
Annual Report 14 - 15 87 Balance Sheet AS AT MARCH 31, 2015
(Amount in ` ) Particulars Note As at As at March 31, 2015 March 31, 2014 EQUITY AND LIABILITIES Shareholders' Funds Share capital 1 246,228,500 246,228,500 Reserves and surplus 2 5,208,013,138 4,922,177,011 Money received against share warrants 12,200,000 - 5,466,441,638 5,168,405,511 Non-Current Liabilities Long-term borrowings 3 3,310,684 11,570,159 Long-term provisions 4 46,005,656 31,267,026 49,316,340 42,837,185 Current Liabilities Short-term borrowings 5 3,055,769,879 2,851,149,497 Trade payables 2,172,915,652 2,942,474,593 Other current liabilities 6 156,293,929 227,752,195 Short-term provisions 7 201,608,671 148,752,964 5,586,588,131 6,170,129,249 TOTAL 11,102,346,109 11,381,371,945 ASSETS Non-Current Assets Fixed assets 8 Tangible assets 1,082,095,939 1,093,914,055 Intangible assets 23,442,870 27,306,034 Intangible assets under development - 2,966,304 Non-current investments 9 175,356,506 175,140,900 Deferred tax assets (Net) 10 34,470,568 2,303,380 Long-term loans and advances 11 41,952,690 68,814,556 1,357,318,573 1,370,445,229 Current assets Inventories 12 5,010,576,515 6,117,608,431 Trade receivables 13 3,786,731,359 3,088,439,310 Cash and bank balances 14 751,870,031 642,263,035 Short-term loans and advances 15 189,278,776 156,107,491 Other current assets 16 6,570,855 6,508,449 9,745,027,536 10,010,926,716 TOTAL 11,102,346,109 11,381,371,945
Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
88 TARA JEWELS LIMITED Statement of Profit and Loss FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars Note Year Ended Year Ended March 31, 2015 March 31, 2014 INCOME Revenue from operations 17 14,141,626,197 14,171,365,477 Other income 18 47,768,003 49,884,337 Total Revenue 14,189,394,200 14,221,249,814
EXPENSES Cost of materials consumed 19 7,543,289,998 8,234,104,212 Purchases of stock-in-trade 20 4,302,781,208 2,980,250,072 Changes in inventories of finished goods, work-in-process and Stock-in-Trade 21 (127,013,732) 238,878,479 Employee benefits expense 22 411,761,350 446,418,288 Finance costs 23 637,604,978 571,545,200 Depreciation and amortization expense 24 270,647,599 206,917,345 Other expenses 25 683,679,723 918,951,288 Total Expenses 13,722,751,124 13,597,064,884
Profit before tax 466,643,076 624,184,930
Tax expense: Current tax 200,000,000 220,000,000 Deferred tax (28,982,063) 6,447,287 Tax of earlier years 3,603,367 3,350,062 Profit after tax 292,021,772 394,387,581
Earning per equity share 38 Basic 11.86 16.03 Diluted 11.86 16.03
Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
Annual Report 14 - 15 89 Cash Flow Statement FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars Year Ended Year Ended March 31, 2015 March 31, 2014 CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax 466,643,076 624,184,930 Adjutments for: Depreciation/ amortisation 270,647,599 206,917,345 Loss / (Profit) on sale of fixed assets 3,593,673 719,802 Fixed Assets Writen off 5,965,192 7,248,695 Profit on sale of investments (1,121,055) (219,103) Dividend income (134,251) (53,584) Interest income (44,745,105) (37,865,728) Interest expense 537,056,610 460,322,356 Sundry balances written back (867,592) (8,107,514) Operating profit before working capital adjustment 1,237,038,147 1,253,147,199 Changes in working capital: Inventories 1,107,031,916 (357,684,063) Trade receivables (698,292,049) (712,431,042) Loans and advances and other assets (7,172,712) (41,266,326) Other Bank balances (168,195,236) 189,704,803 Trade payables (768,691,349) 219,812,293 Other liabilities and provisions (53,212,680) 41,711,657 Cash flow generated from operations 648,506,037 592,994,521 Income tax paid (net of refunds) (175,353,305) (173,489,115) Net cash flow from operating activities (A) 473,152,732 419,505,406 CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (including intangible assets) (274,420,802) (522,682,412) Purchase of Investments (6,373,752) (8,666,354) Sale proceeds of investments 7,279,201 3,219,103 Sale proceeds of fixed assets 5,985,700 1,465,784 Dividend received 134,251 53,584 Interest received 44,682,699 43,044,939 Net Cash Flow from Investing Activities (B) (222,712,703) (483,565,356) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowing 192,068,603 286,519,069 Interest paid (513,296,872) (436,408,868) Proceeds from issue of share capital / share warrants 12,200,000 907,360 Interim dividend - (24,622,850) Tax on dividend - (4,184,653) Net Cash Flow From Financing Activities (C) (309,028,269) (177,789,942) Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) (58,588,240) (241,849,892) Cash & Cash Equivalent at the beginning of the period / year 106,387,634 348,237,526 Cash & Cash Equivalent at the end of the period / year 47,799,394 106,387,634 Deposits with banks to the extent held as margin money for gold 419,755,094 282,378,663 Fixed deposits with banks as security against borrowings 284,315,543 253,496,738 Cash & Bank balances at the end of the period / year 751,870,031 642,263,035 Figures under bracket represent outflows.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
90 TARA JEWELS LIMITED Significant Accounting Policies FOR THE YEAR ENDED MARCH 31, 2015
1. basis of Accounting The financial statements are prepared under historical cost convention, on going concern concept and in compliance with the Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (the “Act”) read with Rule 7 of the Companies (Accounts) Rules, 2014. The Company follows mercantile system of accounting and recognises income and expenditure on accrual basis to the extent measurable and where there is certainty of ultimate realisation in respect of incomes. Accounting policies not specifically referred to otherwise, are consistent and in consonance with the generally accepted accounting policies.
2. Inventories Inventories are valued at cost or net realizable value, whichever is less. Cost of raw materials and stores, consumables and packing material are determined on weighted average basis. Cost of Work in progress and finished goods comprises of raw material cost & appropriate overheads incurred for bringing them to their present condition.
Traded goods are valued at the cost or net realizable value whichever is less and cost is determined on first-in-first-out basis.
3. Fixed Assets a) Tangible assets Tangible Fixed Assets are stated at cost, inclusive of incidental expenses related thereto less accumulated depreciation. b) Intangible assets Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Internally generated intangible assets, excluding development cost, are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the intangible and the costs can be measured reliably.
Intangible assets mainly include Goodwill on Amalgamation and Computer Software. Cost of software includes license fees and implementation / integration expenses.
4. Depreciation a. Depreciation on tangible fixed assets is provided on the written-down-value method based on useful life of the assets as prescribed in Schedule II of the Act, except in respect of certain plant and machinery, where useful life different than those prescribed in Schedule II, is based on technical assessment. b. Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/ up to the date of such additions/ deletions. c. Building on leasehold land is amortised on straight-line basis over the primary period of lease. d. Leasehold Improvements are amortised over the primary period of lease. e. Computer software is amortised over the period of five years. f. Goodwill on Amalgamation is written off over the period of five years.
5. borrowing Cost Borrowing cost includes interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs that are attributable to the acquisition or Construction of a qualifying asset are capitalized as part of cost of such asset till such time as the asset is ready for its intended use. Other borrowing costs are recognized as expense for the period.
6. Revenue Recognition (a) Domestic sales are recognised on dispatch to customers. (b) Revenue from export sales is recognized when the significant risks and rewards of ownership are transferred to the customer, which is based upon the terms of the applicable contract. (c) Service Income is recognized as per the terms of contract with customers when the related services are performed. (d) Dividends are accounted for when the right to receive dividend is established. (e) Income from Interest on deposits, Loans and Interest bearing securities is recognized on time proportionate method.
7. Foreign Currency Transactions (a) Foreign currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of the Balance Sheet. Gains and losses arising on account of differences in foreign exchange rates on settlement/ translation of monetary assets and liabilities are recognised in the Statement of Profit and Loss. Non-monetary foreign currency items are carried at cost.
Annual Report 14 - 15 91 Significant Accounting Policies FOR THE YEAR ENDED MARCH 31, 2015
(b) In respect of forward contracts, other than forward contracts in respect of firm commitments and highly probable forecast transactions, the premium or discount arising at the inception of forward exchange contract, is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense for the period.
(c) Any profit or loss arising on settlement or cancellation of other derivative contracts (forward contracts in respect of firm commitments and highly probable forecast transactions, swaps and currency options) is recognized as income or expense for the period. Pursuant to The Institute of Chartered Accountants of India’s announcement ‘Accounting for Derivatives’, the Company marks-to-market all such outstanding derivative contracts at the year-end and the resulting mark-to-market losses, if any, are recognised in the Statement of Profit and Loss.
8. Investments Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis.
Investment other than current investments, are classified as long-term investments and are stated at cost. Provision for diminution in value of Long term investments is made only if such a decline is other than temporary.
9. cash and Cash equivalents Cash and cash equivalent for the purpose of cash flow statement comprise cash in hand and cash at bank, cheques in hand and fixed deposits with maturity of three months or less.
10. cash Flow Statement Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
11. accounting Estimates The preparation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Difference between the actual results and the estimates are recognized in the period in which the results are known materialized.
12. earnings Per Share Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue that have changed the number of equity shares outstanding, without a corresponding change in the resources. For the purpose of calculating diluted earnings per share, the net profits for the period attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effects of all potential equity shares.
13. employee Benefits (a) Defined Contribution Plans The Company contributes on a defined contribution basis to Employee’s Provident Fund and Employee’s State Insurance Fund towards post employment benefits, both are administered by the respective Government authorities, and has no further obligation beyond making its contribution, which is expensed in the year to which it pertains.
(b) Defined Benefit Plans The Company has a Defined Benefit Plan namely Gratuity for all its employees. The liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end, which is calculated using projected unit credit method. Actuarial gains and losses which comprise experience adjustment and the effect of changes in actuarial assumptions are recognised in the Statement of Profit and Loss. Gratuity Fund is recognized by the income tax authorities and is administered through trustees. The Company has taken a Group Gratuity Policy with Life Insurance of India.
92 TARA JEWELS LIMITED Significant Accounting Policies FOR THE YEAR ENDED MARCH 31, 2015
(c) Employee Leave Entitlement The employees of the Company are entitled to leave as per the leave policy of the Company. The liability in respect of unutilized leave balances is provided based on an actuarial valuation carried out by an independent actuary as at the year end and charged to the Statement of Profit and Loss.
14. Stock Based Compensation The compensation cost of stock options granted to employees is measured by the intrinsic value method. The compensation cost, if any, is amortised uniformly over the vesting period of the option.
15. taxes on Income (a) Current Year Income Tax: Provision for current tax is made considering various allowances and benefits available to the Company under the provisions of Income Tax Act, 1961.
(b) Deferred Income Tax: In accordance with Accounting Standard AS-22 “Accounting for Taxes on Income”, deferred tax resulting from timing differences between book and tax profits are accounted for at tax rate substantially enacted by the Balance Sheet date to the extent the timing differences are expected to be crystallized. Deferred tax assets or liabilities relating to the timing differences arising and reversing during the tax holiday period under Section 10A of the Indian Income Tax Act, 1961, are not recognized.
Deferred Tax Assets arising on account of carried forward losses and unabsorbed depreciation as per Income Tax Act, 1961 are recognised to the extent there is a virtual certainty supported by convincing evidence that such assets will be realized.
(c) Minimum Alternative Tax (MAT) Credit: MAT paid in accordance to the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.
16. Leases Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor, are recognized as operating lease. Lease rental under operating lease are charged off to the Statement of Profit and Loss as incurred.
17. impairment of Assets The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.
18. provisions, Contingent Liabilities and Contingent Assets The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.
Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent Assets are neither recognised nor disclosed.
Annual Report 14 - 15 93 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
1 Share Capital (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Authorised 30,000,000 Equity Shares of ` 10 each 300,000,000 300,000,000 Issued, subscribed and paid-up 24,622,850 Equity Shares of ` 10 each fully paid up 246,228,500 246,228,500 Total 246,228,500 246,228,500
Reconciliation of Equity Shares outstanding Particulars As at March 31, 2015 As at March 31, 2014 No. of Shares Amount (`) No. of Shares Amount (`) As at the beginning of the year 24,622,850 246,228,500 24,577,482 245,774,820 Add: Allotment of shares under ESOP - - 45,368 453,680 (refer note 30) As at the end of the year 24,622,850 246,228,500 24,622,850 246,228,500
Details of shares for the period of five years immediately preceeding the reporting date No. of Shares Particulars As at As at March 31, 2015 March 31, 2014 Alloted as fully paid up by way of bonus shares during the year ended March 31, 2011 5,923,707 5,923,707
Details of shareholders holding more than 5% shares of the Company Name of Shareholder As at March 31, 2015 As at MARCH 31, 2014 No. of Shares % No. of Shares % Mr. Rajeev Sheth 14,514,893 58.95 14,482,893 58.82 Crystalon Finanz AG 1,800,000 7.31 1,800,000 7.31 IDFC Premier Equity Fund 2,162,500 8.78 2,162,500 8.78
Shares reserved for issue under Employee Stock Option Plan (‘ESOP 2013’) For details of shares reserved for issue under ESOP 2013 of the Company, refer note 39.
Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share and dividend in indian rupees, as proposed by the Board of Directors, which is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
2 Reserves and Surplus (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Securities Premium Account Balance as at the beginning of the year 1,679,062,852 1,664,408,988 Add: Premium on exercise of ESOP - 14,653,864 Balance as at the end of the year 1,679,062,852 1,679,062,852 SEZ Reinvestment Allowance Reserve
94 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Balance as at the beginning of the year 335,923,811 586,651,001 Less: Utilised during the year 71,273,127 250,727,190 Balance as at the end of the year 264,650,684 335,923,811 Employee Stock Options Outstanding Balance as at the beginning of the year - 15,600,233 Less: Utilisation during the year - 15,600,233 Balance as at the end of the year - - General Reserve Balance as at the beginning of the year 114,400,049 88,000,000 Add: Additions during the year - 1,400,049 Add: Transferred from Surplus - 25,000,000 Balance as at the end of the year 114,400,049 114,400,049 Surplus Balance as at the beginning of the year 2,792,790,299 2,201,483,031 Add: Profit after tax for the year 292,021,772 394,387,581 Less : Interim Dividend - 24,622,850 Less : Tax on Dividend - 4,184,653 Less : Transfer to General Reserve - 25,000,000 Add: SEZ reinvestment allowance reserve utilised 71,273,127 250,727,190 Less: Adjustment relating to Fixed assets (Net of deferred tax) (Refer Note 8(a)) 6,185,645 - Balance as at the end of the year 3,149,899,553 2,792,790,299 Total 5,208,013,138 4,922,177,011
3 long-Term Borrowings (Amount in `) Particulars As at March 31, 2015 As at March 31, 2014 Non Current Current Non Current Current Secured Term loans from others 2,659,952 74,80,909 10,140,862 8,487,720 Vehicle loan from bank 650,732 9,24,635 815,140 4,284,916 Finance lease obligations - 6,14,157 614,157 539,369 Total 3,310,684 90,19,701 11,570,159 13,312,005
Less: Amount disclosed under 'other current liabilities' - 9,019,701 - 13,312,005 (note 6)
Net Total 3,310,684 - 11,570,159 - a) Term loans from others were taken for : (i) purchase of Software Licenses and carries interest @ 13.20% p.a. The loan is repayable in 12 quarterly installments of `2,182,950/- each including interest from February 2013. (iii) purchase of Plant and Machinery and carried interest @ 13.00% p.a. The loan is repayable in 45 monthly installments of `148,642/- each including interest starting from March 2014. b) Finance lease obligations represents future lease payments towards cost of implementation and upgradation of Server and carried interest @ 13.20% p.a. The lease obligations are payable in 12 quarterly installments of `166,410/- each including interest starting from May 2013, and c) Vehicle loans are secured by hypothecation of vehicles. The interest rate ranges from 10.00% to 13.75% p.a. The loans are repayable in 36 to 60 monthly installments inclusive of interest from the date of loan.
Annual Report 14 - 15 95 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015 d) Maturity Profile: Particulars Maturity Period Total 1-2 Years 2-3 Years 3-4 Years Vehicle loan 377,190 273,542 - 650,732 Term loan from others 1,526,754 1,133,198 - 2,659,952
4 long-term provisions (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Provision for employee benefits Gratuity (Refer note 34) 32,166,555 21,234,184 Leave encashment 13,839,101 10,032,842 Total 46,005,656 31,267,026
5 Short-term borrowings (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Secured Working capital loans from banks 3,040,769,879 2,783,356,326 Working capital loans from others 15,000,000 - Unsecured Loan from related party (Refer note 40) - 67,793,171 Total 3,055,769,879 2,851,149,497 a) Working capital loans from banks are secured by hypothecation of inventories, book debts, plant and machinery, other fixed assets, fixed deposits, other current assets and equitable mortgage of the Holding Company’s factories at Seepz and MIDC, one office at Bandra Kurla Complex, seven flats in Mumbai, and Two Flats at Prabhadevi belonging to Divya Real Estate Pvt. Ltd. b) The above facilities are further secured by (i) personal guarantee of managing director, Mr. Rajeev Sheth, (ii) corporate guarantee of Divya Real Estate Pvt. Ltd. and Fabrikant Tara International LLC and (iii) fixed deposits of ` 7.00 Crores of managing director, Mr. Rajeev Sheth. c) Working capital loans from others are secured by mutual fund investment in SBI MF Magnum Balanced Fund - Regular Plan Growth.
6 other Current Liabilities (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Current maturities of long-term borrowings 9,019,701 13,312,005 Interest accrued but not due on borrowings 354,034 594,296 Statutory liabilities 28,326,577 26,881,020 Other payables# 118,593,617 186,964,874 Total 156,293,929 227,752,195
# Other payables include expenses payable, creditors for fixed assets and advances received from customers.
96 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
7 Short-Term Provisions (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Provision for employee benefits Gratuity (Refer note 32) 1,194,124 641,732 Leave encashment 687,834 634,581 Provision for taxation (Net of tax payments) 199,726,713 147,476,651 Total 201,608,671 148,752,964
8. Fixed Assets (Amount in `) Assets GROSS BLOCK (AT COST) DEPRECIATION / AMORTISATION NET BLOCK As at Additions Deductions As at As at For the year* Deductions/ As at As at As at April 1, 2014 March 31, 2015 April 1, 2014 Adjustments March 31, 2015 March 31, 2015 March 31, 2014 Tangible Assets Building 409,147,341 - - 409,147,341 126,004,424 17,128,197 - 143,132,621 266,014,720 283,142,917 Leasehold Improvements 147,865,117 - 63,640,736 84,224,381 48,970,082 55,601,132 63,640,736 40,930,478 43,293,903 98,895,035 Vehicles 41,474,769 2,167,851 5,210,945 38,431,675 26,164,179 5,420,166 3,779,170 27,805,175 10,626,500 15,310,590 Air Conditioners 32,059,937 - 2,748,853 29,311,084 17,675,033 5,650,588 1,330,689 21,994,932 7,316,152 14,384,904 Computer Hardwares 68,335,588 1,160,325 1,829,797 67,666,116 58,654,952 6,390,422 1,789,711 63,255,663 4,410,453 9,680,636 Electric Installations 47,094,254 - 1,158,660 45,935,594 26,989,748 8,275,768 486,088 34,779,428 11,156,166 20,104,506 Furniture & Fixtures 185,709,552 1,037,951 16,280,398 170,467,105 93,665,353 28,016,820 6,589,551 115,092,622 55,374,483 92,044,199 Office Equipments 43,087,015 644,204 1,625,187 42,106,032 17,763,290 15,797,614 686,873 32,874,031 9,232,001 25,323,725 Plant & Machinery 786,487,853 66,803,979 374,760 852,917,072 407,748,562 109,209,167 157,806 516,799,923 336,117,149 378,739,291 Factory Equipments 41,863,506 17,500 - 41,881,006 14,278,756 5,218,981 - 19,497,737 22,383,269 27,584,750 Flat 139,724,774 203,951,345 - 343,676,119 12,235,282 15,269,694 - 27,504,976 316,171,143 127,489,492 Ship 4,951,213 - 4,951,213 - 3,737,203 78,157 3,815,360 - - 1,214,010 Total 1,947,800,919 275,783,155 97,820,549 2,125,763,525 853,886,864 272,056,706 82,275,984 1,043,667,586 1,082,095,939 1,093,914,055 Previous year 1,410,338,685 581,102,912 43,640,678 1,947,800,919 688,606,615 199,486,646 34,206,397 853,886,864 1,093,914,055 721,732,070 Intangible Assets Computer Software 58,680,266 4,098,499 - 62,778,765 31,374,232 7,961,663 - 39,335,895 23,442,870 27,306,034 Goodwill 27,020,125 - - 27,020,125 27,020,125 - - 27,020,125 - - Total 85,700,391 4,098,499 - 89,798,890 58,394,357 7,961,663 - 66,356,020 23,442,870 27,306,034 Previous year 81,423,601 4,276,790 - 85,700,391 50,963,658 7,430,699 - 58,394,357 27,306,034 30,459,943 Capital-work-in-progress - - Intangible Assets Under Development - 2,966,304
* Depreciation for the year includes depreciation of ` 9,370,770 adjusted against opening balance of Profit and Loss Account. 8 (a) Consequent to the enactment of the Act and its applicability for the accounting periods after April 1, 2014, the Company has computed depreciation with reference to the estimated economic lives of fixed assets prescribed by the Schedule II to the Act, except in respect of certain assets as disclosed in Accounting Policy on depreciation. For assets whose life has been completed as above, the carrying value, net of residual value, aggregating to ` 6,185,645 (net of deferred tax of ` 3,185,125) as at April 1, 2014 has been adjusted to opening balance of Profit and Loss Account and in other assets the carrying value as at April 1, 2014 has been depreciated over the remaining of the revised useful life of the assets. As a result, charge of depreciation is higher by ` 40,519,367 for the year ended March 31, 2015 and the net profit from ordinary activities before tax is lower by the same amount.
Annual Report 14 - 15 97 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
9 non-Current Investments (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Trade Investments (at cost, unquoted, fully paid up) Investment in Equity Instruments Subsidiaries Tara (Hong Kong) Limited 24,867,804 24,867,804 655,590 Equity shares of face value HK$ 10 each Tara Jewels Holding Inc. 113,299,500 113,299,500 2,000 Equity Shares of Face Value US$ 0.01 each Others Divya Jewels Pvt. Ltd. 175,000 175,000 5,000 Equity Shares of Face Value ` 10 each Total Trade Investments (A) 138,342,304 138,342,304 Other Investments (at cost, quoted, fully paid up unless otherwise stated) Investment in Equity Instruments Other entities Punjab National Bank 43,400 43,400 7,000 Equity Shares of Face Value ` 2 each (Market value as on 31.03.2015 - ` 1,010,800) Bank of India Ltd 63,000 63,000 1,400 Equity Shares of Face Value ` 10 each (Market value as on 31.03.2015 - ` 274,190) Investment in Mutual Funds SBI MF Magnum Balanced Fund - Regular Plan Growth 12,000,000 11,500,000 228,036.84 (Previous Year : 220,669.07) Units of Face Value ` 10 each (N.A.V as on 31.03.2015 - `21,655,222/- ) SBI Premier Liquid Fund - Regular Fund Daily Dividend 29,367 27,626 29.235 (Previous Year : 27.535) Units of Face Value ` 10 each (N.A.V as on 31.03.2015 of `29,340/-) AACG-Union KBC Asset Allocation Fund - Conservative Plan Growth - 1,500,000 Nil (Previous Year : 150,000) Units of Face Value `10/- each. Axis Mutual Fund-Liquid Fund A/C 132,510 - 132.465 (Previous year : Nil) Units of Face Value of `1,000/- each (N.A.V as on 31.03.2015 of `132,510/-) AAMG Union KBC Asset Allocation Fund - Moderate Plan Growth 87,234 - 7,079.462 (Previous year : Nil) Units of Face Value `10/- each. (N.A.V as on 31.03.2015 - `91,920/- ) CP1G-Union KBC Capital Protection Oriented Fund - Series 1 Growth 1,000,000 1,000,000 99,990 Units of Face Value of `10/- each (N.A.V as on 31.03.2015 - `1,345,075/- ) CP4G-Union KBC Capital Protection Oriented Fund-Series 4-Reg Plan-Growth 1,500,000 1,500,000 150,000 Units of Face Value of `10/- each (N.A.V as on 31.03.2015 - `1,855,890/-) CP5G-Union KBC Captial Protection Oriented Fund-Series 5-Reg Plan-Growth 1,500,000 1,500,000 150,000 Units of Face Value of `10/- each (N.A.V as on 31.03.2015 - `1,857,930/-) FM7G- Union KBC Fixed Maturity Plan Series 7 Growth - 500,000 Nil (Previous year : 50,000) Units of Face Value of `10/- each SMFG-Union KBC Small and Midcap Fund Regular Plan - Growth 158,691 - 15,185.738 (Previous Year : Nil) Units of face value of ` 10/- each (N.A.V as on 31.03.2015 - `186,177)
98 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
TF1 GR - Union KBC Trigger Fund- Series 1 Regular Plan Growth - 1,664,570 Nil (Previous year : 166,457) Units of Face Value of `10/- each TF2GR-Union KBC Trigger Fund Series 2 - Regular Plan Growth 3,000,000 - 299,990 (Previous year : NIL) Units of Face Value of `10/- each (N.A.V as on 31.03.2015 of `29,87,900/-) Investment in Mutual Funds (Unquoted) IIMCL-Emerging India Opportunities Fund 17,500,000 17,500,000 1,750 units of face value `10,000 each Total Other Investments (B) 37,014,202 36,798,596 Total (A + B) 175,356,506 175,140,900
Details of Quoted and Unquoted Investments (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Aggregate amount of quoted investments (Market value ` 31,426,955 19,514,202 19,298,596 (Previous Year ` 24,188,837)) Aggregate amount of unquoted investments 155,842,304 155,842,304 Total 175,356,506 175,140,900
10 deferred Tax Assets / (Liabilities) - (Net) (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Deferred tax assets arising on account of timing difference in: Depreciation 5,251,480 - Provision for gratuity and leave encashment 16,572,946 11,061,481 Unamortised share issue expenses u/s 35D 10,519,911 15,498,083 Disallowance under section 40(a)(ia) 2,055,082 1,044,170 Carried forward long term losses 71,149 29,651 Total 34,470,568 27,633,385 Deferred tax liabilities arising on account of timing difference in: Depreciation - (25,330,005) Total - (25,330,005) Net Deffered tax asset 34,470,568 2,303,380
11 long-Term Loans and Advances (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Unsecured, considered good Capital Advances 13,255,081 14,118,374 Security Deposits 25,274,105 51,566,803 Prepaid expenses 1,504,422 346,322 Other loans and advances * 1,919,082 2,783,057 Total 41,952,690 68,814,556 * Includes primarily claims receivable
Annual Report 14 - 15 99 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
12 inventories (valued at lower of cost and net realisable value) (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Raw materials 891,112,591 2,118,635,550 (including Goods-in-transit ` 120,176 (Previous year ` 29,466,360) Work-in-process 2,830,979,597 2,498,417,859 Finished goods 1,236,423,451 1,439,482,733 Stock-in-trade 4,777,054 7,265,778 Stores, consumables and packing material 47,283,822 53,806,511 Total 5,010,576,515 6,117,608,431
13 tRade receivables (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Unsecured, considered good Outstanding for a period exceeding six months from the date they became due for payment 738,071,175 495,714,018 Others 3,048,660,184 2,592,725,292 Total 3,786,731,359 3,088,439,310 Note: For dues from subsidiaries, refer note 40
14 cash and Bank balances (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Cash and Cash Equivalents Balances with banks 32,357,502 72,925,043 Cash on hand 15,441,892 33,462,591 Other Bank Balances Deposits with banks to the extent held as margin money for gold 419,755,094 282,378,663 Fixed deposits with banks as security against borrowings 284,315,543 253,496,738 Total 751,870,031 642,263,035
15 Short-term loans and advances (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Unsecured, considered good Loans to employees 3,873,021 3,499,442 Prepaid expenses 57,619,078 55,685,498 Balances with Statutory, Government Authorities 116,508,972 89,106,718 Other loans and advances* 11,277,705 7,815,833 Total 189,278,776 156,107,491 * Includes primarily advance paid to creditors
16 other current assets (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Interest accrued on fixed deposits 6,570,855 6,508,449 Total 6,570,855 6,508,449
100 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
17 Revenue from operations (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Sale of products Gems and Jewellery 14,126,557,238 13,975,053,849 Others 8,154,908 188,343,687 Sale of services Labour charges 5,725,932 7,967,941 Other Operating Revenues Sale of gold dust 1,188,119 - Total 14,141,626,197 14,171,365,477
18 other Income (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Interest on fixed deposits 44,722,394 37,786,994 Interest on others 22,711 78,734 Dividend income 134,251 53,584 Rent received 900,000 900,000 Profit on sale of investments (Net) 1,121,055 219,103 Sundry balances written back 867,592 8,107,514 Miscellaneous income - 2,738,408 Total 47,768,003 49,884,337
19 cost of materials consumed (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 As at beginning of the year 2,118,635,550 1,532,447,411 Add: Purchases 6,315,767,039 8,820,292,351 Less : As at end of the year 891,112,591 2,118,635,550 Total Cost of materials consumed 7,543,289,998 8,234,104,212
Details of raw materials consumed (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Precious metals and diamonds 7,418,660,956 8,087,652,379 Others 124,629,042 146,451,833 Total 7,543,289,998 8,234,104,212
20 purchases of Stock-in-Trade (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Gems and Jewellery 4,296,453,233 2,840,337,320 Others 6,327,975 139,912,752 Total 4,302,781,208 2,980,250,072
Annual Report 14 - 15 101 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
21 changes in inventories of finished goods, work-in-process and Stock-in-Trade (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Inventories as at the beginning of the year Work - in - process 2,498,417,859 2,950,858,023 Finished goods 1,439,482,733 1,204,370,839 Stock-in-trade 7,265,778 28,815,987 Total 3,945,166,370 4,184,044,849 Less : Inventories as at the end of the year Work - in - process 2,830,979,597 2,498,417,859 Finished goods 1,236,423,451 1,439,482,733 Stock-in-trade 4,777,054 7,265,778 Total 4,072,180,102 3,945,166,370 Net decrease / (increase) in inventories (127,013,732) 238,878,479
22 employee benefit expenses (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Salaries, allowances and bonus 328,670,691 370,167,687 Contribution to provident and other funds 36,027,556 24,846,168 Directors remuneration 34,076,752 34,056,202 Staff and labour welfare 12,986,351 17,348,231 Total 411,761,350 446,418,288
23 Finance Cost (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Interest expense 537,056,610 460,322,356 Other borrowing cost 65,461,840 74,409,459 Bank charges 35,086,528 36,813,385 Total 637,604,978 571,545,200
24 depreciation and amortisation expense (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Depreciation of tangible assets 262,685,936 199,486,646 Amortisation of intangible assets 7,961,663 7,430,699 Total 270,647,599 206,917,345
25 other expenses (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Manufacturing Expenses Wages, allowances & bonus 121,855,406 118,803,993 Import clearing charges 8,048,235 17,656,447 Labour charges 115,605,583 165,958,837 Electric power, fuel and water 40,552,795 39,961,001 Repairs and maintenance: factory building 2,201,538 1,878,592 Repairs and maintenance: plant & machinery 6,119,154 6,377,323 Foreign exchange difference (net) (92,294,243) (8,587,390)
102 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Stores, consumables and packing material 98,104,820 115,992,485 300,193,288 458,041,288 Selling, Administration and Other Expenses Advertisement 25,863,176 33,735,980 Auditor's remuneration 7,270,463 7,601,400 Commission 354,746 598,194 Bad Debts w/off - 1,936,016 Discount 51,428,028 22,600,515 Credit insurance 26,965,149 28,471,057 Electricity charges 6,814,827 10,163,356 Export clearing charges 13,786,914 29,211,892 Fixed assets written off 5,965,192 7,248,695 House Keeping Expenses 5,793,495 7,943,224 Insurance 9,180,640 10,548,741 Legal and professional fees 29,620,693 27,890,236 Loss on sale of fixed assets (net) 3,593,673 719,802 Rates and taxes 5,432,556 3,232,895 Rent 74,176,656 97,392,784 Repairs & maintenance - other 12,464,326 22,200,957 Sales promotion expenses 20,408,236 37,917,235 Security charges 18,654,589 24,507,544 Telephone and internet expenses 5,594,588 6,911,602 Travelling & conveyance expenses 24,245,348 32,890,802 Miscellaneous expenses 35,873,140 47,187,073 383,486,435 460,910,000 Total 683,679,723 918,951,288
26 contingent liabilities, commitments and other items (to the extent not recognised) (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Claims against the company not acknowledged as debt in respect of: a. Custom duty matter 1,900,563 1,900,563 b. Property tax 2,481,489 2,481,489 c. Service tax matter 6,723,389 6,723,389 d. Other matter 2,085,723 - Corporate Guarantee given by the Company to the bankers of a subsidiary company 1,157,915,000 1,111,850,000 Bills discounted 2,555,801,018 2,824,436,778 Total 3,726,907,182 3,947,392,219
Commitments Particulars As at As at March 31, 2015 March 31, 2014 Estimated amount of contracts remaining to be executed on capital account 43,687,095 188,735,653 and not provided for Total 43,687,095 188,735,653
Income Tax Assessment The Income- Tax assessments of the Company have been completed up to Assessment Year 2011-12. The disputed demand outstanding up to the said assessment year is approximately ` 37,765,000 Based on the decisions of the appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.
Annual Report 14 - 15 103 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
27 derivative Instruments and Unhedged Foreign currency exposures a) Forward Contracts outstanding as at the reporting date : There are no forward contract outstanding as at the end of the current and previous year. b) Unhedged foreign currency exposure as at the reporting date : Net Foreign currency exposures that are not hedged by derivative instruments as at the end of the year amounts to ` 704,451,234 (Previous year : `264,497,895).
28 auditor’s Remuneration (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Statutory audit fees 3,500,000 3,500,000 Tax audit fees 1,200,000 1,200,000 Certification and consultation 2,570,463 2,901,400 Total 7,270,463 7,601,400
29 Value of Imports on CIF Basis (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Raw materials 3,429,277,511 2,875,230,244 Trading goods 6,327,975 1,240,799,850 Packing Material 20,082,904 49,143,047 Components and spare parts 5,338,765 11,403,533 Capital goods 64,374,975 236,733,513 Total 3,525,402,129 4,413,310,186
30 eXpenditure in Foreign Currency (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Commission on sales 354,746 438,846 Interest 150,825,970 167,581,774 Labour charges 9,957,179 2,942,039 Salary 46,046,376 80,918,132 Professional and consultation fees 271,477 1,499,504 Payment on other accounts 12,230,542 13,830,697 Total 219,686,290 267,210,991
31 earnings in Foreign Exchange (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Export of goods calculated on F.O.B. basis 11,798,922,282 11,635,966,806 Freight 7,288,817 25,317,393 Total 11,806,211,099 11,661,284,199
32 Remittance in Foreign Currency on Account of Dividend The Company has paid interim dividend in respect of shares held by Non-Residents on repartriation basis. The total amount remittable in this respect is given herein below :
104 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 a) Number of Non-Resident Shareholders - 2 b) Number of Equity Shares held by them - 1,800,170 c) (i) Amount of Dividend paid (Gross) - 1,800,170 (ii) Tax deducted at source - - (iii) Year to which dividend relates - 2013-14
33 operating Leases a. The Company has given commercial premises on operating lease. In respect of this arrangements, lease rentals income of ` 900,000 (Previous Year : ` 900,000) are recognised in the statement of profit and loss for the period and are included under Rent (disclosed under Other Income in Note 18) b. The Company’s significant leasing arrangements are in respect of residential flats and office premises taken on lease. The arrangements range between 11 months and 9 years generally and are usually renewable by mutual consent or mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the period and included under Rent, Rates and Taxes (disclosed under Other Expenses in Note 25). The aggregate rental expenses of all the operating leases for the year are ` 74,176,656 (Previous year : ` 97,392,794 ).
The Future minimum lease payments to be paid under non-cancellable operating leases are as follows Minimum Lease Payment Year ended Year ended March 31, 2015 March 31, 2014 Not Later than one year 5,155,782 25,871,577 Later than one year but not later than five year 9,238,147 2,309,702
34 employee Benefits Disclosure (Amount in `) Particulars Year ended Year ended March 31, 2015 March 31, 2014 The Company has classified the various benefits provided to employees as under :- I. Defined Contribution Plans a. Employer's contribution to provident fund b. Employer's contribution to employee’s state insurance During the year, the Company has recognised the following amounts in the Statement of Profit and Loss ` ` - Employers' contribution to provident fund 16,416,365 13,304,876 - Employers' contribution to employee’s state insurance 6,478,847 7,085,713 II. Defined Benefit Plan Contribution to Gratuity Fund a. Major Assumptions (% p.a.) (% p.a.) Discount rate 8 9 Expected rate of return on plan assets 8 8 Salary escalation rate@ 5 5 @ The estimates for future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. b. Change in the Present Value of Obligation ` ` Present value of obligation at beginning of period / year 22,016,199 24,153,236 Current service cost 4,602,253 4,863,824 Interest cost 1,981,458 966,129 Benefit paid from fund - (1,180,860) Benefit paid directly from Company (6,615,281) (4,774,850) Actuarial (gain) \ loss on obligations 11,528,958 (2,011,280) Present value of obligation at end of the year 33,513,587 22,016,199 c. Change in Fair Value of Plan Assets Fair value of plan assets at beginning of period / year 140,283 731,715 Expected return on plan assets 11,223 58,537 Actuarial (gain) \ loss on obligations 1,402 (686,505) Contributions - 1,217,396 Benefits paid - (1,180,860) Fair Value of Plan Assets at end of the year 152,908 140,283
Annual Report 14 - 15 105 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
` ` d. Reconciliation of Present Value of Defined Benefit Obligation and the Fair Value of Assets Present value of funded obligation at end of the year 33,513,587 22,016,199 Fair value of plan assets at end of the year 152,908 140,283 Funded status (33,360,679) (21,875,916) Present value of unfunded obligation at end of the year 33,360,679 21,875,916 Unfunded net liability recognised in the Balance Sheet 33,360,679 21,875,916
e. Amount recognised in the Balance Sheet Present value of obligation at end of the year 33,513,587 22,016,199 Fair value of plan assets at end of the year 152,908 140,283 Liability recognised in the Balance Sheet 33,360,679 21,875,916 Disclosed under : Long term provision 32,166,555 21,234,184 Short term provisions 1,194,124 641,732
f. Expenses Recognised in the Statement of Profit and Loss Current service cost 4,602,253 4,863,824 Interest cost 1,981,458 966,129 Expected return on plan assets (11,223) (58,537) Net actuarial losses / (gain) recognised in the year 11,527,556 (1,324,775) Total expenses recognised in the Statement of Profit and Loss 18,100,044 4,446,641 Actual return on plan assets 12,625 (627,968)
35 disclosures under the Micro, Small and Medium Enterprises Development Act, 2006 The details of amounts outstanding to Micro, Small and Medium Enterprises based on available information with the company is as under: (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 a) Principal amount due and remaining unpaid 77,000 151,986 b) Interest due on above - - c) Payment made beyond the appointed day during the year 583,788 275,856 d) Interest Paid - - e) Interest due and payable for the period of delay 18,547 13,300 f) Interest accrued and remaining unpaid 56,460 13,300 g) Amount of further interest remaining due and payable in succeeding years 91,431 34,971
36 Share Warrants Pursuant to the approval of the Members of the Company obtained under Section 81 (1A) of the Companies Act, 1956 through Postal Ballot on March 19, 2014 , the Management & Administration Committee of the Board of Directors at its meeting held on April 02, 2014 has allotted 3,05,000 (Three Lac Five Thousand) Convertible Warrants (“Warrants”), to Bennett, Coleman & Company Limited (‘BCCL’) on a preferential allotment basis, with each warrant convertible into one equity share at a conversion price of `160 per share, not later than 18 months from the date of allotment in accordance with the SEBI (ICDR) Regulations, 2009. In accordance with ICDR regulations, BCCL has paid ` 12,200,000 towards 25% value of total consideration payable for the Warrants.
106 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
37 Segment Information a. Information about Primary Business Segment The Company is exclusively engaged in the “Diamond and Gold Jewellery” Business Segment. B. Information about Secondary Geographical Segment. Particulars April 1, 2014 to March 31, 2015 India Outside India* Total External Revenue 2,329,900,409 11,811,725,788 14,141,626,197 (2,510,081,278) (11,661,284,199) (14,171,365,477) As at March 31, 2015 Carrying Amount of Segment Assets 7,192,268,215 3,910,077,894 11,102,346,109 (8,174,276,377) (3,207,095,568) (11,381,371,945) April 1, 2014 to March 31, 2015 Capital Expenditure 276,915,350 - 276,915,350 (579,824,176) - (579,824,176)
* Includes mainly United States of America, Australia, China (including Hong kong), United Arab Emirates, Europe, South- Africa, Canada, Israel and United kingdom Note: The figures in brackets are in respect of the previous year ended March 31, 2014 Notes: (a) Segment Revenue in the geographical segment considered for disclosure are as follows: - Revenue within India includes sales to customers located within India and earnings in India - Revenue outside India includes sales to customers located outside India and earnings outside India. (b) Segment revenue, results, assets and liabilities includes the respective amounts identified to each the segment and amounts allocated on a reasonable basis. 38 earnings Per Share (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Profit after tax (`) 292,021,772 394,387,581 Weighted average number of equity shares 24,622,850 24,602,341 Nominal Value per Share (`) 10.00 10.00 Basic and Diluted Earnings Per Share (`) 11.86 16.03
39 employee Stock Option Plan The company implemented ESOP scheme as approved by the shareholders of the company. Details of the options granted under the plan are as under: ESOP Scheme Grant Date No of Options Exercise Price ` Vesting Period ESOP 2010 - Grant A 02.09.2010 442,571 333 02.09.2010 to 01.09.2014 ESOP 2010 - Grant B 02.09.2010 66,454 20 02.09.2010 ESOP 2013 - Grant C 25.07.2013 242,956 230 25.07.2013 to 25.07.2017
The options are granted at an exercise price. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of `10/- each. The options have vesting periods as stated above in accordance with the vesting schedule as per the said plans.
Annual Report 14 - 15 107 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
The particulars of options granted and lapsed under the plan are as below: Particulars Year ended March 31, 2015 Year ended March 31, 2014 Grant B Grant C Grant B Grant C Options outstanding as at the beginning of the year - 242,956 49,841 -
Add: Options granted during the year - - - 242,956 Less: Options lapsed during the year - 131,278 4,473 - Less: Options exercised during the year - - 45,368 -
Less: Options Surrendered during the year - - - -
Options outstanding as at the end of the year - 111,678 - 242,956
The Company has followed the intrinsic value-based method of accounting for stock options based on Guidance Note on Accounting for Employee Share -based Payments, issued by the Institute of Chartered Accountants of India. Had the compensation cost for the Company’s stock based compensation plans been determined in the manner consistent with the fair value approach as described in the said Guidance Note, (a) the Company’s net income would be lower by `231,911 (previous year : ` 940,488), and (b) earnings per share as reported would be lower as indicated below:
Particulars Year ended Year ended March 31, 2015 March 31, 2014 Net profit after tax, as reported 292,021,772 394,387,581 Less: Total stock-based employee compensation expense determined under fair value based method 231,911 940,488 Adjusted net profit after tax 291,789,861 393,447,093 Basic earning per share - As reported 11.86 16.03 - Adjusted 11.85 15.99 Diluted earning per share - As reported 11.86 16.03 - Adjusted 11.85 15.99
The fair value of option is estimated on the date of grant based on the following assumptions: Particulars ESOP 2013 Grant C dated 25.07.2013 Dividend yield (%) 0.00% Expected life (years) 4.00 Yrs Risk free interest rate(%) 9.10% Volatility (%) 46.10%
40. Related Party Disclosure Disclosures of Related Party Transactions as per AS-18 “Related Party Disclosure” is given below:
A. List of Related Parties Subsidiary Companies 1. Fabrikant Tara International LLC. 2. Tara Jewels Holding Inc. 3. Tara (Hong Kong) Ltd. 4. Tara China Jewelery Ltd. 5. Tara Jewels Honduras, Sociedad de Responsabilidad Limitada (Upto 29.08.2013)
108 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
Directors 1. Mr. Rajeev Sheth 2. Mr. Sanjay Sethi (From 01.07.2014) 3. Mrs. Nalini Rajan (Upto 01.07.2014) 4. Mr.Vikram Raizada (Upto 02.01.2015) 5. Ms. Fern Mallis 6. Mr. Nikkhil Vaidya 7. Mr. Rakesh Kalra 8. Mr. Shanti Saroop Khindria 9. Mr. Rajiv Jain 10. Mr. Sandro Brodbeck (Upto 12.11.2014) 11. Mr. Francois Arpels (From 16 May 2013) 12. Mr. Mariano De La Torre (From 10.02.2015) Key Management Personnel 1. Mr. Rajeev Sheth 2. Mr. Sanjay Sethi (From 01.03.2014) 3. Mr. Amol Raje (Upto 05.04.2014) 4. Mrs. Jayshree Soni (From 21.04.2014 to 02.12.2014) 5. Mrs. Nivedita Nayak (From 22.12.2014)
Relatives of Directors 1. Mrs. Aarti Sheth 2. Mrs. Divya Sheth 3. Mrs. Purnima Sheth 4. Mr. Vishnukumar Raizada
Entities in which Key Managerial Personnel/ their relatives are able to exercise significant influence or control 1. F. T. Diamonds 2. Divya Jewels International Pvt. Ltd. 3. Divya Real Estate Pvt. Ltd. 4. Aarti Jewellers Pvt Ltd. 5. Karan Arjun Jewellery Pvt. Ltd. 6. Tara Duniya Corporation
B. transactions during the year April 1, 2014 to March 31, 2015 Particulars Subsidiaries Key Management Entities in which Key Companies Personnel Managerial Personnel/ their relatives have significant influence or control Current Year Previous Current Year Previous Current Previous Year Year Year Year Sale of Goods Fabrikant Tara International LLC. 2,391,741,949 2,935,049,967 - - - - Tara (Hong Kong) Ltd. 983,959,630 538,175,741 - - - - Purchase of Goods Fabrikant Tara International LLC. 448,490,802 979,991,834 - - - - Tara (Hong Kong) Ltd. 284,571,547 492,174,087 - - - - Aarti Jewellers Pvt Ltd. - - - - 84,638 - Labour Charges Paid Tara (Hong Kong) Ltd. 233,189 2,403,252 - - - - Labour Charges Received Fabrikant Tara International LLC. 5,368,942 7,059,838 - - - -
Annual Report 14 - 15 109 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
Aarti Jewellers Pvt Ltd. - - - - 138,162 89,327 Purchase of Fixed Assets Tara (Hong Kong) Ltd. 4,629,789 - - - - - Sale of Fixed Assets Mr. Vishnukumar Raizada - - - 285,000 - - Directors' Remuneration and Commission Mr Rajeev V. Sheth - - 17,116,400 18,917,808 - - Mrs Nalini Rajan - - 2,249,100 6,319,264 - - Mr Vikram Raizada - - 9,890,852 11,056,359 - - Mr Sanjay Sethi - - 4,820,400 - - - Commission and other benefits to - - 3,520,000 3,458,171 - - Independent Directors Salary paid Mr. Sanjay Sethi - - 1,606,380 - - - Ms Aarti Sheth - - 3,008,400 2,991,600 - - Ms Divya Sheth - - 1,325,918 1,200,000 - - Other Key Managerial Personnel - - 787,383 1,400,641 - - Issue of shares (exercise of ESOP) Mrs Nalini Rajan - - - 638,980 - - Repayment of Unsecured Loans Divya Jewels International Pvt. Ltd. - - - - 67,793,171 59,560,552 Unsecured Loans taken Divya Jewels International Pvt. Ltd. - - - - - 52,000,000 Sales Promotion Expenses Aarti Jewellers Pvt Ltd. - - - - 1,055,000 535,000
C. closing Balances as on March 31, 2015 (Amount in `) Particulars Subsidiaries Key Management Entities in which Key Companies Personnel Managerial Personnel/ their relatives have significant influence or control Current Previous Current Previous Current Previous Year Year Year Year Year Year Trade Receivables F. T. Diamonds - - - - 1,031,249 990,223 Aarti Jewellers Pvt Ltd. - - - - 54,182 33,162 Tara (Hong Kong) Ltd. 125,608,774 - - - - - Trade Payables Tara (Hong Kong) Ltd. - 203,803,733 - - - - Fabrikant Tara International LLC. 71,023,048 612,848,081 - - - - Investments Tara Jewels Holding Inc. 113,299,500 113,299,500 - - - - Tara (Hong Kong) Ltd. 24,867,804 24,867,804 - - - -
110 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
Divya Jewels International Pvt. Ltd. - - - - 175,000 175,000 Short Term Borrowings Divya Jewels International Pvt. Ltd. - - - - - 67,793,171 Director Remunaration payable Mr. Rajeev Sheth - - 6,792,297 7,152,949 - - Ms. Nalini Rajan - - - 169,274 - - Mr. Vikram Raizada - - - 573,315 - - Mr Sanjay Sethi - - 493,594 - - - Commission and other benefits Payable to - - 3,628,000 2,980,000 - - Independent Directors Salary Payable Ms Aarti Sheth - - 42,433 45,585 - - Ms Divya Sheth - - 15,266 31,568 - - Other Key Managerial Personnel - - 48,000 108,164 - -
41 corporate Social Responsibility (CSR) During the financial year under review, the company has constituted the Corporate Social Responsibility Committee in terms of Section 135 of the Companies Act, 2013 and the board has adopted a CSR Policy as recommended by the Committee, however the Company has not made any expenditure on CSR as the Company is still in the process of identifying the eligible project. The Company intends to contribute to the money for CSR activities as soon as the project is identified.
42 deferred tax Expense (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Opening deferred tax (Liability) / Asset 2,303,380 8,750,667 Add: Deferred tax asset adjusted to opening balance of Profit and Loss Account (refer note 8(a)) 3,185,125 - 5,488,505 8,750,667 Less : Deferred tax (Liability) / Assets as at the end of year 34,470,568 2,303,380 Deferred tax Expense recognised in Statement of Profit and Loss )28,982,063( 6,447,287
43 Prior year comparatives Prior year comparatives have been reclassified to confirm with the current year’s presentation, wherever applicable.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
Annual Report 14 - 15 111 Independent Auditor’s Report to the members of Tara Jewels Limited
Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of TARA JEWELS LIMITED (hereinafter referred to as “the Holding Company”)and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”),comprising of the Consolidated Balance Sheet as at 31st March, 2015, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).
Management’s Responsibility for the Consolidated Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”)that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company.
Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Holding Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financialstatements.
Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at 31st March, 2015, and theirconsolidated profit and their consolidated cash flows for the year ended on that date.
Other Matters (a) We did not audit the financial statements / consolidated financial statements of subsidiaries, whose financial statements / consolidated financial statements reflect total assets of `. 3,030,498,904 as at 31st March, 2015, total revenues of ` 8,129,456,867 and net cash flows amounting to ` 14,968,939 for the year ended on that date, as considered in the consolidated financial statements. These financial statements / consolidated financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements is based solely on the reports of the other auditors.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.
112 TARA JEWELS LIMITED Report on Other Legal and Regulatory Requirements 1. The subsidiaries companies are incorporated outside India and hence Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act is not applicable for the subsidiary companies. A statement on the matters specified in paragraphs 3 and 4 of the Order as applicable to Holding Company is given in the Annexure to Independent Auditor’s Report of Holding Company.
2. As required by Section 143(3) of the Act, we report, to the extent applicable, 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 of the aforesaid consolidated financial statements. (b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors. (c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements. (d) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. (e) The subsidiaries companies are incorporated outside India and hence provision of section 164 (2) of the Act is not applicable to directors of subsidiary companies. On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2015 and taken on record by the Board of Directors of the Holding Company, none of the directors of the Holding companies incorporated in India is disqualified as on 31st March 2015 from being appointed as a director in terms of Section 164 (2) of the Act. (f) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group– Refer Note 26 to the consolidated financial statements. ii. The Group did not have any material foreseeable losses on long-term contracts including derivative contracts. iii. In case of subsidiary companies incorporated outside India, the provision of the Act relating to Investor Education and Protection Fund are not applicable. There were no amounts which were required to be transferred to the Investor Education andProtection Fund by the Holding Company.
For C. B. Chhajed& Co. Chartered Accountants (Firm RegnNo : 101796W)
Place : Mumbai C. B. Chhajed Dated : 25.05.2015 (Partner) Membership No : 009447
Annual Report 14 - 15 113 Consolidated Balance Sheet AS AT MARCH 31, 2015
(Amount in ` ) Particulars Note As at As at March 31, 2015 March 31, 2014 EQUITY AND LIABILITIES Shareholders' Funds Share capital 1 246,228,500 246,228,500 Reserves and surplus 2 5,587,449,851 5,158,199,972 Money received against share warrants 12,200,000 - 5,845,878,351 5,404,428,472 Minority Interest - - Non-Current Liabilities Long-term borrowings 3 3,310,684 11,570,159 Other long-term liabilities 4 1,536,146 2,756,967 Long-term provisions 5 46,005,656 31,267,026 50,852,486 45,594,152 Current Liabilities Short-term borrowings 6 4,096,662,421 3,848,991,539 Trade payables 3,016,993,810 3,191,154,697 Other current liabilities 7 234,839,435 319,830,684 Short-term provisions 8 200,433,857 149,761,683 7,548,929,523 7,509,738,603 TOTAL 13,445,660,360 12,959,761,227 ASSETS Non-Current Assets Fixed assets 9 Tangible assets 1,105,275,398 1,129,073,887 Intangible assets 23,961,473 28,299,244 Intangible assets under development - 2,966,304 Non-current investments 10 37,189,202 36,973,596 Deferred tax assets (Net) 11 38,737,668 6,570,480 Long-term loans and advances 12 41,952,690 69,698,928 1,247,116,431 1,273,582,439 Current assets Inventories 13 5,764,453,826 6,934,993,215 Trade receivables 14 5,336,748,670 3,807,654,154 Cash and bank balances 15 834,993,933 710,417,998 Short-term loans and advances 16 255,776,645 226,604,972 Other current assets 17 6,570,855 6,508,449 12,198,543,929 11,686,178,788 TOTAL 13,445,660,360 12,959,761,227
Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
114 TARA JEWELS LIMITED Statement of Profit and Loss FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars Note Year Ended Year Ended March 31, 2015 March 31, 2014 INCOME Revenue from operations 18 17,352,768,196 16,953,976,562 Other income 19 53,175,804 53,836,467 Total Revenue 17,405,944,000 17,007,813,029
EXPENSES Cost of materials consumed 20 9,585,422,137 10,144,352,410 Purchases of stock-in-trade 4,615,534,534 3,308,588,594 Changes in inventories of finished goods, work-in-process and Stock-in-Trade 21 50,334,024 151,709,146 Employee benefits expense 22 530,000,134 563,149,107 Finance costs 23 715,519,067 650,804,799 Depreciation and amortization expense 24 280,926,403 215,146,337 Other expenses 25 985,561,146 1,210,425,343
Total Expenses 16,763,297,445 16,244,175,736
Profit before tax 642,646,555 763,637,293
Tax expense: Current tax 231,052,651 250,472,322 Deferred tax (28,982,063) 6,041,877 Tax of earlier years 4,021,343 3,350,062 Profit after tax 436,554,624 503,773,032
Earning per equity share 34 Basic 17.73 20.48 Diluted 17.73 20.48
Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
Annual Report 14 - 15 115 Cash Flow Statement FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars Year Ended Year Ended March 31, 2015 March 31, 2014 CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax 642,646,555 763,637,293 Adjutments for: Depreciation/ amortisation 280,926,403 215,146,337 Loss / (Profit) on sale of fixed assets 2,975,714 (2,004,513) Fixed Assets Writen off 5,965,192 7,301,451 Profit on sale of investments (1,121,055) (219,103) Dividend income (134,251) (53,584) Interest income (45,156,156) (38,425,958) Interest expense 597,382,920 522,453,920 Sundry balances written back (867,592) (8,107,514) Operating profit before working capital adjustment 1,482,617,730 1,459,728,329 Changes in working capital: Inventories 1,170,539,389 (425,613,451) Trade receivables (1,529,094,516) (906,134,603) Loans and advances and other assets (2,288,728) (86,231,446) Other Bank balances (176,908,719) 162,528,528 Trade payables (173,293,295) 154,560,117 Other liabilities and provisions (67,885,649) 91,558,522 Cash flow generated from operations 703,686,212 450,395,996 Income tax paid (net of refunds) (209,007,465) (229,010,749) Net cash flow from operating activities (A) 494,678,747 221,385,247 CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (including intangible assets) (274,983,125) (528,228,632) Purchase of Investments (6,373,752) (8,666,354) Sale proceeds of investments 7,279,201 3,219,103 Sale proceeds of fixed assets 8,223,058 7,215,440 Dividend received 134,251 53,584 Interest received 45,093,750 43,605,169 Net Cash Flow from Investing Activities (B) (220,626,617) (482,801,690) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from borrowing 235,119,103 541,216,128 Interest paid (573,704,017) (502,797,689) Proceeds from issue of share capital / share warrants 12,200,000 907,360 Interim dividend - (24,622,850) Tax on dividend - (4,184,653) Net Cash Flow From Financing Activities (C) (326,384,914) 10,518,296 Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) (52,332,784) (250,898,147) Cash & Cash Equivalent at the beginning of the period / year 113,704,569 364,602,716 Cash & Cash Equivalent at the end of the period / year 61,371,785 113,704,569 Deposits with banks to the extent held as margin money for gold 419,755,094 282,378,663 Fixed deposits with banks as security against borrowings 353,867,054 314,334,766 Cash & Bank balances at the end of the period / year 834,993,933 710,417,998 Figures under bracket represent outflows.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
116 TARA JEWELS LIMITED Significant Accounting Policies FOR THE YEAR ENDED MARCH 31, 2015
A. basis of Preparation of Consolidated Financial Statements These consolidated financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.
B. principles of Consolidation The Consolidated Financial Statements relate to Tara Jewels Limited (the “Holding Company”) and its Subsidiarie0s (collectively referred to as “the Group”). The Consolidated Financial Statements are prepared on the following basis: i) The consolidated financial statements of the Group have been prepared in accordance with the Accounting Standard 21, “Consolidated Financial Statement” issued by the Institute of Chartered Accountants of India. ii) The financial statements of the Group have been consolidated on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances, intra-group transactions and un-realised profits or losses. iii) The consolidated financial statements have been prepared using uniform accounting policies for like transaction and other events in similar circumstances and are presented to the extent possible, in the same manner as those of the parent company’s independent financial statements unless stated otherwise.
The operations of foreign subsidiaries have been considered by the management, as integral operations as described in Accounting Standard – AS 11 (revised) “Accounting for the effects of changes in foreign exchange rates”. Accordingly, the Financial Statements of the Subsidiaries have been translated to Indian rupees on following basis:
zz All income and expenses are translated at the average rate of exchange prevailing during the period;
zz Monetary assets and liabilities are translated at the Closing rate prevailing at the Balance Sheet date;
zz Non-monetary assets and liabilities are translated at the historical rates; and
zz The resulting exchange difference is recognized as income or expense for the period. iv) The difference between the cost to the company of its investments in a subsidiary and its portion of equity of subsidiary on the date it became a subsidiary is recognized in the financial statement as Goodwill or Capital Reserve, as the case may be. v) Minority Interest in the consolidated financial statement is identified and recognized after taking into consideration the minority share of movement in equity since the date parent-subsidiary relationship came into existence. vi) Minority interest is presented separately from the liabilities or assets and the equity of the shareholders in the Consolidated Balance Sheet. Minority interest in the income of the Group is separately presented in Consolidated Statement of Profits and Loss. vii) All Employees’ related benefits including social security have been provided in accordance with the laws of the country in which the individual entity is operating.
C. other Significant Accounting Policies These are set out under “Significant Accounting Policies” as given in the Company’s Standalone Financial Statements.
Annual Report 14 - 15 117 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
1 share Capital (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Authorised 30,000,000 Equity Shares of ` 10 each 300,000,000 300,000,000 Issued, subscribed and paid-up 24,622,850 Equity Shares of ` 10 each fully paid up 246,228,500 246,228,500 Total 246,228,500 246,228,500
Reconciliation of Equity Shares outstanding Particulars As at March 31, 2015 As at March 31, 2014 No. of Shares Amount (Rs.) No. of Shares Amount (Rs.) As at the beginning of the year 24,622,850 246,228,500 24,577,482 245,774,820 Add: Allotment of shares under ESOP - - 45,368 453,680 (refer note 30) As at the end of the year 24,622,850 246,228,500 24,622,850 246,228,500
Details of shares for the period of five years immediately preceeding the reporting date No. of Shares Particulars As at As at March 31, 2015 March 31, 2014 Alloted as fully paid up by way of bonus shares during the year ended March 31, 2011 5,923,707 5,923,707
Details of shareholders holding more than 5% shares of the Company Name of Shareholder As at March 31, 2015 As at MARCH 31, 2014 No. of Shares % No. of Shares % Mr. Rajeev Sheth 14,514,893 58.95 14,482,893 58.82 Crystalon Finanz AG 1,800,000 7.31 1,800,000 7.31 IDFC Premier Equity Fund 2,162,500 8.78 2,162,500 8.78
Shares reserved for issue under Employee Stock Option Plan (‘ESOP 2013’) For details of shares reserved for issue under ESOP 2013 of the Company, refer note 30.
Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share and dividend in indian rupees, as proposed by the Board of Directors, which is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
2 Reserves and Surplus (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Securities Premium Account Balance as at the beginning of the year 1,679,062,852 1,664,408,988 Add: Premium on exercise of ESOP - 14,653,864 Balance as at the end of the year 1,679,062,852 1,679,062,852 SEZ Reinvestment Allowance Reserve
118 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Balance as at the beginning of the year 335,923,811 586,651,001 Less: Utilised during the year 71,273,127 250,727,190 Balance as at the end of the year 264,650,684 335,923,811 Employee Stock Options Outstanding Balance as at the beginning of the year - 15,600,233 Less: Utilisation during the year - 15,600,233 Balance as at the end of the year - - General Reserve Balance as at the beginning of the year 114,400,049 88,000,000 Add: Additions during the year - 1,400,049 Add: Transferred from Surplus - 25,000,000 Balance as at the end of the year 114,400,049 114,400,049 Capital Reserve Balance as at the beginning of the year 26,848,865 26,848,865 Balance as at the end of the year 26,848,865 26,848,865 Surplus Balance as at the beginning of the year 3,001,964,395 2,301,271,676 Add: Profit after tax for the year 436,554,624 503,773,032 Less : Interim Dividend - 24,622,850 Less : Tax on Dividend - 4,184,653 Less : Transfer to General Reserve - 25,000,000 Add: SEZ reinvestment allowance reserve utilised 71,273,127 250,727,190 Less: Adjustment relating to Fixed assets 7,304,745 - (Net of deferred tax) (Refer Note 9(a)) Balance as at the end of the year 3,502,487,401 3,001,964,395 Total 5,587,449,851 5,158,199,972
3 long-Term Borrowings (Amount in `) Particulars As at March 31, 2015 As at March 31, 2014 Non Current Current Non Current Current Secured Term loans from others 2,659,952 74,80,909 10,140,862 8,487,720 Vehicle loan from bank 650,732 9,24,635 815,140 4,284,916 Finance lease obligations - 6,14,157 614,157 539,369 Total 3,310,684 90,19,701 11,570,159 13,312,005
Less: Amount disclosed under 'other current liabilities' - 9,019,701 - 13,312,005 (note 7)
Net Total 3,310,684 - 11,570,159 - a) Term loans from others were taken for : (i) purchase of Software Licenses and carries interest @ 13.20% p.a. The loan is repayable in 12 quarterly installments of `2,182,950/- each including interest from February 2013. (iii) purchase of Plant and Machinery and carried interest @ 13.00% p.a. The loan is repayable in 45 monthly installments of `148,642/- each including interest starting from March 2014.
Annual Report 14 - 15 119 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015 b) Finance lease obligations represents future lease payments towards cost of implementation and upgradation of Server and carried interest @ 13.20% p.a. The lease obligations are payable in 12 quarterly installments of `166,410/- each including interest starting from May 2013, and c) Vehicle loans are secured by hypothecation of vehicles. The interest rate ranges from 10.00% to 13.75% p.a. The loans are repayable in 36 to 60 monthly installments inclusive of interest from the date of loan. d) Maturity Profile: Particulars Maturity Period Total 1-2 Years 2-3 Years 3-4 Years Vehicle loan 377,190 273,542 - 650,732 Term loan from others 1,526,754 1,133,198 - 2,659,952
4 other Long Term Liabilities (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Deferred lease obligations 1,536,146 2,756,967 Total 1,536,146 2,756,967
5 long-term provisions (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Provision for employee benefits Gratuity (Refer note 32) 32,166,555 21,234,184 Leave encashment 13,839,101 10,032,842 Total 46,005,656 31,267,026
6 short-term borrowings (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Secured Working capital loans from banks 4,031,747,835 3,743,662,553 Working capital loans from others 15,000,000 - Unsecured Loan from related party (Refer note 31) 49,914,586 105,328,986 Total 4,096,662,421 3,848,991,539 a) Working capital loans from banks are secured by hypothecation of inventories, book debts, plant and machinery, other fixed assets, fixed deposits, other current assets and equitable mortgage of the Holding Company’s factories at Seepz and MIDC, one office at Bandra Kurla Complex, seven flats in Mumbai, and Two Flats at Prabhadevi belonging to Divya Real Estate Pvt. Ltd. b) The above facilities are further secured by (i) personal guarantee of managing director, Mr. Rajeev Sheth, (ii) corporate guarantee of Divya Real Estate Pvt. Ltd. and Fabrikant Tara International LLC and (iii) fixed deposits of ` 7.00 Crores of managing director, Mr. Rajeev Sheth. c) Working capital loans from others are secured by mutual fund investment in SBI MF Magnum Balanced Fund - Regular Plan Growth. d) Working Capital Loan by USA Subsidiary Company are secured by hypothecation of substantially all assets of the subsidiary company and subordinations; and corporate guarantee of Tara Jewels Limited e) Working Capital Loans taken by Hongkong Subsidiary are secured by hypothecation of inventory, receivables and Fixed Deposits. The loans are further secured by corporate guarantee of Tara Jewels Limited and personal guarantee of Managing Director, Mr. Rajeev Sheth. f) Unsecured Loans from related parties are interest free and repayable on demand.
120 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
7 other Current Liabilities (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Current maturities of long-term borrowings 9,019,701 13,312,005 Interest accrued but not due on borrowings 354,034 675,131 Statutory liabilities 28,326,577 26,881,020 Other payables# 197,139,123 278,962,528 Total 234,839,435 319,830,684
# Other payables include expenses payable, creditors for fixed assets and advances received from customers.
8 short-Term Provisions (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Provision for employee benefits Gratuity (Refer note 32) 1,194,124 641,732 Leave encashment 687,834 634,581 Provision for taxation (Net of tax payments) 198,551,899 148,485,370 Total 200,433,857 149,761,683
9. Fixed Assets (Amount in `) Assets GROSS BLOCK (AT COST) DEPRECIATION / AMORTISATION NET BLOCK As at Additions Deductions As at Upto For the year* Deductions/ Upto As at As at April 1, 2014 March 31, 2015 April 1, 2014 Adjustments March 31, 2015 March 31, 2015 March 31, 2014 Tangible Assets Building 427,658,498 - - 427,658,498 134,163,928 20,085,812 - 154,249,740 273,408,758 293,494,570 Leasehold Improvements 147,865,117 - 63,640,736 84,224,381 48,970,082 55,601,132 63,640,736 40,930,478 43,293,903 98,895,035 Vehicles 42,205,530 2,167,851 5,210,945 39,162,436 26,616,695 5,516,972 3,779,170 28,354,497 10,807,939 15,588,835 Air Conditioners 32,059,937 - 2,748,853 29,311,084 17,675,033 5,650,588 1,330,689 21,994,932 7,316,152 14,384,904 Computer Hardwares 75,090,181 1,160,325 1,829,797 74,420,709 64,449,262 6,953,574 1,789,711 69,613,125 4,807,584 10,640,919 Electric Installations 51,874,783 - 1,158,660 50,716,123 28,654,283 9,221,474 486,088 37,389,669 13,326,454 23,220,500 Furniture & Fixtures 204,937,379 1,600,274 16,280,398 190,257,255 102,445,247 31,150,688 6,589,551 127,006,384 63,250,871 102,492,132 Office Equipments 47,040,430 644,204 1,625,187 46,059,447 19,895,912 17,363,210 686,873 36,572,249 9,487,198 27,144,518 Plant & Machinery 798,866,980 66,803,979 2,695,296 862,975,663 411,942,758 110,869,721 858,943 521,953,536 341,022,127 386,924,222 Factory Equipments 41,863,506 17,500 - 41,881,006 14,278,756 5,218,981 - 19,497,737 22,383,269 27,584,750 Flat 139,724,774 203,951,345 - 343,676,119 12,235,282 15,269,694 - 27,504,976 316,171,143 127,489,492 Ship 4,951,213 - 4,951,213 - 3,737,203 78,157 3,815,360 - - 1,214,010 Total 2,014,138,328 276,345,478 100,141,085 2,190,342,721 885,064,441 282,980,003 82,977,121 1,085,067,323 1,105,275,398 1,129,073,887 Previous year 1,477,511,528 586,649,132 50,022,332 2,014,138,328 715,089,450 207,484,945 37,509,954 885,064,441 1,129,073,887 762,422,078 Intangible Assets Computer Software 64,754,371 4,098,499 - 68,852,870 37,139,883 8,270,117 - 45,410,000 23,442,870 27,614,488 Goodwill 27,020,125 - - 27,020,125 27,020,125 - - 27,020,125 - - Trademark 1,156,250 - - 1,156,250 471,494 166,153 - 637,647 518,603 684,756 Total 92,930,746 4,098,499 - 97,029,245 64,631,502 8,436,270 - 73,067,772 23,961,473 28,299,244 Previous year 88,653,956 4,276,790 - 92,930,746 56,970,110 7,661,392 - 64,631,502 28,299,244 31,683,846 Capital-work-in-progress - - Intangible Assets Under Development - 2,966,304
* Depreciation for the year includes depreciation of `10,489,870 adjusted against opening balance of Profit and Loss Account. 9 (a) Consequent to the enactment of the Act and its applicability for the accounting periods after April 1, 2014, the Company has computed
Annual Report 14 - 15 121 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
depreciation with reference to the estimated economic lives of fixed assets prescribed by the Schedule II to the Act, except in respect of certain assets as disclosed in Accounting Policy on depreciation. For assets whose life has been completed as above, the carrying value, net of residual value, aggregating to ` 7,304,745 (net of deferred tax of ` 3,185,125) as at April 1, 2014 has been adjusted to opening balance of Profit and Loss Account and in other assets the carrying value as at April 1, 2014 has been depreciated over the remaining of the revised useful life of the assets. As a result, charge of depreciation is higher by ` 43,080,022 for the year ended March 31, 2015 and the net profit from ordinary activities before tax is lower by the same amount.
10 non-Current Investments (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Trade Investments (at cost, unquoted, fully paid up) Investment in Equity Instruments Trade Investments (at cost, unquoted, fully paid up) Divya Jewels Pvt. Ltd. 175,000 175,000 5,000 Equity Shares of Face Value ` 10 each Total Trade Investments (A) 175,000 175,000 Other Investments (at cost, quoted, fully paid up unless otherwise stated) Investment in Equity Instruments Other entities Punjab National Bank 43,400 43,400 7,000 Equity Shares of Face Value ` 2 each (Market value as on 31.03.2015 - ` 1,010,800) Bank of India Ltd 63,000 63,000 1,400 Equity Shares of Face Value ` 10 each (Market value as on 31.03.2015 - ` 274,190) Investment in Mutual Funds SBI MF Magnum Balanced Fund - Regular Plan Growth 12,000,000 11,500,000 228,036.84 (Previous Year : 220,669.07) Units of Face Value ` 10 each (N.A.V as on 31.03.2015 - `21,655,222/- ) SBI Premier Liquid Fund - Regular Fund Daily Dividend 29,367 27,626 29.235 (Previous Year : 27.535) Units of Face Value ` 10 each (N.A.V as on 31.03.2015 of `29,340/-) AACG-Union KBC Asset Allocation Fund - Conservative Plan Growth - 1,500,000 Nil (Previous Year : 150,000) Units of Face Value `10/- each. Axis Mutual Fund-Liquid Fund A/C 132,510 - 132.465 (Previous year : Nil) Units of Face Value of `1,000/- each (N.A.V as on 31.03.2015 of `132,510/-) AAMG Union KBC Asset Allocation Fund - Moderate Plan Growth 87,234 - 7,079.462 (Previous year : Nil) Units of Face Value `10/- each. (N.A.V as on 31.03.2015 - `91,920/- ) CP1G-Union KBC Capital Protection Oriented Fund - Series 1 Growth 1,000,000 1,000,000 99,990 Units of Face Value of `10/- each (N.A.V as on 31.03.2015 - `1,345,075/- ) CP4G-Union KBC Capital Protection Oriented Fund-Series 4-Reg Plan-Growth 1,500,000 1,500,000 150,000 Units of Face Value of `10/- each (N.A.V as on 31.03.2015 - `1,855,890/-) CP5G-Union KBC Captial Protection Oriented Fund-Series 5-Reg Plan-Growth 1,500,000 1,500,000 150,000 Units of Face Value of `10/- each (N.A.V as on 31.03.2015 - `1,857,930/-) FM7G- Union KBC Fixed Maturity Plan Series 7 Growth - 500,000 Nil (Previous year : 50,000) Units of Face Value of `10/- each SMFG-Union KBC Small and Midcap Fund Regular Plan - Growth 158,691 - 15,185.738 (Previous Year : Nil) Units of face value of ` 10/- each
122 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
(Amount in ` ) Particulars As at As at March 31, 2015 March 31, 2014 (N.A.V as on 31.03.2015 - `186,177) TF1 GR - Union KBC Trigger Fund- Series 1 Regular Plan Growth - 1,664,570 Nil (Previous year : 166,457) Units of Face Value of `10/- each TF2GR-Union KBC Trigger Fund Series 2 - Regular Plan Growth 3,000,000 - 299,990 (Previous year : NIL) Units of Face Value of `10/- each (N.A.V as on 31.03.2015 of `29,87,900/-) Investment in Mutual Funds (Unquoted) IIMCL-Emerging India Opportunities Fund 17,500,000 17,500,000 1,750 units of face value `10,000 each Total Other Investments (B) 37,014,202 36,798,596 Total (A + B) 37,189,202 36,973,596
Details of Quoted and Unquoted Investments (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Aggregate amount of quoted investments (Market value ` 31,426,955 19,514,202 19,298,596 (Previous Year ` 24,188,837)) Aggregate amount of unquoted investments 17,675,000 17,675,000 Total 37,189,202 36,973,596
11 deferred Tax Assets / (Liabilities) - (Net) (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Deferred tax assets arising on account of timing difference in: Depreciation 2,987,152 - Provision for gratuity and leave encashment 16,572,946 11,061,481 Unamortised share issue expenses u/s 35D 10,519,911 15,498,083 Disallowance under section 40(a)(ia) 2,055,082 1,044,170 Carried forward long term losses 71,149 29,651 Other timing differences 6,531,428 6,531,428 Total 38,737,668 34,164,813 Deferred tax liabilities arising on account of timing difference in: Depreciation - (27,594,333) Total (27,594,333) Net Deferred Tax Asset 38,737,668 6,570,480
12 long-Term Loans and Advances (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Unsecured, considered good Capital Advances 13,255,081 14,118,374 Security Deposits 25,274,105 52,451,175 Prepaid expenses 1,504,422 346,322 Other loans and advances * 1,919,082 2,783,057 Total 41,952,690 69,698,928
* Includes primarily claims receivable
Annual Report 14 - 15 123 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
13 inventories (valued at lower of cost and net realisable value) (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Raw materials 1,076,294,849 2,189,977,525 (including Goods-in-transit ` Nil (Previous year ` 5,706,098) Work-in-process 2,855,679,544 2,499,800,812 Finished goods 1,780,418,557 2,184,142,589 Stock-in-trade 4,777,054 7,265,778 Stores, consumables and packing material 47,283,822 53,806,511 Total 5,764,453,826 6,934,993,215
14 tRade receivables (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Unsecured Outstanding for a period exceeding six months from the date they became due for payment Considered Good 737,515,313 495,714,018 Considered Doubtful 1,502,500 384,219 739,017,813 496,098,237 Other Debts Considered Good 4,599,233,357 3,311,940,136 Considered Doubtful - 1,118,281 4,599,233,357 3,313,058,417 Less: Provision for bad & doubtful debts (1,502,500) (1,502,500) Total 5,336,748,670 3,807,654,154
15 Cash and Bank balances (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Cash and Cash Equivalents Balances with banks 45,497,209 72,886,098 Cash on hand 15,874,576 40,818,471 Other Bank Balances Deposits with banks to the extent held as margin money for gold 419,755,094 282,378,663 Fixed deposits with banks as security against borrowings 353,867,054 314,334,766 Total 834,993,933 710,417,998
16 short-term loans and advances (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Unsecured, considered good Loans to employees 3,873,021 3,499,442 Security deposits 25,286 24,401 Prepaid expenses 86,833,962 84,307,282 Balances with Statutory, Government Authorities 116,508,972 89,106,718 Other loans and advances* 48,535,404 49,667,129 Total 255,776,645 226,604,972
* Includes primarily advance paid to creditors
124 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
17 other current assets (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Interest accrued on fixed deposits 6,570,855 6,508,449 Total 6,570,855 6,508,449
18 Revenue from operations (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Sale of products 17,351,223,087 16,953,068,459 Sale of services 356,990 908,103 Other Operating Revenues 1,188,119 - Total 17,352,768,196 16,953,976,562
19 other Income (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Interest on fixed deposits 45,124,639 38,342,626 Interest on others 31,517 83,332 Dividend income 134,251 53,584 Rent received 900,000 900,000 Profit on sale of fixed assets (Net) - 2,004,513 Profit on sale of investments (Net) 1,121,055 219,103 Sundry balances written back 867,592 8,107,514 Miscellaneous income 4,996,750 4,125,795 Total 53,175,804 53,836,467
20 Cost of materials consumed (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 As at beginning of the year 2,189,977,525 1,623,029,331 Add: Purchases 8,471,739,461 10,711,300,604 Less : As at end of the year 1,076,294,849 2,189,977,525 Total 9,585,422,137 10,144,352,410
21 Changes in inventories of finished goods, work-in-process and Stock-in-Trade (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Inventories as at the beginning of the year Work - in - process 2,499,800,812 2,970,553,720 Finished goods 2,184,142,589 1,843,548,618 Stock-in-trade 7,265,778 28,815,987 Total 4,691,209,179 4,842,918,325 Less : Inventories as at the end of the year Work - in - process 2,855,679,544 2,499,800,812 Finished goods 1,780,418,557 2,184,142,589 Stock-in-trade 4,777,054 7,265,778 Total 4,640,875,155 4,691,209,179 Net decrease / (increase) in inventories 50,334,024 151,709,146
Annual Report 14 - 15 125 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
22 employee benefit expenses (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Salaries, allowances and bonus 431,035,241 472,595,216 Contribution to provident and other funds 44,290,939 33,233,223 Directors remuneration 34,076,752 34,056,202 Staff and labour welfare 20,597,202 23,264,466 Total 530,000,134 563,149,107
23 Finance Cost (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Interest expense 597,382,920 522,453,920 Other borrowing cost 65,461,840 74,409,459 Bank charges 52,674,307 53,941,420 Total 715,519,067 650,804,799
24 depreciation and amortisation expense (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Depreciation of tangible assets 272,490,133 207,484,945 Amortisation of intangible assets 8,436,270 7,661,392 Total 280,926,403 215,146,337
25 other expenses (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Manufacturing Expenses Wages, allowances & bonus 121,855,406 118,803,993 Import clearing charges 15,200,033 27,262,153 Labour charges 263,822,397 293,429,716 Electric power, fuel and water 40,552,795 39,961,001 Repairs and maintenance: factory building 2,201,538 1,878,592 Repairs and maintenance: plant & machinery 6,119,154 6,377,323 Foreign exchange difference (net) (92,385,357) (4,794,645) Stores, consumables and packing material 98,104,820 121,951,070 455,470,786 604,869,203 Selling, Administration and Other Expenses Advertisement 26,373,901 34,669,374 Auditor's remuneration 7,270,463 8,217,714 Commission 354,746 598,194 Bad Debts w/off - 1,936,016 Discount 51,428,028 22,600,515 Credit insurance 26,965,149 28,471,057 Electricity charges 6,814,827 10,163,356 Export clearing charges 14,853,187 33,966,346 Fixed assets written off 5,965,192 7,301,451 House Keeping Expenses 6,429,455 8,584,222 Insurance 21,093,882 21,756,427 Legal and professional fees 40,325,918 49,601,750
126 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
(Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Loss on sale of fixed assets (net) 2,975,714 - Rates and taxes 5,591,118 3,232,895 Rent 97,209,048 119,739,669 Repairs & maintenance - other 15,786,544 26,729,503 Sales promotion expenses 115,541,431 118,645,713 Security charges 18,654,589 24,507,544 Telephone and internet expenses 8,105,468 10,052,823 Travelling & conveyance expenses 31,386,139 41,855,329 Exchange difference on conversion of financials (19,507,564) (26,779,129) Miscellaneous expenses 46,473,125 59,705,371 530,090,360 605,556,140 Total 985,561,146 1,210,425,343
26 Contingent liabilities, commitments and other items (to the extent not recognised) (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Claims against the company not acknowledged as debt in respect of: a. Custom duty matter 1,900,563 1,900,563 b. Property tax 2,481,489 2,481,489 c. Service tax matter 6,723,389 6,723,389 d. Other matter 2,085,723 - Bills discounted 1,943,976,897 1,927,037,667 Total 1,957,168,061 1,938,143,108
Commitments Particulars As at As at March 31, 2015 March 31, 2014 Estimated amount of contracts remaining to be executed on capital account 43,687,095 188,735,653 and not provided for Other commitments 51,949,700 - Total 95,636,795 188,735,653
Income Tax Assessment The Income- Tax assessments of the Company have been completed up to Assessment Year 2011-12. The disputed demand outstanding up to the said assessment year is approximately ` 37,765,000 Based on the decisions of the appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.
27 share Warrants Pursuant to the approval of the Members of the Company obtained under Section 81 (1A) of the Companies Act, 1956 through Postal Ballot on March 19, 2014 , the Management & Administration Committee of the Board of Directors at its meeting held on April 02, 2014 has allotted 3,05,000 (Three Lac Five Thousand) Convertible Warrants (“Warrants”), to Bennett, Coleman & Company Limited (‘BCCL’) on a preferential allotment basis, with each warrant convertible into one equity share at a conversion price of `160 per share, not later than 18 months from the date of allotment in accordance with the SEBI (ICDR) Regulations, 2009. In accordance with ICDR regulations, BCCL has paid ` 12,200,000 towards 25% value of total consideration payable for the Warrants.
28 derivative Instruments and Unhedged Foreign currency exposures a) Forward Contracts outstanding as at the reporting date : There are no forward contract outstanding as at the end of the current and previous year. b) Unhedged foreign currency exposure as at the reporting date : Net Foreign currency exposures that are not hedged by derivative instruments as at the end of the year amounts to ` 704,451,234 (Previous year : `264,497,895).
Annual Report 14 - 15 127 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
29 operating Leases a. The Company has given commercial premises on operating lease. In respect of this arrangements, lease rentals income of ` 900,000 (Previous Year : ` 900,000) are recognised in the statement of profit and loss for the period and are included under Rent (disclosed under Other Income in Note 19) b. The Company’s significant leasing arrangements are in respect of residential flats and office premises taken on lease. The arrangements range between 11 months and 9 years generally and are usually renewable by mutual consent or mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the period and included under Rent, Rates and Taxes (disclosed under Other Expenses in Note 25). The aggregate rental expenses of all the operating leases for the period are `97,209,048 (Previous year: `119,739,669).
The future minimum lease payments to be paid under non-cancellable operating leases are as follows: Minimum Lease Payments As at As at March 31, 2015 March 31, 2014 Not later than one year 20,490,586 30,985,763 Later than one year but not later than five years 10,819,943 6,489,399
30. employee Stock Option Plan The company implemented ESOP scheme as approved by the shareholders of the company. Details of the options granted under the plan are as under: ESOP Scheme Grant Date No of Options Exercise Price ` Vesting Period ESOP 2010 - Grant A 02.09.2010 442,571 333 02.09.2010 to 01.09.2014 ESOP 2010 - Grant B 02.09.2010 66,454 20 02.09.2010 ESOP 2013 - Grant C 25.07.2013 242,956 230 25.07.2013 to 25.07.2017
The options are granted at an exercise price. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of `10/- each. The options have vesting periods as stated above in accordance with the vesting schedule as per the said plans.
The particulars of options granted and lapsed under the plan are as below: Particulars Year ended March 31, 2015 Year ended March 31, 2014 Grant B Grant C Grant B Grant C Options outstanding as at the beginning of the year - 242,956 49,841 -
Add: Options granted during the year - - - 242,956 Less: Options lapsed during the year - 131,278 4,473 - Less: Options exercised during the year - - 45,368 -
Less: Options Surrendered during the year - - - -
Options outstanding as at the end of the year - 111,678 - 242,956
The Company has followed the intrinsic value-based method of accounting for stock options based on Guidance
Note on Accounting for Employee Share -based Payments, issued by the Institute of Chartered Accountants of India. Had the compensation cost for the Company’s stock based compensation plans been determined in the manner consistent with the fair value approach as described in the said Guidance Note, (a) the Company’s net income would be lower by `231,911 (previous year : ` 940,488), and (b) earnings per share as reported would be lower as indicated below:
Particulars Year ended Year ended March 31, 2015 March 31, 2014 Net profit after tax, as reported 436,554,624 503,773,032 Less: Total stock-based employee compensation expense determined
128 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
Particulars Year ended Year ended March 31, 2015 March 31, 2014 under fair value based method 231,911 940,488 Adjusted net profit after tax 436,322,713 502,832,544 Basic earning per share - As reported 17.73 20.48 - Adjusted 17.72 20.44 Diluted earning per share - As reported 17.73 20.48 - Adjusted 17.72 20.44
The fair value of option is estimated on the date of grant based on the following assumptions: Particulars ESOP 2013 Grant C dated 25.07.2013 Dividend yield (%) 0.00% Expected life (years) 4.00 Yrs Risk free interest rate(%) 9.10% Volatility (%) 46.10%
31. Related Party Disclosure Disclosures of Related Party Transactions as per AS-18 “Related Party Disclosure” is given below:
A. List of Related Parties Directors 1. Mr. Rajeev Sheth 2. Mr. Sanjay Sethi (From 01.07.2014) 3. Mrs. Nalini Rajan (Upto 01.07.2014) 4. Mr.Vikram Raizada (Upto 02.01.2015) 5. Ms. Fern Mallis 6. Mr. Nikkhil Vaidya 7. Mr. Rakesh Kalra 8. Mr. Shanti Saroop Khindria 9. Mr. Rajiv Jain 10. Mr. Sandro Brodbeck (Upto 12.11.2014) 11. Mr. Francois Arpels (From 16 May 2013) 12. Mr. Mariano De La Torre (From 10.02.2015)
Key Management Personnel 1. Mr. Rajeev Sheth 2. Mr. Sanjay Sethi (From 01.03.2014) 3. Mr. Amol Raje (Upto 05.04.2014) 4. Mrs. Jayshree Soni (From 21.04.2014 to 02.12.2014) 5. Mrs. Nivedita Nayak (From 22.12.2014)
Relatives of Directors 1. Mrs. Aarti Sheth 2. Mrs. Divya Sheth 3. Mrs. Purnima Sheth 4. Mr. Vishnukumar Raizada
Entities in which Key Managerial Personnel/ their relatives are able to exercise significant influence or control 1. F. T. Diamonds 2. Divya Jewels International Pvt. Ltd. 3. Divya Real Estate Pvt. Ltd. 4. Aarti Jewellers Pvt Ltd. 5. Karan Arjun Jewellery Pvt. Ltd. 6. Tara Duniya Corporation 7. Fabrikant Inventory LLC
Annual Report 14 - 15 129 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
B. transactions during the year April 1, 2014 to March 31, 2015
Particulars Key Management Personnel Entities in which Key Managerial Personnel/ their relatives have significant influence or control Current Year Previous Year Current Year Previous Year Purchase of Goods Aarti Jewellers Pvt Ltd. - - 84,638 - Labour Charges Paid F. T. Diamonds Inc. - - - - Tara (Hong Kong) Ltd. - - - - Labour Charges Received Aarti Jewellers Pvt Ltd. - - 138,162 89,327 Sale of Fixed Assets Mr. Vishnukumar Raizada - 285,000 - - Purchase of Fixed Assets Tara (Hong Kong) Ltd. - - - - Directors' Remuneration and Commission Mr.Rajeev Sheth 17,116,400 18,917,808 - - Mrs. Nalini Rajan 2,249,100 6,319,264 - - Mr.Vikram Raizada 9,890,852 11,056,359 - - Mr. Sanjay Sethi 4,820,400 - - - Commission and other benefits to Independent Directors 3,520,000 3,458,171 - - Salary paid Mr. Sanjay Sethi 1,606,380 - - - Ms. Aarti Sheth 3,008,400 2,991,600 - - Ms. Divya Sheth 1,325,918 1,200,000 - - Other Key Managerial Personnel 787,383 1,400,641 - - Issue of shares (exercise of ESOP) Mrs Nalini Rajan - 638,980 - - Sales Promotion Expenses Aarti Jewellers Pvt Ltd. - - 1,055,000 535,000 Unsecured Loan Taken Divya Jewels International Pvt. Ltd. - - - 52,000,000 F.T. Diamonds - - 20,315,650 - Repayment of Unsecured Loan Taken Divya Jewels International Pvt. Ltd. - - 67,793,171 59,560,552 Tara Duniya Corporation - - 1,305,002 - F.T. Diamonds - - 8,187,029 -
130 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
C. Closing Balances as on March 31, 2015
(Amount in `) Particulars Key Management Personnel Entities in which Key Managerial Personnel/ their relatives have significant influence or control Current Year Previous Year Current Year Previous Year Trade Payables F. T. Diamonds Inc. - - 369,531 - Trade Receivables F. T. Diamonds Inc. - - 1,066,299 1,018,873 Aarti Jewellers Pvt Ltd. - - 54,182 33,162 Investments Divya Jewels International Pvt. Ltd. - - 175,000 175,000 Short Term Borrowings Divya Jewels International Pvt. Ltd. - - - 67,793,171 F.T. Diamonds - - 19,162,116 6,753,677 Tara Duniya Corporation - - 30,752,470 30,782,138 Director Remunaration payable Mr.Rajeev Sheth 6792297 7,152,949 - - Mrs. Nalini Rajan - 169,274 - - Mr.Vikram Raizada - 573,315 - - Mr. Sanjay Sethi 493,594 - - - Commission and other benefits to Independent 3,628,000 2,980,000 - - Directors Salary paid Ms. Aarti Sheth 42,433 45,585 - - Ms. Divya Sheth 15,266 31,568 - - Other Key Managerial Personnel 48,000 108,164 - -
32 employee Benefits Disclosure (Amount in `) Particulars Year ended Year ended March 31, 2015 March 31, 2014 The Company has classified the various benefits provided to employees as under :- I. Defined Contribution Plans a. Employer's contribution to provident fund b. Employer's contribution to employee’s state insurance During the year, the Company has recognised the following amounts in the Statement of Profit and Loss - Employers' contribution to provident fund 16,416,365 13,304,876 - Employers' contribution to employee’s state insurance 6,478,847 7,085,713 II. Defined Benefit Plan Contribution to Gratuity Fund a. Major Assumptions (% p.a.) (% p.a.) Discount rate 8 9 Expected rate of return on plan assets 8 8 Salary escalation rate@ 5 5 @ The estimates for future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors. b. Change in the Present Value of Obligation ` `
Annual Report 14 - 15 131 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
Present value of obligation at beginning of period / year 22,016,199 24,153,236 Current service cost 4,602,253 4,863,824 Interest cost 1,981,458 966,129 Benefit paid from fund - (1,180,860) Benefit paid directly from Company (6,615,281) (4,774,850) Actuarial (gain) \ loss on obligations 11,528,958 (2,011,280) Present value of obligation at end of the year 33,513,587 22,016,199 c. Change in Fair Value of Plan Assets Fair value of plan assets at beginning of period / year 140,283 731,715 Expected return on plan assets 11,223 58,537 Actuarial (gain) \ loss on obligations 1,402 (686,505) Contributions - 1,217,396 Benefits paid - (1,180,860) Fair Value of Plan Assets at end of the year 152,908 140,283
d. Reconciliation of Present Value of Defined Benefit Obligation and the Fair Value of Assets Present value of funded obligation at end of the year 33,513,587 22,016,199 Fair value of plan assets at end of the year 152,908 140,283 Funded status (33,360,679) (21,875,916) Present value of unfunded obligation at end of the year 33,360,679 21,875,916 Unfunded net liability recognised in the Balance Sheet 33,360,679 21,875,916
e. Amount recognised in the Balance Sheet Present value of obligation at end of the year 33,513,587 22,016,199 Fair value of plan assets at end of the year 152,908 140,283 Liability recognised in the Balance Sheet 33,360,679 21,875,916 Disclosed under : Long term provision 32,166,555 21,234,184 Short term provisions 1,194,124 641,732
f. Expenses Recognised in the Statement of Profit and Loss Current service cost 4,602,253 4,863,824 Interest cost 1,981,458 966,129 Expected return on plan assets (11,223) (58,537) Net actuarial losses / (gain) recognised in the year 11,527,556 (1,324,775) Total expenses recognised in the Statement of Profit and Loss 18,100,044 4,446,641 Actual return on plan assets 12,625 (627,968)
132 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
33 segment Information A. Information about Primary Business Segment The Company is exclusively engaged in the “Diamond and Gold Jewellery” Business Segment.
B. Information about Secondary Geographical Segment. Particulars April 1, 2014 to March 31, 2015 India Outside India* Total External Revenue 2,329,900,409 15,022,867,787 17,352,768,196 (2,510,081,278) (14,443,895,284) (16,953,976,562) As at March 31, 2015 Carrying Amount of Segment Assets 7,192,268,215 6,253,392,145 13,445,660,360 (8,174,276,377) (4,785,484,850) (12,959,761,227) April 1, 2014 to March 31, 2015 Capital Expenditure 276,915,350 562,323 277,477,673 (579,824,176) (5,546,220) (585,370,396)
* Includes mainly United States of America, Australia, China (including Hong kong), United Arab Emirates, Europe, South- Africa, Canada, Israel and United kingdom Note: The figures in brackets are in respect of the previous year ended March 31, 2014 Notes: (a) Segment Revenue in the geographical segment considered for disclosure are as follows: - Revenue within India includes sales to customers located within India and earnings in India - Revenue outside India includes sales to customers located outside India and earnings outside India. (b) Segment revenue, results, assets and liabilities includes the respective amounts identified to each the segment and amounts allocated on a reasonable basis.
34 earnings Per Share (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Profit after tax (`) 436,554,624 503,773,032 Weighted average number of equity shares 24,622,850 24,602,341 Nominal Value per Share (`) 10.00 10.00 Basic and Diluted Earnings Per Share (`) 17.73 20.48
35 Capital Reserve on consolidation comprises of: (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 : Capital reserve in respect of )Tara Jewels Holding Inc. (Including Fabrikant Tara International LLC 21,170,278 21,170,278 Tara (Hong Kong) Limited 5,678,587 5,678,587 Total 26,848,865 26,848,865
36 deferred tax Expense (Amount in `) Particulars As at As at March 31, 2015 March 31, 2014 Opening deferred tax (Liability) / Asset 6,570,480 12,612,357 Add: Deferred tax asset adjusted to opening balance of Profit and Loss Account (refer note 9(a)) 3,185,125 - 9,755,605 12,612,357 Less : Deferred tax (Liability) / Assets as at the end of year 38,737,668 6,570,480 Deferred tax Expense recognised in Statement of Profit and Loss )28,982,063( 6,041,877
Annual Report 14 - 15 133 Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
37 the Subsidiary Companies considered in consolidated financial statements are (Amount in `) Name of Subsidiary Country of Incorporation Proportion of Ownership Interest Tara Jewels Holdings, Inc. USA 100% Fabricant-Tara International LLC* USA 100% Tara (Hong Kong) Limited** Hong Kong 100% Tara China Jewelry Limited*** China 100% Tara Jewels Honduras, Sociedad de Responsabilidad Limitada**** Honduras N.A.
*Subsidiary of Tara Jewels Holdings, Inc. and wholly owned subsidiary w.e.f. December 29, 2011 **Tara (Hong Kong) Limited has become subsidiary w.e.f. September 16, 2010 ***Wholly owned Subsidiary of Tara (Hong Kong) Limited ****Subsidiary of Tara Jewels Holdings, Inc. w.e.f. January 17, 2011 and dissolved on August 29, 2013.
38 additional Information, as required under Schedule III to the Companies Act, 2013, of enterprises Consolidated as Subsidiary / Associates / Joint Ventures Name of the Enterprise Net Assets i.e. total assets Share in profit or loss minus total liabilities As % of consolidated Amount As % of consolidated Amount net assets profit or loss Parent Tara Jewels Limited 93.51 5,466,441,638 66.89 292,021,772 Subsidiaries Indian Foreign 1. Tara Jewels Holdings, Inc. * 1.84 107,342,756 8.70 37,960,549 2. Tara (Hong Kong) Limited 4.61 269,413,229 24.03 104,917,059 3. Tara China Jewelry Limited 0.05 2,680,728 0.38 1,655,244 Minority interest in all subsidiaries - - - - Associates (Investments as per the equity method) Indian - - - - Foreign - - - - Joint Ventures(as per proportionate consolidation/Investment as per the equity method) Indian - - - - Foreign - - - - Total 100.00 5,845,878,351 100.00 436,554,624
* Based on Consolidated figures with Fabricant-Tara International LLC
134 TARA JEWELS LIMITED Notes ON ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015
39 salient Features of Financial Statements of Subsidiary / Associates / Joint Ventures as per Companies Act , 2013 Part “A”: Subsidiaries (Amount in `) 1. Sl. No. I II III 2. Name of the subsidiary Tara Jewels Tara (Hong Kong) Tara China Jewelry Holdings, Inc. * Limited Limited ** 3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period N.A. N.A. N.A. 4. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries. USD*** USD*** USD*** 5. Share capital 113,299,500 464,117 4,134,035 6. Reserves & surplus 143,044,067 298,554,276 2,681,700 7. Total assets 1,443,260,144 1,562,749,862 24,488,898 8. Total Liabilities 1,186,916,577 1,263,731,469 17,673,163 9. Investments - 4,135,007 - 10. Turnover 3,751,930,957 4,355,169,042 22,356,868 1. Sl. No. I II III 2. Name of the subsidiary Tara Jewels Tara (Hong Kong) Tara China Jewelry Holdings, Inc. * Limited Limited ** 11. Profit before taxation 38,693,808 124,539,641 1,655,244 12. Provision for taxation 10,833,390 20,637,237 - 13. Profit after taxation 27,860,418 103,902,404 1,655,244 14. Proposed Dividend - - - 15. % of shareholding 100 100 100
* Based on Consolidated figures with Fabricant-Tara International LLC ** Wholly owned subsidiary of Tara (Hong Kong) Limited. *** Exchange rate as at end of the year USD 1 = `62.59.
Note : Tara Jewels Honduras, Sociedad de Responsabilidad Limitada , the wholly owned subsidiary of Tara Jewels
Holdings, Inc. got dissolved on August 29, 2013.
Part “B”: Associates and Joint Ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures is not aaplicable to the company since, there are no associates or joint ventures of the Company.
40 Corporate Social Responsibility (CSR) During the financial year under review, the company has constituted the Corporate Social Responsibility Committee in terms of Section 135 of the Companies Act, 2013 and the board has adopted a CSR Policy as recommended by the Committee, however the Company has not made any expenditure on CSR as the Company is still in the process of identifying the eligible project. The Company intends to contribute to the money for CSR activities as soon as the project is identified.
41 Prior year comparatives Prior year comparatives have been reclassified to confirm with the current year’s presentation, wherever applicable.
As Per Our Attached Report of Even Date
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Sanjay Sethi Partner Managing Director Director and CFO (DIN NO:00266460) (DIN NO: 01152580)
Place : Mumbai Nivedita Nayak Dated : 25.05.2015 Company Secretary [ACS:24590]
Annual Report 14 - 15 135 Notice to the members of Tara Jewels Limited
Notice is hereby given that the Fourteenth (14th) Annual General Meeting (AGM) of the Members of Tara Jewels Limited will be held on Tuesday, September 29, 2015, at 03.00 p.m. at Tribune-I, 6th Floor, Hotel Tunga International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093, to transact the following business:
Ordinary Business: 1. To receive, consider and adopt the Standalone and the Consolidated Audited financial statements as at March 31, 2015 together with the Report of the Board’ and the Auditors’ thereon.
2. To appoint a Director in place of Mr. Rajeev Sheth (DIN: 00266460), who retires by rotation and, being eligible, seeks re-appointment and to pass the following resolution as an Ordinary Resolution.
“RESOLVED THAT Mr. Rajeev Sheth (DIN: 00266460), who retires by rotation and being eligible, offers himself for re-appointment be and is hereby re-appointed as a Director, liable to retire by rotation. “
“RESOLVED FURTHER THAT the above-mentioned re-appointment of Mr. Rajeev Sheth as a Director liable to retirement by rotation shall not in any way constitute a break in his existing office as the Chairman and Managing Director of the Company.”
3. To ratify the appointment of auditors of the Company, and to fix their remuneration and to pass the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to Section 139, 142 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder, pursuant to the recommendations of the audit committee of the Board of Directors, and pursuant to the resolution passed by the members at the 13th Annual General Meeting of the Company held on September 18, 2014, approving the appointment of M/s. C.B. Chhajed & Co., Chartered Accountants (Firm Registration No. 101796W) as the Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held for financial year 2016-2017, the said appointment of M/s. C.B. Chhajed & Co., as the Statutory Auditors of the Company be and is hereby ratified and that the Board of Directors be and is hereby authorized to fix the remuneration payable to them for the financial year ending March 31, 2016, on the recommendation of the audit committee in consultation with the Statutory Auditors of the Company.”
Special Business: 4. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to Section 152 and other applicable provisions of the Companies Act, 2013 and the Rules made thereunder and the Articles of Association of the Company, Mr. Ravindran M.P.(DIN:07188069), who was appointed as an Additional Director by the Board of Directors of the Company with effect from May 25, 2015, and who holds office upto the date of this Annual General Meeting, in terms of Section 161 of the Companies Act, 2013, and in respect of whom the Company has received a notice in writing from a Member under Section 160 of the Companies Act, 2013, alongwith the required deposit, proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.”
5. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Sections 196, 197 and other applicable provisions, if any, of the Companies Act, 2013, (Act) read with Schedule V to the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, (including any statutory modification(s) or re-enactment thereof for the time being in force) and pursuant to the recommendation of the Nomination and Remuneration Committee and the Board of Directors of the Company, the approval of the Members of the Company be and is hereby accorded to the appointment of Mr. Ravindran M.P. (DIN:07188069) as a Whole-Time Director for a period of Five (5) years, with effect from May 25, 2015, at a remuneration and on the terms and conditions of the appointment as per the Explanatory Statement attached to this notice, with liberty to the Board of Directors to vary, amend or revise the remuneration within the maximum ceiling and the terms and conditions of the appointment in accordance with the provisions of the Act and as may be agreed to between the Board of Directors and Mr. Ravindran M.P.”
“RESOLVED FURTHER THAT any one Director of the Company be and is hereby authorized to do all such acts, deeds, matters and things which may be necessary, usual, proper or expedient to give effect to the above resolution. ”
6. To consider and, if thought fit, to pass the following resolution as a Special Resolution:
“RESOLVED THAT pursuant to the provisions of Section 197 and other applicable provisions, if any, of the Companies Act, 2013, and pursuant to the provisions of the Articles of Association of the Company, a sum not exceeding 1% of the net profits of the Company per annum, calculated in accordance with the provisions of Section 198 of the Act, be paid to and distributed among the Directors of the Company or
136 TARA JEWELS LIMITED Notice to the members of Tara Jewels Limited some or any of them (other than the Managing Director and the Whole Time Directors) in such amounts or proportion and in such manner and in all respects as may be decided by the Board of Directors and such payments shall be made with respect to the profits of the Company for each year, for a period of 5 (Five) years commencing from April 01, 2015.”
7. To consider and if thought fit, to pass the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198, 203 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V to the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), and pursuant to the recommendation of the Nomination and Remuneration Committee and the Board of Directors of the Company, the Company hereby approves the proposed re-appointment of Mr. Rajeev Sheth (DIN:00266460) as the Chairman and Managing Director (CMD) of the Company for a period of five years with effect from October 1, 2015 at such remuneration and on the terms and conditions, as per the Explanatory Statement attached to this notice, with liberty to the Board of Directors to vary, amend or revise the remuneration within the maximum ceiling and the terms and conditions of the appointment in accordance with the provisions of the Act, and as may be agreed to between the Board of Directors and Mr. Rajeev Sheth.”
“RESOLVED FURTHER THAT any one Director of the Company be and is hereby authorized to do all such acts, deeds, matters and things which may be necessary, usual, proper or expedient to give effect to the above resolution.”
Registered Office: By Order of the Board of Directors Plot No. 122, 15th Road For Tara Jewels Limited Near IDBI Bank, M.I.D.C Andheri (East) Mumbai – 400 093 Sd/- Nivedita Nayak Mumbai, August 13, 2015 Company Secretary ACS Membership No.24590 CIN: L52393MH2001PLC131252 Tel.:022 66774444 Fax :02266774464 Website:www.tarajewels.in E-mail:[email protected]
NOTES: 1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote, instead of himself/ herself and the proxy need not be a member of the Company and Pursuant to Section 105(1) of the Companies Act, 2013, read with Rule 19 of the Companies (Management and Administration) Rules, 2014, a person can act as proxy on behalf of Members not exceeding 50 (fifty) in number and holding in aggregate not more than 10 (ten) per cent of the total share capital of the Company carrying voting rights. In the case of a Member holding more than 10 (ten) per cent of the total share capital of the Company carrying voting rights, such a Member may appoint a single person as proxy, who however shall not act as proxy for any other person or shareholder.
2. Proxy form duly stamped and executed in order to be effective, must reach the registered office of the Company not less than 48 hours before the time of commencement of the Annual General Meeting. Proxy form for the agm is enclosed.
3. Corporate Members are requested to send to the Registered Office of the Company a duly certified copy of the Board Resolution, pursuant to Section 113 of the Companies Act, 2013, authorizing their representative to attend and vote at the Annual General Meeting.
4. The Explanatory Statement pursuant to Section 102 (1) of the Companies Act, 2013, with respect to Item No. 4 to 7, the Special Business set out in the Notice is attached and forms part of this Notice.
5. Brief resume of Directors proposed to be re-appointed / appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships (excluding Directorships in Private Limited Companies, Foreign Companies and Government bodies) and memberships/ chairmanships of Board Committees (includes only Audit & Shareholders’/ Investors’ Grievance Committee), shareholding and relationships between Directors inter-se as stipulated under Clause 49 of the Listing Agreement, are provided in the “Annexure A” to the Notice.
6. The Registers required to be maintained under the Companies Act, 2013 including the Register of Directors’ Shareholding, and the Register of Directors and Key Managerial Personnel and their Shareholding in the Company under Section 170 of the Companies Act, 2013 and under Section 189 of the Companies Act, 2013 will be available for inspection by the Members at the AGM.
Annual Report 14 - 15 137 Notice to the members of Tara Jewels Limited
7. The Register of Members and Share Transfer Books will remain closed from Wednesday, September 23, 2015 to Tuesday, September 29, 2015 (both days inclusive).
8. Pursuant to Section 72 of the Companies Act, 2013 read with Rule 19(1) of The Companies ( Share Capital and Debentures) Rules, 2014 permits Nomination by the members of the Company in the prescribed Form SH-13. Members are requested to avail this facility.
9. Members/Proxy holders are requested to bring their attendance slip duly signed and copy of the Annual Report to attend the meeting.
10. Members are requested to send to the Company their queries, if any, on accounts and operations of the Company at least 10 days before the Meeting to enable the Company to provide the required information.
11. Relevant documents referred to in the accompanying Notice are open for inspection by the members at the Registered Office of the Company on all working days, except Saturdays, between 11.00 a.m. and 1.00 p.m. up to the date of the Meeting.
12. Members are requested to notify immediately any change in their address / Bank mandate to their respective Depository Participants (DPs) in respect of their electronic share accounts and in respect of their physical shares Folios to the Registrars and Share Transfer Agent of the Company, Link Intime India Private Limited, C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (W), Mumbai - 400078.
13. Members are requested to quote their Ledger Folio Number / Client ID Number in all their future correspondence.
14. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be entitled to vote.
15. Electronic copy of the Notice along with the Annual Report is being sent to all the members whose email IDs are registered with the Company/Depository Participants(s) for communication purposes unless any member has requested for a hard copy of the same. For members who have not registered their email address, physical copies of the Annual Report are being sent in the permitted mode.
16. Non-Resident Indian Members are requested to inform M/s. Link Intime India Private Limited immediately of:
(a) Change in their residential status on return to India for permanent settlement.
(b) Particulars of their bank account maintained in India with complete name, branch, account type, account no. and address of the Bank with PIN Code No, if not furnished earlier.
17. In compliance with the provisions of Section 108 of the Act and the Rules framed thereunder, the Members are provided with the facility to cast their vote electronically, through the e-voting services provided by Central Depository Services (India) Limited (CDSL), on all resolutions set forth in this Notice.
The facility for voting through ballot paper, will be also made available at the AGM and the members attending the AGM who have not already cast their votes by remote e-voting shall be able to exercise their right at the AGM, through ballot paper. Members who have cast their vote by remote e-voting prior, to the AGM may attend the AGM but shall not be entitled to cast their votes again.
The instructions for shareholders voting electronically are as under: (i) The voting period begins on Saturday, September 26, 2015 (9.00 a.m.) and ends on Monday, September 28, 2015 (5.00 p.m.). During this period shareholders’ of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date (September 22, 2015) , may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.
(ii) Any person, who acquires shares of the Company and become member of the Company after the dispatch of the notice and holding shares as on the cut-off date i.e. September 22, 2015 may obtain login id and password by sending a request to Company Secretary.
(iii) The shareholders should log on to the e-voting website www.evotingindia.com.
(iv) Click on Shareholders.
(v) Now Enter your User ID a. For CDSL: 16 digits beneficiary ID, b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID, c. Members holding shares in Physical Form should enter Folio Number registered with the Company. (vi) Next enter the Image Verification as displayed and Click on Login.
138 TARA JEWELS LIMITED Notice to the members of Tara Jewels Limited
(vii) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.
(viii) If you are a first time user follow the steps given below: For Members holding shares in Demat Form and Physical Form PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders)
l Members who have not updated their PAN with the Company/Depository Participant are requested to use the sequence number which is printed on stiker of annual report envelope DOB Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format. Dividend Bank Details Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio.
l Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter the member id / folio number in the Dividend Bank details field as mentioned in instruction (iv).
(ix) After entering these details appropriately, click on “SUBMIT” tab.
(x) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
(xi) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.
(xii) Click on the EVSN of Tara Jewels Ltd.
(xiii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(xiv) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(xv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
(xvi) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.
(xvii) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.
(xviii) If Demat account holder has forgotten the same password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.
(xix) Note for Non – Individual Shareholders and Custodians • Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates. • A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected]. • After receiving the login details a compliance user should be created using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on. • The list of accounts should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote. • A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
(xx) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [email protected].
Annual Report 14 - 15 139 Notice to the members of Tara Jewels Limited
18. a) Mr. S Anantha Rama Subramanian FCS, Practicing Company Secretary (CP No.1925) has been appointed as Scrutinizer to scrutinize voting process in a fair and transparent manner.
b) The Scrutinizer shall after the conclusion of voting at the general meeting, will first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two (2) witnesses who are not in the employment of the Company and shall make not later than three (3) days of the conclusion of the Annual General Meeting and make a consolidated Scrutinizer’s Report of the votes cast in favour or against, if any, to the Chairman of the Company, or a person authorised by him in writing, who shall counter sign the same and declare the result of the voting forthwith.
c) The Results declared along with the Scrutinizer’s Report shall be available for inspection and also placed on the website of the Company and on the website of CDSL immediately after the declaration of result by the chairman or a person authorised by him in writing. The results shall also be immediately forwarded to BSE Limited and NSE.
impoRTANT COMMUNICATION TO MEMBERS: The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliances by the companies and has issued circulars stating that service of notice / documents including Annual Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, members who have not registered their e-mail addresses, so far, are requested to register their e-mail addresses, in respect of electronic holdings with the Depository through their concerned Depository Participants. Members who hold shares in physical form are requested to register the same with the Company’s Share Transfer Agent, M/s. Link Intime India Private Limited Email: [email protected]
EXPLANATORY STATEMENT UNDER SECTION 102 (1) OF THE COMPANIES ACT, 2013 Item No. 4 & 5 The Board of Directors of the Company at their meeting held on May 25, 2015, had appointed Mr. Ravindran M.P. as an Additional Director of the Company on the recommendation of the Nomination and Remuneration Committee. As per Section 161 (1) of the Companies Act, 2013, Mr. Ravindran M.P. holds office up to the date of this Annual General Meeting. The Company has received a notice under Section 160 of the Companies Act, 2013 in writing from a member of the Company alongwith the required deposit, proposing the candidature of Mr. Ravindran M.P. for being elected as a Director liable to retire by rotation. He holds Nil equity shares of the Company.
Mr. Ravindran M.P. is working in the Company since incorporation. He is Chief Operating Officer of the Company. On his appointment as a Director on the Board he has become a Whole-Time Director of the Company in terms of the provisions of the Companies Act, 2013 and the Board on the recommendation of the Nomination and Remuneration Committee has approved his appointment as a Whole-time Director of the Company w.e.f. May 25, 2015, subject to the approval by the members, for a period of 5 (five) years on the terms and conditions including remuneration as set out herein below: Particulars Amount Per Month (in Rs.) Basic Salary plus Allowances 94,330 Bonus 37,732 Gratuity (As per the Gratuity Rules) 700 Provident Fund - Other benefits 1,03,062 Total Monthly Gross Salary 2,35,824
Mr. Ravindran M.P. would continue to draw the existing remuneration and any annual increment/bonus as the Executive Director on the same terms and conditions of his existing appointment/Remuneration policy of the Company.
Mr. Ravindran M.P. satisfies the conditions as given under Section 196 (3) and Part I of Schedule V of the Companies Act, 2013 and is not disqualified from being appointed as a Director under Section 164 of the Act.
The Board recommends his appointment as a Director and also as a Whole-Time Director of the Company for the approval of members of the Company by passing the resolutions as set out at item Nos. 4 & 5 of the notice as Ordinary Resolutions.
The information of Mr. Ravindran M.P. to be provided under Clause 49 of the Listing Agreement and the Secretarial Standards is provided in the Annexure A to this Notice.
Copy of all the documents mentioned herein above, would be available for inspection by the shareholders at the Registered Office of the Company between 11.00 a.m. and 1.00 p.m. on all working days from the date hereof up to the date of the AGM.
140 TARA JEWELS LIMITED Notice to the members of Tara Jewels Limited
Except Mr. Ravindran M.P. and his relatives, none of the Directors and Key Managerial Personnel of the Company and their relatives is/are in any manner, concerned or interested, financially or otherwise, in passing the resolutions set out at item Nos. 4 & 5.
Item No. 6 The Members of the Company at the Annual General Meeting held on August 29, 2011, had by special resolution approved the payment of remuneration by way of commission to non executive directors, such remuneration not exceeding 1% of the net profits of the Company for each year for a period of five years commencing from April 1, 2011 to March 31, 2016.
Although the approval is valid until March 31, 2016, the resolution proposes to seek approval of members in accordance with Section 197 of the Companies Act, 2013 in order to continue payment of the commission to non executive directors. The Board of Directors, in accordance with the Remuneration policy of the Company, will determine each year the specific amount to be paid as commission to the non-executive directors, which shall not exceed 1% of the net profits of the Company for that year, as computed in the manner referred to in Section 198 of the Act.
Except Mr. Rajeev Sheth, Mr. Sanjay Sethi and Mr. Ravindran M.P. and their relatives, Mr. Rajiv Jain, Mr. Rakesh Kalra, Mr. Nikkhil Vaidya, Mr. Shanti Saroop Khindria, Ms. Fern Joy Mallis and Mr. Francois Claude Robert Arpels and their relatives may be deemed to be concerned or interested in the proposed resolution financially or otherwise .
Copy of all the documents mentioned herein above, would be available for inspection by the shareholders at the Registered Office of the Company between 11.00 a.m. and 1.00 p.m. on all working days from the date hereof up to the date of the AGM.
None of the non-executive directors and their relatives hold any equity shares in the company, except Mr.Rajiv Jain who holds 300 shares of the Company.
Item No.7 Mr. Rajeev Sheth was appointed as the Chairman and Managing Director of the Company for a period of five years with effect from October 1, 2010 on the terms and conditions set out in the Agreement dated October 1, 2010. He is the Promoter of the Company and has been playing an important role in the growth of the Company since its inception. Considering his immense contributions towards the growth of the Company, the Board of Directors at their Meeting held on August 13, 2015, based on the recommendation of Nomination & Remuneration Committee, has proposed to re-appoint him as the Chairman and Managing Director (CMD), for a period of five years effective October 1, 2015, on the following terms and conditions as set out herein below: I. Salary: Not exceeding Rs.12,00,000/- per month with such annual increment as may be decided by Board of Directors.
II. Performance Linked Incentive: Mr. Rajeev Sheth shall also be entitled to performance linked incentive based on the specific goals mutually set and approved by the Board of Directors or any committee of Directors from time to time.
III. Commission: Such amount subject to the overall limits pertaining to the managerial remuneration laid down under Section 197 of the Companies Act, 2013, however such commission shall not exceed 1% of the net profit.
IV. Perquisites & Allowances: Perquisites are classified into three parts A, B and C as follows :
Part A: i. Medical Reimbursement: Expenses incurred for self and family. ii. Leave Travel Allowance for self and family once in a year incurred in accordance with the rules of the Company. iii. Fees of clubs subject to a maximum of two clubs excluding admission and Life Membership Fees. iv. Personal Accident Insurance: The amount of the annual premium at actual.
Part B: Contribution to provident fund, superannuation fund or annuity fund will not be included in computation of ceiling on perquisite to the extent that these either singly or put together are not taxable under the Income Tax Act. Gratuity: Gratuity payable shall be in accordance with the Company’s Scheme as may be applicable or amended from time to time.
He shall be entitled to 30 days leave with full salary for every 12 months of service or part thereof, encashment of leave at the end of the tenure will not be included in the computation of the ceiling on perquisites.
Annual Report 14 - 15 141 Notice to the members of Tara Jewels Limited
Part C: The Company shall provide a Car with driver, and mobile, telephone, communication facilities at residence of Managing Director. Provision of Car for use of the Company’s business and telephone, communication facilities at residence will not be considered as perquisites. Personal Long distance call and use of car for private purpose shall be billed by Company on the Chairman and Managing Director.
OTHERS Mr. Rajeev Sheth shall be entitled to reimbursement of expenses, entertainment, travelling expenses, boarding and lodging and all other incidental expenses in connection with and for the business of Company in India and abroad and will not be deemed/treated as a perquisite.
Perquisites shall be evaluated as per Income Tax Rules, wherever applicable or at actual cost.
In case of the Company having adequate profits, the managerial persons will be paid such remuneration, within the limits specified from time to time under Section 197, read with Section I of Part II of Schedule V to the Act viz. The total managerial remuneration payable by a public company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent of the net profits of that company for that financial year computed in the manner laid down in section 198, except that the remuneration of the directors shall not be deducted from the gross profits;
Provided further that, except with the approval of the company in general meeting, the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five per cent of the net profits of the company and if there is more than one such director remuneration shall not exceed ten per cent of the net profits to all such directors and manager taken together.
Minimum Remuneration: In the event of loss or inadequacy of profits in any financial year remuneration will be subject to a maximum ceiling limit per month which shall not exceed the limits specified under section II part II of Schedule V to the Companies Act, 2013, including any statutory modification(s) or re-enactment(s) thereof, for the time being in force. Where in any financial year during the currency of the term of the Managing Director, the Company has no profits or its profits are inadequate, the Company will pay remuneration to the CMD, within the maximum ceiling per annum viz. Rs.60 lac plus 0.01% of the effective capital in excess of Rs.250 Crore, as provided under Section II of Part II of Schedule V to the Act, as per the recommendation of the Nomination and Remuneration Committee and the approval of the Board of Directors of the Company.
Perquisites shall be evaluated as per Income Tax Rules, wherever applicable or at actual cost. The scope and quantum of remuneration and perquisites specified above herein may be enhanced, enlarged, widened, altered or varied by the Board of Directors in the light of and in conformity of the Companies Act and or/ the rules and regulations made thereunder and/or such guidelines as may be announced by Central Government from time to time.
The Board recommends the Resolution at Item No. 7 of the accompanying Notice for reappointment of Mr. Rajeev Sheth as Chairman and Managing Director of the Company, for approval of members to be passed as ordinary resolution.
Mr. Rajeev Sheth and his relatives may be deemed to be interested in the resolution as it pertains to his re-appointment and remuneration payable to him.
The detail of Shareholding of Mr. Rajeev Sheth, his relatives and the Promoter Group Company is provided in Annexure B to this Notice.
No other Director and Key Managerial Personnel and their relatives are in any way concerned or interested in the Resolution at Item No. 7 of the Notice except to the extent of their shareholding and outstanding employee stock options in the Company.
The information of Mr. Rajeev Sheth to be provided under Clause 49 of the Listing Agreement is provided in the Annexure A to this Notice.
142 TARA JEWELS LIMITED Notice to the members of Tara Jewels Limited
Copy of all the documents mentioned herein above, would be available for inspection by the shareholders at the Registered Office of the Company between 11.00 a.m. and 1.00 p.m. on all working days from the date hereof up to the date of the AGM.
Registered Office: By Order of the Board of Directors Plot No. 122, 15th Road For Tara Jewels Limited Near IDBI Bank, M.I.D.C Andheri (East) Mumbai – 400 093 Sd/- Nivedita Nayak Mumbai, August 13, 2015 Company Secretary ACS Membership No.24590 CIN: L52393MH2001PLC131252 Tel.:022 66774444 Fax :02266774464 Website:www.tarajewels.in E-mail:[email protected]
Annexure A Details of the Directors seeking re-appointment/ appointment in the Fourteenth Annual General Meeting pursuant to Clause 49 of the Listing Agreement and Secretarial Standards: Particulars Mr. Ravindran M.P. Mr. Rajeev Sheth Date of Birth 20/07/1959 16/11/1958 Age 56 years 57 years DIN 07188069 00266460 Date of appointment/reappointment May 25, 2015 October 1, 2015
Date of first appointment on Board May 25, 2015 March 16, 2001 Terms and Conditions of appointment As mentioned in resolution and the As mentioned in the resolution and the explanatory statement annexed to the explanatory statement annexed to the Notice Notice Relationship with other Directors, NIL NIL Manager and other Key Managerial Personnel of the company As mentioned in resolution and the As mentioned in the resolution and Remuneration sought to be paid explanatory statement annexed to the explanatory statement annexed to the Notice Notice Remuneration Last Drawn Gross Rs. 2,35,824/- p.m Gross Rs. 10,00,000/- p.m
Qualification He holds a post graduate degree in He holds a graduate degree in commerce & Experience in specific functional area computer science and masters in business from Mumbai University. He also holds a administration in Systems Management diploma in gemology from Gemological from Mumbai University. He is in charge of Institute of America. Mr. Sheth has customer service, trading and outsourcing approximately 33 years of experience in operations in our Company. He has the jewellery business. approximately 24 years of experience in the areas of jewellery and engineering.
Annual Report 14 - 15 143 Notice to the members of Tara Jewels Limited
Particulars Mr. Ravindran M.P. Mr. Rajeev Sheth No. of Meetings of the Board attended **NA 4 during the year
Directorships held in other companies* NIL NIL Memberships/ Chairmanships of NIL NIL Committee in other public limited companies (includes only Audit & Shareholders’/ Investors’ Grievance Committee) No of shares held in Company NIL (1,45,14,893) 58.95% *excludes Directorships in Private Limited Companies, Foreign Companies and Government bodies. ** Appointed as a Whole time Director w.e.f. May 25, 2015.
Annexure B The Shareholding of Mr. Rajeev Sheth, his Relatives and the Promoter Group Company in Tara Jewels Limited is as given below: Name Shareholding in Tara Jewels Limited Percentage (%) Mr. Rajeev Sheth 1,45,14,893 58.95 Ms. Purnima Rajeev Sheth 14,625 0.06 Ms. Aarti Sheth 1,14,440 0.46 Ms. Divya Sheth 1,14,440 0.46 Divya Jewels International Private Limited 33,600 0.14 Total 1,47,91,998 60.07
144 TARA JEWELS LIMITED Design to Desire TARA JEWELS LIMITED
Registered Office Plot No. 122, 15th Road, Near IDBI Bank, M.I.D.C, Andheri (East), Mumbai- 400093, India
Corporate Office Plot No. 29(P), & 30(P), Sub Plot A, SEEPZ SEZ, Andheri (East), Mumbai- 400096, India
www.tarajewels.in