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ANNUAL REPORT 2017TARA JEWELS LIMITED
A YEAR OF BUILDING BRANDS
A Year of Building Brands ... . . . . . . . . . . . . . . . . . . . . . . . . . 01At a Glance.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 02Our Presence ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 04Our Mission and Vision ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05 Our Values .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 06 Our Cherished Clientele .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 07Our Alluring Brands.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08Our Presence Across Retailing Models .. . . . . . . . . 09Chairman’s Statement ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Board of Directors .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Corporate Information ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Management Team .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Our Financial Scorecard ... . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Awards & Recognition ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Created Differentiated Jeweller y Brands to Earn Customer Trust .. . . . . . . . . . . . . . . . . . . . 20 Leveraged Advanced Technologies to Produce Customised Jeweller y .. . . . . . . . . . . . . . . . 22Built a Seamless & Secure User Experience.... .24 Management Discussion and Analysis . . . . . . . . . . 26Board’s Repor t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Corporate Governance Repor t .. . . . . . . . . . . . . . . . . . . . . 78Independent Auditors’ Repor t .. . . . . . . . . . . . . . . . . . . . 99 Annexure to the Independent Auditors’ Repor t .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Balance Sheet.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106Statement of Profit and Loss .. . . . . . . . . . . . . . . . . . . . 107Cash Flow Statement ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Notes.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Consolidated Independent Auditor ’s Repor t 163Consolidated Balance Sheet .. . . . . . . . . . . . . . . . . . . . . 166Consolidated Statement of Profit and Loss .. 167Consolidated Cash Flow Statement.... . . . . . . . . . 168Notes.... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 Notice .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
CONTENTS
RANDS
A YEAR OF
UILDING
We are an integrated jewellery company and specialty retailers of studded gold, platinum and silver jewellery to upmarket and mid-range departmental stores and regional outlets in the world’s key international jewellery markets. We are backed by a strong pedigree and exclusive designs and strong manufacturing capabilities. Our portfolio comprises a thoughtfully curated assortment of inspiring and stunning designs, showcasing the art of elegance. Our vast library of IP designs includes a core line of jewellery which is timeless across generations and created with unequalled expertise and attention to detail.
Mitigating risks, identifying opportunities and strategising our business model for scaleble growth is an integral part of our global business strategy. We live our mission every day to create a solid and cohesive jewellery brands. Through a portfolio of strong brands, we are seeking new growth opportunities by expanding in the existing markets, adding new geographies and increasing traction in the E-Commerce route. We gain the requisite strength to steer this ahead with the presence of advanced, high-tech equipment at our manufacturing facilities. Our computer-aided design software, 3-D laser printing and patented technologies help us produce the most intricate jewellery designs.
FY2017 was a year of building our brands further in the key markets of the world. As a key strategy to optimise growth, we are moving away from Brick & Mortar stores and realigning our focus more towards Internet-based and Made-to-Order jewellery. We are using digitisation as a platform for conveying information, shaping brand identity and building customer relationships. We are also strengthening our presence by entering into exclusive manufacturing and supply agreements with large jewellery retailers in US, UK, Europe, South Africa and Australia. We are bettering our realisations and embarking on several key initiatives to propel the company towards maximising quality growth and entering into newer dimensions of revenue generation.
We take pride in our well-spread portfolio of studded gold, platinum and silver jewellery. We have been the pioneers in jewellery manufacturing with patented technologies and internationally acclaimed celebrity designers.
___
20 COUNTRIES
PRESENCE ACROSS THE
GLOBE ___
___
20 YEARSEXPERIENCE IN
JEWELLERY INDUSTRY
___
___
07INTERNATIONAL
BRANDS ___
Tara Jewels Limited2
AT A
LANCE
We are an integrated player in the jewellery industry with experience in Designing, Manufacturing and Retailing of jewellery. We are one of the world’s few manufacturers with an indigenously developed manufacturing capability. We take pride in maintaining long-standing relationships with leading global retailers and cater to a diverse audience across 20 countries in 5 continents.
OUR COMPETITIVE EDGES
Annual Report 2016-17 3
Strong hold in manufacturing
Asset light jewellery retail model High precision technology
Supplier to large global retailers
OUR MANUFACTURING CAPABILITIES
1,000Skilled
Craftsmen
80,000 Sq. Ft.Total Area
Under Manufacturing
3Manufacturing
Units
80%Current Installed
Capacity Utilisation
39 Designers
50,000+Designs
120,000Units
Manufactured Per Month
600-700New Designs
Introduced Per Month
INDIA RETAIL
EXPORT
NET SALES IN FY2017 (` MILLION)
12,446.31
3,081.24
DESIGNING MANUFACTURING BRANDED JEWELLERY
HI-END LUXURY JEWELLERY
RETAILING
OUR PRESENCE ACROSS THE VALUE CHAIN
Tara Jewels Limited4
Canada
South Africa
U. K.Europe
China
Australia
India
U. S. A.
AT A GLANCE
OUR GLOBAL PRESENCE
To delight our customers, stakeholders and employees
through excellence in service and design, transparent and clear communication, accountable
commitments and assured rewards.
To be the preferred jeweller to the world
Annual Report 2016-17 5
OUR ISSION
OUR ISION
L O R E M I P S U M
EXCEED EXPECTATIONS
Always over deliver.
“SERVICE BEFORE SELF”
Remain customer centric. Educate &
Respect the customer.
CLEAR AND EFFECTIVE COMMUNICATION
Minimise the gap between reality and
perception, through transparency
and clarity.
RELIABLE AND SUSTAINABLE
Through responsible sourcing,
consistent delivery, product quality
and service.
DELIGHT
Customer delight, employee delight
and stake holder delight.
Honour and pride in everything we do.
OUR
ALUES
Tara Jewels Limited6
The largest Global Retailer
No. 1 Off-mall Destination Jeweller
in the US
Largest Online Retailer of Diamonds
Specialty Retail Jewellery chain
in US
No. 1 Specialty Jeweller
in UK
Leading Regional Departmental Store
in South Africa
Leading Chain Store Group in South Africa
Largest SpecialtyJewellery Retailer in the
US, UK and Canada
One of the biggest Mid-Range
DepartmentalStores in US
A Warren Buffett company
No.1 Specialty Jeweller in the US
CHRYST Switzerland
Annual Report 2016-17 7
OUR HERISHED
C LIENTELE
Tara Jewels Limited8
OUR LLURING
BRANDS
Annual Report 2016-17 9
OUR PRESENCE ACROSS RETAILING MODELS
EXCLUSIVE OUTLETS
PARTNERSHIP WITH LEADING
PLAYERS IN UK, US AND
SOUTH AFRICA
GLOBAL ONLINE JEWELLERY
PLAYER
SPECIALTY JEWELLER WITH
DECADES OF EXPERIENCE
RAJEEV SHETHChairman & Managing Director
Tara Jewels Limited10
HAIRMAN’SLETTER
Dear Shareholders,
On behalf of our Board of Directors, it is a great pleasure to share with you our FY2017 Annual Report. While navigating through a challenging business environment, our management delivered satisfactory performance during the year. We took affirmative steps to deliver sustainable financial performance on a consistent basis.
As the market in US and Europe continued to be tough, we focused on preserving our leadership in the business and on strengthening our capabilities. We managed to maintain industry leading margins
– a testament to the proactive and timely decisions taken by our management team.
A Year of Building BrandsWe maintained a healthy equilibrium as we focused on growing our product lines and improving the existing product assortment. We added new customers and geographies, well supported by our state-of-the-art design, manufacturing and retail capabilities and served diverse markets and continents. With most of our business coming from exports, we aim to become the most endearing, trusted and inspiring house of jewellery brands.
Annual Report 2016-17 11
Our single-mindedness lingers on branded jewellery advancing more latitude in the global jewellery market. We are also fortifying our retail trails by leveraging our asset light franchisee model, which is helping us moderate our capital allocation. We continue to scale higher by enriching our aura in the online jewellery market through the E-Commerce model. Our technology and manufacturing capabilities are being capitalised to supply jewellery at affordable price points. We are now fast transforming into a multi-brand jewellery house, supported by several brands targeting different consumer segments.
Our PedigreeWe are an integrated player in the jewellery industry in India, with a portfolio of studded gold, platinum and silver jewellery. We have been the pioneers in jewellery manufacturing with our cutting-edge manufacturing facilities and patented technologies, which have revolutionised low-cost jewellery manufacturing in India. With a range of over 50,000 designs, we cater to a diverse audience across 20 countries in 5 continents. We currently operate our owned stores across metros, Tier 1, 2 & 3 cities. We derive strength from our domain expertise and the experience of our promoters in the gems & jewellery industry. We have also established a leading edge in design and creativity, presence across the jewellery value chain and an established global clientele.
Spearheading a TransformationA vast library of 11,000+ IP designs has converted us into a pivot for jewellery customisation and forerunners in digitisation. We have catalysed a colossal industry transformation by moving away from the archaic way of Brick & Mortar format to Internet-based and Made-to-Order be-spoke jewellery through our low-cost and revolutionary format of retailing branded jewellery. Our advanced, high-tech equipment such as computer-aided design (CAD) software and computer-aided manufacturing (CAM) hardware, such as 3D laser printing and patented technologies enables us advance this technological revolution. Our design team uses the latest technology to produce distinctive, exceptional, elegant, bespoke and intricate jewellery pieces utilising our low-cost format.
We are also experiencing good traction in our overseas business with new customers, geographies
and strong brands. We are gradually engaging in 2nd and 3rd launches of our products due to the growing disposable incomes and rising aspiration levels. With the pattern of online buying rising, jewellery we sell through the e-Commerce route is rising. We have signed exclusive manufacturing and supply agreements with several large jewellery retailers in US, UK and Europe and added design cells in several regions. Our footprint in South Africa and Australia is also surging.
Bullish on Industry GrowthWe continue to take advantage of the industry revolution through our brands and cutomer relationships. We are quite bullish on the growth of organised jewellery. We are embarking on new initiatives to propel the company into newer dimensions of revenue generation. Our strategy continues to be that of growing our cash generating business and strong branding efforts, leading to margin expansion. Our domain expertise in design, coupled with world class manufacturing facilities, puts us in a favourable position to address these challenges.
Going ForwardMoving ahead, we evolved through a long journey transforming us into a business that represents the pinnacle of jewellery design, quality and innovation. We also maintain our standards for governance and transparency for shareholders, investors and stakeholders.
Throughout the year, we continued to take proactive measures to counter macro-economic challenges and implementing key strategic initiatives. This was done with the aim of securing future continuous growth in revenues and net profit. Considering our initiatives and underlying fundamentals, we are in a strong position to continue our long-term growth ambitions.
We thank our customers, shareholders and partners for choosing Tara over the past year. We look forward to delivering exceptional products and sustainable value for them again in the next financial year.
Rajeev Sheth
Chairman & Managing Director
Tara Jewels Limited12
OARD OF DIRECTORS
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 35 years of experience in the jewellery 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.
Mr. Sanjay Sethi is Executive Director and CFO of our Company. He is a Chartered Accountant and all-India ranker with 10th rank. He is also a Cost Accountant by profession and Post Graduate from Delhi School of Economics. He is responsible for overall planning and control of finance function. He has more than 27 years of experience with various organisations, in India and abroad.
Ms. Alison Lazerwitz is a Nominee Director (Non-Executive Non Independent) with over twenty five years’ experience with international legal issues, including leading compliance functions, and the development of international corporate integrity initiatives. Alison began her career in Philadelphia, Pennsylvania as a litigator with the law firm, Duane Morris. She then worked in the in-house legal departments of ARAMARK and the Wood Company in the U.S., where she was the company’s General Counsel, reporting to the CEO and to the Board of Directors. In 2002 Alison left the US and spent nine years in Paris working for Sodexo, the international leader in outsourced services. Alison was first the Chief Legal Officer for Sodexo and then the Senior Vice President for International Development. In 2010, Alison joined Swarovski as Executive Vice President and General Counsel. Alison is a member of the Board of Directors of the Women’s Network for a Sustainable Future. Alison’s hobbies include exploring the countryside, different cultures, art, ballet, opera and food.
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 four decades of experience in architecture, design and fashion industries. She has worked with Conde Nast Publications (Mademoiselle Magazine), Fashion Director Gimbel´s East Department Store and Pres Fern Mallis Public Relations. She was the Senior Vice President of International Design Center, New York, the Executive Director of Council of Fashion Designers of America from 1991 to 2001 and the Senior Vice President of IMG Fashion from 2001 to 2010.
Mr. Rajiv Lochan Jain is a Non- Executive Independent Director. He is B. Tech. (Hons.) in Chemical Engineering from IIT, Kharagpur and MBA from the University of New Hampshire, USA. He served as Chief Executive Officer and Managing Director of Akzo Nobel India Limited from April, 2003 to May, 2009. He successfully led the portfolio reshaping of ICI India Ltd. from a diversified chemical Company to a focused and fastest growing player in the paints business. He was also the Chairman of both ICI’s Research Company in India and the joint-venture company of ICI with Orica, Australia. He advises global and local companies on their entry and growth strategies for India and serves as Director on the Board of Gujarat Alkalies and Chemicals Limited and Fresenius Kabi Oncology Ltd.
Annual Report 2016-17 13
ORPORATE INFORMATION
COMPANY SECRETARY & COMPLIANCE OFFICERMS. NIVEDITA NAYAK
STATUTORY AUDITORSM/S C. B CHHAJED & CO,
CHARTERED ACCOUNTANTS,
DGP HOUSE,
GROUND FLOOR, 88-C,
OLD PRABHADEVI ROAD,
MUMBAI - 400025
INTERNAL AUDITORSBDO INDIA LLP,
LEVEL 9, THE RUBY,
SENAPATI BAPAT ROAD,
DADAR (WEST),
MUMBAI - 400028
REGISTRAR AND SHARE TRANSFER AGENTSLINK INTIME INDIA PVT. LIMITED,
C 101, 247 PARK,L B S MARG, VIKHROLI WEST,
MUMBAI - 400083
BANKERS• STATE BANK OF INDIA
• PUNJAB NATIONAL BANK
• UNION BANK OF INDIA
• STATE BANK OF PATIALA
• CENTRAL BANK OF INDIA
• BANK OF INDIA
• AXIS BANK
• IDBI BANK
• EXIM BANK
• CORPORATION BANK
• CANARA BANK
• VIJAYA BANK
REGISTERED OFFICEPLOT NO. 122, 15TH ROAD, NEAR IDBI
BANK, M.I.D.C, ANDHERI (EAST), MUMBAI-400093
CORPORATE OFFICEPLOT NO. 29 (P), & 30 (P), SUB PLOT A,
SEEPZ SEZ, ANDHERI (EAST),
MUMBAI - 400096
CIN NO: L52393MH2001PLC 131252
OUR MANUFACTURING PLANTSa. Plot No. 122, 15th Road,
Near IDBI Bank, M.I.D.C, Andheri (East),
Mumbai - 400093
b. Plot No. 29(P), & 30(P), Sub Plot A,
SEEPZ SEZ, Andheri (East),
Mumbai - 400096
c. Unit No. GJ-7, SDF VII, SEEPZ SEZ,
Andheri (East), Mumbai - 400096
Tara Jewels Limited14
OUR ANAGEMENT
TEAM
Mr. Ravindran M.P is Chief Operating Officer of
our 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 26 years of experience in the
areas of jewellery and engineering.
Mr. Tateos Tateossian is the Group Senior Vice
President – Operations. He holds Bachelor’s Degree
in Electronics Engineering from Kliment Ohridski,
Bulgaria. He joined the Company on July 13, 2009.
He is responsible for planning, production and
quality assurance. He has approximately 40 years of
experience in the field of jewellery manufacturing.
Mr. Sajid Salim Sakarwalla is the Vice President
– Diamond Procurement. A Graduate Diamond
from Gemological Institute of America, he is also
certified as an Accredited Jewellery Professional from
GIA. He holds a Graduation Degree in Commerce
from Mumbai University and aMastersDegree
in Management Studies (MMS-Finance) from
NarseeMonjee Institute of Management Studies,
Mumbai University. He joined the Company on
October 11, 2002 and is in charge of the overall
diamond division.
Ms. Aarti Sheth Cooper is the Vice President -
Business Development (exports division) of our
Company. She holds a Bachelor of Science degree
in International Business and Marketing from Drexel
University;Masters of Science degree in international
employment relations; and Human Resource
Management from London School of Economics.
She is responsible for overall sales review, business
development and strategic alliances management of
the institutional retail clients in U.S. She also plays an
active role in managing product development for all
the US markets.
Mr. Rajesh Kumar Gupta, is the General Manager
Accounts and Costing. He is a qualified Chartered
Accountant and ICWA. He has approximately 23 years
of experience in the field of accounts and costing.
Mr. Chander Gurnani is the General Manager-
Finance. He is a qualified Chartered Accountant,
responsible for managing finance and tax matters
of the Company. Hehas approximately 17 years of
experience in the field of accounts and finance.
Annual Report 2016-17 15
Mr. Pravin Patil is the General Manager-Human
Resources and Administration. He holds a Master’s
Degree in Labour Studies and Graduation in Law
from Mumbai University. He is responsible for human
resources and administrative division of the Company.
Mr. Patil has approximately 25 years of experience
in the area of human resource and administration in
hospitality and jewellery industry.
Mr. Vishal Adhyapak is the General Manager-
Information Technology of the Company. He holds
a Diploma in Mechanical Engineering from Mumbai
University. He is in charge of information technology
division of the Company. He has approximately 16
years of experience in the field.
Mrs. Nivedita Nayak is the Company Secretary
and Compliance Officer. She is fellow member of
the Institute of Company Secretaries of India. She
also holds degree in Bachelor of Law and Bachelor
of Commerce from Mumbai University. She is
responsible for handling all the Company Secretarial
and Legal matters. She has experience of around 7
years in the field of Secretarial and Legal.
INTERNATIONAL BUSINESS Mr. Jeffrey Shlakman is the President-Merchandising
and product development of our Company. He
holds a 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 sales responsibilities. He
has 35 years of experience in diamond and jewellery
manufacturing business.
SUBSIDIARY COMPANY Mr. Nilesh J. Agashiwala joined Fabrikant-Tara
International LLC, Tara’s USA division, as their Chief
Financial Officer in 2015. Mr. Agashiwala has over
27 years of experience working with variety of
companies, including jewelry wholesaler, private
equity, public accounting firms. Mr. Agashiwala holds
a bachelors degree in Finance and Economics from
the University of Mumbai, India, and is currently
pursuing his CPA designation.
Ms. Ambica Singh is the Chief Operating Officer
of our subsidiary Fabrikant Tara International LLC.
She has over 31 years of experience in increasingly
responsible roles within the jewelleryindustry. As
the Chief Operating Officer, Ambica is responsible
for the overall leadership of the FTI office and its
performance and staff, along with key productivity
areas such as inventory control, dilution monitoring
and identifying efficiencies and savings.
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 Northeastern University, Boston. He is responsible
for diamond fashion and bridal sales to many of
our accounts. He has approximately 32 years of
experience in jewellery and four years in table top
merchandise.
Tara Jewels Limited16
OUR INANCIAL
SCORECARD
FY2013
1,63
5.45
1,69
5.40
1,73
5.30
1,80
1.31
1,55
2.76
FY2014 FY2015 FY2016 FY2017
FY2013
50.3
8
73.6
7
43.6
25.4
4
-4.6
2
FY2014 FY2015 FY2016 FY2017
NET SALES (` Crore)
PROFIT AFTER TAX (` Crore)
Annual Report 2016-17 17
EARNINGS PER SHARE (`)
FY2013
20.4
8
35.7
3
17.7
3
10.3
3
-1.8
8
FY2014 FY2015 FY2016 FY2017
FY2013
153.
4
157.
6
158.
6
124.
37
101.
68
FY2014 FY2015 FY2016 FY2017
EBITDA (` Crore)
FY2013
16
1311
86
FY2014 FY2015 FY2016 FY2017
ROCE (%)
BOOK VALUE (`)
FY2013
201 21
9 237
248
242
FY2014 FY2015 FY2016 FY2017
Tara Jewels Limited18
We always endeavour to deliver the best results to our customers. Our achievements have been encouraged and recognised through various awards and accolades we have received in several categories over the years.
WARDS & ECOGNITION
Highest Export Performance Award for 2009 - 2010
Highest Export Performance Award for 2008 - 2009
Highest Export Performance Award for 2007- 2008
Highest Net Foreign Exchange Earner” Award for 2009 - 2010
Second Highest Net Foreign Exchange Earner” Award for 2008 - 2009
Second Highest Net Foreign Exchange Earner” Award for 2007 - 2008
Annual Report 2016-17 19
The second highest exporter of studded jewellery for the year 2008 - 2009
The second highest exporter of studded jewellery for the year 2007 - 2008
The “Global Supplier of the Year” Award for 2007 from Walmart
Awarded “LUXURY RETAILER OF THE YEAR” at the Star Retailer Awards 2013
Nominated for the Best 360 Marketing of the Year 2012
The Best Store Design of the Year - Single Brand category at the ET Retail Awards 2013
Awarded “Print Campaign of the Year 2012”
z Global Supplier of the Year Twice Awarded by Walmart
z 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
z 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
INTERNATIONAL BUSINESS
CREATED DIFFERENTIATED JEWELLERY BRANDS TO EARN
CUSTOMER TRUST
We aim to become the most endearing, trusted and inspiring house of jewellery brands. Our elegant, innovative and differentiated jewellery brands are created by our dedicated and talented team and well supported by state-of-the-art design, manufacturing and retail capabilities. We continue to grow our product lines by launching new categories, collections and continuing to drive premium pricing through innovation.
We are a specialty retail
jewellery store brand
targeting customers, style
seekers and influencers. We
provide affordable, high
quality and tasteful jewellery
to specialty retail jewellery
store chains and care about
our merchandise brands. Our
vision is to connect with our
customers through our brands
and earn their trust.
Fashion jewellery is critical
to our business. Our aim is
stronger engagement, loyalty
and trust in our brands. We
want to be the destination
for any type of jewellery and
want to make every guest
think about our brands
when they first enter the
jewellery marketplace. We are
focussed more on fashion-
oriented products and identify
fashion trends in jewellery at
affordable price points.
Creating a Strong PortfolioWe are vertically integrated
with presence in all parts of
the diamond supply chain with
our manufacturing facilities
in India. We constantly live
our mission to create solid
and cohesive jewellery brands.
Through our portfolio of strong
brands, we seek new growth
opportunities by expanding
in the existing markets,
adding new geographies and
increasing traction through the
E-Commerce route.
Leveraging Social MediaOur core strategy is to be the
“best-in-class” in the digital
ecosystem as we reach out to
our customers through the
E-Commerce and social media
touch-points. We are using
digitisation as a platform for
conveying information, shaping
brand identity and building
customer relationships. We
are bettering our realisations
and embarking on several
key initiatives to propel the
company towards maximising
quality growth and entering
into newer dimensions of
revenue generation.
Tara Jewels Limited20
O U R B U S I N E S S S T R AT E G I E S D U R I N G T H E Y E A R U N D E R R E V I E W
OUR KEY STRENGTHS
Robust brands
Select merchandise
Excellent customer service
Resilient supply chain
High-quality manufacturing
Advertising efficiency
Annual Report 2016-17 21
TIMELESS ACROSS GENERATIONS
We work continuously on implementing new product initiatives, new collection and innovative technologies to continue winning more consumers. Our vast library of IP designs includes a core line of jewellery which is timeless across generations and created with unequalled expertise and attention to detail. As a key strategy to optimise growth, we are moving away from Brick & Mortar stores and realigning our focus more towards Internet-based and Made-to-Order jewellery. We sell our products across countries through a network of exclusive and non-exclusive distributors, wholesalers and retailers.
Tara Jewels Limited22
LEVERAGED ADVANCED TECHNOLOGIES TO PRODUCE
CUSTOMISED JEWELLERY
We are backed by a strong pedigree of exclusive designs, manufacturing capabilities and high-tech equipment. Digitisation in design manufacturing through CAD/CAM and 3D printing machines led us to produce customised jewellery at competitive rates.
Our manufacturing facilities
enable us efficiently design
and produce a wide variety
of unique products to meet
the evolving needs of our
customers. Our portfolio
comprises of a thoughtfully
curated assortment of
inspiring and stunning
designs, showcasing the art of
elegance.
We operate more than 80,000
sq. ft. of manufacturing space
through 3 manufacturing
units, employing over
1,000 experienced gold and
diamond jewellery craftsmen,
which gives us a competitive
position in the industry. We
gain the requisite strength
to steer this ahead with
the presence of advanced,
high-tech equipment at our
manufacturing facilities.
Advanced and Patented TechnologiesWe use advanced, high-
tech equipment such as
computer-aided design (CAD)
software and computer-
aided manufacturing (CAM)
hardware, such as 3D laser
printing and patented
technologies. This helps us
move towards Made-to-Order
bespoke jewellery through our
low-cost format and producing
the most intricate jewellery
designs. Our design team
uses the latest technology
to produce distinctive,
exceptional, elegant and
intricate jewellery pieces.
We are bringing about
a transformational and
tectonic shift in the way
jewellery is being designed
and manufactured. We are
pioneering the revolution
through our cutting-edge
manufacturing technology and
our vast library of IP designs.
We have over 1,000 craftsmen
producing 600-700 different
jewellery models every month
in gold and studded diamond
jewellery. We have signed up
manufacturing and supply
agreements with independent
and specialty retailers in US,
UK and Europe.
Annual Report 2016-17 23
O U R B U S I N E S S S T R AT E G I E S D U R I N G T H E Y E A R U N D E R R E V I E W
BUILT A SEAMLESS AND SECURE
USER EXPERIENCE
E-Commerce is an important touchpoint of our business strategy. We reach out to our customers through the E-Commerce route to create a seamless and secure user experience. We are engaging with them on a platform that they are most comfortable with. Moving ahead, we expect online sales to account for a significant portion of our sales.
We live in an age where online
buying has become the norm.
Our jewellery sold through
the E-Commerce platform is
growing. We have tied up with
reputed E-Commerce and
online portals including
Amazon, Velvet Case, and
Shoppers Stop as part of
our endeavour to offer our
jewellery online globally. We
also sell our jewellery through
our online platform - Tara
Jewellers Online.
Our objective behind this is
to participate in the broader
trends in jewellery retailing,
besides catering to our global
network of retail outlets and
jewellery stores. A major driver
to get our jewellery online
is to cater to the changing
consumer behavior, especially
of young Indian women who
are exposed to global trends
and are increasingly shopping
online.
Jewellery retailing allows
companies, such as ours, to
offer our customers a wider
choice of designs, without
actually keeping the physical
stocks. For the customers,
it replicates the comfort
and convenience associated
with shopping at the luxury
showrooms. It offers customers
the jewellery of their choice
delivered at home for trial
at no cost. Online retailing
enables us to offer our
customers the convenience
to place an order from the
comforts of an individual’s
home. There are other
incentives such as giving the
customer time to decide and
not making it obligatory for
customers to purchase at the
very first visit.
Riding the Industry WaveWe wish to capture a share
of the growing online retail
market in India, which is
projected to touch US$ 22
billion by 2018, with free
delivery and heavy discounting,
as per an estimate by CLSA
Asia Pacific Markets. The
global jewellery market is
expected to touch US$ 257
billion in 2017. Growth in
the global jewellery market
is being fueled by the shift
to the E-Commerce, with the
global online jewellery market
accounting for 4% to 5% of
this and expected to capture
10% of the market by 2020.
Online fashion jewellery sales
is projected to take an even
bigger slice, capturing 15% of
the market by 2020.
The online jewellery market
is experiencing tremendous
Tara Jewels Limited24
O U R B U S I N E S S S T R AT E G I E S D U R I N G T H E Y E A R U N D E R R E V I E W
growth in Asia, in particular,
where it witnessed a CAGR of
62.2% during 2011 to 2014.
As global luxury E-Commerce
approaches a tipping point,
the luxury category’s share of
online sales is seen doubling
from 6% to 12% by 2020,
and accounting for 18% of
the luxury sales to be made
online by 2025, making online
luxury sales worth about US$
80 billion annually. This growth
has resulted in established
jewellery retailers to
move online.
Winning with Gen-YWith an increased online
presence, we are trend-setting
across generations by catering
to the needs and tastes of
Generation X, Y and Z, who
prefer buying jewellery online.
We continue to innovate
into winning trends and
categories and emphasise
winning with the Gen-Y
through our products
and channels. Besides
our scalable business
model and expansion in
the overseas markets, our
increased online presence in
propelling future growth.
Annual Report 2016-17 25
Tara Jewels Limited26
INDIA ECONOMIC OVERVIEWIndia remains the fastest growing large developing economy,
as it benefits from strong private consumption and the
gradual introduction of significant domestic reforms,
according to a United Nations report. India has positioned
itself as the most dynamic emerging economy among the
largest countries. India’s economy grew by 7.1% in FY2017,
slower than 8% recorded in the previous year and equal to
CSO’s estimate of 7.1%. Real GDP growth in the first half
of FY2016 was 7.2%, on the weaker side of the 7.0% to
7.75% growth projected by the Economic Survey of 2015-16
and the projection of 7.4% in the Economic Survey of
2016-17. It is expected to remain the fastest growing
economy on the back of high private consumption levels and
gradually implemented domestic reforms.
Having sunk to its lowest level in the past five years in
January 2017, Consumer Price Inflation (CPI) in India
averaged at 4.7% during FY2017 with an increasing pressure
on food as well as the uptick in global oil and commodity
ANAGEMENT ISCUSSION
& NALYSIS
India has positioned itself as the most dynamic emerging economy among the
largest countries. Its economy grew by 7.1% in FY2017, slower than 8% recorded
in the previous year and equal to CSO’s estimate of 7.1%.
___
7.1%India’s
Economic Growth in
FY2017 ___
Annual Report 2016-17 27
rates. The sharper-than-expected fall in inflation over the past
few months has already started correcting as remonetisation
gained currency. According to Crisil, CPI inflation is seen
averaging at 5% in FY2018, 30 basis points higher than that
in FY2017. The Reserve Bank of India has raised its inflation
projection for FY2018, expecting the index to average 4.5%
in the first half and 5.0% in the second half, taking it above
its medium-term target.
Against this backdrop of robust macro-economic stability, the
year was marked by two major domestic policy developments
– the passage of the transformational Goods and Services
Tax (GST) by both Houses of Parliament implemented on
July 1, 2017; and the action to demonetise the two highest
denomination notes. The GST will create a common Indian
market, improve tax compliance and governance, and boost
investment and growth. This is a bold new experiment in the
governance of India’s cooperative federalism.
Demonetisation has led to short-term costs on industries
dealing predominantly in cash, severely impacting them in the
first few months, but still holds the potential for long term
benefits. These benefits will allow growth to return to trend
in 2017-18.
Benefits of Demonetisation:
• Transition from unorganised to organised sector
• Less usage of cash for transaction among the major
countries as India has one of the highest usage of cash
• Greater tax compliance
Tara Jewels Limited28
INDUSTRY OVERVIEWGems & Jewellery - GlobalThe global gems & jewellery industry is seen becoming a
US$ 443 billion industry by 2022. This is on account of the
booming tourism industry, establishment of a large number
of exclusive showrooms by leading players, and rising
online availability of gems & jewellery. Demand for gems &
jewellery across the globe is dominated by Asia-Pacific and
North America. Expanding urbanisation, changing lifestyles,
growing E-Commerce sales, rising presence of organised retail
channels, growing number of premium product launches and
synchronised distribution networks is projected to drive the
global jewellery market during the forecast period. Demand
for diamond in gold, platinum, gemstones and pearl jewellery
has always been high, regardless of prices, globally. Further,
major players operating in global gems & jewellery market are
changing their product portfolios and increasing their focus
on making customised jewellery, as per consumer demands.
Advancements in jewellery making process, along with
availability of a range of certification bodies such as
Kimberly Process Certification Scheme and Bureau of Indian
Standards (BIS) hallmarking are anticipated to pump growth
in the global market in the coming years. Asia-Pacific is
also emerging as the fastest growing market across the
globe, on account of high demand from India, China,
Vietnam, Thailand, Japan and Indonesia. High demand for
gems & jewellery in the region can also be attributed to
rising disposable incomes, and aggressive marketing and
promotional strategies by leading players.
Global Market - Trends & Developments:
• Growing Use of 3-D Jewellery Printing
• Increasing Demand for Smart Wearable Jewellery
• Changing Preferences of Youth Population
• Rising Demand for Branded Jewellery
• Technological Advancements in Jewellery Manufacturing
• Growth in Organised Retail Formats and E-Commerce
• Emergence of New Product Categories
• Aggressive Marketing and Promotional Strategies
Annual Report 2016-17 29
Gems & Jewellery - IndiaThe Gems & Jewellery sector plays a significant role in the
Indian economy, contributing around 6% to 7% to India’s
GDP. India is the 2nd largest consumer of gold jewellery in
the world, with a 29% share of the total global demand
for gold jewellery. Gold jewellery makes up for about 80%
of India’s ` 3,00,000-crore Gems & Jewellery market. India
is the world’s largest gold consumer and imports a sizeable
chunk of its total annual consumption of around 900-1,000
tonnes. It is one of the fastest growing sectors and extremely
export oriented and labour intensive. The gems & jewellery
sector in India is home to more than 500,000 players. India
is one of the largest exporters of gems & jewellery and
the industry is considered to play a vital role in the Indian
economy as it contributes a major chunk to India’s foreign
exchange earnings. UAE, US, Russia, Singapore, Hong Kong,
Latin America and China are the biggest importers of Indian
jewellery. India exports about 95% of the world’s diamonds,
as per statistics from the Gems & Jewellery Export Promotion
Council (GJEPC). According to a report by Research and
Markets, the jewellery market in India is expected to grow at
a Compound Annual Growth Rate (CAGR) of 15.95% over
the period 2014-2019.
A FICCI AT-Kearney study projects the Indian jewellery market
to touch close to US$ 85 billion or ` 5,30,000 crore by
2018. According to India Retail Report 2015, total jewellery
retail market is worth ` 2,01,344 crore (US$ 33.56 billion)
growing at 24-26% and is expected to touch ` 383,000 crore
(US$ 63.87 billion) by 2017. Modern retail is estimated at
10% of the total market and is expected to grow by a little
under 22%. The jewellery market in India is expected to see
reasonable growth in the coming years.
The Indian government presently allows 100% Foreign
Direct Investment (FDI) in the sector through the automatic
route. The cumulative Foreign Direct Investment (FDI)
inflows in diamond and gold ornaments in the period April
2000-September 2016 were US$ 851.34 million, according
to Department of Industrial Policy and Promotion (DIPP). The
Government has recently undertaken various measures to
promote investments and to upgrade technology and skills
to promote ‘Brand India’ in the international market. India is
deemed to be the hub of the global jewellery market because
of its low costs and availability of high-skilled labour. India is
the world’s largest cutting and polishing centre for diamonds,
with the cutting and polishing industry being well supported
by Government policies.
Gems & Jewellery TradeBased on its potential for growth and value addition, the
Government has declared the Gems & Jewellery industry as
a thrust area for export promotions. India’s Gems & Jewellery
industry is expected to grow from the present US$ 41,833
Mio (` 251,000 Crore) to US$ 88,333 Mio (` 530,000 Crore)
by 2018. The overall net exports of Gems & Jewellery during
April-December 2016 stood at ` 175,879.24 crore
(US$ 26.28 billion), whereas exports of cut and polished
diamonds stood at ` 113,171.17 crore (US$ 16.91 billion).
Exports of gold coins and medallions was ` 25,819.48 crore
(US$ 3.86 billion) and silver jewellery export was ` 18,010.72
crore (US$ 2.69 billion). According to the Gems & Jewellery
Export Promotion Council (GJEPC), the apex industry body,
the export of gems and jewellery is likely to witness a growth
of about 10% during FY2017 due to increasing demand from
US and Europe.
Jewellery ExportsExports of gems & jewellery grew 9.5% to about US$ 29
billion during April-January 2016-17, compared to US$ 26.5
billion during April-January period of FY2016. Demand was
driven largely by demand in India's major markets, such as
the US. This was higher than exports of US$ 26.5 billion
INDIA’S GEMS & JEWELLERY INDUSTRY IS EXPECTED TO GROW FROM US$ 41,833 MIO (` 251,000 CRORE) TO US$ 88,333 MIO (` 530,000 CRORE) BY 2018. THE OVERALL NET EXPORTS DURING APRIL-DECEMBER 2016 STOOD AT ` 175,879.24 CRORE (US$ 26.28 BILLION).
Tara Jewels Limited30
registered during April-January period of FY2016, according
to the data from GJEPC. Gems and jewellery contribute
about 14% to India’s overall exports. Rise in export shipments
were mainly supported by cut and polished diamonds, which
stood at US$ 18.5 billion during the period, as compared to
US$ 16.5 billion a year ago. Export of silver jewellery grew
by 20% to US$ 2.94 billion during the period of last fiscal.
Overall exports of silver started registering positive growth
and was the main contributor in gems & jewellery shipments.
Shipments of gold jewellery, however, contracted to US$ 3
billion during the period under review, from US$ 3.13 billion
a year ago. Exports of gold medallion and coins too dipped
to US$ 4.32 billion in April-January 2016-17. GJEPC estimates
India's gems & jewellery exports to move up by 10% for
FY2018.
Value of Gems & Jewellery Exports from India (In US$ Million)
February 2016 3,378.28
March 2016 2,507.71
April 2016 2,741.51
May 2016 2,893.65
June 2016 2,773.90
July 2016 2,479.25
August 2016 3,033.30
September 2016 3,419.37
October 2016 4,167.57
November 2016 1,684.37
December 2016 2,611.27
January 2017 2,663.86
February 2017 3,451.72
YoY Growth in Export of Gems & Jewellery from India (In US$ Billion)
Year Export Value
FY2005 15.66
FY2006 16.70
FY2007 17.16
FY2008 20.92
FY2009 24.89
FY2010 29.44
FY2011 43.05
FY2012 43.21
FY2013 39.14
FY2014 34.99
FY2015 36.22
FY2016 32.63
FY2017 35.55
Source: GJEPC
India's gems & jewellery exports jumped by 8.95% for
financial year 2016-17 on recovery in demand from the
United States (US), Hong Kong and the United Arab Emirates
(UAE). The three destinations account for over 75% of
India's overall shipment of precious ornaments by value. Data
compiled by GJEPC showed India's net exports of gems &
jewellery at US$ 35.55 billion (` 238,252.79 crore) for the
financial year 2016-17, compared with US$ 32.63 billion (`
213,871.29 crore) for the corresponding period
last year.
EXPORTS OF GEMS & JEWELLERY GREW 9.5% TO ABOUT US$ 29 BILLION DURING APRIL-JANUARY 2016-17, WITH DEMAND BEING DRIVEN LARGELY BY DEMAND IN INDIA’S MAJOR MARKETS, SUCH AS THE US.
Annual Report 2016-17 31
US – Key Demand Driver for India ExportsThe US economy is on a revival path after witnessing a
slowdown in the past few years. The consumer sentiment has
turned positive and buyers have started coming to the market
for the purchase of new jewellery. Apart from US, jewellery
demand also moved up in Hong Kong and the United Arab
Emirates. While Hong Kong reported increase in jewellery
demand for their supply to China and other destinations
in the north east, demand from UAE rose despite the 5%
import duty levied by the Government in the region. In UAE,
local consumption of jewellery was impacted due to a decline
in crude oil prices (being majorly oil driven economies). Re-
routing of exports to the African and European countries
will not get impacted due to duty levy. Meanwhile, cut and
polished diamonds contributed around 60% of India's overall
exports of precious metals and stones. While exports of gold
jewellery jumped by a marginal 1.92% to US$ 8.7 billion
for 2016-17, shipment of coloured gemstones declined by a
marginal 3% to US$ 419.9 million.
Organised Jewellery Segment in IndiaWhile the overall retail Gems & Jewellery sector is growing by
10% annually, the organised retail segment has been expanding
by 30% to 40% in recent years. Currently, the organised
segment accounts for 22% of the total market. The unorganised
segment, primarily comprising local and independent stores,
makes up for 78% of the retail Gems & Jewellery market.
With changing lifestyles and growing disposable incomes, the
outlook and buying patterns of consumers in the recent years
have changed rapidly. Indian consumers now demand greater
transparency, better service and a more compelling value
proposition driven by brand and fashion.
The Indian retail sector is growing rapidly and this growth
is significantly driven by large retailers and brands. The
leading brands are pulling the organised market and are
opening opportunities to grow. The large brands are also
increasing their reach at a fast pace through setting up of
retail showrooms, on-line sales portals and franchise routes,
especially in Tier 1 & 2 cities. These players are also offering
a variety of discount schemes including financing schemes to
consumers to further boost sales. Future growth outlook for
the sector looks reasonably robust. However, competition is
expected to be stiff and very consumer centric. Besides this,
there are challenges posed by the unorganised sector which
still account for more than 80% of the market.
India’s branded Gems & Jewellery Sector is facing competition
with the entry of branded players. Branded jewellery players,
with their own manufacturing set-ups, pan-India network of
showrooms, strong online presence and access to funds at
relatively cheaper rates pose a challenge for smaller players with
less number of operational showrooms and no funding support.
Tara Jewels Limited32
Branded Jewellery – On the RiseConsumers are beginning to move towards branded
jewellery and are willing to pay a justified premium for high
quality and inventive designs. As a consequence, the share
of the organised segment has grown substantially. In the
past decade, India witnessed the emergence of organised
and branded players. The share of branded jewellery
increased from 20% to nearly 35% and is expected to grow
strongly. The growth of organised sector is also aided by
the emergence of large organised jewellery manufacturers
who serve the rapidly growing organised retail industry. The
curated collection in branded jewellery ranges from daily
wear such as light weight necklace sets, rings, pendants,
earrings, bangles to more occasion-related exclusive designs.
These are targeted at young consumers looking for chic
gifting options for special occasions such as Anniversaries,
Birthdays and Valentine’s Day. Branded jewellers are more
equipped than the local organised players to appease
consumers’ growing demand for design innovation and
variety. An increase in disposable incomes has also been
an important factor for an increase in sales of jewellery. In
India, customised jewellery is a niche market and is showing
significant growth year-on- year and would likely take
precedence in the near future.
Change in Consumer PreferencesThere is a dynamic change in consumer preferences in
jewellery as customers have become more astute and aware
about trends and quality. The key reasons for growth of
demand in the jewellery industry include an increasing
disposable income, growing number of working women and
fostering new talent. The challenges include factors such
as the unorganised sector, involvement of huge working
capital, dependency on import for raw materials and a labour
intensive market. The prime trends in India’s jewellery market
are the changing tastes and preferences of consumers,
festive season sales, emergence of new distribution channels
and inclination towards branded jewellery. Consumers are
demanding new designs and varieties in jewellery, and
branded jewellers are able to fulfil their changing demands
better than the local unorganised players. Moreover, increase
in per capita income has led to an increase in sales of
jewellery, as jewellery is a status symbol in India.
Increasing Role of E-CommerceThe overall online retail market in India is estimated to have
risen to US$ 6 billion in 2015, compared with US$ 3.5 billion
in 2014, according to Gartner Inc. CLSA Asia Pacific Markets
forecasts this to grow to US$ 22 billion by 2018. The online
jewellery market is expected to be worth US$ 2.5 billion
over the next 5-10 years. Currently, it accounts for less than
Annual Report 2016-17 33
0.1% of the US$ 55 billion jewellery market. The online
retail jewellery market is growing steadily due to changing
consumer behaviour, especially of the young Indian women
exposed to global trends. According to the annual online
shopping growth report compiled by Forrester Consulting
and Google search trends, about 100 million people in India
will shop online by 2016, and about 40% of these will be
women. However, the total sale of online jewellery ventures
(including traditional players) in 2015 amounted to US$ 200
million or ` 1,256 crore. After the Government eased import
curbs on gold bars and coins, jewellers have been tying up
with Amazon.com Inc., Flipkart Online Services Pvt. and Ebay
Inc. Online retailing offers convenience of purchasing from
the comforts of an individual’s home. Moreover, it allows
other incentives such as giving customers time to decide and
not making it obligatory for them to purchase at their very
first visit. Offline jewellers realise the potential and the need
for being present online.
Impact of GSTThe Goods & Services Tax (GST) on raw materials in the
gems & jewellery industry has been fixed at 0.25% and on
ready material at 3%. Although it is higher than the current
applicable taxes, including 1% excise duty and 1.5% VAT,
it is below the anticipated GST of 5%. Customs duty will
continue to be 10% and processing charges will be taxed
at 5%. The average processing charges are around 12%
of the gold price. So, the total taxes and duties which
amounted to nearly 12.4%, will now be 14% post GST.
Organised players will be the biggest beneficiaries of this as
the cost gap between organised and unorganised players will
come down. The industry has welcomed the Government's
decision and are happy that the Centre has created a special
category, which will help the industry. Gold jewellery demand
is expected to grow by 9% in value and 6% in volume
during 2017, following rapid formalisation of the sector,
according to a report by the rating agency ICRA. Following
a tumultuous 2016, jewellery demand has rebounded
sharply. Easing liquidity pressures with fading impact of
demonetisation, extended wedding season,
better farm output and rising income levels have been
supporting growth.
Government InitiativesA conducive policy environment and with jewellery being
a focus area in the Government’s ‘Make in India’ push
manufacturing in this sector is expected to get a fillip. Where
India enjoys an advantage is in skilled craftsmanship and
uniqueness of design.
• In the Union Budget 2017-18, the Government of India
offered tax cuts for the middle class and other sections
of the society (5% for the ` 250,000-500,000 tax slab;
which was 10% initially). All these measures will drive
consumption, which will be favourable to the gems and
jewellery industry.
• The Government’s proposal to cut corporate tax rates to
25% for micro, small and medium enterprises (MSMEs)
having annual turnover up to ` 50 crore (US$ 7.5 million)
will benefit a large number of gems and jewellery
exporters from MSME category.
• The Government’s announcement on establishing gold
spot exchange could help in India’s participation in
determining gold price in the international markets.
• The demonetisation move is encouraging people to use
plastic money, debit/ credit cards for buying jewellery.
This is good for the industry in the long run and will
create more transparency.
• The Reserve Bank of India (RBI) announced norms for
gold monetisation scheme, which allows individuals,
trusts and mutual funds to deposit gold with banks
GOLD JEWELLERY DEMAND IS EXPECTED TO GROW BY 9% IN VALUE AND 6% IN VOLUME DURING 2017, FOLLOWING RAPID FORMALISATION OF THE SECTOR. FOLLOWING A TUMULTUOUS 2016, JEWELLERY DEMAND HAS REBOUNDED SHARPLY.
Tara Jewels Limited34
in return for interest, to help reduce gold imports and
alleviate pressure on trade balance.
• RBI has liberalised gold import norms. With this, star
and premier export houses can import the commodity,
while banks and nominated agencies can offer gold for
domestic use as loans to bullion traders and jewellers.
• India has signed a Memorandum of Understanding
(MoU) with Russia to source data on diamond trade
between the two countries. India is the top global
processor of diamonds, while Russia is the largest rough
diamond producer. The Government of India is planning
to establish a special zone with tax benefits for diamond
import and trading in Mumbai, in an effort to develop
the city as a rival to Antwerp and Dubai, which are
currently the top trading hubs for diamond.
• Due to shortage of skilled manpower, the Gems and
Jewellery Skill Council of India is planning to train over
four million people till 2022. The council aims to train,
skill and enhance 4.07 million people by 2022. The
council plans to tie up with the existing training institutes
including Gemological Institute of America (GIA) and
Indian Gemological Institute (IGI), along with setting
up of new institutes in major diamond cutting and
processing centres.
• The GJEPC has also proposed to develop a jewellery park
on Thane-Belapur Road which is around five kilometers
from Mumbai with a view to boost the Mumbai-based
jewellery industry by providing modern facilities and
services.
• Indian Institute of Gems & Jewellery (IIGJ) Mumbai, a
project of the GJEPC, has come-up with a three-year
Graduate Program in Jewellery Design & Manufacturing
Techniques with an introduction to Management
studies, in collaboration with Welingkar Institute of
Management.
• In September 2015, the Government of India approved
the gold monetisation plan in the form of revamped Gold
Deposit Scheme (GDS) and the Gold Metal Loan (GML)
Scheme to mobilise tonnes of gold stored in households
and temples across the country. The Union Cabinet
also approved the introduction of Sovereign Gold Bond
Scheme, under which gold bonds denominated in grams
of gold will be issued to individuals by the Reserve Bank
of India (RBI), in consultation with Ministry of Finance.
Rising Market Opportunities
• Entering New Markets
The sector is exploring new locations to diversify
business and to minimise the risk. Russia, Middle East
and China are a few of the emerging destinations that
are witnessing an increase in jewellery demand. The
Indian gems & jewellery players can tap these countries
to diversify and increase their business. India’s vast, low
cost and extremely skilled workforce provides it with a
competitive edge over other countries. By moving up
the value chain and processing larger stones, India can
further increase its value share in total exports.
• Value Addition
There exists a huge opportunity for Indian players to do
value addition to the low cost gold and diamonds items
and can export such jewellery. India has an advantage of
manufacturing affordable gold and diamond jewellery
for the world market.
• Jewellery Retail
The Indian retail sector provides an excellent opportunity
for the Indian players to manufacture and sell their
jewellery through the retail channels that are fast
catching up in the Indian markets.
• Outsourcing Hub
India can become an outsourcing hub for designing and
manufacturing jewellery. There is an increased trend of
outsourcing designing and manufacturing of jewellery
from India by global retail players.
INDIA’S VAST, LOW COST AND SKILLED WORKFORCE PROVIDES IT WITH A COMPETITIVE EDGE. BY MOVING UP THE VALUE CHAIN AND PROCESSING LARGER STONES, INDIA CAN FURTHER INCREASE ITS VALUE SHARE IN EXPORTS.
Annual Report 2016-17 35
Industry OutlookIn the coming years, growth in Gems & Jewellery sector
would be largely contributed by the development of large
retailers/brands. Established brands are guiding the organised
market and are opening opportunities to grow. Increasing
penetration of organised players provides variety in terms
of products and designs. Also, the relaxation of restrictions
of gold import is likely to provide a fillip to the industry. The
improvement in availability along with the reintroduction
of low cost gold metal loans and likely stabilisation of gold
prices at lower levels is expected to drive volume growth
for jewellers over short to medium term. The demand for
jewellery is expected to be significantly supported by the
recent positive developments in the industry.
The Gems & Jewellery industry is launching several initiatives
to further its share of global trade in the sector. With a
share of over 60%, India is already a major player in the
manufacturing of diamonds across the world. Besides
furthering its current impact on world’s diamond trade,
the industry is now aiming to have the same influence in
the trade of precious gems, including precious and semi-
precious stones. The industry, which already employs 4.6
million people, has a huge potential of skilling labour and
contributing to the decline in India’s unemployment rates.
Another key focus is the export potential of the industry.
With India being a cutting and polishing hub for diamonds,
the Government aims to make India a preferred destination
for diamond manufacturing and an international diamond
trading hub.
COMPANY OVERVIEWTara Jewels Limited is an integrated player in the global
jewellery industry founded in 1994 by Rajeev Sheth, a first
generation entrepreneur and a gemologist with over 40 years
of experience in jewellery manufacturing and retailing.
We are the manufacturers of international brands and co-
branded jewellery. We have over two decades of experience
in the international market with leading retailers across
the globe. Our experience ranges from designing and
manufacturing to retailing of jewellery.
We are predominantly an exporter and retailer of studded
diamond jewellery in over 20 countries and five continents,
including US, UK and Europe. Our products are available
across 12,000 points of sale. We also have an online presence
through Amazon, Velvet Case, Shoppers Stop and Tara
Jewellers Online.
Tara Jewels Limited36
Our Portfolio
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Facets Zales
Heart to Heart Helzberg
Cherished Hearts Blue Nile
Heart Essence JC Penny
Forever Bride Signet UK
Secrets of the Sea Foschini
Bevilles, Chryst
We operate in the Branded Jewellery segment of the
jewellery value chain through our diversified product mix of
gold and diamond studded jewellery. We currently operate
company-owned stores across Metros, Tier I, Tier II and Tier III
Indian cities. Our basket includes products of Gold, Platinum
and Silver. We offer an extensive range of fine jewellery
catering to consumers through our chain of 4 retail stores.
Our portfolio of products includes studded gold, platinum
and silver jewellery.
OUR CORE COMPETENCIES
Strategic Initiatives adopted in FY2017
a. Reduction in interest burden
b. Reduction in operating cost
c. Change in Auditors in USA
Our Manufacturing Capacity
Strong promoter/management
background in Retail and Branding
High precision jewellery
manufacturing technology
Experienced supplier to large global
retailers
OUR CAPABILITIES
55,000 Designs
20 Countries
5 Continents
DESIGNING MANUFACTURING RETAILING
OUR CHANNELS OF SALE
OUR PRESENCE IN THE VALUE CHAIN
Annual Report 2016-17 37
MAJORITY INDIAN
EXPORTS
PRESENCE OF TARA JEWELS LIMITED
PROCESSED DIAMONDS
ROUGH DIAMONDS
JEWELLERY
BRANDED JEWELLERY
HIGH-END LUXURY
JEWELLERY
JOB WORK
BRICK AND MORTAR
E-COMMERCE RETAIL PARTNERS
Tara Jewels Limited38
Our Manufacturing CapacityOur presence spans across the value chain – from designing
to manufacturing and retailing of jewellery – with
patented technologies and state-of-the-art manufacturing
processes. We have 3 manufacturing facilities spread across
approximately 80,000 sq. ft., employing 1,000 craftsmen
and 39 designers. Our current installed capacity is 120,000
units per month, while our current capacity utilisation is 80%
in a single shift. We use state-of-the-art equipment in our
manufacturing processes and rely on essential technologies
such as wax setting technology. Our multi-skilled workforce
makes use of our patented turntable technology.
Our Business Performance in FY2017Total Revenues
`12,495.03 Million Exports
Total Sales
`3,081.24 Million
India Domestic
`12,446.31 Million
International Business
Gross Profit
`231.27 Million
India Domestic
`1,736.56 Million
International Business
` 3,083.46 Million
India Retail
Our Competencies in Manufacturing:• State-of-the-art equipment at manufacturing facilities
• Advanced technologies such as wax-setting
• Owning the patented turntable technology
• Multi-skilled workforce
• Use of robotics technology for stone setting in studs
Our Competitive Advantages:• SAP implemented across all the manufacturing units
• Manufacturing of jewellery using patented and state-of-
the-art technologies
• High precision jewellery manufacturing technology
• Fully automated jewellery casting plant
• Applied for grant of patents for invisible plate setting
technology for setting princess diamonds in wax
• Applied for grant of patents on resizable ring technology,
enabling resizing of rings without disturbing the shape or
falling of stones in studded rings
Annual Report 2016-17 39
Innovation Through Technology:Patented Technologies - Invisible setting
- Patented turntable technology – an indigenously developed manufacturing facility for
increase in productivity and versatility
Continuous innovation in
technology
- High-end jewellery cell developed for high-end manufacturing, using techniques
followed by ultra-luxury jewellery companies
- Implemented factory within factory concept to increase productivity and reduce cycle
time
Access to advanced
technology and modern
machinery
- State-of-the-art equipment for wax injection, laser, investment and casting
- 100% CAD/CAM product development
- Microscope setting
- Machine shop for machine made bands, automated machine stone setting, miracle
plates and britecut texturing
- Platinum casting facility
OUR MANUFACTURING
TOOLS
LASER LITHOGRAPHY
MICROSCOPIC PRECISION SETTING
MACHINE MADE BANDS
INVISIBLE SETTINGS
MACHINED GRAVING
CAD AND CAM
Tara Jewels Limited40
Our Business VerticalsA. RETAIL MODEL
a. International Retail
We export studded jewellery to global retailers
and leading chain stores across 12,000 points of
sale globally. Almost 90% of our revenues are
contributed by the overseas markets. We promote
7 brands globally across segments and geographies.
During the year, we launched some of our signature
collection in new geographies. Our jewellery is
primarily exported to Australia, Canada, European
Union, South Africa, United Kingdom and United
States of America.
We have strategic tie-ups with reputed global
branded jewellery retailers and international chains
in the global market. We co-brand our merchandise
with reputed jewellery retailers to enhance brand
recognition and repeat orders. We also leverage
the E-Commerce platform to sell our brands. Our
jewellery is also available online in one of the world’s
leading E-commerce platforms Amazon, Velvet
Case, Shoppers Stop and Tara Jewellers Online for
jewellery sales.
OUR GLOBAL TIE-UPS WITH BRANDED JEWELLERY RETAILERS
WALMART
JC PENNY
ZALES
SIGNET
KAY JEWELLERS
JARED
ERNEST JONES
STERNS
AMERICAN SWISS
BLUE NILE
H. SAMUEL
HELZBERG
CHRYST SWITZERLAND
Annual Report 2016-17 41
b. India Retail
Being an integrated player in the jewellery industry,
we are present in the affordable luxury segment
with our jewellery ranging in an average ticket
size of ` 50,000. Our presence is spread across
manufacturing, designing, exports and retailing
of jewellery, targeting the aspiring Indians at the
base of the socio-economic pyramid. Our jewellery
is displayed on Browse Walls, Collection Walls and
Consultation Tables, which reduces the inventory
requirement and leads to limited operating cost.
Our low-cost format and asset light model enables
us to capture the captive audience at these stores
and offer brand visibility. This format is targeted
to generate gifting and impulse purchases with
a wide range of jewellery available from ` 1,000
to ` 40,000. We accept orders for larger designs
depending upon the customer requirement. Our
collection on offer ranges from daily wear (light
weight necklace sets, chains, rings, pendants,
bracelets, earrings and bangles) to more occasion
related exclusive designs. The format enables
customers to purchase any casual / fashion jewellery
or a gift purchase during their visit to the stores.
Re-engineering India Retail
We are expanding our retail footprint in the
domestic market by adopting an asset light strategy.
We reduced our number of outlets from 19 in
FY2016 to 4 stores by the end of FY2017. These
small-format stories are aimed towards increasing
our revenues from the export vertical and relying
less on the domestic market. A lesser number of
outlets lowers our inventory requirement and limits
operating cost. At these outlets, we are consciously
reducing the sale of plain gold jewellery and
emphasising more towards high-margin products
such as Diamond, Kundan and Made-to-Order
jewellery.
Leveraging the E-Commerce Route
We have established a significant presence in the
online segment. We are leveraging the E-Commerce
platform to reach out and cater to new-age
customers. Our association with online retailing
portals helps us retail our daily wear to signature
collection. The channel not only helps us reach out
to Generation Y, but also in creating a strong brand
recall and creating high-end customer experience
and also redefining the way jewellery is sold to our
customers.
B. EXPORT MODEL
We understand the demands of global consumers and
serve distinct markets across various continents. We
export diamond and coloured stone studded jewellery
and branded jewellery to international jewellery retailers.
About 90% of our revenues are contributed by the
export of diamond and diamond studded jewellery to
global retailers with an extensive distribution network.
We have a global product development team, led by the
sales team in US. We are the exclusive manufacturers of
fresh and strong brands. We earn 90% of our revenue
from US, UK, China, Australia, South Africa, European
Union and Canada. Our key brands — Zac Posen,
Monique Lhullier and Trio’s — performed well during the
year across all the outlets.
Tara Jewels Limited42
Our End-to-End Value ChainRough Diamonds Processed
Diamonds
Job Work
Unbranded Branded High-End Luxury
Highlights on Exports:
• Zac Posen, Monique Lhullier and Trio’s performed well
at Helzberg, Blue Nile and Walmart
• In the process of launching Zac Posen at Foschini,
South Africa
Awards & CertificationsInternational
• Awarded as “Global Supplier of the Year” second time
by Walmart
• Bagged Overall Excellence Award (Second-highest
exporter in the category of studded precious metal
jewellery exports in EPZ) by The Gem & Jewellery Export
Promotion Council in year 2007, 2008, 2009
• Conferred with the status of a “Star Trading House” by
the Ministry of Commerce & Industry; Been the highest
exporter in gems and jewellery for FY2009 and FY2010
• Won the “Luxury Retailer of the Year” award at the Star
Retailer Awards 2013
• Bagged “Best Store Design of the year - Single Brand
category” at the Economic Times Retail Awards, 2013
• Won “Print campaign of the Year 2012” at the Retail
Jeweller India Awards, 2012
• Received the Responsible Jewellery Council (RJC)
Certification, 2014 by meeting the highest ethical, social
and environmental standards
Retail
• Luxury Retailer of the Year” at the Star Retailer Awards
2013
• Best Store Design of the year – Single Brand category” at
the Economic Times Retail Awards 2013
• Print Campaign of the Year 2012” at the Retail Jeweller
India Awards 2012
Business OutlookWe are launching several initiatives to enhance our market
share. We have been leveraging our domain expertise,
industry know-how and manufacturing capabilities in order
to drive innovation, expand collection, enhance footprint
Annual Report 2016-17 43
and delight our customers. We are also capitalising on our
asset light model of expansion to cater to the rising demand
for branded jewellery to optimise margins and enhance
profitability. Our skilled labour is helping us fast become a
cutting and polishing hub for diamonds. Our objective is to
be the preferred destination for diamond manufacturing and
an international diamond trading hub.
As part of our key strategy in aiding growth and profitability,
we are significantly expanding our presence in the global
market, introducing region specific collection, focussing on
new strategies to enhance market share, satiate the appetite
of all the age groups and cater to repeat orders from existing
clients. We hope to capture the robust demand in the
branded retail segment, re-emphasise our brands, build new
brands and increase brand recognition.
Financial OverviewStandalone:During the year under review, the Company earned a total
revenue of ` 1,197 crore, as against ` 1,363.54 crore in the
previous financial year. The net loss after Tax suffered by the
Company during the year under review was ` 11.82 crore,
as against a Profit After Tax of ` 9.25 crore achieved by the
Company in the previous financial year.
Consolidated:During the year under review, the Company earned a total
revenue of ` 1,557.85 crore, as against ` 1,807.30 crore
in the previous year. The net loss after Tax suffered by the
Company during the year under review was ` 4.62 crore,
as against a Profit After Tax of ` 17.91 crore achieved by the
Company in the previous financial year.
Human ResourcesHuman Resource is the most vital factor to achieve the goals
of any organisation. Being a progressive organisation, we
believe in the strength of our most vital asset – our strong
workforce. To maintain our competitive edge in a highly
dynamic industry, we recognise the importance of having
a workforce which is consumer focussed, performance
driven and future capable. We continually strive to attract
fresh talent to build a highly skilled and motivated pool
of resources. Several initiatives are being taken to ensure
optimal development and management of human resources
by imparting need-based training to employees across
categories.
The Company’s Human Resources philosophy is to establish
and build a strong performance and competency driven
culture with greater sense of accountability and responsibility.
The Company acknowledges that its major asset is its
employees. The expertise of the management team, the
professional training provided to the staff, their personal
commitment and their spirit of teamwork together enhance
the Company’s networth. The Company has taken various
steps for strengthening organisational competency through
involvement and development of employees as well as
installing effective systems for improving their productivity
and accountability at functional levels.
Key Risks and Concerns Your Company has put into place a detailed Risk
Management Policy. It has tried to identify the various types
of risks and integrate risk management activities at all levels
in the Company. The details about the risk management
policy are given in the Boards’ Report.
WE HAVE BEEN LEVERAGING OUR DOMAIN EXPERTISE, INDUSTRY KNOW-HOW AND MANUFACTURING CAPABILITIES TO DRIVEN INNOVATION, EXPAND COLLECTION, ENHANCE FOOTPRINT AND DELIGHT OUR CUSTOMERS.
Tara Jewels Limited44
• Business Threats The gems and jewellery sector in India is unorganised and
fragmented. Around 90% of the players operate in the
unorganised sector mostly in family-run operations. The
nature of the sector prevents it from achieving economies
of scale.
Mitigation: The Company is engaged in the export of
gems and jewellery whereas the unorganised players are
in the domestic market only. Overseas importers place the
orders based on credentials and the company’s promoters
being associated in this business for three decades are not
affected by such competition.
• Predominance of the US market The Indian gems and jewellery sector is pre-dominantly
dependent on the US markets, which is its top export
destination. The growth of gems and jewellery sector is
heavily dependent on the growth of demand in the US
market.
Mitigation: Company is exporting to Middle East market
only and is not affected by US market scenario.
• Exchange Rate/Currency Risk The gems and jewellery sector is affected by the rupee/
dollar exchange rate because it is export oriented. Any
volatility in the exchange rates affects the margins of the
players.
Mitigation: The Company would do forward cover for
imports and exports and insulates itself from fluctuation
in exchange rate.
• High Level of Inventories As the gems and jewellery sector is highly dependent
on imports for its raw materials, the players have to
maintain a high level of inventory. However, maintaining
this inventory becomes difficult for the players during the
slack season, as it carries inventory price risk.
Mitigation: The Company does not envisage holding
large inventory and as it is a merchant exporter the
purchases would be made based on orders only and for
domestic sales it expects to have an inventory turnover
of 3 to 5 times and thereby reduce the risk of inventory
holding substantially.
• Competition from Other Luxury Goods With the increase in disposable income and the change
in standard of living, the demand for luxury goods such
as perfumes, consumer electronics, leather, automobile
and gadgets are also increasing. The gems and jewellery
sector is experiencing competition from these luxury
goods, which is eating into the market share of the sector.
Mitigation: The market potential is huge and the
competition from other consumer goods would not
dent company’s turnover. The estimated turnover of the
company is very small when compare to total export
turnover of the county. Therefore the risk is negligible.
• Artificial Jewellery The sector also faces a challenge in the form of
integration of synthetic or man-made diamonds. With
the advent of technology, it is difficult to differentiate
between natural and artificial jewellery. This may hit the
sale of low-cost jewellery in the long run.
Mitigation: There are different classes of people who
buy real gold jewellery and artificial jewellery. Artificial
items are more use by youngsters and office goers for
day-to-day use, whereas the real gold jewellery is used for
occasions and as a tool for savings of earnings. Therefore
this competition is also small and negligible.
WE HAVE TAKEN VARIOUS STEPS FOR STRENGTHENING ORGANISATIONAL COMPETENCY THROUGH INVOLVEMENT AND DEVELOPMENT OF EMPLOYEES AS WELL AS INSTALLING EFFECTIVE SYSTEMS.
Annual Report 2016-17 45
Internal Control Systems and their AdequacyThe Company has an adequate internal control system,
commensurate with the size of its operations. The Company’s
Audit Committee reviews the internal control systems and
internal auditors’ recommendations from time to time. All
efforts are being made to make the internal control systems
more effective. We identify new risks and re-evaluate old
risks during the year, in the process of considering risk
mitigating strategies. Some of the risks that our Company’s
core businesses are exposed to include credit risk, market risk,
operational risk and legal risk. It is also exposed to specific
risks in connection with the management of investments
and the environment within which it operates. The Company
manages cost escalation risk through processes aimed at
optimising costs through suppliers and through rigorous
contracts and procurement.
We seek to understand, limit and manage the adverse
impacts arising from external and internal events. Our risk
management team safeguards and protects the Company’s
assets against unauthorised use or disposition, maintenance
of proper accounting records and verification of authenticity
of all transactions. Within the Company, the directors are
responsible for maintenance of a sound system of internal
controls. This is done through a continuous process of
identifying, evaluating and managing the risks faced by
the company. The Company’s effectiveness on internal
control is also checked by external agencies. This results in
an unbiased and independent examination of the adequacy
and effectiveness of the internal control system and aims to
achieve the objective of optimal functioning of the Company.
Cautionary StatementThis document contains statements about expected future
events, financial and operating results of Tara Jewels Limited,
which are forward-looking. By their nature, forward-looking
statements require the Company to make assumptions
and are subject to inherent risks and uncertainties. There is
significant risk that the assumptions, predictions and other
forward-looking statements will not prove to be accurate.
Readers are cautioned not to place undue reliance on
forward-looking statements as a number of factors could
cause assumptions, actual future results and events to differ
materially from those expressed in the forward-looking
statements. Accordingly, this document is subject to the
disclaimer and qualified in its entirely by the assumptions,
qualifications and risk factors referred to in the management’s
discussion and analysis of Tara Jewels Limited’s Annual
Report, 2016-17.
Tara Jewels Limited46
ToThe Members,Tara Jewels Limited
Your Directors take pleasure in presenting their 16th Annual Report on the business and operations of the Company together with audited financial statements for the year ended March 31, 2017.
FINANCIAL RESULTS (`in Crore)
Particulars Standalone Consolidated
FY 2016-17 FY 2015-16 FY 2016-17 FY 2015-16
Total Income 1197.00 1363.54 1557.85 1807.30
Less: Expenditure 1210.96 1347.71 1562.33 1779.82
Profit/(Loss) Before Tax (13.96) 15.83 (4.48) 27.47
Less: Tax (2.14) 6.58 0.14 9.57
Net Profit /(Loss) For Year (11.82) 9.25 (4.62) 17.91
Earnings Per Share (EPS) (4.80) 3.76 (1.88) 7.27
PERFORMANCE REVIEWStandalone:During the year under review, the Company earned a total revenue of ̀ 1197 crores against ̀ 1363.54 crores in the Previous Year. The net loss after Tax suffered by the Company for the year under review was ` 11.82 crores against the Profit after Tax of `9.25 crores achieved by the Company in the previous Financial Year.
Consolidated:During the year under review, the Company earned a total revenue of ` 1557.85 crores against ` 1807.30 crores in the Previous Year. The net loss after Tax suffered by the Company for the year under review was ` 4.62 crores against the Profit After Tax of ` 17.91 crores achieved by the Company in the previous Financial Year.
MANAGEMENT DISCUSSION AND ANALYSISAs per SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report is presented in a separate section as part of this annual report.
DIVIDEND & RESERVES In view of the loss incurred by the Company, the Directors do not recommend dividend on the Equity Share Capital of the Company for the Financial Year ended March 31, 2017.No amount has been transferred to reserve during the financial year under review.
SHARE CAPITAL The paid up share capital of the Company as on March 31,2017 stood at `246,228,500/-During the year under review the Company has not issued any shares nor has granted any stock option or sweat equity. None of the directors of the company hold instruments convertible into equity shares of the company.
EMPLOYEES STOCK OPTION SCHEMEParticulars of Employee Stock Options are given in “Annexure A” to this report.
SUBSIDIARY COMPANIES AND THEIR PERFORMANCE / FINANCIAL POSITIONThe Subsidiaries and Step down Subsidiaries of the Company as on March 31, 2017 are as follows:
BOARD’S REPORT
Annual Report 2016-17 47
Subsidiary Companies:Tara (Hong Kong) LimitedTara Jewels Holdings Inc
Step Down Subsidiaries:Tara China Jewelry Limited- Subsidiary of Tara (Hong Kong) LimitedFabrikant Tara International, LLC- Subsidiary of Tara Jewels Holdings Inc
In accordance with Section 129 (3) of the Companies Act, 2013 and Indian Accounting Standards, the Company has prepared the Consolidated Financial Statements of the Company and all its subsidiaries, which forms part of this Annual 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.
DIRECTORSa. The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. The Board consists of 5 members, 2 of whom are executive or whole-time directors, and 2 are independent directors and 1 is Nominee Director. The Board periodically evaluates the need for change in its composition and size.
Declaration by Independent DirectorsThe 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 Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
CHANGES IN CONSTITUTION OF BOARDThe following changes have taken place in the Board of Directors/Key Managerial Personnel of the Company during the year 2016-17 and upto the date of this Report:
SrNo
Name Designation Appointment Resignation Date Of Appointment/Resignation
1 Mr. Bimal Desai Chief Financial Officer - YES May 13, 2016
2 Mr. Vishnu Prakash Garg Chief Financial Officer and Executive Director
YES - May 23, 2016
3 Mr. Stuart Marcus Director YES - September 2, 2016
4 Mr. Jeffrey Shlakman Director YES - September 2, 2016
5 Mr. Mariano de la torree Nominee Director - YES December 9, 2016
6 Ms. Alison Lazerwitz Nominee Director YES - February 10, 2017
7. Mr. Rakesh Kalra Director - YES May 29, 2017
8 Mr. Stuart Marcus Director - YES May 29, 2017
9 Mr. Jeffrey Shlakman Director - YES May 29, 2017
10 Mr. Vishnu Prakash Garg Chief Financial Officer - YES May 29, 2017
11 Mr. Sanjay Sethi Chief Financial Officer YES - June 20, 2017
12 Mr. Nikkhil Vaidya Director - YES August 4, 2017
13 Mr. Shanti Saroop Khindra Director - YES August 10, 2017
14 Mr. Vishnu Prakash Garg Director - YES August 10, 2017
15 Mr. Ravindran M.P Executive Director - YES August 10, 2017
16 Mr. Sanjay Sethi Executive Director YES - August 10. 2017
Tara Jewels Limited48
BOARD’S REPORT
b. Board/ Committee Meetings:During the year under review, four meetings of the Board took place. Details of Board Meetings and Committee Meetings have been provided in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two Board 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. A detailed presentation is also made to apprise the Board of important developments in industry, segments, business operations, marketing, products etc.
c. Familiarization Programme with Independent Directors:Pursuant to provisions of SEBI (Listing and Disclosures Requirements) Regulations, 2015, 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:www.tarajewels.in/investorrelations/corporategovernance/policies) d. Performance Evaluation:The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).
The performance of the board was evaluated by the board after seeking inputs from all the directors and senior managerial personnel.
The performance of the Committees and effectiveness of Committee Meetings was evaluated by the board after taking into consideration the inputs provided by the Committee Members.
The Board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of Nomination and Remuneration Policy laid down by the said committee and approved by the Board.
In a separate meeting of Independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated taking into account the views of executive directors and non-executive directors. The same was considered by the board of directors at its meeting. e. Policy for Selection, Appointment and Remuneration of Directors/Key Managerial Personnel/Senior Man-agement 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 attached as Annexure “C” to the Board’s Report and also 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.
Annual Report 2016-17 49
BOARD’S REPORT
AUDIT COMMITTEEa. 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, and Regulation 18 of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 the Audit Committee consists of the following Members :
SR. No.
Name Designation
1 Mr. Nikkhil Vaidya * Chairman (Independent Director)
2 Mr. Rajiv Jain* Member (Independent Director)
3 Mr. Sanjay Sethi* Member (Executive Director)
4 Mr. Rakesh Kalra * Member (Independent Director)
5 Mr. Ravindran M.P* Member (Executive Director)
*Mr. Rajiv Jain appointed as a Member of Committee w.e.f May 29, 2017 and Mr. Rakesh Kalra resigned as a Member and also from Board w.e.f May 29, 2017.
*Mr. Nikkhil Vaidya resigned as a Member and also from Board w.e.f August 4, 2017.
*Mr. Sanjay Sethi appointed as a Member of Committee and on Board w.e.f August 10, 2017 and Mr. Ravindran M.P resigned as a Member and also from Board w.e.f August 10, 2017.
During the year 2016-17, 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/Whistle Blower Policy and oversees through the committee for expressing genuine concerns 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 complainant to have direct access to the Chairman of the Audit Committee. The Vigil Mechanism Policy of the Company is placed on Company’s website i.e.www.tarajewels.in.(weblink:www.tarajewels.in/investorrelations/corporategovernance/policies)
AUDITORSa. Statutory Auditors Pursuant to the provisions of section 139(2) of the Companies Act, 2013 no listed Company shall appoint a firm of
Auditors for more than two terms of five consecutive years. However as per third proviso to said sub-section (2) in case of an existing Company i.e. as on 1st April, 2014 if an Auditor has already completed the abovementioned term, then the said firm can continue for a period of another three years commencing from the date of the 1st Annual General Meeting of the Company held from the commencement of the Companies Act, 2013. The existing Auditors of the Company M/s. C.B. Chajjed and Co., Chartered Accountants (Firm Registration No. 101796W) shall be completing their term of extended three years at the conclusion of the ensuing Annual General Meeting and therefore the Company has to appoint another firm of Auditors at the ensuing Annual General Meeting.
On the recommendation of the Audit Committee, the Board proposes the appointment of M/s GMJ & Co, Chartered Accountants (Firm Registration No. 103429W) as the Statutory Auditors of the Company for a period of 5 years, to hold office from the conclusion of this AGM till the conclusion of the twenty-first AGM to be held in the year 2022 (subject to ratification of their appointment at every AGM) and to fix their remuneration by the members at the ensuing Annual General Meeting of the Company.
As regards Statutory Auditor’s remark for not depositing undisputed statutory dues with prescribed authorities within prescribed time, the Board is making its best efforts to be regular in depositing undisputed statutory dues.
b. Secretarial Auditor M/s Sunil Agrawal, Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for
the financial year 2016-17, as required under Section 204 of the Companies Act, 2013 and rules made thereunder.
Tara Jewels Limited50
BOARD’S REPORT
The Secretarial Audit report for Financial year 2016-17 forms part of Annual Report as Annexure D to the Board’s Report.
Qualification in Secretarial Audit Report: The Company is not regular in depositing statutory dues i.e. Provident funds, ESI, Profession Tax with concerned authority.
Board’s Explanation: The Board is making efforts to be regular in depositing the statutory dues.
c. Cost Auditor Cost Auditor is not required to be appointed by 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 FRAMEWORKThe Company has strong internal control framework which includes level controls, whistle blower policy, rigorous management reviews and MIS and strong internal audit mechanism. There are robust financial control processes with appropriate checks and balances, defined policies and procedures to ensure reasonable assurance with regard to financial information. Process controls deployed ensure adherence to policies and procedures, efficiency in operations and reduce risk of frauds.
The rigorous internal controls, management overseas results, thorough review of internal audit reports by the Audit Committee and implementation of action plans makes the internal financial controls strong in the Company.RISK MANAGEMENT
The Board of Directors has constituted Risk Management Committee constituting 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. and risk register would be prepared for identifying and mitigating risks in each identified area. 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 TRANSACTIONSAll the transactions with related parties are in the ordinary course of business and on arm’s length basis; and the details of material related party transactions or arrangement have been furnished in Form AOC-2 (Annexure E) attached to this report. All the Related Party Transactions entered during the year under review are set out under notes to accounts to the Financial Statements.
The policy on Related Party Transactions and on Materiality of Related Party Transactions as approved by the Board are uploaded on the Company’s website at Weblink: www.tarajewels.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 Whole - time Director and sitting fees and Commission paid to other Non-Executive Directors
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEESINFORMATION AS REQUIRED UNDER RULE 5(2) & 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report.
Annual Report 2016-17 51
BOARD’S REPORT1)
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Tara Jewels Limited52
BOARD’S REPORT
2) Details of Employees who were: (a) Employed throughout the Financial Year under review and in receipt of remuneration for the Financial Year in the
aggregate of not less than ̀ 1,02,00,000 per annum: Apart from information furnished above, their were no other employees in this category.
(b) Employed for the part of the Financial Year under review and in receipt of remuneration at the rate of not less than ` 8,50,000/- per month: There were no employees in this category.
3) There was no employee either throughout the financial year or part thereof who was in receipt of remuneration which in the aggregate was in excess of that drawn by the Managing Director or Whole-time Director and who held by him-self or along with his spouse or dependent children two percent or more of the Equity Shares of the Company.
4) *Ms. Divya Rajeev Sheth and Ms. Aarti Farshid Cooper are daughters of Mr. Rajeev Sheth, Managing Director of the Company
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 16th Annual General Meeting during the business hours on working days.
LOANS, GUARANTEES OR INVESTMENTSDetails 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 RESPONSIBILITYPursuant 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 has been constituted consisting of the following members:
Name Designation
Mr. Rajeev Sheth Chairman and Member
Mr. Sanjay Sethi* Member
Ms. Fern Mallis Member
Mr. Ravindran MP* Member
* Mr. Sanjay Sethi appointed as a Member of Committee w.e.f August 10, 2017 and Mr. Ravindran M.P resigned as a Member and also from Board w.e.f August 10, 2017.
Initiative Taken:The Company has not made any expenditure on CSR activities as the Company is still exploring the appropriate project in which the CSR expenses can be made so as to provide the maximum benefit to the society at large. The Company intends to contribute the money for CSR activities as soon as the appropriate project is identified.
DEPOSITS During the year 2016-17, the Company did not accept any deposit from public.
SIGNIFICANT AND MATERIAL ORDERSThere 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.
Annual Report 2016-17 53
BOARD’S REPORT
EXTRACT OF ANNUAL RETURNThe 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 F”.
DIRECTORS’ RESPONSIBILITY STATEMENTThe 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 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, 2017, 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 loss 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 GOVERNANCEAs per SEBI (Listing and Disclosures Requirements) Regulations, 2015 a separate section on Corporate Governance practices followed by the Company is provided in the Corporate Governance section of the Annual Report. The certificate from practising Company Secretary on compliance with the condition of corporate governance of Listing Regulation is given in Annexture G of this Report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARN-INGS AND OUTGO(a) CONSERVATION OF ENERGY:- The Company is very much conscious of conservation of energy and all measures are being taken to minimize the
consumption of energy wherever possible.
(b) TECHNOLOGY ABSORPOTION:- The Company has not acquired any technology during the Financial Year under review. The efforts for research and
development is an ongoing process throughout the year.
(c) FOREIGN EXCHANGE EARNING & OUTGO:- Part of Notes to Accounts of Financial Statement.
Tara Jewels Limited54
BOARD’S REPORT
MATERIAL CHANGES AND COMMITMENT IF ANY EFFECTING THE FINANCIAL POSITION OF COMPANY WHICH HAVE OCCURRED BETWEEN THE FINANCIAL YEAR END OF THE COMPA-NY TO WHICH FINANCIAL RESULTS RELATE
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.
CHANGES IN NATURE OF BUSINESS AND REVISION IN THE BOARD’S REPORTThere are no changes in nature of business and also revision in the Board’s Report during the year.
HUMAN RESOURCEYour 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 programmes are conducted to enhance employee skills, motivation as also to foster team spirit. Company also conducts in house training programmes to 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 HARASSMENTThe 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 2016-2017 no complaints were received regarding sexual harassment.
APPRECIATIONYour 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 at all levels 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
Sd/- RAJEEV SHETHPlace : Mumbai Chairman and Managing Director Date : August 10, 2017 (DIN: 00266460)
Annual Report 2016-17 55
BOARD’S REPORT
ANNEXTURE - A
(a) Employee Stock Option Plan The Employee Stock Option Plan (ESOP) is designed to provide incentives to employees above the designation of managers to deliver long term returns. Participation in the plan is at the board's discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. Once vested, the options remain exercisable for a period of 4 years. When exercisable, each option is convertible into one equity share of ` 10 each. The exercise price of the share options is ` 230. Movement during the period The number and weighted average exercise prices (WAEP) of the options and movement during the period is as follows:
Year ended March 31, 2017 Year ended March 31, 2016
Numer of options
WAEP Numer of options
WAEP
Opening balance 111,678 230 111,678 230
Granted duing the period - - - -
Exercised during the period - - - -
Forfeited /lapsed during the period (5,395) - - -
Expired during the period - - - -
Closing balance 106,283 230 111,678 230
Vested and exercisable 63,770 33,503
Share options outstanding at the end of the period have the following expiry date and exercise prices
Amount in `
Particluars Grant date Expiry date Exercise price (`)
Share options as at March 31,
2017
Share options as at March 31,
2016
Share options as at April 1,
2015
ESOP 2013 - Grant C
25-Jul-13 25-Jul-17 230 106,283 111,678 111,678
Total 106,283 111,678 111,678
Weighted average remaining contractual life of options outstanding at the end of period
0.32 Years 1.32 Years 2.32 Years
(b) Expense arising from share based payment transactionsTotal expenses arising from share based payment transactions recognised in profit or loss as part of employee benefit expense were as follows:
Amount in `
Year ended March 31, 2017
Year ended March 31, 2016
Employee stock option 447,460 895,107
Total employee share-based payment expense 447,460 895,107
Tara Jewels Limited56
BOARD’S REPORT
ANNEXTURE - B 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 Holdings, Inc. *
Tara (Hong Kong) Limited
Tara China 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 (including foreign currency translation reserve)
188,163,200 408,879,846 (60,916)
7. Total assets 2,407,254,658 2,533,203,903 10,411,294
8. Total Liabilities 2,105,791,958 2,123,859,940 6,338,175
9. Investments - 4,135,007 -
10. Turnover 4,956,962,113 8,485,767,683 4,482,216
11. Profit before taxation 31,770,014 66,879,406 913,763
12. Provision for taxation 15,486,049 8,604,226 -
13. Profit after taxation 16,283,965 58,275,180 913,763
14. Other Comprehensive Income (7,111,909) (9,971,701) (251,796)
15. Total Comprehensive Income 9,172,056 48,303,479 661,967
16. Proposed Dividend - - -
17. % 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 = `64.84
Part “B”: Associates and Joint VenturesStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures is not applicable to the company since, there are no associates or joint ventures of the Company.
As Per Our Attached Report of Even DateFor C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : May 29, 2017
Annual Report 2016-17 57
BOARD’S REPORT
ANNEXTURE - C NOMINATION AND REMUNERATION POLICY
Introduction:In pursuance of the Company’s policy to consider human resources as its invaluable assets, to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP) and employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 and the listing agreement as amended from time to time this policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Committee and approved by the Board of Directors.
Objective and purpose of the Policy:
The objective and purpose of this policy are:
• To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.
• To determine remuneration based on the Company’s size and financial position and trends and practices on remuneration prevailing in peer companies, in the media industry.
• To carry out evaluation of the performance of Directors, as well as Key Managerial and Senior Management Personnel.
• To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company’s operations.
• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. In the context of the aforesaid criteria the following policy has been formulated by the Nomination and Remuneration Committee and adopted by the Board of Directors at its meeting held on February 10, 2015.
Effective Date:This policy shall be effective from 1st April, 2014.
Constitution of the Nomination and Remuneration Committee:The Board has changed the nomenclature of Remuneration Committee by renaming it as Nomination and Remuneration Committee on Board Meeting held on May 28, 2014.
The Board has the power to reconstitute the Committee consistent with the Company’s policy and applicable statutory requirement from time to time.
Definitions:
• Board means Board of Directors of the Company.
• Directors means Directors of the Company.
• Committee means Nomination and Remuneration Committee of the Company as constituted or reconstituted by the Board.
• Company means Tara Jewels Limited.
• Independent Director means a director referred to in Section 149 (6) of the Companies Act, 2013.
• Key Managerial Personnel (KMP) means-
(i) Executive Chairman and/or Managing\Director;
(ii) Whole-time Director;
(iii) Chief Financial Officer;
(iv) Company Secretary;
(v) Such other officer as may be prescribed under the applicable statutory provisions / regulations.
Tara Jewels Limited58
BOARD’S REPORT
• Senior Management means personnel of the Company occupying the position of Chief Executive Officer (CEO) of any unit / division or Vice President including Vice President of any unit / division of the Company. Unless the context otherwise requires, words and expressions used in this policy and not defined herein but defined in the Companies Act, 2013 as may be amended from time to time shall have them earning respectively assigned to them therein.
Applicability:
The Policy is applicable to
• Directors (Executive and Non-Executive)
• Key Managerial Personnel
• Senior Management Personnel
General:
• This Policy is divided in three parts: Part – A covers the matters to be dealt with and recommended by the Committee to the Board, Part – B covers the appointment and nomination and Part–C covers remuneration and perquisites etc.
• The key features of this Company’s policy shall be included in the Board’s Report.
PART – AMATTERS TO BE DEALT WITH, PERUSED AND RECOMMENDED TO THE BOARD BY THE NOMINATION AND REMUNERA-TION COMMITTEE:
The Committee shall:
• Formulate the criteria for determining qualifications, positive attributes and independence of a director.
• Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy.
• Recommend to the Board, appointment and removal of Director, KMP and Senior Management Personnel.
PART–BPOLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR MANAGEMENT
• Appointment criteria and qualifications:
1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend to the Board his/ her appointment.
2. A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient/satisfactory for the concerned position.
3. The Company shall not appoint or continue the employment of any person as Whole time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.
• Term/Tenure:
1. Managing Director/Whole-time Director:
- The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive Director for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.
2. Independent Director:
- An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.
Annual Report 2016-17 59
BOARD’S REPORT
- No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly. However, if a person who has already served as an Independent Director for 5 years or more in the Company as on 1st October, 2014 or such other date as may be determined by the Committee as per regulatory requirement, he / she shall be eligible for appointment for one more term of 5 years only.
- At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company.
• Evaluation: The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel at
regular interval (yearly).Criteria for evaluation of Board and Committee as a whole is attached on last page of policy. Performance evaluation will be done by grading the performance as Poor, Good, Excellent or NA (No Opportunity to Observe).
• Removal: Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other
applicable Act, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations.
• Retirement: The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Companies Act,
2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.
Board Diversity:The Board of the Company may consciously be drawn in a manner that at least one director from each of the following field is on the Board of the Company.Human Resource, Banking and finance,Legal and general administration,
Any other field as may be decided by the Nomination and Remuneration Committee of the Company.
PART–CPOLICY RELATING TO THE REMUNERATION FOR THE WHOLE-TIME DIRECTOR, KMP AND SENIOR MANAGEMENT PER-SONNEL
• General:
1. The remuneration / compensation / commission etc. to the Whole-time Director, KMP and Senior Management Personnel will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.
2. The remuneration and commission to be paid to the Whole-time Director shall be in accordance with the percentage / slabs / conditions laid down in the Articles of Association of the Company and as per the provisions of the Companies Act, 2013, and the rules made thereunder.
3. Increments to the existing remuneration / compensation structure may be recommended by the Committee to the Board which should be within the slabs approved by the Shareholders in the case of Whole-time Director.
4. Where any insurance is taken by the Company on behalf of its Whole-time Director, Chief Executive Officer, Chief Financial Officer, the Company Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.
Tara Jewels Limited60
BOARD’S REPORT
• Remuneration to Whole-time / Executive / Managing Director, KMP and Senior Management Personnel:
1. Fixed pay: The Whole-time Director / KMP and Senior Management Personnel shall be eligible for a monthly remuneration
as may be approved by the Board on the recommendation of the Committee. The breakup of the pay scale and quantum of perquisites including, employer’s contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required.
2. Minimum Remuneration: If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration
to its Whole-time Director/Managing Director in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions, with the previous approval of the Central Government.
3. Provisions for excess remuneration: If any Whole-time Director/Managing Director draws or receives, directly or indirectly by way of remuneration
any such sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction of the Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government.
• Remuneration to Non-Executive/Independent Director:
1. Remuneration/Commission: The remuneration / commission shall be fixed as per the slabs and conditions mentioned in the Articles of Association
of the Company and the Companies Act, 2013 and the rules made thereunder.
2. Sitting Fees: The Non- Executive / Independent Director may receive remuneration by way of fees for attending meetings of
Board or Committee thereof. Provided that the amount of such fees shall not exceed ` One lakh per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time.
3. Commission: Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding
1% of the profits of the Company computed as per the applicable provisions of the Companies Act,2013.
4. Stock Options: An Independent Director shall not be entitled to any stock option of the Company.
AMENDMENT The Company reserves its right to amend or modify this Policy in whole or in part, at any time without assigning any reason whatsoever. However, no such amendment or modification will be binding unless the same is dully approved and notified by the Committee and Board of Directors of the Company.
Annual Report 2016-17 61
BOARD’S REPORT
ANNEXTURE - D
To ,The Members,Tara Jewels LimitedPlot No. 29(P) & 30(P)Sub- Plot- ‘A’, SEEPZ (SEZ),Andheri (E)Mumbai- 400096
Our report of even date is to be read along with this letter.
1. Maintenance of Secretarial Records is the responsibility of the management of the company. Our responsibility is to express an opinion on these secretarial records based on our audit.
2. I have followed the audit practices and processes as were appropriate to obtained reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records, we believe that the processes and practices, we followed provide are reasonable basis for our opinion.
3. I have not verified the correctness and appropriateness of financial records and books of accounts of the company. I relied on the statutory report provided by the Statutory Auditor as well as Internal Auditor of the company for the financial year ending March 31, 2017
4. Wherever required I have obtained the management representation about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provision and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.
6. The secretarial audit reports neither an assurance as to the future liability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.
For SUNIL AGARWAL & CO.Company Secretaries
Place: MUMBAIDate: 29/05/2017
Sd/- SUNIL AGARWAL
(Proprietor) FCS No. 8706 C.P. No. 3286
Tara Jewels Limited62
BOARD’S REPORT
Form No. MR-3
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2017[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and
Remuneration Personnel) Rules, 2014]
To, The Members,Tara Jewels LimitedPlot No. 29(P) & 30(P),Sub- Plot- ‘A’, SEEPZ (SEZ),Andheri (E),Mumbai- 400096.
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 31st March, 2017 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 have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2017 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made there under;
(ii) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the rules made there under as amended from time to time.
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct Investment and Overseas Direct Investment (There were no instances of Foreign Direct Investment and Overseas Direct Investments during the year. However, the company has complied with the requirements of filing required forms with Reserve Bank of India for providing Bank Guarantee to the Foreign Subsidiaries, and there were no External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) as amended from time to time:
(a) The Securities and Exchange Board of India (Substantial acquisition of Shares and Takeovers) Regulations, 2015 as amended from time to time;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and SEBI (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure (Requirements) Regulations, 2009 as amended as Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time to time;
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 as amended as Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable, as the company has not issued any Debt instruments;
Annual Report 2016-17 63
BOARD’S REPORT
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 and as amended as Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 as amended as Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable, as the company has not applied for Delisting of shares from any stock exchanges and;
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 as amended from time to time are not applicable, as the company has not bought back any securities during the year under audit.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India;
(ii). The Listing Agreements entered into by the Company with:
(a.) Bombay Stock Exchange Stock Exchange Limited
(b.) National Stock Exchange of India Limited During the period under review the Company has complied with the provisions of the Acts, Rules, Regulations, Guidelines
and Standards as mentioned above.
I further report that,
Based on the information provided by the company, its officers and authorized representative during the conduct of audit, and also on the review of compliances report 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 process and control mechanism exists in the company to monitor and ensure compliance with applicable general laws, rules, regulations and guidelines detailed as under:
LABOUR LAWS
(a) Factories Act, 1948
(b) Payment of Gratuity Act 1972
(c) Payment of Wages Act, 1936
(d) Minimum Wages Act, 1947
(e) Employee’s Provident Funds & Miscellaneous Provisions Act, 1952 and Rules made there under
(f) Payment of Bonus Act, 1965
(g) Employee’s State Insurance Act, 1948
(h) Contract labour ( Regulations & Abolition) Act, 1970
(i) The Equal Remuneration Act, 1976
(j) The Maternity Benefits Act, 1961
(k) Industrial disputes Act, 1947
(l) The Bombay Shops & Establishment Act, 1948
(m) Customs Act 1952
(n) The Maharashtra Value Added Tax Act, 2002
(o) The Central Sales Tax Act, 1956
(p) Provisions of Finance Act, 2015 read with Service Tax Rules, 1994 and CENVAT Credit Rules, 2004
(q) The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
Tara Jewels Limited64
BOARD’S REPORT
ENVIRONMENTAL LAWS
(a) Air (Prevention & Control of Pollution) Act, 1981
(b) Water (Prevention & Control of Pollution) Act, 1974
(c) Hazardous Waste (Management & Handling) Rules, 1989
(d) Environment (Protection) Act, 1986
SEEPZ (SEZ) RELATED COMPLAINES The Company has complied with the requirements of the applicable Laws and Rules and Guidelines as required for
establishment of the manufacturing units in SEZ .
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 is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were
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 are captured and recorded as part of the minutes.
I further report that, during the audit period I observed that the company is not regular in depositing statutory dues i.e provident Funds, ESI, Profession Tax with the concerned Authority.
For SUNIL AGARWAL & CO. Company Secretaries
Sd/-
SUNIL AGARWAL (Proprietor)Place: MUMBAI FCS No. 8706Date: 29/05/2017 C.P. No. 3286
Annual Report 2016-17 65
BOARD’S REPORT
ANNEXTURE - E
FORM NO. 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, 2017, which were not at arm’s length basis.
2 The details of related party transactions including material related party transactions are as follows:
SR. No.
Name of the releated Party and nature of relationship
Nature of contracts/arrangements/transactions
Duration of the contracts/arrangements/transactions
Salient terms of the contracts or the arrangements or transactions including the value
Date of approval by the Audit Committee/Board
Amount paid as advances
1 Fabrikant Tara International LLC.U.S.A (Wholly owned subsidiary of Tara Jewels Holding Inc., a wholly owned subsidiary)
Sale of Goods Ongoing transactional net margin method `1,649,874,842/-
approval obtained on quarterly basis
Nil
2 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)
Sale of Goods Ongoing transactional net margin method ` 3,145,372,848/-
approval obtained on quarterly basis
Nil
3 Fabrikant Tara International LLC.U.S.A (Wholly owned subsidiary of Tara Jewels Holding Inc., a wholly owned subsidiary)
Purchase of Goods
Ongoing transactional net margin method ` 956,514,721/-
approval obtained on quarterly basis
Nil
4 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)
Purchase of Goods
Ongoing transactional net margin method ` 2,235,421,221/-
approval obtained on quarterly basis
Nil
5 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)
Labour Charges Paid
Ongoing transactional net margin method ` 154,524/-
approval obtained on quarterly basis
Nil
6 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)
Purchase of Fixed Assets
Ongoing transactional net margin method ` 594,510/-
approval obtained on quarterly basis
Nil
7 Fabrikant Tara International LLC.U.S.A (Wholly owned subsidiary of Tara Jewels Holding Inc., a wholly owned subsidiary)
Labour Charges Received
Ongoing transactional net margin method ` 4,694,481/-
approval obtained on quarterly basis
Nil
8 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)
Labour Charges Received
Ongoing transactional net margin method ` 3,358/-
approval obtained on quarterly basis
Nil
Tara Jewels Limited66
BOARD’S REPORT
ANNEXTURE - F
FORM NO. MGT 9
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration ) Rules, 2014.
EXTRACT OF ANNUAL RETURN AS ON FINANCIAL YEAR ENDED ON MARCH 31, 2017 I REGISTRATION & OTHER DETAILS:
i CIN L52393MH2001PLC131252
ii Registration Date #March 16, 2001
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 101, 247 Park, L.B.S Marg
Town / City : Vikroli (East), Mumbai- 400083
State : Maharashtra
Pin Code: 400078
Telephone : 022-49286000
Fax Number : 022-49186060
Email Address : [email protected]
Annual Report 2016-17 67
BOARD’S REPORT
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. No.
Name and Description of main products / services
NIC Code of the Product / service % to total turnover of the company
1 Jewellary 321 100%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -
S. No.
NAME AND ADDRESS OF THE COMPANY
CIN/GLN HOLDING/ SUBSIDIARY /ASSOCIATE
% of shares held Applicable Section
1 Tara Jewels Holdings Inc N.A Subsidiary 100% 2(87)
2 Fabrikant Tara International LLC *
N.A Subsidiary 2(87)
3 Tara Hong Kong Limited N.A Subsidiary 100% 2(87)
4 Tara China Jewelry Limited* N.A Subsidiary 2(87)
* Both the Companies are Step Down Subsidiaries of our Wholly Owned Subsidiary
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i. Category-wise Share Holding
Sr No
Category ofShareholders
Shareholding at the beginning of the year - 2016
Shareholding at the end of the year - 2017
% Changeduring
the yearDemat Physical Total % of Total
Shares
Demat Physical Total % of Total
Shares
(A) Shareholding of Promoter and Promoter Group
[1] Indian
(a) Individuals / Hindu Undivided Family
14766398 0 14766398 '59.9703 14746398 0 14746398 '59.8891 '-0.0812
(b) Central Government / State Government(s)
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(c) Financial Institutions / Banks
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(d) Any Other (Specify)
Bodies Corporate 33600 0 33600 '0.1365 33600 0 33600 '0.1365 '0.0000
Sub Total (A)(1) 14799998 0 14799998 '60.1068 14779998 0 14779998 '60.0255 '-0.0813
[2] Foreign
(a) Individuals (Non-Resident Individuals / Foreign Individuals)
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(b) Government 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(c) Institutions 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(d) Foreign Portfolio Investor 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(e) Any Other (Specify)
Sub Total (A)(2) 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
Total Shareholding of Promoter and Promoter Group(A)=(A)(1)+(A)(2)
14799998 0 14799998 '60.1068 14779998 0 14779998 '60.0255 '-0.0813
Tara Jewels Limited68
BOARD’S REPORT
Sr No
Category ofShareholders
Shareholding at the beginning of the year - 2016
Shareholding at the end of the year - 2017
% Changeduring
the yearDemat Physical Total % of Total
Shares
Demat Physical Total % of Total
Shares
(B) Public Shareholding
[1] Institutions
(a) Mutual Funds / UTI 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(b) Venture Capital Funds 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(c) Alternate Investment Funds
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(d) Foreign Venture Capital Investors
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(e) Foreign Portfolio Investor 225080 0 225080 '0.9141 0 0 0 '0.0000 '-0.9141
(f) Financial Institutions / Banks
0 0 0 '0.0000 31979 0 31979 '0.1299 '0.1299
(g) Insurance Companies 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(h) Provident Funds/ Pension Funds
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(i) Any Other (Specify)
Sub Total (B)(1) 225080 0 225080 '0.9141 31979 0 31979 '0.1299 '-0.7842
[2] Central Government/ State Government(s)/ President of India
Sub Total (B)(2) 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
[3] Non-Institutions
(a) Individuals
(i) Individual shareholders holding nominal share capital upto ` 1 lakh.
3405434 3 3405437 '13.8304 4466235 253 4466488 '18.1396 '4.3092
(ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh
2243431 196521 2439952 '9.9093 1731296 196521 1927817 '7.8294 '-2.0799
(b) NBFCs registered with RBI 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(c) Employee Trusts 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
(d) Overseas Depositories(holding DRs) (balancing figure)
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
Annual Report 2016-17 69
BOARD’S REPORT
Sr No
Category ofShareholders
Shareholding at the beginning of the year - 2016
Shareholding at the end of the year - 2017
% Changeduring
the yearDemat Physical Total % of Total
Shares
Demat Physical Total % of Total
Shares
(e) Any Other (Specify)
Hindu Undivided Family 274286 0 274286 '1.1139 250180 0 250180 '1.0160 '-0.0979
Foreign Companies 1800000 0 1800000 '7.3103 1800000 0 1800000 '7.3103 '0.0000
Non Resident Indians (Non Repat)
35548 0 35548 '0.1444 54219 0 54219 '0.2202 '0.0758
Other Directors 3300 0 3300 '0.0134 3300 0 3300 '0.0134 '0.0000
Non Resident Indians (Repat)
251610 0 251610 '1.0219 359685 0 359685 '1.4608 '0.4389
Clearing Member 282351 0 282351 '1.1467 206317 0 206317 '0.8379 '-0.3088
Bodies Corporate 1105288 0 1105288 '4.4889 742867 0 742867 '3.0170 '-1.4719
Sub Total (B)(3) 9401248 196524 9597772 '38.9791 9614099 196774 9810873 '39.8446 '0.8655
Total Public Shareholding(B)=(B)(1)+(B)(2)+(B)(3)
9626328 196524 9822852 '39.8932 9646078 196774 9842852 '39.9745 '0.0813
Total (A)+(B) 24426326 196524 24622850 '100.0000 24426076 196774 24622850 '100.0000 '0.0000
(C) Non Promoter - Non Public
[1] Custodian/DR Holder 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
[2] Employee Benefit Trust (under SEBI (Share based Employee Benefit) Regulations, 2014)
0 0 0 '0.0000 0 0 0 '0.0000 '0.0000
Total (A)+(B)+(C) 24426326 196524 24622850 '100.0000 24426076 196774 24622850 '100.0000 '0.0000
ii Shareholding of Promoters
Sr No
Shareholder's Name Shareholding at thebeginning of the year - 2016
Shareholding at theend of the year - 2017
% change inshareholding
during the yearNo. of
SharesHeld
% of total
Shares of the
company
%of SharesPledged
/encumbered to
total shares
No. ofShares
Held
% of total
Shares of the
company
%of SharesPledged/
encumbered to
total shares
1 RAJEEV SHETH 14522893 '58.9814 '13.5450 14502893 '58.9001 '48.5577 '-0.0813
2 AARTI SHETH 114440 '0.4648 '0.0000 114440 '0.4648 '0.0000 '0.0000
3 DIVYA SHETH 114440 '0.4648 '0.0000 114440 '0.4648 '0.0000 '0.0000
4 DIVYA JEWELS INTERNATIONAL PVT LTD
33600 '0.1365 '0.0000 33600 '0.1365 '0.0000 '0.0000
5 PURNIMA RAJEEV SHETH 14625 '0.0594 '0.0000 14625 '0.0594 '0.0000 '0.0000
Total 14799998 '60.1068 '48.5577 14779998 '60.0255 '48.5577 '-0.0813
Tara Jewels Limited70
BOARD’S REPORT
iii Change in Promoters’ Shareholding (please specify , if there is no change)
Sr No.
Name & Type of Transaction
Shareholding at the beginning of
the year - 2016
Transactions during the year
Cumulative Shareholding at the end of
the year - 2017
No. of Shares
Held
% of Total Shares of The
Company
Date of Transaction
No. of Shares
No of Shares
Held
% of Total Shares of The
Company
1 RAJEEV SHETH* 14522893 58.9814 14522893 58.9814
Transfer 10 Mar 2017 (8575175) 5947718 24.1553
Transfer 24 Mar 2017 8555175 14502893 58.9001
AT THE END OF THE YEAR 14502893 58.9001
2 AARTI SHETH
114440 0.4648 114440 0.4648
AT THE END OF THE YEAR 114440 0.4648
3 DIVYA SHETH
114440 0.4648 114440 0.4648
AT THE END OF THE YEAR 114440 0.4648
4 DIVYA JEWELS INTERNATIONAL PVT LTD
33600 0.1365 33600 0.1365
AT THE END OF THE YEAR 33600 0.1365
5 PURNIMA RAJEEV SHETH
14625 0.0594 14625 0.0594
AT THE END OF THE YEAR 14625 0.0594
* Change in shareholding of Mr. Rajeev Sheth is due to sale of 20,000 share by Punjab National Bank.
# In case of other Promoter’s Holdings no changes during the year.
iv Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)
Sr No.
Name & Type of Transaction
Shareholding at the beginning of
the year - 2016
Transactions during the year
Cumulative Shareholding at the end of
the year - 2017
No. of Shares
Held
% of Total Shares of The
Company
Date of Transaction
No. of Shares
No of Shares
Held
% of Total Shares of The
Company
1 CRYSTALON FINANZ AG 1800000 7.3103 1800000 7.3103
AT THE END OF THE YEAR 1800000 7.3103
2 SUBRAMANIAN P 158218 0.6426 158218 0.6426
Transfer 14 Oct 2016 228635 386853 1.5711
AT THE END OF THE YEAR 386853 1.5711
3 M R RAJARAM 284902 1.1571 284902 1.1571
Transfer 16 Sep 2016 (10000) 274902 1.1165
Annual Report 2016-17 71
BOARD’S REPORT
Sr No.
Name & Type of Transaction
Shareholding at the beginning of
the year - 2016
Transactions during the year
Cumulative Shareholding at the end of
the year - 2017
No. of Shares
Held
% of Total Shares of The
Company
Date of Transaction
No. of Shares
No of Shares
Held
% of Total Shares of The
Company
Transfer 14 Oct 2016 (40000) 234902 0.9540
Transfer 04 Nov 2016 (5000) 229902 0.9337
Transfer 27 Jan 2017 (5000) 224902 0.9134
Transfer 10 Feb 2017 (1500) 223402 0.9073
Transfer 17 Feb 2017 (5000) 218402 0.8870
AT THE END OF THE YEAR 218402 0.8870
4 FABRIKANT H K TRADING LIMITED
196521 0.7981 196521 0.7981
AT THE END OF THE YEAR 196521 0.7981
5 ANUJ ANANTRAI SHETH 185000 0.7513 185000 0.7513
AT THE END OF THE YEAR 185000 0.7513
6 KIFS INTERNATIONAL LLP 0 0.0000 0 0.0000
Transfer 15 Jul 2016 115000 115000 0.4670
AT THE END OF THE YEAR 115000 0.4670
7 AMRIT PETROLEUMS PVT LIMITED
69309 0.2815 69309 0.2815
AT THE END OF THE YEAR 69309 0.2815
8 JAGDISH AMRITLAL SHAH 68706 0.2790 68706 0.2790
AT THE END OF THE YEAR 68706 0.2790
9 JIGNESH MADHUKANT MEHTA
65000 0.2640 65000 0.2640
Transfer 31 Mar 2017 (500) 64500 0.2620
AT THE END OF THE YEAR 64500 0.2620
10 NARENDRA SINGHANIA 55555 0.2256 55555 0.2256
AT THE END OF THE YEAR 55555 0.2256
Tara Jewels Limited72
BOARD’S REPORT
v Shareholding of Directors and Key Managerial Personnel
Shareholding of each Directors and each Key Managerial Shareholding at the beginning of
the year
Cumulative Shareholding during the year
No. of shares % of total shares of the
company
No. of shares % of total shares of the
company
1. Mr. Rajeev Sheth, Chairman and Managing Director* 14522893 #58.98%
Transfer -8575175 #34.83% 5947718 #24.1553%
Transfer 8575175 #34.83% 14502893 #58.90%
2. Mr. Vishnu Prakash Garg, Executive Director & CFO # NIL NIL
3. Mr. Ravindran M.P, Executive Director # NIL NIL
4. Mr. Nikkhil Vaidya, Independent Director # NIL NIL
5. Mr. Rajiv Jain, Independent Director 300 300 #0.001%
6. Mr. Rakesh Kalra, Independent Director # NIL NIL
7. Mr. Shanti Saroop Khindria, Independent Director # NIL NIL
8. Ms. Fern Mallis, Independent Director NIL NIL
9. Mr. Mariano De La Torrre, Nominee Director # NIL NIL
10. Ms. Alison Lazerwitz, Nominee Director & NIL NIL
11. Mr. Stuart Marcus, Director# NIL NIL
12. Mr. Jeffrey Shlakman, Director # NIL NIL
13. Ms. Nivedita Nayak, Company Secretary NIL NIL
14. Mr. Sanjay Sethi, Executive Director & CFO & NIL NIL
*The above changes in Mr. Rajeev Sheth Shares are on account of Sale of 20,000 Shares by Punjab National Bank
# Mr. Rakesh Kalra, Mr. Stuart Marcus, Mr. Jeffrey Shalkman Resigned w.e.f May 29, 2017, Mr. Mariano de la torree resigned w.e.f December 9, 2016, Mr. Ravindran M.P, Mr. Vishnu Prakash Garg, Mr. Shanti Saroop Khindria resigned w.e.f August 10, 2017, Mr. Nikkhil Vaidya resigned w.e.f August 4, 2017.
& Ms. Alison Lazerwitz appointed w.e.f February 10, 2017
# Mr. Vishnu Prakash Garg resigned as CFO w.e.f May 29, 2017
& Mr. Sanjay Sethi appointed as CFO w.e.f June 20, 2017 and as a Executive Director w.e.f August 10, 2017
Annual Report 2016-17 73
BOARD’S REPORT
V INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment(Amount in `)
Secured Loans including Deposits
Unsecured Loans Deposits Total Indebtness
Indebtedness at the beginning of the financial year
i) Principal Amount 5,755,824,696 - - 5,755,824,696
ii) Interest due but not paid
- - - -
iii) Interest accrued but not due
194,614 - - 194,614
Total (i+ii+iii) 5,756,019,310 - - 5,756,019,310
Change in Indebtedness during the financial year
• Addition (185,407,473) 8,064,008 (177,343,465)
• Reduction - - - -
Net Change (185,407,473) 8,064,008 - (177,343,465)
Indebtedness at the end of the financial year
i) Principal Amount 5,561,401,873 8,064,008 - 5,569,465,881
ii) Interest due but not paid
6,960,484 - - 6,960,484
iii) Interest accrued but not due
2,249,480 - - 2,249,480
Total (i+ii+iii) 5,570,611,837 8,064,008 - 5,578,675,845
Tara Jewels Limited74
BOARD’S REPORT
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:
Sr. No.
Particulars of Remuneration Name of MD/WTD/ Manager Total Amount in `
Mr Rajeev V. Sheth
Mr. Vishnu Prakash Garg
Mr Ravindran M. P.
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
12,000,000 4,430,543 2,947,049 19,377,592
(b) Value of perquisites 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 - - - -
- as % of profit - - - -
- others, specify… - - - -
5 Others, please specify - - - -
Total (A) 12,000,000 4,430,543 2,947,049 19,377,592
Ceiling as per the Act (being 10% of the net profits
of the company calculated as
per section 198 of the
Companies Act, 2013.
Annual Report 2016-17 75
BOARD’S REPORT
B. Remuneration to other directors:
Sr. No.
Particulars of Remuneration
Name of Directors Total Amount
in `Ms. Fern Mallis Mr. Nikhil
VaidyaMr. Rakesh
KalraMr. Shanti
Saroop Khindria
Mr. Rajiv Jain
1 Independent Directors
• Fee for attending board / committee meetings
60,000 160,000 160,000 40,000 80,000 500,000
• Commission - - - - - -
• Others, please specify - - - - - -
Total (1) - - - - - -
2 Other Non-Executive Directors
• Fee for attending board / committee meetings
- - - - - -
• Commission - - - - - -
• Others, please specify - - - - - -
Total (2) - - - - - -
Total (B)=(1+2) - - -
Total Managerial Remuneration
60,000.00 160,000.00 160,000.00 40,000.00 80,000.00 500,000.00
Overall Ceiling as per the Act
(being 1% of the net profitsbof the company
calculated as per section 198 of the
Companies Act, 2013)
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C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD
Sr. No.
Particulars of Remuneration CFO Company Secretary
Total Amount
in `
Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
652,759 629,039 1,281,798
(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 652,759 629,039 1,281,798
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
TYPE Section of the Companies Act
Brief Description Details of Penalty/Punishment/Compoundingfees imposed
Authority (RD/NCLT/COURT)
A. COMPANY
Penalty
Punishment NONE
Compounding
B. DIRECTORS
Penalty
Punishment NONE
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment NONE
Compounding
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ANNEXTURE G
PRACTISING COMPANY SECRETARY’S CERTIFICATE ON CORPORATE GOVERNANCE[Regulation 34(3) read with Para E of Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015]
ToThe Members of TARA JEWELS LIMITEDPlot No. 29(O) & 30(P)Sub- Plot- ‘A’, SEEPZ (SEZ),Andheri (E)Mumbai- 400096
I have examined the compliance of conditions of Corporate Governance by TARA JEWELS LIMITED (“Company”) for the year ended March 31, 2017, as stipulated in Regulation 34(3) read with Para C of Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
I have conducted my examination on the basis of the relevant records and documents maintained by the Company and furnished to me for the purpose of the review and the information and explanations given to me 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 my opinion and to the best of my information and according to the explanations given to me, I certify that the Company has in all material respects complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
I 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 SUNIL AGARWAL &CO. Company Secretaries
Sd/-Date: May 29, 2017 SUNIL AGARWAL Place: Mumbai Proprietor C.P. No. 3286
Tara Jewels Limited78
The Report on Corporate Governance as prescribed by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) is given below:
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 Five Directors, and except the Chairman & Managing Director and one Whole-Time Director, all other three Directors are Non-executive. Out of the three Non-executive Directors, two are Independent Directors and one is Non Independent Director i.e Nominee Director. 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 the date of this Report, along with the other Directorships held by each of the Directors is brought out in the following tables:
Name of Director Position Relationship with other Directors
No. of otherDirectorships#
No. of other Board Committee(s) of whichhe / she is aMember*
No. of other Board Committee(s) of whichhe / she is aChairman*
Mr. Rajeev Sheth(DIN: 00266460)
Chairman & Managing Director
None 3 NIL NIL
Mr. Ravindran M.P (DIN:07188069)@
Executive Director None NIL NIL NIL
Mr. Vishnu Prakash Garg(DIN: 00024991)@
Executive Director None NIL NIL NIL
Mr. Mariano Fernando de la Torre (DIN: 07087405)@
Nominee Director None NIL NIL NIL
CORPORATE GOVERNANCE REPORT
Annual Report 2016-17 79
Name of Director Position Relationship with other Directors
No. of otherDirectorships#
No. of other Board Committee(s) of whichhe / she is aMember*
No. of other Board Committee(s) of whichhe / she is aChairman*
Mr. Rajiv Lochan Jain(DIN: 00161022)
Non-executive & Independent Director
None 2 2 NIL
Mr. Rakesh Kalra(DIN: 00780354)@
Non-executive & Independent Director
None 5 4 1
Mr. Nikkhil Vaidya(DIN: 02942549)@
Non-executive & Independent Director
None NIL 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. Jeffrey Shlakman (DIN:07545964 )@
Non-executive & Non Independent Director
None NIL NIL NIL
Mr. Stuart Marcus (DIN:07545966)@
Non-executive & Non Independent Director
None NIL NIL NIL
Ms. Alison Lazerwitz (DIN: 07706809)$
Nominee Director None NIL NIL NIL
Mr. Sanjay Sethi(DIN: 01152580) %
Executive Director None NIL NIL NIL
# Excludes Directorships in Foreign Companies and Section 8 Companies.* Includes only Audit Committee and Stakeholders’ Relationship Committee.@ Mr. Mariano de la torree resigned as a Nominee Director w.e.f December 9, 2016, Mr. Rakesh Kalra resigned as a Director w.e.f May 29, 2017, Mr. Jeffrey Shlakman resigned as a Director w.e.f May 29, 2017, Mr. Stuart Marcus resigned as a Director w.e.f May 29, 2017, Mr. Nikkhil Vaidya resigned as a Director w.e.f August 4, 2017, Mr. Vishnu Prakash Garg resigned as a Director w.e.f August 10, 2017, Mr. Shanti Saroop Khindria resigned as a Director w.e.f August 10, 2017 and Mr. Ravindran M.P resigned as a Director w.e.f August 10, 2017.$ Ms. Alison Lazerwitz appointed as a Nominee Director w.e.f February 10, 2017.% Mr. Sanjay Sethi appointed as Executive Director w.e.f August 10, 2017.
iii) Board Meetings / Annual General Meeting During the year 2016-17, the Board of Directors of your Company met 4 times on May 23, 2016, September 2,
2016, December 9, 2016 and February 10, 2017.
The previous Annual General Meeting was held on September 19, 2016. The Details regarding the attendance of Directors at the Board Meetings and the Annual General Meeting held
during 2016-17 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. Ravindran M.P 4 3 NO
Mr. Vishnu Prakash Garg 4 4 YES
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Director No. of Board Meetings Whether Last AGM Attended (Yes/No)
Held Attended
Ms. Fern Mallis 4 3 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 2 NO
Mr. Mariano De la Torree 4 1 NO
Mr. Stuart Marcus 4 2 NO
Mr. Jeffrey Shlakman 4 2 NO
Ms. Alison lazerwitz 4 1 NO
(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, 2017. 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 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 SEBI (Listing and Disclosure Requirements) Regulations, 2015 In compliance with SEBI (Listing and Disclosure Requirements) Regulations, 2015 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 Notice of annual general meeting.
C. BOARD COMMITTEES In compliance with both the mandatory and non-mandatory requirements under SEBI (Listing and Disclosure Requirements)
Regulations, 2015 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
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(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 Board of Directors has also adopted the following policies in line with the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 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
l) Documents Retention Policy
m) Policy on Material Related Party Transaction
n) Policy on disclosure of material events and information.
(i) Audit Committee The Audit Committee of the Board of Directors of your Company consists of the following Members as on March
31, 2017:
1. Mr. Nikkhil Vaidya- Chairman and Member upto August 4, 2017
2. Mr. Rakesh Kalra- Member upto May 29 , 2017
3. Mr. Rajiv Jain- Member from May 29, 2017
4. Mr. Ravindran M.P- Member upto August 10, 2017
5. Mr. Sanjay Sethi- Member from August 10, 2017
The Company Secretary of the Company acts as the Secretary of the Committee. The Company’s Audit Committee met four times during 2016-17 on May 23, 2016, September 2, 2016, December
9, 2016 and February 10, 2017.
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The following table presents the details of attendance at the Audit Committee meetings held during 2016-17:
Members No. of Meetings Held No. of Meetings Attended Category
Mr. Nikkhil Vaidya 4 4 Independent Director
Mr. Rakesh Kalra 4 4 Independent Director
Mr. Ravindran M.P 4 2 Executive Director
Mr. Nikkhil Vaidya, the Chairman of the Audit Committee was present at the Company’s Previous Annual General Meeting held on September 19, 2016.
The composition, role, terms of reference as well as powers of the Audit Committee are in accordance with the provisions of SEBI (Listing and Disclosure Requirements) Regulations, 2015 and Section 177 of the Companies Act, 2013.
The role of the audit committee shall include the following:
(1) oversight of the listed entity’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
(2) recommendation for appointment, remuneration and terms of appointment of auditors of the listed entity;
(3) approval of payment to statutory auditors for any other services rendered by the statutory auditors;
(4) reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the board for approval, with particular reference to:
(a) matters required to be included in the director’s responsibility statement to be included in the board’s report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;
(b) changes, if any, in accounting policies and practices and reasons for the same;
(c) major accounting entries involving estimates based on the exercise of judgment by management;
(d) significant adjustments made in the financial statements arising out of audit findings;
(e) compliance with listing and other legal requirements relating to financial statements;
(f) disclosure of any related party transactions;
(g) modified opinion(s) in the draft audit report;
(5) reviewing, with the management, the quarterly financial statements before submission to the Board for approval;
(6) reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter;
(7) reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;
(8) approval or any subsequent modification of transactions of the listed entity with related parties;
(9) scrutiny of inter-corporate loans and investments;
(10) valuation of undertakings or assets of the listed entity, wherever it is necessary;
(11) evaluation of internal financial controls and risk management systems;
(12) reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;
(13) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;
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(14) discussion with internal auditors of any significant findings and follow up there on;
(15) reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
(16) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
(17) to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
(18) to review the functioning of the whistle blower mechanism;
(19) approval of appointment of chief financial officer after assessing the qualifications, experience and background, etc. of the candidate;
(20) Carrying out any other function as is mentioned in the terms of reference of the audit committee.
The audit committee shall mandatorily review the following information:
(1) management discussion and analysis of financial condition and results of operations;
(2) statement of significant related party transactions (as defined by the audit committee), submitted by management;
(3) management letters / letters of internal control weaknesses issued by the statutory auditors;
(4) internal audit reports relating to internal control weaknesses; and
(5) the appointment, removal and terms of remuneration of the internal auditor shall be subject to review by the audit committee.
(6) statement of deviations:
(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) in terms of Regulation 32(1).
(b) annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice in terms of Regulation 32(7).
The Audit Committee acts as a Link between the Management, the Statutory Auditors, Internal Auditors and the Board of Directors.
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, 2017:
1. Mr. Rakesh Kalra- Chairman upto May 29, 2017
2. Mr. Nikkhil Vaidya- Chairman from May 29, 2017 to August 4, 2017
3. Mr. Rajiv Jain- Member
4. Ms. Fern Mallis- Member from May 29, 2017
The Company Secretary of the Company acts as the Secretary of the Committee.
The Company’s Nomination and Remuneration Committee met three times during the year 2016-17viz. May 23, 2016, September 2, 2016 and February 10, 2017.
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The following table presents the details of attendance at the Nomination and Remuneration Committee meetings held during 2016-17:
Members No. of Meetings Held No. of Meetings Attended Category
Mr. Nikkhil Vaidya 3 3 Independent Director
Mr. Rakesh Kalra 3 3 Independent Director
Mr. Rajiv Jain 3 3 Executive Director
The Board of Directors has on the recommendation of the Nomination and Remuneration Committee adopted the Nomination and Remuneration Policy. A copy of the same has been attached to the Directors Report as Annexture C.
Role of committee shall, inter-alia, include the following:
(1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;
(2 formulation of criteria for evaluation of performance of independent directors and the board of directors;
(3) devising a policy on diversity of board of directors;
(4) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment and removal.
(5) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.
Remuneration Policy The remuneration of Executive Director/s is decided by the Board of Directors on the recommendation of Nomination
and Remuneration Committee and 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 ` 20,000/- per
meeting to the Independent Directors for attending the meetings of the Board and Audit Committee Meetings of the Board.
Details of Remuneration for the Financial Year 2016-17
Non-Executive Independent Directors
Name of the Director Commission (`) Sitting Fees (`) No of Shares Held
Mr. Nikkhil Vaidya NIL 1,60,000 NIL
Mr. Rakesh Kalra NIL 1,60,000 NIL
Mr. Rajiv Jain NIL 80,000 300
Mr. Shanti Saroop Khindria NIL 40,000 NIL
Ms. Fern Mallis NIL 60,000 NIL
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Executive / Whole--Time Director
Name of Director Period of Appointment Remuneration Including Commission (`)
No. of Shares Held/Stock Options *
Mr. Rajeev Sheth, Chairman and Managing Director
Reappointed for 5 years w.e.f October 1, 2015
12,000,000 14,520,893
Mr. Vishnu Prakash Garg, Executive Director
Appointed w.e.f May 23, 2016 and Resigned w.e.f August 10, 2017
44,30,543 NIL
Mr. Ravindran M.P, Executive Director
5 years w.e.f May 25, 2015 Resigned w.e.f August 10, 2017
29,47,049 NIL
None of the Directors are entitled to any benefit upon termination of their association with your Company.
* There were no Stock Options granted during Financial Year 2016-2017.
(iii) Stakeholders Relationship Committee The Stakeholders Relationship Committee of the Board of Directors of your Company consists of the following
Members as on March 31, 2017:
1. Mr. Rajiv Jain- Chairman and Member
2. Mr. Ravindran M.P- Member upto August 10, , 2017
3. Mr. Nikkhil Vaidya- Member upto August 4, 2017
4. Mr. Sanjay Sethi- Member from August 10, 2017
The Company Secretary of the Company acts as the Secretary of the Committee. The Company’s Stakeholders Committee met four times during 2016-17 on May 23, 2016, September 2, 2016,
December 9, 2016 and February 10, 2017
The following table presents the details of attendance at the Stakeholders Relationship Committee meetings held during 2016-17:
Members No. of Meetings Held No. of Meetings Attended Category
Mr. Rajiv Jain 4 4 Independent Director
Mr. Ravindran M.P 4 2 Executive Director
Mr. Nikkhil Vaidya 4 3 Independent Director
The Company has received no complaint from the investors / shareholders during the financial year ended March 31, 2017 and the same has been resolved by the Company.
The terms of reference of the Stakeholders 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;
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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:
• Centralised database of all complaints
• Online movement of complaints to the concerned listed companies
• Online upload of Action Taken Reports (ATRs) by the concerned companies
• Online viewing by investors of actions taken on the complaint and its current status
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.
(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, 2017.
1. Mr. Rajeev Sheth- Chairman;
2. Mr. Ravindran M.P- Member upto August 10, 2017
3. Mr. Sanjay Sethi- Member from August 10, 2017
The Company Secretary of the Company acts as the Secretary of the Committee.
The Company’s Finance Committee met nine times during 2016-2017 on May 23, 2016, September 2, 2016, October 6, 2016, November 18, 2016, December 6, 2016, December 9, 2016, February 10, 2017, March 2, 2017 and March 3, 2017.
The following table presents the details of attendance at the Finance Committee meetings held during 2016-17:
Members No. of Meetings Held No. of Meetings Attended Category
Mr. Rajeev Sheth 9 9 Managing Director
Mr. Ravindran M.P 9 9 Executive Director
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.
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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.
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, 2017 viz.:
1. Mr. Rajeev Sheth- Chairman;
2. Mr. Ravindran M.P- Member upto August 10 , 2017
3. Mr. Sanjay Sethi- Member from August 10, 2017 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.
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The Compensation Committee of the Board of Directors of your Company consists of the following Members as on March 31, 2017 viz.:
Mr. Rajeev Sheth- Chairman
Mr. Nikkhil Vaidya- Member upto August 4, 2017
Mr. Rakesh Kalra- Member upto May 29, 2017
Mr. Pravin Patil- GM, Human Resources and Administration
Mr. Rajiv Jain- Member from May 29, 2017
Mr. Sanjay Sethi- Member from August 10, 2017
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, 2017 viz.:
1. Mr. Rajeev Sheth- Chairman
2. Mr. Ravindran M.P- Member upto August 10, 2017
3. Mr. Sanjay Sethi- Member from August 10, 2017
The Company’s Management and Administration Committee met one time during 2016-2017 on May 12, 2016.
The Company Secretary of the Company acts as the Secretary of the Committee.
The following table presents the details of attendance at the Management and Administrative Committee meetings held during 2016-17:
Members No. of Meetings Held No. of Meetings Attended Category
Mr. Rajeev Sheth 1 1 Managing Director
Mr. Ravindran M.P 1 1 Executive Director
The terms of reference of the Management and Administrative Committee 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 but not limited to body corporate, units, mutual funds, individuals, trust, etc. as may be required from time to time, within the maximum ceiling of `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;
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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, 2017:
Mr. Rajeev Sheth Chairman
Ms. Fern Mallis Member
Mr. Ravindran M.P Member upto August 10, 2017
Mr. Sanjay Sethi Member from August 10, 2017
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, 2017:
Mr. Ravindran M.P Chairman upto August 10, 2017
Mr. Nikkhil Vaidya Member upto August 4, 2017
Mr. Rakesh Kalra Member upto May 29, 2017
Mr. Rajiv Jain Member from May 29, 2017
Mr. Sanjay Sethi Chairman from August 10, 2017
The Committee Shall
• 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.
• To establish a framework for the company’s risk management process and to ensure its implementation.
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• To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.
• To assure business growth with financial stability.
No Risk Management Committee Meeting was held during the year.
Meeting of Independent Directors The brief meeting of Independent Directors of the Company was held on February 10, 2017. Since the meeting was
Video Conference and detailed discussion was held on Meeting held on May 29, 2017 where the directors were physically present 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.
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 SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. 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 judgment, 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)
Interse Relationship among Directors There are no Interse Relationship among Directors.
D. GENERAL BODY MEETINGS: 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
15th Annual General Meeting
September 19, 2016 03.00 pm Hotel Suncity Premiere, Gate 3, Plot No. A-1, off JVLR Road, SEEPZ, SEZ, Andheri (East), Mumbai- 400096.
1. Ratification of reappointment of Mr. Rajeev Sheth as Chairman and Managing Director
2. Ratification of appointment of Mr. Ravindran M.P as Executive Director
3. Appointment of Mr. Vishnu Prakash Garg as Executive Director
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Nature of Meeting
Date Time Venue Details of Special Resolution(s) passed
14th Annual General Meeting
September 29, 2015 03.00 pm Tribune-I, 6th Floor, Hotel Tunga International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093
Commission paid to Independent Directors
13th Annual General Meeting
September 18, 2014 03.00 pm Tribune-I, 6th Floor, Hotel Tunga International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093
NIL
- There was no Extraordinary General Meeting held during the year. - No Special Resolution was passed last year through postal ballot. - Special Resolution is proposed to be conducted through postal ballot in 2017- 2018.
E. SUBSIDIARY COMPANY Your Company does not have any material non-listed Indian Subsidiary Company. Your Company has unlisted subsidiary
companies in USA, Hongkong.
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 Policy for determining material subsidiaries is available on your Company’s website viz. www.tarajewels.in
F. RELATED PARTY TRANSACTIONS All the transactions with related parties including material related party transaction arrangements are in the ordinary
course of business and arm’s length basis.
The policy on Related Party Transactions and on Materiality of Related Party Transactions as approved by the Board are uploaded on the Company’s website at Weblink:www.tarajewels.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, Whole Time Director and sitting fees and Commission paid to other Non-Executive Directors.
G. DISCLOSURES (i) Materially Related Party Transactions There have been no materially significant related party transactions, pecuniary transactions or relationships between
your Company and the Directors, management, or their relatives. The other transactions with related parties are disclosed in notes to accounts of financial statement.
(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 SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 and has also complied with the non-mandatory requirements relating to having unqualified Financial Statements.
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(iv) Whistle Blower Policy The Company has adopted Whistle Blower Policy and employees are encouraged to report any contravention or
suggestion for improved working of the Company. The details of the policy is also placed on the website of the company i.e.www.tarajewels.in (weblink:www.tarajewels.in/investorsrelations/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 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
(vi) Certificate on Corporate Governance The Practicing Company Secretary’s certificate 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, 2017, 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 the Indian Accounting Standards has been followed by the Company.
(xi) Commodity Price Risk or Foreign Exchange Risk and Hedging Activities: The above details have been furnished in notes to accounts of the Financials.
(xii) Proceeds from public issues, rights issues, preferential issues During the year, Company did not raise any funds by way of public issues, rights issues, preferential issues etc.
(xiii) Compliance of Non- Mandatory Requirements
1. The Company has only Chairman and Managing Directors and there is no Chief Executive Officer in the Company.
2. The Internal Auditors report to the Audit Committee
3. The Statutory Financial Statements of Company are unqualified.
(xiv) The Company has complied with corporate governance requirements specified in regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46.
H. 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 newspapers in which it is published in are:
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Financial Express- All Editions Navshakti/Mumbai Lakshwadeep- Marathi
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.
I. GENERAL SHAREHOLDERS’ INFORMATION
1. Annual General Meeting
Date, Time and Venue September 28, 2017 at 3.00 p.m at Hotel Suncity Residency, Emerald - 1, Basement, 16th Road, Marol MIDC, Andheri (East),Mumbai-400093.
2. Financial Year
Quarterly results will be declared as per the following tentative schedule:• Financial reporting for the quarter ending
June 30, 2017• Financial reporting for the half year ending
September 30, 2017• Financial reporting for the quarter ending
December 31, 2017• Financial reporting for the year ending March
31, 2018
First Fortnight of August, 2017
First Fortnight of November, 2017
First Fortnight of February, 2018
Last Fortnight of May, 2018
3. Dates of Book Closure Friday September 22, 2017 to Thursday September 28, 2017 (both days inclusive)
4. Listing on Stock Exchanges Your Company’s shares are listed on:
• BSE Ltd. (BSE) Floor 27, P. J. Towers, Dalal Street, Mumbai – 400 001
• 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 2017-18 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 101, 247 Park, L.B.S Marg,Vikroli (East), Mumbai- 400083
Tel:+91-22-49286000Fax:+91-22-49186060E-mail: [email protected]
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7. Share Transfer System The Company has entrusted the administrative work of share transfers, transmissions, issuance of duplicate certificates, sub-division, demat and re-mat requisite etc., and all tasks related to shareholdings to Link Intime India Private Limited, the Registrars and Share Transfer Agents. If the relevant documents are complete and in order in all respects, the transfer of shares is effected within 15 days and certificates are dispatched to the transferees within 15 days from the date of receipt. The requests for dematerialization of shares are processed by the Registrar and Share Transfer Agents and if all the documents are found to be in order, the same are approved by them within a period of 15 days.
8. Address for Correspondence The Company SecretaryTARA JEWELS LIMITED Plot 29(P) & 30(P), Sub Plot ‘A’, SEEPZ, SEZ, Andheri East, Mumbai 400096 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, 2017.
10. Investor Complaints to be addressed to Registrars and Transfer Agents or the Company Secretary, at the addresses mentioned earlier.
11. Outstanding GDRs/ ADRs/ Warrants or any Convertible Instruments, Conversion Date and likely impact on equity
The Company has not issued any GDRs/ADRs/Warrants. There were no outstanding convertible warrants, as on March 31, 2017.
12. Commodity Price Risk or Foreign Exchange Risk and Hedging Activities
Mentioned in Financial Statements
13. 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.
J. MARKET PRICE DATA FOR 2016-17The 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 (`) Low Price (`) High Price (`) Low Price (`)
April, 2016 47.00 40.25 47.00 39.60
May, 2016 44.65 31.95 45.00 32.00
June, 2016 41.30 30.60 41.25 30.30
July, 2016 41.00 36.00 41.25 33.30
August, 2016 44.00 34.30 42.95 34.50
September, 2016 45.95 36.10 46.00 35.55
October, 2016 50.20 38.55 50.30 38.65
November, 2016 47.50 35.80 47.95 36.00
December, 2016 44.55 36.10 44.60 35.40
January, 2017 43.70 37.45 43.20 37.50
February, 2017 48.50 38.00 48.70 38.00
March, 2017 41.70 38.05 41.70 36.20
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K. SHARE PRICE MOVEMENT OF SHARES ON BSE & NSE DURING FY 2016-2017
47 44.65 41.3 41 44 45.9550.2 47.5 44.55 43.7
48.541.7
40.2531.95 30.6
36 34.3 36.1 38.55 35.8 36.1 37.45 38 38.05
2300024000250002600027000280002900030000
0
10
20
30
40
50
60
Share Price Movement of Tara Jewels Limited on BSE Sensitive Index (`)
High Price (Rs.) Low Price (Rs.) BSE-30 Sensitive Index
47 45 41.25 41.25 42.95 4650.3 47.95 44.6 43.2
48.741.739.6
32 30.3 33.3 34.5 35.55 38.65 36 35.4 37.5 38 36.2
7000
7500
8000
8500
9000
9500
0102030405060
Share Price Movement of Tara Jewels Limited on NSE-50 (`)
High Price (Rs.) Low Price (Rs.) NSE-50 Index
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CORPORATE GOVERNANCE REPORT
L. 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.
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.
M. SHAREHOLDING PATTERN, AS ON MARCH 31, 2017
Sr. No.
Category of Shareholders No. ofShareholders
No. of Shares Percentage (%)
1 Promoter and Promoter Group 5 14779998 60.02
2 Individuals 8437 6394305 25.97
3 Bodies Corporate 152 742867 3.02
4 Financial Institutions/Banks 2 31979 0.13
5 Clearing Members 97 206317 0.84
6 Non-resident Indians (Repat) 228 359685 1.46
7 Directors/Others 2 3300 0.01
8 Non-residents (Non repatriable) 50 54219 0.22
9 Foreign Companies 1 1800000 7.31
10 Hindu Undivided Family 291 250180 1.02
TOTAL 9265 24622850 100.00
N. DISTRIBUTION OF SHAREHOLDING, AS ON MARCH 31, 2017
Sr. No.
Category (Share) No. ofShareholders
TotalShareholders (%)
No. of Shares Percentage (%)
1 1 – 500 6877 74.23 1199639 4.87
2 501 – 1000 1100 11.87 909196 3.69
3 1001 – 2000 660 7.12 1011087 4.11
4 2001 – 3000 241 2.60 616219 2.50
5 3001 – 4000 73 0.79 259054 1.05
6 4001 – 5000 98 1.06 465869 1.89
7 5001 – 10000 131 1.41 954873 3.88
8 10001 & Above 85 0.92 19206913 78.00
Total 9265 100.00 24622850 100.00
Annual Report 2016-17 97
DECLARATION PURSUANT TO SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 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, 2017.
For TARA JEWELS LIMITED
sd/-RAJEEV SHETH
Chairman and Managing DierctorMumbai, August 10, 2017 DIN:00266460
Tara Jewels Limited98
CERTIFICATION BY THE CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) ON FINANCIAL STATEMENTS OF THE COMPANY:
(Pursuant to SEBI (Listing Obligations and Disclosure Requirements, 2015)
We, Rajeev Sheth, Chairman & Managing Director and Sanjay Sethi, Chief Financial Officer, of Tara Jewels Limited, certify that:
1. We have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2017 and that to the best of our knowledge and belief:
a) These statements do not contain any materially untrue statement nor omit any material fact nor contain statements that might be misleading and
b) 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.
2. 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;
3. 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
4. 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 and Managing Director Chief Financial OfficerMumbai, August 10, 2017 DIN: 00266460
Annual Report 2016-17 99
To the Members of Tara Jewels Limited
REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS We have audited the accompanying standalone Ind AS financial statements of Tara Jewels Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including other comprehensive income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS financial statements”)
MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE IND AS 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 and presentation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 Ind AS 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 of standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 standalone Ind AS 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 Ind AS financial statements.
OPINION In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at March 31, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
INDEPENDENT AUDITORS REPORT
Tara Jewels Limited100
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in
terms of section 143 (11) of the Act, we give in the Annexure “I”, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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;
c the Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act,
e on the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act.
f With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure II”.
g 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 standalone Ind AS financial statements – Refer Note 35 to the standalone Ind AS 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.
iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note No.43 to the standalone Ind AS financial statements.
For C. B. Chhajed & Co. Chartered Accountants (Firm Regn. No : 101796W)
Place : Mumbai C. B. ChhajedDated : 29.05.2017 (Partner) Membership No : 009447
INDEPENDENT AUDITORS REPORT
Annual Report 2016-17 101
ANNEXURE “I” TO THE INDEPENDENT AUDITORS’ 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 (‘the Company’)
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 have been noticed on such verification. In our opinion, the frequency of verification is reasonable.
c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
2 The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to book records were not material and the same were properly dealt with in the books of accounts.
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, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, clauses (iii)(a) to (iii)(c) 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, the company has complied with the provisions of section 185 and 186 in respect of loans, investments, guarantees and securities, wherever applicable.
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 is 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, undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess have not been regularly deposited with the appropriate authorities and there have been delays in a large number of cases.
The Statutory dues outstanding as on Balance Sheet date for a period of more than six months from the date they became payable, are listed below:
Name of the Statute Nature of Dues Amount (Rs.)
Period to which the amount relates
Due Date Date of Payment
Income Tax Act, 1961 Income tax 133,607,523 F.Y. 2014-15 15.03.2015 Not Paid
Income tax 76,921,826 F.Y. 2015-16 15.03.2016 Not Paid
Tax Deducted at Source
1,102,248 August 2016 07.09.2016 25.05.17
The Employees’ Provident Fund And Miscellaneous Provisions Act, 1952
Provident fund 2,609,936 August 2016 15.09.2016 Not Paid
INDEPENDENT AUDITORS REPORT
Tara Jewels Limited102
Name of the Statute Nature of Dues Amount (Rs.)
Period to which the amount relates
Due Date Date of Payment
The Employees’ State Insurance Act, 1948
ESIC on Salaries and Wages
529,125 July 2016 21.08.2016 18.04.2017
476,471 August 2016 21.09.2016 18.04.2017
ESIC on Contracts 1,218 April 2016 21.05.2016 22.05.2017
881 June 2016 21.07.2016 22.05.2017
2,470 July 2016 21.08.2016 22.05.2017
309 August 2016 21.09.2016 22.05.2017
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 authority are as under :
The Statutory dues outstanding as on Balance Sheet date for a period of more than six months from the date they became payable, are listed below:
Name of the Statute Nature of Dues Amount (`)
Period to which the amount relates
Forum where the dispute is pending
Customs Act, 1962 Custom Duty 1,418,430 1995-1996 Commissioner of Customs (Appeals), Mumbai
Customs Act, 1962 Custom Duty 377,133 1996-1997 Assistant Commissioner of Customs, Mumbai
Customs Act, 1962 Custom Duty 105,000 2004-2005 Customs, Excise and Gold (Control) Appellate Tribunal
Income Tax Act, 1961 Income Tax 56,500,000 2001-2014 CIT Appeals, IT Tribunal and High court
Finance Act, 1994 Service Tax 6,723,389 2006-2008 Joint Commissioner of Service Tax
8. In our opinion and according to the information and explanation given to us, the Company has defaulted in repayment of loans or borrowings to a financial institution and banks during the year. The Company does not have any loans or borrowings from Government or has not issued any debentures. The period and amount of defaults are as under :
Name of Lender Type of Facility Amount of Default Period of Default
1. Canara Bank Bills Discounted 95,935,829 Upto 90 Days
2. Central Bank of India Bills Discounted 20,885,179 Upto 90 Days
3. Corporation Bank Bills Discounted 48,402,395 30 - 45 Days
4. Punjab National Bank Bills Discounted 30,669,320 Upto 15 Days
5. State Bank of India Bills Discounted 117,353,000 Upto 90 Days
6. Union Bank of India Bills Discounted 72,305,033 Upto 60 Days
7. Vijaya Bank Bills Discounted 83,625,343 Upto 30 Days
8. Daimler Financial Services India Pvt Ltd Vehicle Loan 445,237 Upto 60 Days
INDEPENDENT AUDITORS REPORT
Annual Report 2016-17 103
9 The Company has not raised money by way of initial public offer or further public offer or debt instruments during the year. 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.
10 According to the information and explanations given to us, no material fraud by the Company or on the Company by its
officers or employees has been noticed or reported during the course of our audit
11 According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
12 In our opinion and according to the information and explanations given to us, the company is not a nidhi company.
Accordingly, clause (xii) of paragraph 3 of the order is not applicable to the company. 13 According to the information and explanations given to us and based on our examination of the records of the Company,
transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
14 According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, clause (xiv) of paragraph 3 of the order is not applicable to the Company.
15 According to the information and explanations given to us, the Company has not entered into any non-cash transactions
during the year with the directors or persons connected with him. Accordingly, clause (xv) of paragraph 3 of the order is not applicable to the company.
16 In our opinion and according to the information and explanations given to us, the Company is not required to register
under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, clause (xvi) of paragraph 3 of the order is not applicable to the company.
For C. B. Chhajed & Co. Chartered Accountants (Firm Regn. No : 101796W)
Place : Mumbai C. B. ChhajedDated : 29.05.2017 (Partner) Membership No : 009447
INDEPENDENT AUDITORS REPORT
Tara Jewels Limited104
ANNEXURE “II” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATE-MENTS OF TARA JEWELS LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Tara Jewels Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors’ Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
INDEPENDENT AUDITORS REPORT
Annual Report 2016-17 105
being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For C. B. Chhajed & Co. Chartered Accountants (Firm Regn. No : 101796W)
Place : Mumbai C. B. ChhajedDated : 29.05.2017 (Partner) Membership No : 009447
INDEPENDENT AUDITORS REPORT
Tara Jewels Limited106
(Amount in `)
Particulars Notes As at March 31, 2017
As at March 31, 2016
ASSETS Non-Current Assets Property, Plant and Equipment 4 1,049,608,759 1,147,865,585 Capital Work-in-Progress - 28,293,589 Intangible Assets 5 22,433,090 16,575,092 Financial Assets
Investments 6 172,947,995 204,106,247 Other Financial Assets 8 5,128,722 16,405,333
Deferred Tax Asset (Net) 14 90,950,566 67,534,872 Other Non-Current Assets 13 23,469,276 24,335,471
1,364,538,408 1,505,116,189 Current assets Inventories 9 4,663,044,143 5,298,972,788 Financial Assets
Trade Receivables 10 7,945,347,225 7,144,810,421 Cash and Cash Equivalents 11 6,937,180 20,275,608 Other Bank Balances 12 686,917,573 694,259,301 Loans 7 3,755,939 2,720,393 Other Financial Assets 8 9,651,427 10,771,524
Other Current Assets 13 143,937,442 134,447,323 13,459,590,929 13,306,257,358
TOTAL 14,824,129,337 14,811,373,547 EQUITY AND LIABILITIES Equity Equity Share capital 15 246,228,500 246,228,500 Other Equity 16 5,170,572,201 5,291,991,938
5,416,800,701 5,538,220,438 Liabilities Non Current Liabilities Financial Liabilities
Borrowings 17 7,968,080 12,158,836 Provisions 21 43,534,714 30,443,904
51,502,794 42,602,740 Current Liabilities Financial Liabilities
Borrowings 17 5,586,932,601 5,739,200,295 Trade Payables 19
Micro, Small and Medium Enterprises - 77,787 Others 3,207,190,597 3,014,658,652
Other Financial Liabilities 18 65,514,142 31,406,621 Other Current Liabilities 20 200,246,237 166,110,284 Provisions 21 2,228,622 6,162,410 Current Tax Liabilities (Net) 22 293,713,643 272,934,320
9,355,825,842 9,230,550,369 TOTAL 14,824,129,337 14,811,373,547
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 Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
BALANCE SHEET AS AT MARCH 31, 2017
Annual Report 2016-17 107
(Amount in `)
Particulars Notes Year ended March 31, 2017
Year ended March 31, 2016
REVENUE
Revenue from operations (net) 23 11,906,360,620 13,568,611,216
Other income 24 63,662,043 66,823,068
Total Revenue 11,970,022,663 13,635,434,284
EXPENSES
Cost of materials consumed 25 9,697,997,342 9,576,285,173
Purchases of stock-in-trade 26 257,120,224 2,324,708,368
Changes in inventories of finished goods, work-in-process and Stock-in-Trade
27 417,216,901 (323,502,785)
Excise duty 11,560,930 3,265,750
Employee benefits expense 28 282,952,855 343,114,241
Finance costs 29 758,399,759 658,250,475
Depreciation and amortization expense 30 221,722,364 213,614,892
Other expenses 31 462,612,835 681,386,467
Total Expenses 12,109,583,210 13,477,122,581
Profit/(loss) before tax (139,560,547) 158,311,703
Tax expense:
Current tax - 81,000,000
Deferred tax (21,353,283) (15,199,381)
(21,353,283) 65,800,619
Profit/(loss) for the year (118,207,264) 92,511,084
OTHER COMPREHENSIVE INCOME
A. Other Comprehensive income not to be reclassified to profit and loss in subsequent periods:
Remeasurement of gains (losses) on defined benefit plans (6,237,824) 6,210,526
Income tax effect 2,062,411 (2,149,339)
Equity Instruments through Other Comprehensive Income 515,480 (556,220)
Income tax effect - -
Other Comprehensive income for the year, net of tax (3,659,933) 3,504,967
Total Comprehensive Income for the year, net of tax (121,867,197) 96,016,051
Earnings / (Loss) per Equity Share 32
Basic (4.80) 3.76
Dilluted (4.80) 3.76
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 Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2017
Tara Jewels Limited108
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit/(Loss) before income tax from: (139,560,547) 158,311,703
Adjustments for:
Depreciation and amortisation expense 221,722,364 213,614,892
Employee share-based payment expense 447,460 895,107
Loss on disposal of property, plant and equipment 6,175,932 6,759,433
Fixed Assets written off 4,347,902 7,881,649
Financial guarantees income (17,807,480) (17,977,510)
Financial guarantees expense 14,760,000 14,860,000
Gain(Loss)on sale of investments (1,370,671) 69,574
Bad debts written off 98,157,644 55,573,718
Rent Income (5,170,454) (2,331,000)
Allowance for doubtful debts (23,172,104) 50,466,745
Changes in fair value of financial assets at fair value through profit or loss 18,143,004 925,729
Dividend and interest income classified as investing cash flows (39,270,116) (46,398,785)
Finance costs 675,810,116 575,389,904
Operating profit before working capital adjustment 813,213,050 1,018,041,159
Change in operating assets and liabilities:
(Increase)/Decrease in trade receivables (875,522,344) (967,693,709)
(Increase)/Decrease in inventories 635,928,645 (288,396,273)
Increase/(Decrease) in trade payables 192,454,158 841,820,787
(Increase)/Decrease in loans (1,035,546) 1,152,628
(Increase)/Decrease in other financial assets 14,057,687 9,853,432
(Increase)/Decrease in other assets (9,490,119) 48,542,436
(Increase)/Decrease in other bank balances 7,341,728 9,811,336
Increase/(Decrease) in other financial liabilities 5,470,779 7,574,962
Increase/(Decrease) in provisions and other liabilities 37,007,548 21,512,131
Cash generated from operations 819,425,586 702,218,889
Less: Income taxes paid (34,220,677) (31,792,393)
Net cash inflow from operating activities (A) 785,204,909 670,426,496
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property, plant and equipment (including intangible assets) (113,400,115) (334,542,869)
Payments for purchase of investments (8,150,320) (17,840,057)
Proceeds from sale of investments 45,620,956 4,884,885
Proceeds from sale of property, plant and equipment 2,760,132 7,305,190
Dividends received 8,185 259,972
Interest received 37,600,952 46,798,049
Rent Received 5,170,454 2,331,000
Net cash outflow from investing activities (B) (30,389,756) (290,803,830)
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2017
Annual Report 2016-17 109
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings (156,358,815) 131,923,413
Interest paid (611,794,766) (551,549,324)
Net cash inflow (outflow) from financing activities (C) (768,153,581) (419,625,910)
Net increase (decrease) in cash and cash equivalents (A + B + C) (13,338,428) (40,003,244)
Cash and Cash Equivalents at the beginning of the financial year 20,275,608 60,278,852
Cash and Cash Equivalents at end of the year 6,937,180 20,275,608
Reconciliation of cash and cash equivalents as per the cash flow statement:
Cash and cash equivalents as per above comprise of the following:
Balances with banks 6,578,722 17,971,638
Cash on hand 358,458 2,303,970
Balances per statement of cash flows 6,937,180 20,275,608
Figures under bracket represent outflows.
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
Tara Jewels Limited110
A Equity Share Capital
(Amount in `)
Particulars Balance at the Beginning of
the year
Changes in Equity share capital
during the year
Balance at the end of the
year
March 31, 2016
Numbers 24,622,850 - 24,622,850
Amount 246,228,500 - 246,228,500
March 31, 2017
Numbers 24,622,850 - 24,622,850
Amount 246,228,500 - 246,228,500
B Other Equity(Amount in `)
Particulars Reserves and Surplus Money Received
against share warrants
Total
SEZ Reinvestment
Allowance Reserve
Securities Premium Reserve
General Reserve
Share Based Payment Reserve
Retained Earnings
Equity Instruments through OCI
As at April 1, 2015 264,650,684 1,679,062,852 114,400,049 2,577,905 3,121,010,700 1,178,590 12,200,000 5,195,080,780
Profit for thhe year 92,511,084 92,511,084
Other comprehensive income
4,061,187 (556,220) 3,504,967
Total comprehensive income for the year
- - - - 96,572,271 (556,220) - 96,016,051
Transfer to General Reserve
12,200,000 (12,200,000) -
Utilisation of SEZ Reinvestment allowance reserve
(264,650,684) 264,650,684 -
Share based payments 895,107 895,107
As at March 31, 2016 - 1,679,062,852 126,600,049 3,473,012 3,482,233,655 622,370 - 5,291,991,938
Loss for the year (118,207,264) (118,207,264)
Other comprehensive income
(4,175,413) 515,480 (3,659,933)
Total comprehensive income for the year
- - - - (122,382,677) 515,480 - (121,867,197)
Lapse of share options 189,392 (189,392) -
Share based payments 447,460 447,460
As at March 31, 2017 - 1,679,062,852 126,789,441 3,731,080 3,359,850,978 1,137,850 - 5,170,572,201
Figures under bracket represent outflows.
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
STATEMENT OF CHANGES IN EQUITY AS AT MARCH 31, 2017
Annual Report 2016-17 111
1 CORPORATE INFORMATION
Tara Jewels Limited ('the Company') is a public Company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Plot 122, 15th Road , Near IDBI Bank, MIDC, Andheri (E), Mumbai 400093.
The Company is in the business of exports and domestic sales of fine jewellery. The Company has been in the jewellery
exports business since inception and has started the retail jewellery business in 2010. The Company is an integrated player in the jewellery industry with experience ranging from designing to retailing of jewellery. The Company’s business can be divided into three operations namely, manufacturing, exporting and retailing. The portfolio of products includes gold, platinum and silver jewellery with or without studded precious and semi-precious stones. The Company's products have presence across different price points and cater to customers across high-end, mid-market and value market segments. The financial statements for the year ended March 31, 2017 were approved by the Board of Directors and authorised for issue on May 29, 2017.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation The financial statements of the Company have been prepared in accordance with Indian Accounting Standards
(Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, under the historical cost convention on the accrual basis except for derivative financial instruments and certain financial assets and liabilities which are measured at fair value.
For all periods upto and including the year ended March 31, 2016, the Company prepared its financial statements
in accordance accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2017 has been prepared in accordance with Ind AS and the adoption was carried out in accordance with Ind AS 101 - 'First time adoption of India Accounting Standard'. Reconciliation and description of the effect of the transition has been summarised in Note 46.
2.2 Summary of significant accounting policies
(a) Revenue recognition
(i) Sale of goods Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the
goods have passed to the buyer. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates.
(ii) Rendering of services Service income is recognised as per terms of contract with customers when the related services are
performed.
(iii) Interest income Income from Interest on fixed deposits is recognised using effective interest rate method.
(iv) Dividend income Revenue is recognised when the Company’s right to receive the payment is established, which is generally
when shareholders approve the dividend.
(v) Rental income Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms
unless the payments are structured to increase in line with expected general inflation to compensate for the Company's expected inflationary cost increases and is included in other income in the statement of profit or loss.
(b) Foreign currency translation
(i) Functional and presentation currency Items included in the financial statements of the entity are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Indian rupee (`), which is entity’s functional and presentation currency.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Tara Jewels Limited112
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.
Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at
fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction.
(c) Taxes
(i) Current income tax Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it
relates to items recognized directly in equity, in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
(ii) Deferred tax Deferred tax assets and liabilities are recognized using the liability method for all temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been
enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date.
A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences and tax losses can be utilized. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right
to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
(d) Leases The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement
at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
(i) As a lessee Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company
as lessee are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.
(ii) As a lessor Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line
basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
Annual Report 2016-17 113
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(e) Impairment of non financial assets Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is
measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
(f) Cash and cash equivalents Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are subject to an insignificant risk of changes in value. (g) Inventories Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on weighted average basis. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of
manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on weighted average basis.
Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on first in, first out basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale. (h) Financial instruments
(i) Initial recognition The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.
(ii) Subsequent measurement
a. Non-derivative financial instruments (i) Financial assets carried at amortised cost A financial asset is subsequently measured at amortised cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding."
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.
Tara Jewels Limited114
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(ii) Financial assets at fair value through other comprehensive income A financial asset is subsequently measured at fair value through other comprehensive income if it is held
within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
(iii) Financial assets at fair value through profit or loss A financial asset which is not classified in any of the above categories are subsequently fair valued
through profit or loss. (iv) Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109.
Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated
as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. Financial liabilities at amortised cost Financial liabilities are subsequently carried at amortized cost using the effective interest rate method. For
trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Financial guarantee contracts Financial guarantee contracts issued by the company are those contracts that require a payment
to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.
(v) Investment in subsidiaries
Investment in subsidiaries is carried at cost in the financial statements. b. Derivative financial instruments The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign currency
risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
(iii) Derecognition of financial instruments The company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
Annual Report 2016-17 115
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(iv) Impairment of financial assets The company assesses on a forward looking basis the expected credit losses associated with its assets carried
at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 39 details how the Company determines whether there has been a significant increase in credit risk.
For trade receivables only, the company applies the simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables. (v) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
(i) Property, plant and equipment Property, plant and equipment are stated at cost, less accumulated depreciation. Cost directly attributable
to the acquisition are capitalised until the property, plant and equipment are ready for use, as intended by management. The Company depreciates property, plant and equipment over their estimated useful lives as specified in Schedule II of the Companies Act, 2013 using the written down value method. The estimated useful lives of assets are as follows:
Buildings 30 Years Plant and Equipments* 8-15 Years Furniture and Fixtures 10 Years Vehicles 8 - 10 Years Air- Conditioners 5 - 15 Years Office Equipments 5 Years Computer Hardwares 3 - 6 Years Factory Equipments 15 Years Flats 60 Years Electric Installations 10 Years
Building on leasehold land and leasehold improvements are amortised on straight line basis over the primary period of lease.
*Based on technical evaluation, the management believes that the useful lives for few plant and
machinery best represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.
The residual values are not more than 5% of the original cost of the asset. The Useful lives and residual
values are reviewed periodically, including at each financial year end. Subsequent expenditures relating to property, plant and equipment is capitalized only
when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.
(j) Intangible assets Intangible assets includes computer software, are stated at cost less accumulated amortization. Computer software
are amortized over estimated useful lives of five years on a straight-line basis, from the date that they are available for use. Amortization methods and useful lives are reviewed periodically including at each financial year end.
Tara Jewels Limited116
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(k) Borrowing costs General and specific borrowing costs that are directly attributable to the acquisition, construction or production of
a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
(l) Provisions, Contingent Liabilities and Commitments A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation
that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Contingent liability is disclosed in the case of:
- a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;
- a present obligation arising from past events, when no reliable estimate is possible;
- a present obligation arising from past events, unless the probability of outflow of resources is remote.
Commitments include the amount of purchase order(net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
(m) Employee benefits
(i) Short-term obligations Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Post-employment obligations The company operates the following post-employment schemes: (a) defined benefit plans such as gratuity and (b) defined contribution plans such as provident fund.
(a) Gratuity The company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible
employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment with the Company.
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an
independent actuary, at each balance sheet date using the projected unit credit method. The Company has taken a Group Gratuity Policy with Life Insurance Corporation of India.
The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an liability.
Gains and losses through re-measurements of the net defined benefit liability are recognized in other comprehensive income. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognized in net profit in the Statement of Profit and Loss.
(b) Provident Fund The Company pays provident fund contributions to publicly administered provident funds as per local
regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due.
Annual Report 2016-17 117
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(iii) Other long-term employee benefit obligations Compensated absences The expected cost of accumulating compensated absences is determined by actuarial valuation performed
by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
(iv) Share-based payments Share-based compensation benefits are provided to employees via the Employee Stock Option Plan. The
Company recognizes compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of options is charged to expense on a straight-line basis over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.
(v) Bonus Plans The company recognises a liability and an expense for bonuses. The company recognises a provision where
contractually obliged or where there is a past practice that has created a constructive obligation. (n) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided the Chief Operating
Decision Maker (CODM). The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been notified as the Board of Directors that makes strategic decisions.
(o) Cash Flow Statement Cash flows are reported using the indirect method, whereby profit 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 group are segregated based on available information.
(p) Current/non current classification The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An
asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current. A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
The company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The company has identified twelve months as its operating cycle.
Tara Jewels Limited118
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(q) Earnings per share Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders
of the company by the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders, after income tax effect of interest and other financing costs associated with dilutive potential equity, by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
3 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed below. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
The areas involving critical accounting estimates or judgments are:
- Estimation of current tax expense and payable – Note 14
- Estimated fair value of unlisted securities – Note 38
- Estimated useful life of intangible asset – Note 5
- Estimated useful life of tangible asset – Note 4
- Estimation of defined benefit obligation – Note 33
- Recognition of deferred tax assets for carried forward tax losses – Note 14
- Impairment of trade receivables and other financial assets – Note 39
- Impairment of non-financial assets – Note 39
Annual Report 2016-17 119
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
4.
PRO
PER
TY, P
LAN
T A
ND
EQ
UIP
MEN
T
(Am
ount
in `
)
Part
icul
ars
Bui
ldin
gsPl
ant
and
Equi
pmen
tsFu
rnit
ure
and
Fixt
ures
Vehi
cles
Air-
Co
ndit
ione
rsO
ffice
Eq
uipm
ents
Com
pute
r H
ardw
ares
Fact
ory
Equi
pmen
tsFl
ats
Leas
ehol
d Im
prov
emen
tsEl
ectr
ic
Inst
alla
tion
sTo
tal
GRO
SS C
ARR
YIN
G V
ALU
E
As
at A
pril
1, 2
015
266
,014
,720
3
36,1
17,1
49
55,
374,
483
10,
626,
500
7,3
16,1
52
9,2
32,0
01
4,4
10,4
53
22,
383,
269
316
,171
,143
4
3,29
3,90
3 1
1,15
6,16
6 1
,082
,095
,939
Add
ition
s -
270
,819
,163
2
,639
,428
1
8,49
4,18
4 6
8,77
6 1
10,5
39
432
,145
1
26,3
70
- -
- 2
92,6
90,6
05
Disp
osal
s -
1,8
34,4
97
17,
041,
882
1,3
88,4
19
1,0
77,1
09
1,8
08,2
35
407
,618
3
,807
,167
-
16,
307,
143
2,3
12,1
40
45,
984,
210
As
at M
arch
31,
201
6 2
66,0
14,7
20
605
,101
,815
4
0,97
2,02
9 2
7,73
2,26
5 6
,307
,819
7
,534
,305
4
,434
,980
1
8,70
2,47
2 3
16,1
71,1
43
26,
986,
760
8,8
44,0
26
1,3
28,8
02,3
34
Add
ition
s -
127
,540
,917
-
- -
- 2
9,20
1 5
92,6
40
- 1
00,1
95
- 1
28,2
62,9
53
Disp
osal
s -
1,8
87,6
45
11,
442,
486
789
,564
6
65,8
17
1,5
73,9
80
135
,047
2
,487
,462
-
25,
851,
064
1,4
64,3
49
46,
297,
414
As
at M
arch
31,
201
7 2
66,0
14,7
20
730
,755
,087
2
9,52
9,54
3 2
6,94
2,70
1 5
,642
,002
5
,960
,325
4
,329
,134
1
6,80
7,65
0 3
16,1
71,1
43
1,2
35,8
91
7,3
79,6
77
1,4
10,7
67,8
73
ACC
UM
ULA
TED
DEP
RECI
ATIO
N/I
MPA
IRM
ENT
As
at A
pril
1, 2
015
- -
- -
- -
- -
- -
- -
Dep
reci
atio
n fo
r the
yea
r 1
6,33
2,81
5 1
09,6
02,8
58
15,
420,
212
8,2
82,7
44
2,1
88,9
15
4,0
54,7
24
2,0
16,6
04
4,0
46,0
30
15,
394,
026
24,
394,
184
3,2
41,5
75
204
,974
,687
Ded
uctio
ns/A
djus
tmen
ts
durin
g th
e ye
ar -
365
,704
4
,869
,304
1
32,1
65
351
,526
5
64,4
70
36,
504
514
,814
-
16,
307,
226
896
,225
2
4,03
7,93
8
As
at M
arch
31,
201
6 1
6,33
2,81
5 1
09,2
37,1
54
10,
550,
908
8,1
50,5
79
1,8
37,3
89
3,4
90,2
54
1,9
80,1
00
3,5
31,2
16
15,
394,
026
8,0
86,9
58
2,3
45,3
50
180
,936
,749
Dep
reci
atio
n fo
r the
yea
r 1
5,59
1,21
1 1
44,4
47,5
20
6,4
08,9
46
6,1
88,6
13
1,0
84,1
75
1,1
46,5
00
679
,353
2
,724
,237
1
4,64
4,50
8 1
8,90
4,15
5 1
,416
,599
2
13,2
35,8
17
Ded
uctio
ns/A
djus
tmen
ts
durin
g th
e ye
ar -
617
,626
3
,814
,511
3
85,3
10
363
,700
7
96,7
79
48,
573
652
,992
-
25,
851,
064
482
,897
3
3,01
3,45
2
As
at M
arch
31,
201
7 3
1,92
4,02
6 2
53,0
67,0
48
13,
145,
343
13,
953,
882
2,5
57,8
64
3,8
39,9
75
2,6
10,8
80
5,6
02,4
61
30,
038,
534
1,1
40,0
49
3,2
79,0
52
361
,159
,114
Net
Car
ryin
g va
lue
as a
t M
arch
31,
201
7 2
34,0
90,6
94
477
,688
,039
1
6,38
4,20
0 1
2,98
8,81
9 3
,084
,138
2
,120
,350
1
,718
,254
1
1,20
5,18
9 2
86,1
32,6
09
95,
842
4,1
00,6
25
1,0
49,6
08,7
59
Net
Car
ryin
g va
lue
as a
t M
arch
31,
201
6 2
49,6
81,9
05
495
,864
,661
3
0,42
1,12
1 1
9,58
1,68
6 4
,470
,430
4
,044
,051
2
,454
,880
1
5,17
1,25
6 3
00,7
77,1
17
18,
899,
802
6,4
98,6
76
1,1
47,8
65,5
85
Net
Car
ryin
g va
lue
as a
t A
pril
1, 2
015
266
,014
,720
3
36,1
17,1
49
55,
374,
483
10,
626,
500
7,3
16,1
52
9,2
32,0
01
4,4
10,4
53
22,
383,
269
316
,171
,143
4
3,29
3,90
3 1
1,15
6,16
6 1
,082
,095
,939
Not
es:
i. Pr
op
erty
, Pla
nt
and
Eq
uip
men
t p
led
ged
as
secu
rity
ag
ain
st b
orr
ow
ing
s b
y th
e co
mp
any
Re
fer
to N
ote
41 f
or in
form
atio
n on
pro
pert
y, p
lant
and
equ
ipm
ent
pled
ged
as s
ecur
ity b
y th
e co
mpa
ny
ii.
Co
ntr
actu
al O
blig
atio
ns
Re
fer
to N
ote
35 f
or d
iscl
osur
e of
con
trac
tual
com
mitm
ents
for
the
acq
uisi
tion
of p
rope
rty,
pla
nt a
nd e
quip
men
t.
Tara Jewels Limited120
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
5. INTANGIBLE ASSETS
(Amount in `)
Particulars Computer Software
Total
GROSS CARRYING VALUE
As at April 1, 2015 23,442,870 23,442,870
Additions 1,772,427 1,772,427
Deletions 231,490 231,490
As at March 31, 2016 24,983,807 24,983,807
Additions 14,344,549 14,344,549
Deletions 186,124 186,124
As at March 31, 2017 39,142,232 39,142,232
ACCUMULATED AMORTISATION AND IMPAIRMENT
As at April 1, 2015 - -
Amortisation for the year 8,640,205 8,640,205
Deductions/Adjustments during the year 231,490 231,490
As at March 31, 2016 8,408,715 8,408,715
Amortisation for the year 8,486,547 8,486,547
Deductions/Adjustments during the year 186,120 186,120
As at March 31, 2017 16,709,142 16,709,142
Net Carrying value as at March 31, 2017 22,433,090 22,433,090
Net Carrying value as at March 31, 2016 16,575,092 16,575,092
Net Carrying value as at April 1, 2015 23,442,870 23,442,870
6. INVESTMENTS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current Investments
Equity Instruments of Subsidiaries 146,648,124 143,600,644 140,483,134
Other Equity Instruments 1,419,250 903,770 1,459,990
Mutual Funds 24,880,621 59,601,833 47,641,964
Total 172,947,995 204,106,247 189,585,088
Details of Non Current Investments (Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
(1) Investments carried at Cost
Investments in Equity Instruments of Subsidiaries
Unquoted
Tara (Hong Kong) Limited655,590 Equity shares of face value HK$ 10 each
28,161,724 27,059,444
Tara Jewels Holding Inc. 2,000 Equity Shares of Face Value US$ 0.01 each
118,486,400 116,541,200
146,648,124 143,600,644
Annual Report 2016-17 121
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
(2) Investments carried at fair value through Other Comprehensive Income
Investments in Equity Instruments
Unquoted
Divya Jewels International Pvt. Ltd. 5,000 Equity Shares of Face Value ` 10 each
175,000 175,000
Quoted
Punjab National Bank 7,000 Equity Shares of Face Value ` 2 each
1,049,300 592,900
Bank of India 1,400 Equity Shares of Face Value ` 10 each
194,950 135,870
1,419,250 903,770
(3) Investments carried at fair value through Profit and Loss
Investments in Mutual Funds
Quoted
SBI MF Magnum Balanced Fund - Regular Plan Growth 7,367.763 (Previous Year: 228,036.84) Units of face value of ` 10 each
804,230 21,595,476
SBI Premier Liquid Fund - Regular Fund Daily Dividend 32.254 (Previous Year: 30.791) Units of Face Value of ` 10 each
32,359 30,891
Principal Emerging Bluechip Fund-Direct Plan Growth NIL (Previous Year: 7,210.845) Units of face value of ` 10 each
- 480,026
Axis Liquid Fund - Daily Dividend 146.40 (Previous Year: 139.675) Units of Face Value of ` 1000 each
146,528 139,780
CP4G-Union KBC Capital Protection Oriented Fund-Series 4-Reg Plan-Growth NIL (Previous Year: 150,000) Units of Face Value of ` 10 each
- 1,733,085
CP5G-Union KBC Captial Protection Oriented Fund-Series 5-Reg Plan-Growth NIL (Previous Year: 150,000) Units of Face Value of ` 10 each
- 1,765,455
DBDP- union KBC Dynamic Bonds Fund- Div Payout NIL (Previous Year: 227,250.347) Units of face value of ` 10 each
- 2,713,824
Principle Large Cap Fund - Regular Plan growth NIL (Previous Year: 47,327.581) Units of Face Value of ` 10 each
- 2,049,284
TF2GR-Union KBC Trigger Fund Series 2 - Regular Plan Growth 299,990 (Previous Year: 299,990) Units of Face Value of ` 10 each
3,377,887 2,759,908
Principal Asset Allocation Fund - Aggressive Plan NIL (Previous Year: 895,309.07) Units of face value of ` 10 each
- 8,834,104
Principal Tax Savings Fund - Regular Plan Growth 6,768.429 (Previous Year: NIL) Units of face value of ` 10 each
1,189,754 -
CP7G-Union Capital Protection Oriented Fund - Series 7 - Regular Plan Growth 1,82,172 (Previous Year: NIL) Units of face value of ` 10 each
1,829,863 -
Unquoted
1,750 units of face value ` 10,000 each of IIMCL-Emerging India Opportunities Fund
17,500,000 17,500,000
24,880,621 59,601,833
Total 172,947,995 204,106,247
Tara Jewels Limited122
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Details of Quoted and Unquoted Investments(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Aggregate amount of quoted investments(Market Value `86,24,871 (Previous Year : `4,28,30,603))
8,624,871 42,830,603
Aggregate amount of unquoted investments 164,323,124 161,275,644
Total 172,947,995 204,106,247
Carrying value of Investments (Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Investments carried at fair value through other comprehensive income 1,419,250 903,770
Investments carried at fair value through profit and loss 24,880,621 59,601,833
Investments carried at cost 146,648,124 143,600,644
Total 172,947,995 204,106,247
7. LOANS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Unsecured, considered good
Loans to Employees 3,755,939 2,720,393 3,873,021
Total 3,755,939 2,720,393 3,873,021
8. OTHER FINANCIAL ASSETS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current
Financial assets carried at amortised cost
Security Deposits 5,128,722 16,405,333 25,274,105
Total 5,128,722 16,405,333 25,274,105
Current
Financial assets carried at amortised cost
Interest Accrued but not due 7,572,598 5,911,619 6,570,855
Other financial assets* 2,078,829 4,859,905 5,849,630
Total 9,651,427 10,771,524 12,420,485
* Includes claims Receivable.
Annual Report 2016-17 123
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
9. INVENTORIES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
(Valued at lower of Cost and Net Realisable value)
Raw materials [including goods-in-transit: ` 2,716,182 (March 31, 2016: ` 41,261,070, April 1, 2015: ` 120,176)]
673,486,062 891,580,715 891,112,591
Work-in-process 3,237,608,537 3,530,932,266 2,830,979,597
Finished goods 740,831,241 864,724,413 1,236,423,451
Stock-in-trade 26,208 26,208 4,777,054
Stores, consumables and packing material 11,092,095 11,709,186 47,283,822
Total 4,663,044,143 5,298,972,788 5,010,576,515
10. TRADE RECEIVABLES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Unsecured
Considered good 7,945,347,225 7,144,810,421 6,283,157,175
Considered doubtful 86,669,843 109,841,947 59,375,202
8,032,017,068 7,254,652,368 6,342,532,377
Less: Allowances for doubtful debts 86,669,843 109,841,947 59,375,202
7,945,347,225 7,144,810,421 6,283,157,175
Includes Receivables from related parties (Refer Note 36)
11. CASH AND CASH EQUIVALENTS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Balances with banks:
- in current accounts 6,578,722 17,971,638 44,836,960
Cash on hand 358,458 2,303,970 15,441,892
Total 6,937,180 20,275,608 60,278,852
12. OTHER BANK BALANCES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Deposits with banks to the extent held as margin money 359,331,656 403,362,647 419,755,094
Deposits with banks as security against borrowings 327,585,917 290,896,654 284,315,543
Total 686,917,573 694,259,301 704,070,637
Tara Jewels Limited124
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
13. OTHER ASSETS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current
Capital Advances 23,469,276 24,335,471 13,255,081
Others
- Prepaid expenses - - 1,504,422
Total 23,469,276 24,335,471 14,759,503
Current
Advances other than Capital advances
- Other Advances * 24,434,183 10,427,656 7,069,222
Others
- Prepaid expenses 41,302,738 44,283,509 57,619,078
- Balances with Statutory, Government Authorities 78,174,116 79,731,093 116,508,972
- Other current assets 26,405 5,065 283,000
Total 143,937,442 134,447,323 181,480,272
* includes advances paid to creditors
14. INCOME TAX
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Deferred tax relates to the following:
Accelerated Depreciation for tax purposes 19,017,055 12,147,017 5,251,480
Gratuity 10,595,492 8,908,141 11,545,464
Leave Encashment 4,535,240 3,760,572 5,027,482
Unamortised share issue expenses u/s 35D - 5,259,956 10,519,911
Disallowance under Section 40(a)(ia) - 674,856 2,055,082
Investment in Subsidiaries (1,956,695) (1,253,580) (534,308)
Losses available for offsetting against future taxable income 23,649,345 23,809 71,149
Provision for doubtful debts 28,655,650 38,014,101 20,548,570
Derivative Liability 6,454,479 - -
Net Deferred Tax Assets / (Liabilities) 90,950,566 67,534,872 54,484,830
Movement in deferred tax liabilities/assets(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Opening balance as at beginning of the year 67,534,872 54,484,830
Tax income/(expense) during the period recognised in profit or loss 21,353,283 15,199,381
Tax income/(expense) during the period recognised in OCI 2,062,411 (2,149,339)
Closing balance as at end of the year 90,950,566 67,534,872
Annual Report 2016-17 125
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liablities relate to income taxes levied by the same tax authority.
Tax losses which arose in India of ` 71528130 that are available for offsetting for eight years against future taxable profits of the Company. Major Components of income tax expense for the years ended March 31, 2017 and March 31, 2016 are as follows: i. Income tax recognised in profit or loss
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Current income tax charge - 81,000,000
Adjustment in respect of current income tax of previous year - -
Deferred tax
Relating to origination and reversal of temporary differences (21,353,283) (15,199,381)
Income tax expense recognised in profit or loss (21,353,283) 65,800,619
ii. Income tax recognised in OCI(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Net loss/(gain) on remeasurements of defined benefit plans 2,062,411 (2,149,339)
Income tax expense recognised in OCI 2,062,411 (2,149,339)
Reconciliation of current tax expense and accounting profit multiplied by income tax rate for March 31, 2017 and March 31, 2016
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Profit / (Loss) before tax (139,560,547) 158,311,703
Accounting profit before income tax (139,560,547) 158,311,703
Enacted tax rate in India 33.063% 34.608%
Income tax on accounting profits (46,142,904) 54,788,514
Effects of Incomes exempt from tax (911,748) (374,883)
Non-deductible expenses for tax purposes 23,887,691 11,337,253
Tax on income at different rate 3,876,089 (410,461)
Others (2,062,411) 460,196
Tax at effective income tax rate (21,353,283) 65,800,619
Tara Jewels Limited126
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
15. SHARE CAPITAL
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Authorised
30,000,000 Equity Shares of ` 10 each 300,000,000 300,000,000 300,000,000
Issued, subscribed and paid-up
24,622,850 Equity Shares of ` 10 each fully paid up 246,228,500 246,228,500 246,228,500
TOTAL 246,228,500 246,228,500 246,228,500
i. 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.
ii. Shares held by holding/ ultimate holding company and / or their subsidiaries / associates The company does not have holding company or ultimate holding company iii. Details of shareholders holding more than 5% shares in the company
Name of the shareholder As at March 31, 2017 As at March 31, 2016
Number % holding Number % holding
Equity shares of ` 10 each fully paid
Rajeev Sheth 14,502,893 58.90 14,522,893 58.98
Crystalon Finanz AG 1,800,000 7.31 1,800,000 7.31
iv. Shares reserved for issue under options For details of shares reserved for issue under the Share based payment plan of the company, please refer note 34
v. Shares issued for consideration other than Cash / Bonus Shares The company has not issued shares for consideration other than cash or Bonus shares during the preceding 5 financial years.
16. OTHER EQUITY
i. Reserves and Surplus(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Securities Premium Reserve 1,679,062,852 1,679,062,852 1,679,062,852
General Reserve 126,789,441 126,600,049 114,400,049
Share Based Payment Reserve 3,731,080 3,473,012 2,577,905
Retained Earnings 3,359,850,978 3,482,233,655 3,121,010,700
SEZ Reinvestment Allowance Reserve - - 264,650,684
5,169,434,351 5,291,369,568 5,181,702,190
Annual Report 2016-17 127
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(a) Securities Premium Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 1,679,062,852 1,679,062,852
Add/(Less):
changes during the period - -
Closing balance 1,679,062,852 1,679,062,852
(b) General Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 126,600,049 114,400,049
Add/(Less):
Shares warrants forfeited - 12,200,000
Share based payment reserve transferred on lapse of option 189,392
Closing balance 126,789,441 126,600,049
(c) Share Based Payment Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 3,473,012 2,577,905
Add/(Less):
Option Compensation expense charged during the period 447,460 895,107
Transfer to General Reserve on exercise/lapse of option (189,392) -
Closing balance 3,731,080 3,473,012
The Company has one share option scheme under which options to subscribe for the company’s shares have been granted to certain executives and senior employees. The Share based payment reserve is used to recognise the value of equity settled share based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 34 for further details of these plans. (d) Retained Earnings
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 3,482,233,655 3,121,010,700
Net Profit/(Loss) for the year (118,207,264) 92,511,084
Add/(Less):
Untilisation of SEZ Reinvestment allowance reserve - 264,650,684
Items of Other Comprehensive Income directly recognised in Retained Earnings
Remeasurement of post employment benefit obligation, net of tax (4,175,413) 4,061,187
Closing balance 3,359,850,978 3,482,233,655
Tara Jewels Limited128
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(e) SEZ Reinvestment Allowance Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance - 264,650,684
Add/(Less):
Utilisation of SEZ Reinvestment allowance reserve - (264,650,684)
Closing balance - -
A ‘Unit’ in Special Economic Zone (“SEZ Unit”) claiming tax holiday benefit under section 10AA enjoys the tax incentive for a period of 10 years. The incentive is a staggered one, spread over a period of 10 years. An SEZ Unit does not have to pay income tax on entire export profits for the first 5 years. In the next block of 2 years, a SEZ unit is not required to pay tax on half of its export profits. In the last block of 3 years (Year 8 to Year 10), a SEZ unit can claim deduction of the amount not exceeding fifty per cent of the profit as debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the “Special Economic Zone Re-investment Reserve Account”) to be created and utilized for the purposes of the business of the company for the purposes of acquiring machinery or plant before the expiry of a period of three years following the previous year in which the reserve was created. ii. Components of Other Comprehensive Income
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Equity Instruments through OCI 1,137,850 622,370 1,178,590
1,137,850 622,370 1,178,590 The disaggregation of changes to OCI by each type of reserve in equity is shown below:
(Amount in `)
Particulars Equity Investments Through OCI
Total
As at April 1, 2015 1,178,590 1,178,590
Gain/(Loss) on FVTOCI financial assets (556,220) (556,220)
As at March 31, 2016 622,370 622,370
Gain/(Loss) on FVTOCI financial assets 515,480 515,480
As at March 31, 2017 1,137,850 1,137,850
iii. Other Components of Equity(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Money Received against share warrants - - 12,200,000
Total - - 12,200,000.00
Share Warrants The Company had allotted 3,05,000 (Three Lac Five Thousand) Convertible Warrants (“Warrants”), on April 02, 2014 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 had paid ` 12,200,000 towards 25% value of total consideration
Annual Report 2016-17 129
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
payable for the Warrants. The aforesaid share warrants were due for conversion in equity shares on or before October 2, 2015, however BCCL has not exercised the option and hence the warrants have lapsed on October 2, 2015. The amount paid against the aforesaid warrants has been forfeited by the Company and transferred to General Reserve. 17. BORROWINGS
i. Non Current Borrowings(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Secured
Term Loans
From Banks 150,824 598,804 1,575,367
From Others 12,382,456 16,025,597 10,140,861
Long term maturity of Finance Lease Obligations - - 614,157
(A) 12,533,280 16,624,401 12,330,385
Current Maturity of Non Current Borrowings
Term Loans
From Banks 150,824 377,190 924,635
From Others 4,414,376 4,088,375 7,480,909
Long term maturity of Finance Lease Obligations - - 614,157
(B) 4,565,200 4,465,565 9,019,701
Total (A)-(B) 7,968,080 12,158,836 3,310,684
a) Term Loan from Banks includes vehicle loan which is secured by hypothecation of vehicle and carries interest @ 10.22% p.a. The loans is repayable in 60 monthly installments inclusive of interest from the date of loan.
b) Term Loans from others include
i) Loan secured by hypothecation of Plant and Machinery and carries interest @ 13.00% p.a. The loan is repayable in 45 monthly installments of `148,642/- each including interest starting from March 2014.
ii) Loan secured by hypothecation of vehicle and carries interest @ 10.22%. The loans is repayable in 60 monthly installments inclusive of interest from the date of loan.
ii. Current Borrowings(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Secured
Loans repayable on demand
From Banks 3,029,954,842 3,085,069,038 3,040,769,879
From Other Parties 30,000,000 15,000,000 15,000,000
Bills Discounted 2,518,913,751 2,639,131,257 2,555,801,018
Unsecured
Loan from Related Party 8,064,008 - -
Total 5,586,932,601 5,739,200,295 5,611,570,897
(a) Working capital loans from banks are secured by hypothecation of inventories, book debts, plant and machinery, fixed deposits, other current assets and equitable mortgage of the 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.
Tara Jewels Limited130
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(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., Fabrikant Tara International LLC and
Tara (Hong kong) Limited(iii) fixed deposits of ` 8.79 Crores of managing director, Mr. Rajeev Sheth
(iv) pledge of 9,581,300 equity shares of the Company held by managing director, Mr. Rajeev Sheth”
(c) Working capital loans from others are secured by pledge of 23,75,000 equity shares of the Company held by managing director, Mr. Rajeev Sheth and personal guarantee of managing director
(d) Loan from related party is interest free and repayable on demand. iii. Other Disclosures
(a) The carrying amounts of financial and non-financial assets pledged as security for current and non current borrowings are disclosed in Note 41
(b) Amount and period of default in repayment of borrowings (Amount in `)
As at March 31, 2017
Particulars Amount Period of Default
Term Loans from Others
Principal 445,237 1-60 Days
Interest 170,696 1-60 Days
Loans repayable on demand from Banks
Principal 469,176,099 1-90 Days
Interest 5,804,928 1-90 Days
18. OTHER FINANCIAL LIABILITIES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
(i) Financial Liabilities at amortised cost
Current maturities of long term debts 4,565,200 4,465,565 8,405,544
Current maturities of finance lease obligations - - 614,157
Interest accrued and due on borrowings 6,960,484 - -
Interest accrued but not due on borrowings 2,249,480 194,614 354,034
Unpaid dividends 5,065 5,065 5,065
Others
Bank Overdraft 24,372,532 19,383,813 12,479,458
Other Payables 7,839,624 7,357,564 7,947,116
45,992,385 31,406,621 29,805,374
(ii) Financial Liabilities carried at fair value through profit and loss
Derivatives not designated as hedge
- Foreign Exchange forward contracts 19,521,757 - -
19,521,757 - -
Total 65,514,142 31,406,621 29,805,374
Annual Report 2016-17 131
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
19. TRADE PAYABLES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Trade Payables to Micro, Small and Medium Enterprises - 77,787 77,000
Trade Payables to Others 3,207,190,597 3,014,658,652 2,172,838,652
Total 3,207,190,597 3,014,736,439 2,172,915,652
Includes dues to related parties (refer note 36)
20. OTHER LIABILITIES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Statutory Liabilities 59,462,634 34,724,886 28,326,577
Others* 140,783,603 131,385,398 110,646,501
Total 200,246,237 166,110,284 138,973,078
*Others includes expenses payable, advance received from customer and deposits.
21. PROVISIONS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current
Provision for employee benefits
Gratuity (Refer Note 33) 30,609,587 20,546,146 32,166,555
Leave encashment 12,925,127 9,897,758 13,839,101
Total 43,534,714 30,443,904 46,005,656
Current
Provision for employee benefits
Gratuity (Refer Note 33) 1,436,784 5,193,974 1,194,124
Leave encashment 791,838 968,436 687,834
Total 2,228,622 6,162,410 1,881,958
22. CURRENT TAX LIABILITY(NET)
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Opening balance 272,934,320 199,726,713 199,726,713
Add: Current tax payable for the year - 81,000,000 -
Add: Provision for interest payable on current tax 55,000,000 24,000,000 -
Less: Taxes paid 34,220,677 31,792,393 -
Closing Balance 293,713,643 272,934,320 199,726,713
Tara Jewels Limited132
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
23. REVENUE FROM OPERATIONS
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Sale of products
Gems and Jewellery 11,901,368,218 13,563,434,564
Others - 199,608
Sale of services
Labour charges 4,992,402 4,839,955
Other Operating Revenues
Sale of gold dust - 137,089
11,906,360,620 13,568,611,216
24. OTHER INCOME
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Interest income on
Bank fixed deposits 39,261,931 46,119,223
Loans to others - 19,590
Dividend income 8,185 259,972
Other Non Operating Income
Financial Guarantee Income 17,807,480 17,977,510
Net gain on sale of Investments 1,370,671 (69,574)
Others
Rent received 5,170,454 2,331,000
Commission received 43,322 185,347
63,662,043 66,823,068
25. COST OF MATERIALS CONSUMED
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
As at beginning of the year 891,580,715 891,112,591
Add: Purchases 9,479,902,689 9,576,753,297
Less : As at end of the year 673,486,062 891,580,715
9,697,997,342 9,576,285,173
Details of raw materials and components consumed (Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Precious metals and diamonds 9,624,108,819 9,456,718,100
Others 73,888,523 119,567,073
9,697,997,342 9,576,285,173
Annual Report 2016-17 133
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
26. PURCHASES OF STOCK-IN-TRADE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Gems and Jewellery 257,120,224 2,324,708,368
257,120,224 2,324,708,368
27. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Inventories as at the beginning of the year
Work - in - process 3,530,932,266 2,830,979,597
Finished goods 864,724,413 1,236,423,451
Stock-in-trade 26,208 4,777,054
4,395,682,887 4,072,180,102
Less : Inventories as at the end of the year
Work - in - process 3,237,608,537 3,530,932,266
Finished goods 740,831,241 864,724,413
Stock-in-trade 26,208 26,208
3,978,465,986 4,395,682,887
Net decrease / (increase) in inventories 417,216,901 (323,502,785)
28. EMPLOYEE BENEFITS EXPENSE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Salaries, wages and bonus 251,233,199 304,861,311
Contribution to provident and other funds 21,317,223 23,515,563
Share based payments to employees 447,460 895,107
Staff welfare expenses 6,120,158 11,829,162
Gratuity Expense 3,834,815 2,013,098
282,952,855 343,114,241
29. FINANCE COST
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Interest expense on debts and borrowings 620,810,116 551,389,904
Interest on Income tax 55,000,000 24,000,000
Other borrowing costs
Guarantee Commission Expense 14,760,000 14,860,000
Others 67,829,643 68,000,571
758,399,759 658,250,475
Tara Jewels Limited134
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
30. DEPRECIATION AND AMORTISATION EXPENSE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Depreciation on tangible assets 213,235,817 204,974,687
Amortisation on intangible assets 8,486,547 8,640,205
221,722,364 213,614,892
31. OTHER EXPENSES
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Manufacturing Expenses
Wages, allowances and bonus 98,622,620 124,752,628
Import clearing charges 8,466,250 12,288,323
Labour charges 43,239,632 90,736,867
Electric power, fuel and water 32,386,699 40,349,097
Repairs and maintenance
Factory Building 1,063,096 2,668,451
Plant and Machinery 2,775,897 6,812,170
Foreign Exchange fluctuation loss (47,771,137) (126,496,470)
Stores, consumables and packing material 38,132,298 114,664,171
176,915,355 265,775,237
Selling, Administration and Other Expenses
Advertisement 394,242 8,266,732
Payments to auditors (Refer note below) 6,915,000 7,668,500
Bad Debts written off 98,157,644 55,573,718
Credit insurance 21,862,549 28,651,495
Electricity charges 1,500,157 3,093,399
Export clearing charges 11,142,932 14,085,955
Fixed assets written off 4,347,902 7,881,649
House Keeping Expenses 2,775,265 3,948,817
Insurance 4,963,799 9,976,046
Legal and professional fees 24,917,550 35,467,085
Net loss on disposal of property, plant and equipment 6,175,932 6,759,433
Rates and taxes 4,702,533 7,688,811
Rent 14,381,226 44,751,602
Repairs & maintenance - other 8,498,385 8,721,894
Sales promotion expenses 7,891,260 7,292,267
Security charges 8,232,505 13,437,456
Telephone and internet expenses 3,220,931 4,241,530
Travelling & conveyance expenses 15,185,668 17,048,668
Annual Report 2016-17 135
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Allowance for doubtful debts (23,172,104) 50,466,745
Bank charges 30,821,927 48,547,964
Fair value loss on financial instrument at Fair value through profit and loss 18,143,004 925,729
Miscellaneous expenses 14,639,173 31,115,735
285,697,480 415,611,230
Total 462,612,835 681,386,467
a. Details of Payments to auditors (Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Audit Fee 1,500,000 2,000,000
Tax audit fee 1,500,000 1,500,000
Limited review fee 1,000,000 1,000,000
Services for tax matters 1,500,000 1,500,000
Certification and consultation 1,100,000 1,308,000
Service Tax 315,000 360,500
6,915,000 7,668,500
b. Value of imports calculated on CIF Basis(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Raw materials 5,838,516,471 5,832,763,015
Trading goods - -
Packing Material 16,306,328 25,693,357
Components and spares 1,502,512 12,797,459
Capital goods 82,104,303 298,847,852
Total 5,938,429,614 6,170,101,683
c. Expenditure in foreign currency(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Salary 7,954,514 15,158,010
Interest 163,273,625 159,833,971
Labour charges 8,135,284 7,514,763
Payment on other accounts 9,498,152 13,153,155
Total 188,861,575 195,659,899
Tara Jewels Limited136
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
d. Earnings in foreign currency(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
F.O.B value of exports 8,813,354,363 9,870,087,143
Labour charges 4,729,138 4,611,767
Freight 9,905,166 11,293,564
Total 8,827,988,667 9,885,992,474
32. EARNINGS PER SHARE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Profit / (Loss) after tax (`) (118,207,264) 92,511,084
Weighted average number of equity shares 24,622,850 24,622,850
Nominal value per share (`) 10.00 10.00
Basic and Diluted Earning / (Loss) per Equity Share (`) (4.80) 3.76
33. EMPLOYEE BENEFIT OBLIGATIONS
(Amount in `)
As at March 31, 2017 As at March 31, 2016
Current Non Current Total Current Non Current Total
Leave obligations 791,838 12,925,127 13,716,965 968,436 9,897,758 10,866,194
Gratuity 1,436,784 30,609,587 32,046,371 5,193,974 20,546,146 25,740,120
Total Employee Benefit Obligation
2,228,622 43,534,714 45,763,336 6,162,410 30,443,904 36,606,314
(i) Leave Obligations The leave obligations cover the company’s liability for sick and earned leave. The amount of the provision of ` 791,838 (Previous Year : ` 968,436) is presented as current, since the company does
not have an unconditional right to defer settlement for any of these obligations.
(ii) Post Employment obligations Gratuity The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are
in continuous service for a period of five years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied by number of years of service.
The gratuity plan is a funded plan and the company makes contributions to recognised funds in India. The company
does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.
Annual Report 2016-17 137
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
The amount recognised in the balance sheet and the movement in the net defined benefit obligation over the period are as follows
(Amount in `)
Particulars Present value of obligation
Fair value of plan assets
Net amount
As at April 1, 2015 33,513,587 (152,908) 33,360,679
Current service cost 3,006,728 - 3,006,728
Interest expense/(income) 2,681,087 - 2,681,087
Total amount recognised in profit or loss 5,687,815 - 5,687,815
Remeasurements
Return of plan assets, excluding amount included in interest (income)
- (12,233) (12,233)
(Gain)/Loss from change in demographic assumptions - - -
(Gain)/Loss from change in financial assumptions 551,601 (535) 551,066
Experience (gains)/losses (6,749,359) - (6,749,359)
Total amount recognised in other comprehensive income (6,197,758) (12,768) (6,210,526)
Employer contributions -
Benefit payments (7,097,848) - (7,097,848)
As at March 31, 2016 25,905,796 (165,676) 25,740,120
Current service cost 3,861,587 - 3,861,587
Interest expense/(income) 1,878,170 (12,012) 1,866,158
Total amount recognised in profit or loss 5,739,757 (12,012) 5,727,745
Remeasurements
Return of plan assets, excluding amount included in interest (income)
- - -
(Gain)/Loss from change in demographic assumptions 153,631 - 153,631
(Gain)/Loss from change in financial assumptions 5,460,489 - 5,460,489
Experience (gains)/losses 625,360 (1,656) 623,704
Total amount recognised in other comprehensive income 6,239,480 (1,656) 6,237,824
Employer contributions -
Benefit payments (5,659,318) - (5,659,318)
As at March 31, 2017 32,225,715 (179,344) 32,046,371
The net liability disclosed above relates to funded and unfunded plans are as follows:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Present value of funded obligations 32,225,715 25,905,796 33,513,587
Fair value of plan assets (179,344) (165,676) (152,908)
Deficit of funded plan 32,046,371 25,740,120 33,360,679
Unfunded plans - - -
Deficit of gratuity plan 32,046,371 25,740,120 33,360,679
Tara Jewels Limited138
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
The significant actuarial assumptions were as follows:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Discount rate 7.25% 8.00%
Expected return on plan assets 7.25% 7.99%
Salary growth rate 3.50% 2.50%
Attrition rate 1% to 4% 1% to 3%
Life expectation for
Male 60 Years 60 years
Female 60 Years 60 years
A quantitative sensitivity analysis for significant assumption as at March 31, 2017 is shown below:
Assumptions Discount rate Salary growth rate
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
March 31, 2016
Impact on defined benefit obligation (129,400) 130,735 34,462 (34,052)
March 31, 2017
Impact on defined benefit obligation (1,735,769) 1,897,725 1,959,837 (1,804,161)
Sensivities due to mortality, attrition and withdrawals are insignificant and therefore ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement. The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The following payments are expected contributions to the defined benefit plan in future years:
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Within the next 12 months 1,616,128 6,398,609
Between 2 and 5 years 9,211,898 8,536,487
Between 5 and 10 years 7,285,680 -
Beyond 10 years - -
Total expected payments 18,113,706 14,935,096
(iii) Defined contribution plans The company also has defined contribution plans. Contributions are made to provident fund in India for employees at the
rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The company has also contributed towards employee’s state insurance scheme and Maharashtra labour welfare fund. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation.
Annual Report 2016-17 139
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
During the year, the Company has recognised the following amounts in the Statement of Profit and Loss: (Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Employer's contribution to provident fund 16,320,666 18,243,875
Employer's contribution to employee's state insurance 4,918,041 5,179,455
Employer's contribution to Maharashtra labour welfare fund 78,516 92,233
21,317,223 23,515,563
34. SHARE BASED PAYMENTS
(a) Employee stock option plan The Employee Stock Option Plan (ESOP) is designed to provide incentives to employees above the designation of
managers to deliver long term returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.
Once vested, the options remain exercisable for a period of 4 years. When exercisable, each option is convertible
into one equity share of ` 10 each. The exercise price of the share options is ` 230.
Movement during the period The number and weighted average exercise prices (WAEP) of the options and movement during the period is as
follows
Particulars Year ended March 31, 2017 Year ended March 31, 2016
No. of options WAEP No. of options WAEP
Opening balance 111,678 230 111,678 230
Granted during the period - - - -
Exercised during the period - - - -
Forfeited / lapsed during the period (5,395) - - -
Expired during the period - - - -
Closing balance 106,283 230 111,678 230
Vested and exercisable 63,770 33,503
Share options outstanding at the end of the period have the following expiry date and exercise prices
Particulars Grant date Expiry date Exercise price (Rs.)
Share options
Share options
Share options
March 31, 2017
March 31, 2016
April 1, 2015
ESOP 2013 - Grant C 25-Jul-13 25-Jul-17 230 106,283 111,678 111,678
Total 106,283 111,678 111,678
Weighted average remaining contractual life of options outstanding at the end of period
0.32 Years 1.32 Years 2.32 Years
Tara Jewels Limited140
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(b) Expense arising from share based payment transactions Total expenses arising from share based payment transactions recognised in profit or loss as part of employee
benefit expense were as follows:(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Employee stock option 447,460 895,107
Total employee share-based payment expense 447,460 895,107
35. COMMITMENTS AND CONTINGENCIES A. Commitments
i. Capital Commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as
follows:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Property, plant and equipment 10,400,445 11,515,601 43,687,095
ii. Leases Operating lease commitments - Company as lessee The Company’s significant leasing arrangements are in respect of residential flats and commercial 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 year and included under Rent (disclosed under Other Expenses).
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Commitments for minimum lease payments in relation to non cancellable operating leases are as follows
Within one year 320,000 543,513 5,155,782
Later than one year but not later than five years - - 993,835
later than five years - - -
320,000 543,513 6,149,617
Rents recognised as expense in the period 14,381,226 44,751,602 -
Operating lease commitments - Company as lessor The Company has entered into operating leases for its commercial property. These leases have terms of between
11 months and 3 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total rents recognised as income during the year is ̀ 51,70,454 (Previous Year : ` 23,31,000).
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Minimum lease rentals receivables in relation to non cancellable operating leases are as follows
Within one year 4,800,000 - -
Later than one year but not later than five years 7,880,000 - -
later than five years - - -
12,680,000 - -
Annual Report 2016-17 141
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
B. Contingent Liabilities(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Claim against the company not acknowledged as debt
(a) Custom duty matters 1,900,563 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 6,723,389
(d) Other matter 1,004,921 2,085,723 2,085,723
Brief description of the nature of each contingent liability (a) Custom duty matters Two show cause notices have been issued against our Company by Assistant Commissioner of Customs, Mumbai,
regarding shortage of gold and misuse of wastage norms. Also Additional Assistant Commissioner of Customs, Mumbai has imposed fine for import without a license that could not be cleared as prototype samples. Company has filed appeals before the Commissioner of Customs / Additional Commissioner of Customs and matters are pending.
(b) Property tax Bill of Property Tax issued by MCGM mentioned an old outstanding amount to be paid by company, which as per
company were not payable and the same has been settled during the year. (c) Service tax matter Joint Commissioner, Service Tax- I, Mumbai has issued a show cause notice to Company for service tax demand for
the Taxation of Services (Provided from Outside India and Received in India). Company has filed an appeal before the Commissioner of Central Excise against the order and the matter is currently pending.
(d) Other matter American Express Bank on his credit card bill to the Company is showing an outstanding amount for interest payable on
account of delay in payment of regular credit card outstanding in past. This amount has been disputed by the company and matter is not yet settled.
C. Financial Guarantees
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Corporate Guarantee given by the Company to the bankers of a subsidiary company
1,847,940,000 1,558,755,000 1,157,915,000
Income Tax Assessment The Income- Tax assessments of the Company have been completed up to Assessment Year 2014-15. The disputed
demand outstanding up to the said assessment year is approximately ` 56,500,000 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.
36. RELATED PARTY TRANSACTIONS
i. List of related parties as per the requirements of Ind-AS 24 - Related Party Disclosures Subsidiary Companies
1. Fabrikant Tara International LLC.2. Tara Jewels Holding Inc.3. Tara (Hong Kong) Ltd.4. Tara China Jewelery Ltd.
Tara Jewels Limited142
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Key Management Personnel1. Mr. Rajeev Sheth2. Mr.Ravindran M. P.3. Mr. Sanjay Sethi (Upto 11-02-2016)4. Mr. Vishnu Prakash Garg (From 23-05-2016)5. Ms. Fern Mallis6. Mr. Nikkhil Vaidya7. Mr. Rakesh Kalra8. Mr. Shanti Saroop Khindria9. Mr. Rajiv Jain10. Mr. Francois Arpels (Upto 11-02-2016)11. Mr. Mariano De La Torre (Upto 09-12-2016)12. Mr. Jeffery Shlakman (From 02-09-2016)13. Mr. Stuart Marcus (From 02-09-2016)14. Ms. Alison Lazerwitz (From 09-12-2016)15. Mr. Bimal Desai (Upto 13-05-2016)16. Mrs. Nivedita Nayak
Relatives of Directors 1. Mrs. Aarti Sheth2. Mrs. Divya Sheth3. Mrs. Purnima Sheth4. Mrs. Rama Ravindran Menon
Entities in which Key Managerial Personnel/ their relatives are able to exercise significant influence or control 1. F. T. Diamonds2. 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
ii. Transactions during the year ended Mar 31, 2017
(Amount in `)
Particulars Subsidiaries Companies
Key Management Personnel/ Relatives
Entities in which Key Managerial Personnel/ their
relatives have significant influence or control
Current Year
Previous Year
Current Year
Previous Year
Current Year
Previous Year
Sale of Goods
Fabrikant Tara International LLC. 1,649,874,842 2,065,262,615 - - - -
Tara (Hong Kong) Ltd. 3,145,372,848 2,554,223,829 - - - -
F. T. Diamonds - - - - 164,497,155 39,887,037
Purchase of Goods
Fabrikant Tara International LLC. 956,514,721 769,887,182 - - - -
Tara (Hong Kong) Ltd. 2,235,421,221 1,110,764,555 - - - -
Aarti Jewellers Pvt Ltd. - - - - 108,000 78,023
F. T. Diamonds - - - - 145,552,019 -
Labour Charges Paid
Tara (Hong Kong) Ltd. 154,524 437,489 - - - -
F. T. Diamonds - - - - 1,159,269 -
Annual Report 2016-17 143
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Subsidiaries Companies
Key Management Personnel/ Relatives
Entities in which Key Managerial Personnel/ their
relatives have significant influence or control
Current Year
Previous Year
Current Year
Previous Year
Current Year
Previous Year
Labour Charges Received
Fabrikant Tara International LLC. 4,694,481 4,577,880 - - - -
Tara (Hong Kong) Ltd. 3,358 163,342 - - - -
Aarti Jewellers Pvt Ltd. - - - - - 71,342
F. T. Diamonds - - - - 27,988 22,324
Purchase of Fixed Assets
Tara (Hong Kong) Ltd. 594,510 252,497 - - - -
Directors' Remuneration and Commission
Mr Rajeev V. Sheth - - 12,000,000 12,000,000 - -
Mr Sanjay Sethi - - - 5,136,207 - -
Mr Vishnu Prakash Garg - - 4,430,543 - - -
Mr Ravindran M. P. - - 2,947,049 2,767,264
Commission and other benefits to Independent Directors
- - 500,000 3,560,000 - -
Salary paid
Mr. Bimal Desai - - 652,759 1,867,370 - -
Ms Aarti Sheth - - 3,246,335 3,720,000 - -
Ms Divya Sheth - - 2,299,067 2,187,165 - -
Other Key Managerial Personnel - - 629,039 611,175 - -
Professional Fees paid
Mrs. Rama Ravindran Menon - - 1,901,880 1,654,992 - -
Sales Promotion Expenses
Aarti Jewellers Pvt Ltd. - - - - 146,744 -
Unsecured Loan Taken
Mr. Rajeev Sheth - - 10,664,008 - - -
Repayment of Unsecured Loans
Mr. Rajeev Sheth - - 2,600,000 - - -
Commission Income on Corporate Guarantee issued
Fabrikant Tara International LLC. 2,308,650 1,989,900 - - - -
Tara (Hong Kong) Ltd. 1,116,645 1,127,610 - - - -
Tara Jewels Limited144
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Subsidiaries Companies
Key Management Personnel/ Relatives
Entities in which Key Managerial Personnel/ their
relatives have significant influence or control
Current Year
Previous Year
Current Year
Previous Year
Current Year
Previous Year
Guarantee Commission Expense on Corporate Guarantee received
Fabrikant Tara International LLC. 7,380,000 14,860,000 - - - -
Tara (Hong Kong) Ltd. 7,380,000 - - - - -
Guarantee Commission Income on Corporate Guarantee received
Fabrikant Tara International LLC. 7,380,000 14,860,000 - - - -
Tara (Hong Kong) Ltd. 7,380,000 - - - - -
iii. Key management personnel compensation
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Salaries and other employee benefits to whole time directors and Key Management Personnel
26,204,792 28,289,181
Provision for Post employment benefits to whole time directors and Key Management Personnel *
1,349,977 -
Commission and other benefits to non-executive / independent directors 500,000 3,560,000
Share based payments - -
28,054,769 31,849,181
* The amount for year ended March 31, 2016 excludes post employment benefit viz. gratuity which can not be separately identified from the composite amount advised by the Actuary. iv. Closing Balances as on March 31, 2017
(Amount in `)
Subsidiaries Companies
Key Management Personnel/ Relatives
Entities in which Key Managerial Personnel/ their
relatives have significant influence or control
Current Year
Previous Year
Current Year
Previous Year
Current Year
Previous Year
Trade Receivables
Fabrikant Tara International LLC. - 44,308,468
Tara (Hong Kong) Ltd. 1,100,692,796 285,605,138 - - - -
F. T. Diamonds - - - - - 41,229,519
Aarti Jewellers Pvt Ltd. - - - - 52,903 71,794
Trade Payables
Fabrikant Tara International LLC. 67,879,027 - - - - -
F. T. Diamonds - - - - 35,396,027 -
Investments
Tara Jewels Holding Inc. 118,849,850 116,541,200 - - - -
Annual Report 2016-17 145
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Subsidiaries Companies
Key Management Personnel/ Relatives
Entities in which Key Managerial Personnel/ their
relatives have significant influence or control
Current Year
Previous Year
Current Year
Previous Year
Current Year
Previous Year
Tara (Hong Kong) Ltd. 28,176,089 27,059,444 - - - -
Divya Jewels International Pvt. Ltd. - - - - 175,000 175,000
Short-term borrowings
Mr. Rajeev Sheth - - 8,064,008 - - -
Director Remuneration payable
Mr. Rajeev Sheth - - 984,912 5,567,343 - -
Mr Vishnu Prakash Garg - - 577,133 - - -
Mr Ravindran M. P. - - 352,156 165,439 - -
Commission and other benefits Payable to Independent Directors
- - 2,866,100 5,444,420 - -
Salary Payable
Ms Aarti Sheth - - 1,359,935 647,707 - -
Ms Divya Sheth - - 117,507 71,983 - -
Mr. Bimal Desai - - - 297,634 - -
Other Key Managerial Personnel - - 108,269 45,364 - -
Professional Fees Payable
Mrs. Rama Ravindran Menon - - 470,448 137,916 - -
v. Terms and conditions of transactions with related parties The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year end are unsecured and interest free. For the year ended March 31, 2017, the Company has not recorded any impairment of receivables relating to amount owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and market in which the related party operates.
37. SEGMENT REPORTING
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.(Amount in `)
April 1, 2016 to March 31, 2017
Particulars India Outside India* Total
External Revenue 3,081,244,909 8,825,115,711 11,906,360,620
(3,741,809,572) (9,826,801,644) (13,568,611,216)
As at March 31, 2017
Carrying Amount of Segment Assets 6,880,024,150 7,944,105,187 14,824,129,337
(7,499,469,964) (7,311,903,583) (14,811,373,547)
April 1, 2016 to March 31, 2017
Capital Expenditure 114,313,913 - 114,313,913
(322,756,621) - (322,756,621)
* Includes mainly United States of America, Australia, China (including Hong kong), United Arab Emirates,
Tara Jewels Limited146
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Europe, South- Africa, Canada, Singapore and United kingdom
Note: The figures in brackets are in respect of the previous year ended March 31, 2016
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.
(c) Revenue from two subsidiaries amounted to `4,79,99,45,528 (March 31, 2016 : ` 4,62,42,27,666)
38. FAIR VALUE MEASUREMENTS
i. Financial Instruments by Category(Amount in `)
Particulars Carrying Amount Fair Value
As at March 31,
2017
As at March 31, 2016
As at April 1, 2015
As at March 31,
2017
As at March 31, 2016
As at April 1, 2015
FINANCIAL ASSETS
Amortised cost
Trade Receivables 7,945,347,225 7,144,810,421 6,283,157,175 7,945,347,225 7,144,810,421 6,283,157,175
Loans 3,755,939 2,720,393 3,873,021 3,755,939 2,720,393 3,873,021
Cash and Cash Equivalents 6,937,180 20,275,608 60,278,852 6,937,180 20,275,608 60,278,852
Other Bank Balances 686,917,573 694,259,301 704,070,637 686,917,573 694,259,301 704,070,637
Other Financial Assets 14,780,149 27,176,857 37,694,590 14,780,149 27,176,857 37,694,590
FVTOCI
Investment in Equity Instruments 1,419,250 903,770 1,459,990 1,419,250 903,770 1,459,990
FVTPL
Investments in Mutual Funds 24,880,621 59,601,833 47,641,964 24,880,621 59,601,833 47,641,964
Total 8,684,037,937 7,949,748,183 7,138,176,229 8,684,037,937 7,949,748,183 7,138,176,229
FINANCIAL LIABILITIES
Amortised cost
Borrowings 5,594,900,681 5,751,359,131 5,614,881,581 5,594,900,681 5,751,359,131 5,614,881,581
Trade Payables 3,207,190,597 3,014,736,439 2,172,915,652 3,207,190,597 3,014,736,439 2,172,915,652
Other financial liabilities 45,992,385 31,406,621 29,805,374 45,992,385 31,406,621 29,805,374
FVTPL
Derivative instruments 19,521,757 - - 19,521,757 - -
Total 8,867,605,420 8,797,502,191 7,817,602,607 8,867,605,420 8,797,502,191 7,817,602,607
The management assessed that the fair value of cash and cash equivalent, other bank balances, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
The fair values for security deposits were calculated based on cash flows discounted using a current lending rate. They are
classified as level 3 fair values in the fair value hierarchy and their fair values are assessed as approximate to their carrying amounts.
Annual Report 2016-17 147
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
The fair values of non current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. The own non performance risk as at reporting date was assessed to be insignificant and therefore fair values approximate their carrying amounts.
ii. Fair Value Hierarchy This section explains the judgments and estimates made in determining the fair values of the financial instruments
that are recognised and measure at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table:
Assets and liabilities measured at fair value - recurring fair value measurement:
Particulars Fair value measurement using Total
Quoted prices in active markets (Level 1)
Significant Observable
Inputs (Level 2)
Significant Unobservable
Inputs (Level 3)
As at March 31, 2017
Financial Assets
Financial Investments at FVTPL
Quoted Mutual Funds 7,380,621 7,380,621
Unquoted Mutual Funds 17,500,000 17,500,000
Financial Investments at FVTOCI
Quoted equity shares 1,244,250 1,244,250
Unquoted equity shares 175,000 175,000
Total Financial Assets 8,624,871 17,500,000 175,000 26,299,871
Financial Liabilities at FVTPL
Derivative instruments 19,521,757 19,521,757
Total Financial Liabilities - 19,521,757 - 19,521,757
As at March 31, 2016
Financial Assets
Financial Investments at FVTPL
Quoted Mutual Funds 42,101,833 42,101,833
Unquoted Mutual Funds 17,500,000 17,500,000
Financial Investments at FVTOCI
Quoted equity shares 728,770 728,770
Unquoted equity shares 175,000 175,000
Total Financial Assets 42,830,603 17,500,000 175,000 60,505,603
Financial Liabilities at FVTPL
Derivative instruments - -
Total Financial Liabilities - - - -
As at April 1, 2015
Financial Assets
Financial Investments at FVTPL
Quoted Mutual Funds 30,141,964 30,141,964
Tara Jewels Limited148
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Particulars Fair value measurement using Total
Quoted prices in active markets (Level 1)
Significant Observable
Inputs (Level 2)
Significant Unobservable
Inputs (Level 3)
Unquoted Mutual Funds 17,500,000 17,500,000
Financial Investments at FVTOCI
Quoted equity shares 1,284,990 1,284,990
Unquoted equity shares 175,000 175,000
Total Financial Assets 31,426,954 17,500,000 175,000 49,101,954
There have been no transfers among Level 1, Level 2 and Level 3 during the period
Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2 - The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 - If one or more of the significant inputs are not based on observable market data, the instrument is included in level
3. This is the case for unlisted equity shares, contingent consideration and indemnification assets included in level 3.
iii. Valuation technique used to determine fair value Specific Valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments - the fair value of the remaining financial instruments is determined using discounted cash flow analysis
iv. Valuation inputs and relationships to fair value The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The
valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate of fair value for these unquoted equity investments.
v. Valuation processes The finance department of the Company performs the valuations of financial assets and liabilities required for
financial reporting purposes, including level 3 fair values. The department reports directly to the chief financial officer (CFO) and the audit committee. Discussions of valuation processes and results are held between the CFO, Audit Committee and the valuation team periodically.
vi. Reconciliation of fair value measurement of financial assets carried at fair value (Level 3): There is no change in fair value of unquoted equity shares.
39. FINANCIAL RISK MANAGEMENT
The company’s activity expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
Annual Report 2016-17 149
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(A) Credit risk Credit risk is the risk that the counterparty will not meet its obligations leading to a financial loss. Credit risk arises
from cash and cash equivalents, investments carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables.
i. Credit risk management Credit risk has always been managed by the company through credit approvals, obtaining credit reports,
establishing credit limits, taking credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business.
The company considers the probability of default upon initial recognition of asset and whether there has been
a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.
A default on a financial asset is when the counterparty fails to make contractual payments of when they fall
due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.
ii. Provision for expected credit losses The company follows ‘simplified approach’ for recognition of impairment loss allowance on Trade
receivables As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on
portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
iii. Reconciliation of loss allowance provision - Trade receivables
(Amount in `)
Particulars
Loss allowance on April 1, 2015 59,375,202
Changes in loss allowance 50,466,745
Loss allowance on March 31, 2016 109,841,947
Changes in loss allowance (23,172,104)
Loss allowance on March 31, 2017 86,669,843
(B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
Tara Jewels Limited150
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Maturities of financial liabilities The tables below analyse the company’s financial liabilities into relevant maturity groupings based on their
contractual maturities for: - all non-derivative financial liabilities, and - net and gross settled derivative financial instruments for which the contractual maturities are essential for an
understanding of the timing of the cash flows. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Company can be required to pay. In the table below, borrowings include both interest and principal cash flows. To the extent that the interest rates are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.
Contractual maturities of financial liabilities
Particulars Carrying Amount
Contractual Cash Flows
Total Less than 1 year
Between 1 and 3 years
More than 3 years
March 31, 2017
Non-derivatives
Borrowings 5,599,465,881 5,941,419,994 5,932,497,894 8,231,500 690,600
Trade payables 3,207,190,597 3,207,190,597 3,207,190,597 - -
Other financial liabilities 45,992,385 45,992,385 45,992,385 - -
Total non derivative liabilities 8,852,648,863 9,194,602,976 9,185,680,876 8,231,500 690,600
Derivatives (net settled)
Foreign exchange forward contracts 19,521,757 19,521,757 19,521,757 - -
Total derivative liabilities 19,521,757 19,521,757 19,521,757 - -
March 31, 2016
Non-derivatives
Borrowings 5,755,824,696 6,378,618,229 6,364,546,769 9,237,260 4,834,200
Trade payables 3,014,736,439 3,014,736,439 3,014,736,439 - -
Other financial liabilities 31,406,621 31,406,621 31,406,621 - -
Total non derivative liabilities 8,801,967,756 9,424,761,289 9,410,689,829 9,237,260 4,834,200
April 1, 2015
Non-derivatives
Borrowings 5,623,901,282 6,169,464,736 6,165,893,092 3,571,644 -
Trade payables 2,172,915,652 2,172,915,652 2,172,915,652 - -
Other financial liabilities 29,805,374 29,805,374 29,805,374 - -
Total non derivative liabilities 7,826,622,308 8,372,185,762 8,368,614,118 3,571,644 -
(C) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
change in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk such as equity price risk and commodity price risk.
(i) Foreign currency risk The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and
loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than functional currency of the Company.
Annual Report 2016-17 151
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuation in exchange rates in those countries. The risk primarily relate to fluctuations in US Dollars(USD). Other Currencies in which risk of fluctuation is not significant are Great Britain Pound(GBP) and Euro(EUR) against the functional currency of the Company.
The Company, as per its risk management policy uses derivative instruments primarily to hedge foreign
exchange. Further, any movement in the foreign currencies of the various operations of the Company against the functional currency of the Company may impact the Company’s revenue from international business.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risk. It hedges a part of this risk by using derivative financial instruments in line with risk management policies.
(a) Foreign currency risk exposure The Company’s exposure to foreign currency risk at the end of the reporting period expressed in Indian
Rupees are as follows (Amount in `)
Particulars USD Others Total
March 31, 2017
Trade Receivables 7,717,609,967 79,718 7,717,689,685
Bank balance in EEFC accounts 70,297 70,297
Foreign Currency loans (2,336,314,096) (2,336,314,096)
Trade Payables (2,962,026,090) (14,033,572) (2,976,059,662)
Derivative Instruments (19,521,757) (19,521,757)
Net exposure to foreign currency risk 2,399,818,321 (13,953,854) 2,385,864,467
March 31, 2016
Trade Receivables 7,138,796,247 86,452 7,138,882,699
Bank balance in EEFC accounts 71,912 71,912
Foreign Currency loans (2,684,589,030) (2,684,589,030)
Trade Payables (2,451,339,299) (52,377,569) (2,503,716,868)
Net exposure to foreign currency risk 2,002,939,830 (52,291,117) 1,950,648,713
April 1, 2015
Trade Receivables 6,272,194,161 86,356 6,272,280,517
Bank balance in EEFC accounts 65,611 65,611
Foreign Currency loans (2,335,012,394) (2,335,012,394)
Trade Payables (1,861,152,257) (52,116,987) (1,913,269,244)
Net exposure to foreign currency risk 2,076,095,121 (52,030,631) 2,024,064,490
(b) Foreign currency sensitivity 1% increase or decrease in foreign exchange rates will have the following impact on profit before tax:
Year ended March 31, 2017 Year ended March 31, 2016
1% Increase 1% Decrease 1% Increase 1% Decrease
USD 23,998,183 (23,998,183) 20,029,398 (20,029,398)
Others (139,539) 139,539 (522,911) 522,911
Net Increase/(decrease) in profit or loss 23,858,645 (23,858,645) 19,506,487 (19,506,487)
Tara Jewels Limited152
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(ii) Interest rate risk The company’s main interest rate risk arises from borrowings with variable rates, which expose the company to cash
flow interest rate risk. During March 31, 2017, March 31, 2016 and April 1, 2015, the company’s borrowings at variable rate were mainly denominated in Rupees and USD.
The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate
risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market.
(a) Interest rate risk exposure The exposure of the company’s borrowing to interest rate changes at the end of the reporting period are as follows:
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Variable rate borrowings 5,548,868,593 5,724,200,295 5,596,570,897
Fixed rate borrowings 50,597,288 31,624,401 27,330,385
Total borrowings 5,599,465,881 5,755,824,696 5,623,901,282
% of borrowings at variable rate 99.10 99.45 99.51
(b) Sensitivity Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.
Particulars Impact on profit before tax
Year ended March 31, 2017
Year ended March 31, 2016
Interest rates - increase by 50 basis points (50 bps)* (27,744,343) (28,621,001)
Interest rates - decrease by 50 basis points (50 bps)* 27,744,343 28,621,001
* holding all other variables constant
(iii) Price risk Commodity price risk - The company is affected by the price volatility of certain commodities. Its operating activities
require the ongoing purchase and manufacture of Jewellery and therefore require a continuous supply of mainly Gold and Diamond. Due to the volatility in the price of Gold and Diamond, the company is exposed to commodity price risk. Historically, the company has been able to increase prices to reflect changes in commodity cost.
Equity / Units price risk - The company’s exposure to listed and unlisted equity / debt securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.
To manage its price risk arising from investments in equity securities, the company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the company. Reports on the equity / debt portfolio are submitted to the company’s senior management on a regular basis. The majority of the company’s equity / debt investments are publicly traded.
Equity / debt price sensitivity The analysis is based on the assumption that the stock market index had increased by 1% or decreased by 1% with
all other variables held constant, and that all the company’s equity / debt instruments moved in line with the index.
Particulars Impact on profit before tax Impact on other component of equity
Year ended March 31,
2017
Year ended March 31,
2016
Year ended March 31,
2017
Year ended March 31,
2016
Stock Market Index - increase 1% (2016 - 1%) 73,806 421,018 12,443 7,288
Stock Market Index - decrease 1% (2016 - 1%) (73,806) (421,018) (12,443) (7,288)
Annual Report 2016-17 153
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
Profit for the period would increase/decrease as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value though other comprehensive income.
40. CAPITAL MANAGEMENT
For the purpose of the company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is Total outside liabilities (TOL) divided by Total net worth (TNW). TOL includes interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Borrowings 5,594,900,681 5,751,359,131 5,614,881,581
Trade payables 3,207,190,597 3,014,736,439 2,172,915,652
Other payables 65,514,142 31,406,621 29,805,374
Less: cash and cash equivalents 6,937,180 20,275,608 60,278,852
Less: Other bank balances 686,917,573 694,259,301 704,070,637
TOL 8,173,750,667 8,082,967,282 7,053,253,118
Total Equity 5,416,800,701 5,538,220,438 5,441,309,280
TNW 5,416,800,701 5,538,220,438 5,441,309,280
Gearing ratio (TOL / TNW) 1.51 1.46 1.30
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define capital structure requirements as follows:
- the ratio of total outside liabilities to adjusted Net Worth must be not more than 5 times, - the ratio of long term debt to EBITDA must not be more than 4.5 times, and - the ratio of EBITDA to net finance cost must not be less than 1.62 times The company has complied with these covenants throughout the reporting period except ratio of EBITDA to net finance cost.
41. ASSETS PLEDGED AS SECURITY
The carrying amount of assets pledged as security for current and non current borrowings are:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
CURRENT ASSETS
i. Financial Assets
Trade Receivables 7,945,347,225 7,144,810,421 6,283,157,175
Cash and Cash Equivalents 6,937,180 20,275,608 60,278,852
Other Bank Balances 686,917,573 694,259,301 704,070,637
Loans 3,755,939 2,720,393 3,873,021
Other Financial Assets 9,651,427 10,771,524 12,420,485
Tara Jewels Limited154
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
ii. Non Financial Assets
Inventories 4,663,044,143 5,298,972,788 5,010,576,515
Other Current Assets 102,634,704 90,163,814 123,861,194
Total current assets pledge as security 13,418,288,191 13,261,973,849 12,198,237,879
NON CURRENT ASSETS
Property, Plants and equipments 724,767,552 765,128,252 612,758,369
Total non current assets pledge as security 724,767,552 765,128,252 612,758,369
42. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 (MSMED ACT, 2006)
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
a) Principal amount due and remaining unpaid - 55,624 77,000
b) Interest due on above - 3,498 271
c) Payment made beyond the appointed day during the year 245,905 489,630 583,788
d) Interest Paid on above - - -
e) Interest due and payable for the period of delay 7,439 12,821 18,276
f) Interest accrued and remaining unpaid 7,439 16,319 18,547
g) Amount of further interest remaining due and payable in succeeding years
115,189 107,750 91,431
43. DISCLSOURE ON SPECIFIED BANK NOTES (SBNS)
During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:
Particulars SBNs* Other Denomination
Notes
Total
Closing cash in hand as on 08-11-2016 53,612,000 318,808 53,930,808
Add : Permitted receipts # - 2,438,551 2,438,551
Less : Permitted payments - 499,527 499,527
Less : Amount deposited in Banks 53,612,000 130,591 53,742,591
Closing cash in hand as on 30-12-2016 - 2,127,241 2,127,241
* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning as provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E), dated the November 8, 2016.
# Includes withdrawals from Banks `5,23,000
44. DISCLOSURES REQUIRED UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013
Corporate guarantees given by the Company in respect of Loans as at March 31, 2017(Amount in `)
Name of the Party As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Fabrikant Tara International LLC. 1,296,800,000 994,950,000 625,900,000
Tara (Hong Kong) Ltd. 551,140,000 563,805,000 532,015,000
All the above corporate guarantees have been given for the purpose of business.
Annual Report 2016-17 155
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
45. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the previous financial year, the company has constituted the Corporate Social Responsibility Committee in terms of Section 135 of the Companies Act, 2013 and the board had adopted a CSR Policy as recommended by the Committee. However during the financial year under review, the Company has not made any expenditure on CSR as the Company is still in the process of identifying the eligible project, by which the public can be benefited appropriately. The Company intends to contribute to the money for CSR activities as soon as the project is identified.
46. FIRST TIME ADOPTION OF IND AS
These are the company’s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 (the Company’s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following tables and notes.
A. Exemptions and exceptions availed Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition
from previous GAAP to Ind AS.
1. Ind AS optional exemptions i. Business combinations Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a
specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.
ii. Deemed cost Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property,
plant and equipment and intangible assets covered by Ind AS 38 - Intangible Assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for investment property covered by Ind AS 40 Investment Properties since there is no change in the functional currency. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.
iii. Designation of previously recognised financial instruments Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of
the facts and circumstances at the date of transition to Ind AS. The company has elected to apply this exemption for its investment in quoted and unquoted equity investments.
iv. Estimates The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates
in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:
- FVTOCI – unquoted equity shares
- FVTPL – unquoted mutual funds
- Impairment of financial assets based on expected credit loss model The estimates used by the company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2015, the date of transition to Ind AS and as of March 31, 2016.
Tara Jewels Limited156
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
v. Investments in subsidiaries In separate financial statements, a first-time adopter that subsequently measures an investment in a
subsidiary at cost , may measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) in its separate opening Ind AS balance sheet. Selection of fair value or previous GAAP carrying amount for determining deemed cost can be done for each subsidiary. The company elects to carry all its investments in subsidiaries at previous GAAP carrying amount as deemed cost.
vi. Share based payment transactions A first-time adopter is encouraged, but not required, to apply Ind AS 102 Share-based Payment to
equity instruments that were vested on or before the date of transition to Ind AS. However, if a first-time adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of those equity instruments determined at the measurement date as defined in Ind AS 102.
Therefore, Ind AS 102 Share-based Payment has been applied to equity instruments in share-based payment transactions that vested before April 1, 2015.
2. Ind AS mandatory exceptions i. De-recognition of financial assets and liabilities Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively
for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 retrospectively from the date of transition to Ind AS.
ii. Classification and measurement of financial assets Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in
debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
B. Reconciliations between previous GAAP and Ind AS Ind AS 101 requires an entity to reconcile equity and total comprehensive income for prior periods. The following
tables represent the reconciliations from previous GAAP to Ind AS.
i. Reconciliation of equity as at date of transition (April 1, 2015) (Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
ASSETS
Non-Current Assets
Property, Plant and Equipment 1,082,095,939 1,082,095,939
Other Intangible Assets 23,442,870 23,442,870
Investments 1 175,356,506 14,228,582 189,585,088
Other Financial Assets 25,274,105 25,274,105
Deferred Tax Asset (Net) 2 34,470,568 20,014,262 54,484,830
Other Non-Current Assets 14,759,503 14,759,503
1,355,399,491 34,242,844 1,389,642,335
Current assets
Inventories 5,010,576,515 5,010,576,515
Annual Report 2016-17 157
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
Financial Assets -
Trade Receivables 3 6,342,532,377 (59,375,202) 6,283,157,175
Cash and Cash Equivalents 60,278,852 60,278,852
Other Bank Balances 704,070,637 704,070,637
Loans 3,873,021 3,873,021
Other Financial Assets 12,420,485 12,420,485
Other Current Assets 181,480,272 181,480,272
12,315,232,159 (59,375,202) 12,255,856,957
TOTAL 13,670,631,650 (25,132,358) 13,645,499,292
EQUITY AND LIABILITIES
Equity
Equity Share capital 246,228,500 246,228,500
Other Equity 7, 8 5,220,213,138 (25,132,358) 5,195,080,780
5,466,441,638 (25,132,358) 5,441,309,280
Liabilities
Non Current Liabilities
Financial Liabilities
Borrowings 3,310,684 3,310,684
Provisions 46,005,656 46,005,656
49,316,340 49,316,340
Current Liabilities
Financial Liabilities
Borrowings 4 5,611,570,897 5,611,570,897
Trade Payables
Micro, Small and Medium Enterprises 77,000 77,000
Others 2,172,838,652 2,172,838,652
Other Financial Liabilities 29,805,374 29,805,374
Other Current Liabilities 138,973,078 138,973,078
Provisions 1,881,958 1,881,958
Current Tax Liabilities (Net) 199,726,713 199,726,713
8,154,873,672 - 8,154,873,672
TOTAL 13,670,631,650 (25,132,358) 13,645,499,292
Tara Jewels Limited158
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
ii. Reconciliation of equity as at March 31, 2016(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
ASSETS
Non-Current Assets
Property, Plant and Equipment 1,147,865,585 - 1,147,865,585
Capital Work-in-Progress 28,293,589 - 28,293,589
Other Intangible Assets 16,575,092 - 16,575,092
Financial Assets
Investments 1 188,619,351 15,486,896 204,106,247
Other Financial Assets 16,405,333 - 16,405,333
Deferred Tax Asset (Net) 2 30,774,351 36,760,521 67,534,872
Other Non-Current Assets 24,335,471 - 24,335,471
1,452,868,772 52,247,417 1,505,116,189
Current assets
Inventories 5,298,972,788 - 5,298,972,788
Financial Assets
Trade Receivables 3 7,254,652,368 (109,841,947) 7,144,810,421
Cash and Cash Equivalents 20,275,608 - 20,275,608
Bank Balances Other than (iii) above 694,259,301 - 694,259,301
Loans 2,720,393 - 2,720,393
Other Financial Assets 10,771,524 - 10,771,524
Other Current Assets 134,447,323 - 134,447,323
13,416,099,305 (109,841,947) 13,306,257,358
TOTAL 14,868,968,077 (57,594,530) 14,811,373,547
EQUITY AND LIABILITIES
Equity
Equity Share capital 246,228,500 246,228,500
Other Equity 7, 8 5,349,586,468 (57,594,530) 5,291,991,938
5,595,814,968 (57,594,530) 5,538,220,438
Liabilities
Non Current Liabilities
Financial Liabilities
Borrowings 12,158,836 - 12,158,836
Provisions 30,443,904 - 30,443,904
42,602,740 - 42,602,740
Current Liabilities
Financial Liabilities
Borrowings 4 5,739,200,295 - 5,739,200,295
Trade Payables
Annual Report 2016-17 159
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
Micro, Small and Medium Enterprises 77,787 - 77,787
Others 3,014,658,652 - 3,014,658,652
Other Financial Liabilities 31,406,621 - 31,406,621
Other Current Liabilities 166,110,284 - 166,110,284
Provisions 6,162,410 - 6,162,410
Current Tax Liabilities (Net) 272,934,320 - 272,934,320
9,230,550,369 - 9,230,550,369
TOTAL 14,868,968,077 (57,594,530) 14,811,373,547
iii. Reconciliation of total comprehensive income for the year ended March 31, 2016(Amount in `)
Particulars Notes IGAAP Adjustments IND AS Balance
REVENUE
Revenue from operations (net) 13,568,611,216 - 13,568,611,216
Other income 1, 9 49,222,805 17,600,263 66,823,068
Total Revenue (I) 13,617,834,021 17,600,263 13,635,434,284
EXPENSES
Cost of materials consumed 9,576,285,173 - 9,576,285,173
Purchases of stock-in-trade 2,324,708,368 - 2,324,708,368
Changes in inventories of finished goods, work-in-process and Stock-in-Trade
(323,502,785) - (323,502,785)
Excise duty 3,265,750 - 3,265,750
Employee benefits expense 5, 6 340,021,032 3,093,209 343,114,241
Finance costs 9 643,390,475 14,860,000 658,250,475
Depreciation and amortization expense 213,614,892 213,614,892
Other expenses 1, 3, 5 625,981,569 55,404,898 681,386,467
Total Expenses (II) 13,403,764,474 73,358,107 13,477,122,581
Profit/(loss) before tax (I-II) 214,069,547 (55,757,844) 158,311,703
Tax expense: - -
Current tax 81,000,000 81,000,000
Adjustment of tax relating to earlier periods -
Deferred tax 2 3,696,217 (18,895,598) (15,199,381)
84,696,217 (18,895,598) 65,800,619
Profit/(loss) for the year 129,373,330 (36,862,246) 92,511,084
Tara Jewels Limited160
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
OTHER COMPREHENSIVE INCOME
A. Other Comprehensive income not to be reclassified to profit and loss in subsequent periods:
Remeasurement of gains (losses) on defined benefit plans
5 - 6,210,526 6,210,526
Income tax effect 2 - (2,149,339) (2,149,339)
Equity Instruments through Other Comprehensive Income
1 - (556,220) (556,220)
Income tax effect - - -
Other Comprehensive income for the year, net of tax
- 3,504,967 3,504,967
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX
129,373,330 (33,357,279) 96,016,051
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note
iv. Reconciliation of total equity as at March 31, 2016 and April 1, 2015(Amount in `)
Particulars Notes March 31, 2016 April 1, 2015
Total equity (shareholder’s funds) as per previous GAAP 5,595,814,968 5,466,441,638
Adjustments:
Fair valuation of investments 1 10,053,556 11,912,752
Provision for expected credit losses on trade receivables 3 (109,841,947) (59,375,202)
Fair valuation of financial guarantees 9 5,433,340 2,315,830
Tax effects of adjustments 2 36,760,521 20,014,262
Total adjustments (57,594,530) (25,132,358)
Total equity as per Ind AS 5,538,220,438 5,441,309,280
v. Reconciliation of total comprehensive income for the year ended March 31, 2016(Amount in `)
Particulars Notes As at March 31, 2016
Profit after tax as per previous GAAP 129,373,330
Adjustments:
Fair valuation of investments 1 (1,302,976)
Provision for expected credit losses on trade receivables 3 (50,466,745)
Fair valuation of financial guarantees 9 3,117,510
Share based payment transaction 6 (895,107)
Remeasurements of post-employment benefit obligations 5 (6,210,526)
Annual Report 2016-17 161
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Notes As at March 31, 2016
Tax effects of adjustments 2 18,895,598
Total adjustments (36,862,246)
Profit after tax as per Ind AS 92,511,084
Other comprehensive income 8 3,504,967
Total comprehensive income as per Ind AS 96,016,051
C. Notes to first-time adoption: Note 1: Fair valuation of investments Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2016. This increased the retained earnings by ` 9,431,186 as at March 31, 2016 (April 1, 2015 - ` 10,734,162). Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognised in FVOCI – Equity instruments through OCI reserve as at the date of transition and subsequently in the other comprehensive income for the year ended March 31, 2016. This increased Equity instruments through OCI reserve by ` 622,370 as at March 31, 2016 (April 1, 2015 - ` 1,178,590). Consequent to the above, the total equity as at March 31, 2016 increased by ` 10,053,556 (April 1, 2015 - ` 11,912,752) and profit and other comprehensive income for the year ended March 31, 2016 decreased by ` 1,302,976 and ` 556,220 respectively. Note 2: Deferred tax Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of ` 2,00,14,262 (March 31, 2016: ` 3,67,60,521) Note 3: Trade and Other Receivables Under Indian GAAP, the company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Due to ECL model, the company impaired its trade receivable by ` 5,93,75,202 on April 1, 2015 which has been eliminated against retained earnings. The impact of ` 5,04,66,745 for year ended on March 31, 2016 has been recognized in the statement of profit and loss. Under Indian GAAP, the Company had derecognised the trade receivables against which the bills discounting facility has been availed; and had disclosed such bills discounted which are outstanding as at the balance sheet date under contingent liabilities. Under Ind AS, the risk of default associated with certain trade receivables against which the bill discounting facility has been availed remains with the Company and hence, the Company cannot derecognise the related trade receivable.
Tara Jewels Limited162
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2017
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 Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
Note 4: Borrowings Under Indian GAAP, the Company had not recognised the borrowings in the nature of bills discounted as the same had been set off against the related trade receivables and had been disclosed under contingent liabilities. Under Ind AS, as the trade receivables cannot be derecognised till the risk of default does not get transferred, the bills discounting facility availed against such trade receivables has to be recognised separately as short term borrowings. Note 5: Remeasurements of post-employment benefit obligations Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 decreased by ` 6,210,526. There is no impact on the total equity as at March 31, 2016. Note 6: Employee stock option expense Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognised based on the fair value of the options as at the grant date. Consequently, the amount recognised in share option outstanding account increased by ̀ 3,473,102 as at March 31, 2016 (April 1, 2015: ` 2,577,509). The profit for the year ended March 31, 2016 decreased by ` 895,107. There is no impact on total equity. Note 7: Retained earnings Retained earnings as at April 1, 2015 has been adjusted consequent to the above Ind AS transition adjustments. Note 8: Other comprehensive income Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP. Note 9: Financial Guarantees Under Indian GAAP, the bank guarantees issued to banks in relation to loans availed by subsidiaries is only disclosed by way of a note in Contingent Liabilities disclosure. Under Ind AS, liability from such financial guarantees is to be recorded initially at fair value. The adjustment represents the fair value of the guarantee given by the Company on behalf of others and issued by others on Company’s behalf.
Annual Report 2016-17 163
To the Members of Tara Jewels Limited
REPORT ON THE CONSOLIDATED IND AS FINANCIAL STATEMENTSWe have audited the accompanying consolidated Ind AS financial statements of TARA JEWELS LIMITED (“the Holding Company”) and its subsidiaries (collectively referred to as “the Group”), comprising of the Consolidated Balance Sheet as at March 31, 2017, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Cash Flow Statement and the Consolidated Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “consolidated Ind AS financial statements”).
MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED IND AS FINANCIAL STATEMENTSThe Holding Company’s Board of Directors is responsible for the preparation of the consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules issued thereunder. 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 of 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 Ind AS financial statements by the Directors of the Holding Company, as aforesaid.
AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on these consolidated Ind AS 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 theaudit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS 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 of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 Ind AS 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 Other Matters below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.
OPINIONIn our opinion and to the best of our information and according to the explanations given to us and based on consideration of reports of the other auditors on separate financial statements of the subsidiary companies referred to in “Other Matters” below, the aforesaid consolidated Ind AS 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 financial position of the Group as at March 31, 2017, and their consolidated financial performance including other comprehensive income, their consolidated cash flows and consolidated statement of changes in equity for the year ended on that date.
INDEPENDENT AUDITORS REPORT
Tara Jewels Limited164
OTHER MATTERSWe did not audit the financial statements of subsidiaries, whose financial statements reflect total assets of `2,54,36,15,197 as at March 31, 2017, total revenues of `8,49,53,40,957 and net cash outflows amounting to `35,41,508 for the year ended on that date, as considered in the consolidated Ind AS financial statements. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and our report in terms of Section 143 (3) of the Act, insofar as it relates to the aforesaid subsidiaries is based solely on the reports of the other auditors.
The Company’s Management has converted the financial statements of such subsidiaries located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made of the Company’s Management. Our opinion is so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Company and audited by us.
We did not audit the financial statements of subsidiaries, whose financial statements reflect total assets of ` 2,40,72,54,658 as at March 31, 2017, total revenues of `4,95,69,62,113 and net cash outflows amounting to `8,36,888 for the year ended on that date, as considered in the consolidated Ind AS financial statements. These financial statements of subsidiaries are unaudited and have been furnished to us by the Management and our opinion on the consolidated In AS financial statements, in so far as it related to the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub section (3) of Section 143 of the Actin so far as it relates to the aforesaid subsidiaries is based solely on such unaudited financial statements.
Our opinion on the consolidated Ind AS financial statements above, 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.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSAs 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 ofour knowledge and belief were necessary for the purposesof our audit of the aforesaid consolidated Ind AS financial statements.
b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS 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, the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements.
d. In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act as applicable.
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
March 31, 2017 and taken on record by the Board of Directors of the Holding Company, none of the directors of the Holding company incorporated in India is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
f. In case of subsidiary companies incorporated outside India, the provisions of the Act relating to internal financial controls are not applicable. With respect to the adequacy of the internal financial controls over financial reporting of the Holding Company and the operating effectiveness of such controls, refer to our separate report in the ‘Annexure II’ to Independent Auditor’s Report of Holding Company.
g. 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:
INDEPENDENT AUDITORS REPORT
Annual Report 2016-17 165
i. The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial position of the Group Refer Note 33 to the consolidated Ind AS 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.
iv. the Holding Company has provided requisite disclosures in its consolidated Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016 and these are in accordance with the books of accounts maintained by the Holding Company. Refer Note No.42 to the Consolidated Ind AS financial statements.
For C. B. Chhajed & Co. Chartered Accountants (Firm Regn. No : 101796W)
Place : Mumbai C. B. ChhajedDated : 29.05.2017 (Partner) Membership No : 009447
INDEPENDENT AUDITORS REPORT
Tara Jewels Limited166
(Amount in `)
Particulars Notes As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
ASSETS Non-Current Assets Property, Plant and Equipment 4 1,051,756,778 1,150,474,277 1,090,478,429 Capital Work-in-Progress - 28,293,589 - Intangible Assets 5 24,316,757 18,233,342 25,007,620 Financial Assets
Investments 6 26,299,871 60,505,603 49,101,954 Other Financial Assets 8 5,128,722 16,405,333 25,274,105
Deferred Tax Asset (Net) 14 99,938,928 75,177,786 73,482,498 Other Non-Current Assets 13 42,743,170 38,406,386 14,759,503
1,250,184,226 1,387,496,316 1,278,104,109 Current assets Inventories 9 5,221,909,537 5,810,279,063 5,764,453,826 Financial Assets
Trade Receivables 10 10,525,268,953 10,557,797,700 7,833,174,486 Cash and Cash Equivalents 11 16,862,384 34,579,208 73,851,243 Other Bank Balances 12 739,041,995 746,958,353 773,622,148 Loans 7 3,753,527 2,720,393 3,873,021 Other Financial Assets 8 10,356,886 11,494,455 12,445,771
Other Current Assets 13 169,095,941 231,539,585 247,952,855 16,686,289,223 17,395,368,757 14,709,373,350
TOTAL 17,936,473,449 18,782,865,073 15,987,477,459
EQUITY AND LIABILITIES Equity
Equity Share capital 15 246,228,500 246,228,500 246,228,500 Other Equity 16 5,723,454,725 5,790,211,701 5,573,181,409
5,969,683,225 6,036,440,201 5,819,409,909 Liabilities Non Current Liabilities Financial Liabilities
Borrowings 17 14,671,115 18,322,352 4,846,830 Provisions 21 43,534,714 30,443,904 46,005,656
58,205,829 48,766,256 50,852,486 Current Liabilities Financial Liabilities
Borrowings 17 7,405,426,375 7,370,567,476 6,652,463,439 Trade Payables 19
Micro, Small and Medium Enterprises - 77,787 77,000 Others 3,879,902,428 4,819,755,988 3,016,916,810
Other Financial Liabilities 18 69,484,861 47,243,439 29,805,374 Other Current Liabilities 20 239,040,039 177,502,595 217,518,584 Provisions 21 2,228,622 6,162,410 1,881,958 Current Tax Liabilities (Net) 22 312,502,070 276,348,921 198,551,899
11,908,584,395 12,697,658,616 10,117,215,064 TOTAL 17,936,473,449 18,782,865,073 15,987,477,459
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 Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2017
Annual Report 2016-17 167
(Amount in `)
Particulars Notes Year ended March 31, 2017
Year ended March 31, 2016
REVENUE
Revenue from operations (net) 23 15,527,552,427 17,953,924,075
Other income 24 50,945,621 119,040,606
Total Revenue 15,578,498,048 18,072,964,681
EXPENSES
Cost of materials consumed 25 11,771,301,081 12,584,573,603
Purchases of stock-in-trade 1,084,482,557 2,997,569,090
Changes in inventories of finished goods, work-in-process and Stock-in-Trade
26 282,277,687 (150,991,099)
Excise duty 11,560,930 3,265,750
Employee benefits expense 27 388,238,928 455,558,681
Finance costs 28 844,582,957 708,091,794
Depreciation and amortization expense 29 223,200,490 217,111,437
Other expenses 30 1,017,670,971 983,049,887
Total Expenses 15,623,315,601 17,798,229,143
Profit/(loss) before tax (44,817,553) 274,735,538
Tax expense:
Current tax 26,587,767 99,303,009
Adjustment of tax relating to earlier periods (2,497,492) -
Deferred tax (22,698,731) (3,640,857)
1,391,544 95,662,152
Profit/(loss) for the year (46,209,097) 179,073,386
OTHER COMPREHENSIVE INCOME
A. Other Comprehensive income not to be reclassified to profit and loss in subsequent periods:
Foreign Currency Translation Reserve (17,335,406) 33,556,832
Remeasurement of gains (losses) on defined benefit plans (6,237,824) 6,210,526
Income tax effect 2,062,411 (2,149,339)
Equity Instruments through Other Comprehensive Income 515,480 (556,220)
Income tax effect - -
Other Comprehensive income for the year, net of tax (20,995,339) 37,061,799
Total Comprehensive Income for the year, net of tax (67,204,436) 216,135,185
Earnings / (Loss) per Equity Share 36
Basic (1.88) 7.27
Dilluted (1.88) 7.27
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 Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2017
Tara Jewels Limited168
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit/(Loss) before income tax from: (44,817,553) 274,735,538
Adjustments for:
Depreciation and amortisation expense 223,200,490 217,111,437
Employee share-based payment expense 447,460 895,107
Loss on disposal of property, plant and equipment 6,175,932 6,759,433
Fixed Assets written off 4,347,902 11,323,405
(Gain) / loss on sale of investments (1,370,671) 69,574
Changes in fair value of financial assets at fair value through profit or loss 18,143,004 925,729
Bad Debts written off 99,292,404 64,809,862
Rent Income (5,170,454) (2,331,000)
Loss Allowance on Doubtful Debts (14,785,854) 50,466,745
Dividend and interest income classified as investing cash flows (39,767,119) (46,858,575)
Finance costs 766,662,889 640,091,223
Sundry Balances written back (4,594,055) (66,965,580)
Foreign Currency Translation Reserve (17,948,256) 33,343,910
Operating profit before working capital adjustment 989,816,119 1,184,376,808
Change in operating assets and liabilities:
(Increase)/Decrease in trade receivables (51,977,803) (2,839,899,821)
(Increase) in inventories 588,369,526 (45,825,237)
Increase / (Decrease) in trade payables (935,337,292) 1,869,805,545
(Increase) /Decrease in loans (1,033,134) 1,152,628
(Increase) / Decrease in other financial assets 14,075,159 9,160,852
(Increase)/decrease in other assets 57,240,665 3,846,777
(Increase)/decrease in other bank balances 7,916,358 26,663,795
Increase/(decrease) in other financial liabilities 872,730 17,873,336
Increase/(decrease) in provisions and other liabilities 65,382,039 (47,643,425)
Cash generated from operations 735,324,367 179,511,258
Less: Income taxes paid (42,324,276) (45,496,901)
Net cash inflow from operating activities 693,000,091 134,014,357
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property, plant and equipment (115,615,985) (332,538,286)
Payments for purchase of investments (8,150,320) (17,840,057)
Proceeds from sale of investments 45,620,956 4,884,885
Proceeds from sale of property, plant and equipment 2,760,132 7,305,190
Dividends received 8,185 259,972
Interest received 38,097,955 47,257,839
Rent Received 5,170,454 2,331,000
Net cash outflow from investing activities (32,108,623) (288,339,457)
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2017
Annual Report 2016-17 169
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 31,307,297 727,025,423
Interest paid (709,915,589) (611,972,358)
Net cash inflow (outflow) from financing activities (678,608,292) 115,053,065
Net increase (decrease) in cash and cash equivalents (17,716,824) (39,272,035)
Cash and Cash Equivalents at the beginning of the financial year 34,579,208 73,851,243
Cash and Cash Equivalents at end of the year 16,862,384 34,579,208
Reconciliation of cash and cash equivalents as per the cash flow statement:
Cash and cash equivalents as per above comprise of the following:
Balances with banks 16,129,190 31,300,320
Cash on hand 733,194 3,278,888
Balances per statement of cash flows 16,862,384 34,579,208
Figures under bracket represent outflows.
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
Tara Jewels Limited170
A Equity Share Capital
(Amount in `)
Particulars Balance at the Beginning of
the year
Changes in Equity share capital
during the year
Balance at the end of the
year
March 31, 2016
Numbers 24,622,850 - 24,622,850
Amount 246,228,500 - 246,228,500
March 31, 2017
Numbers 24,622,850 - 24,622,850
Amount 246,228,500 - 246,228,500
B Other Equity(Amount in `)
Particulars Reserves and Surplus Exchange differences
on translating the financial
statements of foreign operations
Money Received against share
warrants
Equity Instruments through OCI
Total other equity *
Capital Reserve
SEZ Reinvestment
Allowance Reserve
Securities Premium Reserve
General Reserve
Share Based
Payment Reserve
Retained Earnings
As at April 1, 2015 26,848,865 264,650,684 1,679,062,852 114,400,049 2,577,905 3,411,877,405 60,385,059 12,200,000 1,178,590 5,573,181,409
Profit for the period 179,073,386 179,073,386
Other comprehensive income
4,061,187 33,556,832 (556,220) 37,061,799
Total comprehensive income for the year
- - - - - 183,134,573 33,556,832 - (556,220) 216,135,185
Transfer to General Reserve
12,200,000 (12,200,000) -
Utilisation of SEZ Reinvestment allowance reserve
(264,650,684) 264,650,684 -
Share based payments 895,107 895,107
As at March 31, 2016 26,848,865 - 1,679,062,852 126,600,049 3,473,012 3,859,662,662 93,941,891 - 622,370 5,790,211,701
Profit for the period (46,209,097) (46,209,097)
Other comprehensive income
(4,175,413) (17,335,406) 515,480 (20,995,339)
Total comprehensive income for the year
- - - - - (50,384,510) (17,335,406) - 515,480 (67,204,436)
Lapse of share options 189,392 (189,392) -
Share based payments 447,460 447,460
As at March 31, 2017 26,848,865 - 1,679,062,852 126,789,441 3,731,080 3,809,278,152 76,606,485 - 1,137,850 5,723,454,725 * Attributable to equity holders of the Parent as there is no non-controlling interest.
For C. B. Chhajed & Co. For and on Behalf of Board of Directors Chartered Accountants
C. B. Chhajed Rajeev Sheth Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
STATEMENT OF CHANGES IN EQUITY AS AT MARCH 31, 2017
Annual Report 2016-17 171
1 CORPORATE INFORMATION
The consolidated financial statements comprise financial statements of Tara Jewels limited (‘the Company’) and its subidiaries (collectively, ‘the Group’)for the year ended March 31, 2017. The Company is a public Company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Plot 122, 15th Road , Near IDBI Bank, MIDC, Andheri (E), Mumbai 400093.
The Group is in the business of exports and domestic sales of fine jewellery. The Group has been in the jewellery exports
business since inception and has started the retail jewellery business in 2010. The Group is an integrated player in the jewellery industry with experience ranging from designing to retailing of jewellery. The portfolio of products includes gold, platinum and silver jewellery with or without studded precious and semi-precious stones. The Group’s products have presence across different price points and cater to customers across high-end, mid-market and value market segments.
The consolidated financial statements for the year ended March 31, 2017 were approved by the Board of Directors and authorised for issue on May 29, 2017.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation The consolidated financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, under the historical cost convention on the accrual basis except for derivative financial instruments and certain financial assets and liabilities which are measured at fair value.
For all periods up to and including the year ended March 31, 2016, the group prepared its financial statements in
accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).These financial statements for the year ended March 31, 2017 has been prepared in accordance with Ind AS and the adoption was carried out in accordance with Ind AS 101 - ‘First time adoption of India Accounting Standard’. Reconciliation and description of the effect of the transition has been summarised in Note 46.
2.2 Principles of consolidation
The consolidated financial statements have been prepared on the following basis
(a) Subsidiaries
Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the group.
The group combines the financial statements of the parent and its subsidiaries line by line adding together like
items of assets, liabilities, equity, income and expenses. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.
The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of the parent company, i.e., year ended on March 31 2017. When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial information as of the same date as the financial statements of the parent to enable the parent to consolidate the financial information of the subsidiary.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Tara Jewels Limited172
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Non-controlling interests, if any, in the results and equity of subsidiaries are shown separately in the consolidated statement of profit and loss, consolidated statement of changes in equity and balance sheet respectively.
(b) Changes in ownership interests
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity.
(c) Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
(d) Foreign currency translation
(i) Functional and presentation currency Items included in the financial statements of the entity are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Indian rupee (INR), which is entity’s functional and presentation currency.
(ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.
Annual Report 2016-17 173
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction.
iii) Group companies The results and financial position of foreign operations that have a functional currency different from the
presentation currency are translated into the presentation currency as follows: - assets and liabilities are translated at the closing rate at the date of that balance sheet
- income and expenses are translated at average exchange rates , and
- All resulting exchange differences are recognised in other comprehensive income. 2.3 Other Significant Accounting Policies
These are set out under “Significant Accounting Policies” as given in the Company’s standalone financial statements. 3 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS
These are same as given in the Company’s standalone financial statements.
Tara Jewels Limited174
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
4.
PRO
PER
TY, P
LAN
T A
ND
EQ
UIP
MEN
T
(Am
ount
in `
)
Part
icul
ars
Bui
ldin
gsPl
ant
and
Equi
pmen
tsFu
rnit
ure
and
Fixt
ures
Vehi
cles
Offi
ce
Equi
pmen
tsCo
mpu
ter
Har
dwar
esFa
ctor
y Eq
uipm
ents
Air
co
ndit
ione
rsFl
ats
Leas
ehol
d Im
prov
emen
tsEl
ectr
ic
Inst
alla
tion
sTo
tal
GRO
SS C
ARR
YIN
G V
ALU
E
As
at A
pril
1, 2
015
266
,014
,720
3
36,7
27,0
88
57,
071,
235
10,
769,
831
7,3
16,1
52
9,2
38,6
98
5,0
19,7
67
22,
383,
269
316
,171
,143
4
7,59
5,77
6 1
2,17
0,75
0 1
,090
,478
,429
Add
ition
s du
ring
2015
-16
- 2
70,8
19,1
63
3,3
02,0
14
18,
494,
184
68,
776
110
,539
5
13,1
84
126
,370
-
- 1
,047
2
93,4
35,2
77
Disp
osal
s du
ring
2015
-16
- 1
,834
,497
1
7,04
1,88
2 1
,388
,419
1
,077
,109
1
,808
,235
4
07,6
18
3,8
07,1
67
- 2
0,80
6,27
4 2
,312
,140
5
0,48
3,34
1
WD
V Tr
ansla
tion
Diff
eren
ce
2015
-16
- 3
6,44
6 1
10,1
94
9,7
59
- 4
00
37,
486
- -
197
,258
6
0,63
9 4
52,1
82
As
at M
arch
31,
201
6 2
66,0
14,7
20
605
,748
,200
4
3,44
1,56
1 2
7,88
5,35
5 6
,307
,819
7
,541
,402
5
,162
,819
1
8,70
2,47
2 3
16,1
71,1
43
26,
986,
760
9,9
20,2
96
1,3
33,8
82,5
47
Add
ition
s du
ring
2016
-17
- 1
27,5
40,9
17
7,7
15
- -
909
,539
2
9,20
1 5
92,6
40
- 1
00,1
95
13,
351
129
,193
,558
Disp
osal
s du
ring
2016
-17
- 1
,887
,645
1
1,44
2,48
6 7
89,5
64
665
,817
1
,573
,980
1
35,0
47
2,4
87,4
62
- 2
5,85
1,06
4 1
,464
,349
4
6,29
7,41
4
WD
V Tr
ansla
tion
Diff
eren
ce
2016
-17
- (1
4,52
0) (5
5,73
3) (3
,374
) -
(30,
662)
(16,
350)
- -
- (2
4,62
4) (1
45,2
63)
As
at M
arch
31,
201
7 2
66,0
14,7
20
731
,386
,952
3
1,95
1,05
7 2
7,09
2,41
7 5
,642
,002
6
,846
,299
5
,040
,623
1
6,80
7,65
0 3
16,1
71,1
43
1,2
35,8
91
8,4
44,6
74
1,4
16,6
33,4
28
ACC
UM
ULA
TED
D
EPRE
CIAT
ION
/
IMPA
IRM
ENT
As
at A
pril
1, 2
015
- -
- -
- -
- -
- -
- -
Dep
reci
atio
n fo
r the
yea
r 20
15-1
6 1
6,33
2,81
5 1
10,0
48,1
82
16,
295,
477
8,4
27,0
18
2,1
88,9
15
4,0
58,5
21
2,5
31,7
08
4,0
46,0
30
15,
394,
026
25,
451,
625
3,6
96,9
15
208
,471
,232
Ded
uctio
ns/A
djus
tmen
ts
durin
g 20
15-1
6 -
365
,704
4
,869
,304
1
32,1
65
351
,526
5
64,4
70
36,
504
514
,814
-
17,
364,
667
896
,225
2
5,09
5,37
9
Acc
umul
ated
Dep
reci
atio
n Tr
ansla
tion
Diff
eren
ce
2015
-16
- 5
,919
1
1,63
3 1
,917
-
50
6,8
46
- -
- 6
,052
3
2,41
7
As
at M
arch
31,
201
6 1
6,33
2,81
5 1
09,6
88,3
97
11,
437,
806
8,2
96,7
70
1,8
37,3
89
3,4
94,1
01
2,5
02,0
50
3,5
31,2
16
15,
394,
026
8,0
86,9
58
2,8
06,7
42
183
,408
,270
Dep
reci
atio
n fo
r the
yea
r 20
16-1
7 1
5,59
1,21
1 1
44,5
52,7
84
6,9
79,7
47
6,1
88,6
13
1,0
84,1
75
1,2
78,9
36
859
,624
2
,724
,237
1
4,64
4,50
8 1
8,90
4,15
5 1
,774
,524
2
14,5
82,5
14
Ded
uctio
ns/A
djus
tmen
ts
durin
g 20
16-1
7 -
617
,626
3
,814
,511
3
85,3
10
363
,700
7
96,7
79
48,
573
652
,992
-
25,
851,
064
482
,897
3
3,01
3,45
2
Acc
umul
ated
Dep
reci
atio
n Tr
ansla
tion
Diff
eren
ce
2016
-17
- (1
3,66
7) (3
9,06
5) (3
,284
) -
(4,5
28)
(17,
770)
- -
- (2
2,36
8) (1
00,6
82)
As
at M
arch
31,
201
7 3
1,92
4,02
6 2
53,6
09,8
88
14,
563,
977
14,
096,
789
2,5
57,8
64
3,9
71,7
30
3,2
95,3
31
5,6
02,4
61
30,
038,
534
1,1
40,0
49
4,0
76,0
01
364
,876
,650
Net
Car
ryin
g va
lue
as a
t M
arch
31,
201
7 2
34,0
90,6
94
477
,777
,064
1
7,38
7,08
0 1
2,99
5,62
8 3
,084
,138
2
,874
,569
1
,745
,292
1
1,20
5,18
9 2
86,1
32,6
09
95,
842
4,3
68,6
73
1,0
51,7
56,7
78
Net
Car
ryin
g va
lue
as a
t M
arch
31,
201
6 2
49,6
81,9
05
496
,059
,803
3
2,00
3,75
5 1
9,58
8,58
5 4
,470
,430
4
,047
,301
2
,660
,769
1
5,17
1,25
6 3
00,7
77,1
17
18,
899,
802
7,1
13,5
54
1,1
50,4
74,2
77
Net
Car
ryin
g va
lue
as a
t A
pril
1, 2
015
266
,014
,720
3
36,7
27,0
88
57,
071,
235
10,
769,
831
7,3
16,1
52
9,2
38,6
98
5,0
19,7
67
22,
383,
269
316
,171
,143
4
7,59
5,77
6 1
2,17
0,75
0 1
,090
,478
,429
Not
es:
i.
Pro
per
ty, P
lan
t an
d E
qu
ipm
ent
ple
dg
ed a
s se
curi
ty a
gai
nst
bo
rro
win
gs
by
the
Gro
up
Re
fer
to N
ote
40 f
or in
form
atio
n on
pro
pert
y, p
lant
and
equ
ipm
ent
pled
ged
as s
ecur
ity b
y th
e G
roup
.ii.
C
on
trac
tual
Ob
ligat
ion
s
Refe
r to
Not
e 33
for
dis
clos
ure
of c
ontr
actu
al c
omm
itmen
ts f
or t
he a
cqui
sitio
n of
pro
pert
y, p
lant
and
equ
ipm
ent.
Annual Report 2016-17 175
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
5. INTANGIBLE ASSETS
(Amount in `)
Particulars Computer Software
Patent and Trademark
Total
GROSS CARRYING VALUE
As at April 1, 2015 23,442,870 1,564,750 25,007,620
Additions during 2015-16 1,772,427 - 1,772,427
Disposals during 2015-16 231,490 - 231,490
WDV Translation Difference 2015-16 - 93,500 93,500
As at March 31, 2016 24,983,807 1,658,250 26,642,057
Additions during 2016-17 14,747,760 - 14,747,760
Disposals during 2016-17 186,124 - 186,124
WDV Translation Difference 2016-17 (13,523) (37,250) (50,773)
As at March 31, 2017 39,531,920 1,621,000 41,152,920
ACCUMULATED DEPRECIATION / IMPAIRMENT
As at April 1, 2015 - - -
Depreciation for the year 2015-16 8,640,205 - 8,640,205
Deductions/Adjustments during 2015-16 231,490 - 231,490
Accumulated Depreciation Translation Difference 2015-16 - - -
As at March 31, 2016 8,408,715 - 8,408,715
Depreciation for the year 2016-17 8,617,976 - 8,617,976
Deductions/Adjustments during 2016-17 186,120 - 186,120
Accumulated Depreciation Translation Difference 2016-17 (4,408) - (4,408)
As at March 31, 2017 16,836,163 - 16,836,163
Net Carrying value as at March 31, 2017 22,695,757 1,621,000 24,316,757
Net Carrying value as at March 31, 2016 16,575,092 1,658,250 18,233,342
Net Carrying value as at April 1, 2015 23,442,870 1,564,750 25,007,620
6. INVESTMENTS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current Investments
Other Equity Instruments 1,419,250 903,770 1,459,990
Mutual Funds 24,880,621 59,601,833 47,641,964
Total 26,299,871 60,505,603 49,101,954
Tara Jewels Limited176
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Details of Non Current Investments (Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
(1) Investments carried at fair value through Other Comprehensive Income
Investments in Equity Instruments
Unquoted
Divya Jewels International Pvt. Ltd.5,000 Equity Shares of Face Value ` 10 each
175,000 175,000
Quoted
Punjab National Bank 7,000 Equity Shares of Face Value ` 2 each
1,049,300 592,900
Bank of India 1,400 Equity Shares of Face Value ` 10 each
194,950 135,870
1,419,250 903,770
(2) Investments carried at fair value through Profit and Loss
Investments in Mutual Funds
Quoted
SBI MF Magnum Balanced Fund - Regular Plan Growth 7,367.763 (Previous Year: 228,036.84) Units of face value of ` 10 each
804,230 21,595,476
SBI Premier Liquid Fund - Regular Fund Daily Dividend 32.254 (Previous Year: 30.791) Units of Face Value of ` 10 each
32,359 30,891
Principal Emerging Bluechip Fund-Direct Plan Growth NIL (Previous Year: 7,210.845) Units of face value of ` 10 each
- 480,026
Axis Liquid Fund - Daily Dividend 146.40 (Previous Year: 139.675) Units of Face Value of ` 1000 each
146,528 139,780
CP4G-Union KBC Capital Protection Oriented Fund-Series 4-Reg Plan-Growth NIL (Previous Year: 150,000) Units of Face Value of ` 10 each
- 1,733,085
CP5G-Union KBC Captial Protection Oriented Fund-Series 5-Reg Plan-Growth NIL (Previous Year: 150,000) Units of Face Value of ` 10 each
- 1,765,455
DBDP- union KBC Dynamic Bonds Fund- Div Payout NIL (Previous Year: 227,250.347) Units of face value of ` 10 each
- 2,713,824
Principle Large Cap Fund - Regular Plan growth NIL (Previous Year: 47,327.581) Units of Face Value of ` 10 each
- 2,049,284
TF2GR-Union KBC Trigger Fund Series 2 - Regular Plan Growth 299,990 (Previous Year: 299,990) Units of Face Value of ` 10 each
3,377,887 2,759,908
Principal Asset Allocation Fund - Aggressive Plan NIL (Previous Year: 895,309.07) Units of face value of ` 10 each
- 8,834,104
Principal Tax Savings Fund - Regular Plan Growth 6,768.429 (Previous Year: NIL) Units of face value of ` 10 each
1,189,754 -
CP7G-Union Capital Protection Oriented Fund - Series 7 - Regular Plan Growth 1,82,172 (Previous Year: NIL) Units of face value of ` 10 each
1,829,863 -
Annual Report 2016-17 177
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Unquoted
1,750 units of face value ` 10,000 each of IIMCL-Emerging India Opportunities Fund
17,500,000 17,500,000
24,880,621 59,601,833
Total 26,299,871 60,505,603
Details of Quoted and Unquoted Investments(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Aggregate amount of quoted investments (Market Value `86,24,871 (Previous Year : `4,28,30,603))
8,624,871 42,830,603
Aggregate amount of unquoted investments 17,675,000 17,675,000
Total 26,299,871 60,505,603
Carrying value of Investments (Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Investments carried at fair value through other comprehensive income 1,419,250 903,770
Investments carried at fair value through profit and loss 24,880,621 59,601,833
Total 26,299,871 60,505,603
7. LOANS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Unsecured, considered good
Loans to Employees 3,753,527 2,720,393 3,873,021
Total 3,753,527 2,720,393 3,873,021
Tara Jewels Limited178
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
8. OTHER FINANCIAL ASSETS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current
Financial assets carried at amortised cost
Security Deposits 5,128,722 16,405,333 25,274,105
Total 5,128,722 16,405,333 25,274,105
Current
Financial assets carried at amortised cost
Interest Accrued but not due 7,572,598 5,911,619 6,570,855
Security Deposits 705,459 722,931 25,286
Other financial assets* 2,078,829 4,859,905 5,849,630
Total 10,356,886 11,494,455 12,445,771
* Includes advances paid to creditors and claims Receivable.
9. INVENTORIES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
(Valued at lower of Cost and Net Realisable value)
Raw materials [including goods-in-transit: ` 2,716,182 (March 31, 2016: ` 41,261,070, April 1, 2015: ` 120,176)]
682,109,423 972,925,085 1,076,294,849
Work-in-process 3,239,898,159 3,545,356,247 2,855,679,544
Finished goods 1,288,783,652 1,280,262,337 1,780,418,557
Stock-in-trade 26,208 26,208 4,777,054
Stores, consumables and packing material 11,092,095 11,709,186 47,283,822
Total 5,221,909,537 5,810,279,063 5,764,453,826
10. TRADE RECEIVABLES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Unsecured
Considered good 10,525,268,953 10,557,797,700 7,811,708,244
Considered doubtful 96,395,843 111,500,197 82,406,194
10,621,664,796 10,669,297,897 7,894,114,438
Less: Allowances for credit losses 96,395,843 111,500,197 60,939,952
10,525,268,953 10,557,797,700 7,833,174,486
Includes Receivables from other related parties (Refer Note 34)
Annual Report 2016-17 179
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
11. CASH AND CASH EQUIVALENTS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Balances with banks:
- in current accounts 16,129,190 31,300,320 57,976,667
Cash on hand 733,194 3,278,888 15,874,576
Total 16,862,384 34,579,208 73,851,243
12. OTHER BANK BALANCES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Deposits with banks to the extent held as margin money 359,331,656 403,362,647 419,755,094
Deposits with banks as security against borrowings 379,710,339 343,595,706 353,867,054
Total 739,041,995 746,958,353 773,622,148
13. OTHER ASSETS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current
Capital Advances 23,469,276 24,335,471 13,255,081
Others
- Prepaid expenses 19,273,894 14,070,915 1,504,422
Total 42,743,170 38,406,386 14,759,503
Current
Advances other than Capital advances
- Other Advances 39,541,903 10,427,656 7,069,222
Others
- Prepaid expenses 51,353,517 103,181,630 86,833,962
- Balances with Statutory, Government Authorities 78,174,116 79,731,093 116,508,972
- Other current assets 26,405 38,199,206 37,540,699
Total 169,095,941 231,539,585 247,952,855
Tara Jewels Limited180
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
14. INCOME TAX
Deferred Tax(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Deferred tax relates to the following:
Accelerated Depreciation for tax purposes 19,017,055 12,147,017 2,893,339
Gratuity and Leave encashment 15,130,732 12,668,713 16,572,946
Unamortised share issue expenses u/s 35D - 5,259,956 10,519,911
Disallowance under Section 40(a)(ia) - 674,856 2,055,082
Losses available for offsetting against future taxable income 23,649,345 23,809 71,149
Provision for doubtful debts 28,655,650 38,014,101 20,548,570
Derivative Liability 6,454,479 - -
Others - - 6,802,031
Inventories 7,031,667 6,389,334 14,019,470
Net Deferred Tax Assets / (Liabilities) 99,938,928 75,177,786 73,482,498
Movement in deferred tax liabilities/assets(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Opening balance as of April 1 75,177,786 73,482,498
Tax income/(expense) during the period recognised in profit or loss 22,698,731 3,640,857
Tax income/(expense) during the period recognised in OCI 2,062,411 (2,149,339)
Translation difference 203,770
Closing balance as at March 31 99,938,928 75,177,786
The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liablities relate to income taxes levied by the same tax authority.
Tax losses which arose in India of ̀ 7,15,28,130 (Previous year ̀ NIL) that are available for offsetting for eight years against future taxable profits of the Holding company. Major Components of income tax expense for the years ended March 31, 2017 and March 31, 2016 are as follows:
i. Income tax recognised in profit or loss(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Current income tax charge 26,587,767 99,303,009
Adjustment in respect of current income tax of previous year (2,497,492) -
Deferred tax
Relating to origination and reversal of temporary differences (22,698,731) (3,640,857)
Income tax expense recognised in profit or loss 1,391,544 95,662,152
Annual Report 2016-17 181
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
ii. Income tax recognised in OCI(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Net loss/(gain) on remeasurements of defined benefit plans 2,062,411 (2,149,339)
Income tax expense recognised in OCI 2,062,411 (2,149,339)
Reconciliation of tax expense and accounting profit multiplied by income tax rate for March 31, 2017 and March 31, 2016(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Profit / (Loss) before tax (44,817,553) 274,735,538
Accounting profit before income tax (44,817,553) 274,735,538
Enacted tax rate in India 33.06% 33.06%
Income tax on accounting profits (14,818,028) 90,835,811
Effects of
Incomes exempt from tax (911,748) (374,883)
Non-deductible expenses for tax purposes 23,887,691 11,337,253
Tax on income at different rate 3,876,089 (410,461)
Differential overseas tax rates (8,580,049) (6,185,764)
Others (2,062,411) 460,196
Tax at effective income tax rate 1,391,544 95,662,152
15. SHARE CAPITAL
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Authorised
30,000,000 Equity Shares of ` 10 each 300,000,000 300,000,000 300,000,000
Issued, subscribed and paid-up
24,622,850 Equity Shares of ` 10 each fully paid up 246,228,500 246,228,500 246,228,500
TOTAL 246,228,500 246,228,500 246,228,500
i. Terms/rights attached to equity shares The Holding 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 Holding 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.
Tara Jewels Limited182
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
ii. Details of shareholders holding more than 5% shares in the Holding company
Name of the shareholder As at March 31, 2017 As at March 31, 2016
Number % holding Number % holding
Equity shares of ` 10 each fully paid
Rajeev Sheth 14,502,893 58.90 14,522,893 58.98
Crystalon Finanz AG 1,800,000 7.31 1,800,000 7.31 iii. Shares reserved for issue under options
For details of shares reserved for issue under the Share based payment plan of the Holding company, please refer note 32
iv. Shares issued for consideration other than Cash / Bonus Shares The Holding company has not issued shares for consideration other than cash or Bonus shares during the preceding 5
financial years.
16. OTHER EQUITY
i. Reserves and Surplus(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Securities Premium Reserve 1,679,062,852 1,679,062,852 1,679,062,852
General Reserve 126,789,441 126,600,049 114,400,049
Share Based Payment Reserve 3,731,080 3,473,012 2,577,905
Retained Earnings 3,809,278,152 3,859,662,662 3,411,877,405
Capital Reserve 26,848,865 26,848,865 26,848,865
Foreign Currency Translation Reserve 76,606,485 93,941,891 60,385,059
SEZ Reinvestment Allowance Reserve - - 264,650,684
5,722,316,875 5,789,589,331 5,559,802,819
(a) Securities Premium Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 1,679,062,852 1,679,062,852
Add/(Less):
changes during the period - -
Closing balance 1,679,062,852 1,679,062,852
(b) General Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 126,600,049 114,400,049
Add/(Less):
Shares warrants forfeited - 12,200,000
Share based payment reserve transferred on lapse of option 189,392
Closing balance 126,789,441 126,600,049
Annual Report 2016-17 183
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(c) Share Based Payment Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 3,473,012 2,577,905
Add/(Less):
Option Compensation expense charged during the period 447,460 895,107
Transfer to General Reserve on exercise/lapse of option (189,392) -
Closing balance 3,731,080 3,473,012
The Holding Company has one share option scheme under which options to subscribe for the company’s shares have been granted to certain executives and senior employees.
The Share based payment reserve is used to recognise the value of equity settled share based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 32 for further details of these plans. (d) Retained Earnings
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 3,859,662,662 3,411,877,405
Net Profit/(Loss) for the year (46,209,097) 179,073,386
Add/(Less):
Untilisation of SEZ Reinvestment allowance reserve - 264,650,684
Items of Other Comprehensive Income directly recognised in Retained Earnings
Remeasurement of post employment benefit obligation, net of tax (4,175,413) 4,061,187
Closing balance 3,809,278,152 3,859,662,662
(e) Capital Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 26,848,865 26,848,865
Add/(Less):
changes during the period - -
Closing balance 26,848,865 26,848,865
(f) Foreign Currency Translation Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance 93,941,891 60,385,059
Add/(Less):
changes during the period (17,335,406) 33,556,832
Closing balance 76,606,485 93,941,891
Tara Jewels Limited184
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(g) SEZ Reinvestment Allowance Reserve(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Opening balance - 264,650,684
Add/(Less):
Untilisation of SEZ Reinvestment allowance reserve - (264,650,684)
Closing balance - -
A ‘Unit’ in Special Economic Zone (“SEZ Unit”) claiming tax holiday benefit under section 10AA enjoys the tax incentive for a period of 10 years. The incentive is a staggered one, spread over a period of 10 years. An SEZ Unit does not have to pay income tax on entire export profits for the first 5 years. In the next block of 2 years, a SEZ unit is not required to pay tax on half of its export profits. In the last block of 3 years (Year 8 to Year 10), a SEZ unit can claim deduction of the amount not exceeding fifty per cent of the profit as debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the “Special Economic Zone Re-investment Reserve Account”) to be created and utilized for the purposes of the business of the company for the purposes of acquiring machinery or plant before the expiry of a period of three years following the previous year in which the reserve was created. ii. Components of Other Comprehensive Income
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Equity Instruments through OCI 1,137,850 622,370 1,178,590
1,137,850 622,370 1,178,590 The disaggregation of changes to OCI by each type of reserve in equity is shown below:
(Amount in `)
Particulars Equity Instruments through OCI
Total
As at April 1, 2015 1,178,590 1,178,590
Gain/(Loss) on FVTOCI financial assets (556,220) (556,220)
As at March 31, 2016 622,370 622,370
Gain/(Loss) on FVTOCI financial assets 515,480 515,480
As at March 31, 2017 1,137,850 1,137,850
iii. Other Components of Equity(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Money Received against share warrants - - 12,200,000
Total - - 12,200,000
Share Warrants The Holding Company had allotted 3,05,000 (Three Lac Five Thousand) Convertible Warrants (“Warrants”), on April 02, 2014 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 had paid ` 12,200,000 towards 25% value of
Annual Report 2016-17 185
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
total consideration payable for the Warrants. The aforesaid share warrants were due for conversion in equity shares on or before October 2, 2015, However BCCL has not exercised the option and hence the warrants have lapsed on October 2, 2015. The amount paid against the aforesaid warrants has been forfeited by the Holding Company and transferred to General Reserve. 17. BORROWINGS
i. Non Current Borrowings(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Secured
Term Loans
From Banks 150,824 598,804 1,575,367
From Others 12,382,456 16,025,597 10,140,861
Long term maturity of Finance Lease Obligations 6,703,035 6,163,516 2,150,303
(A) 19,236,315 22,787,917 13,866,531
Current Maturity of Non Current Borrowings
Term Loans
From Banks 150,824 377,190 924,635
From Others 4,414,376 4,088,375 7,480,909
Long term maturity of Finance Lease Obligations - - 614,157
(B) 4,565,200 4,465,565 9,019,701
Total (A)-(B) 14,671,115 18,322,352 4,846,830
a) Term Loan from Banks includes vehicle loan which is secured by hypothecation of vehicle and carries interest @ 10.22% p.a. The loans is repayable in 60 monthly installments inclusive of interest from the date of loan.
b) Term Loans from others include
i) Loan secured by hypothecation of Plant and Machinery and carries interest @ 13.00% p.a. The loan is repayable in 45 monthly installments of `148,642/- each including interest starting from March 2014.
ii) Loan secured by hypothecation of vehicle and carries interest @ 10.22%. The loans is repayable in 60 monthly installments inclusive of interest from the date of loan.
c) Long term maturity of Finance Lease Obligations represents fair value of Finance lease obligations amortised over the lease term on a straight line basis in accordance with Ind AS 109.
ii. Current Borrowings(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Secured
Loans repayable on demand
From Banks 4,808,224,033 4,668,930,938 4,031,747,835
From Other Parties 30,000,000 15,000,000 15,000,000
Bills Discounted 2,518,913,751 2,639,131,257 2,555,801,018
Unsecured
Loan from Related Party 48,288,591 47,505,281 49,914,586
Total 7,405,426,375 7,370,567,476 6,652,463,439
Tara Jewels Limited186
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(a) Working capital loans from banks are secured by hypothecation of inventories, book debts, plant and machinery, 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., Fabrikant Tara International LLC and Tara (Hong kong)
Limited(iii) fixed deposits of ` 8.79 Crores of managing director, Mr. Rajeev Sheth(iv) pledge of 9,581,300 equity shares of the Holding Company held by managing director, Mr. Rajeev Sheth
(c) Working capital loans from others are secured by pledge of 23,75,000 equity shares of the Holding Company held
by managing director, Mr. Rajeev Sheth and personal guarantee of managing director
(d) Working capital loans taken by USA Subsidiary Company are secured by hypothecation of substantially all assets of the subsidiary company, subordinations and corporate guarantee of Tara Jewels Limited.
(e) Working capital loans taken by Hongkong Subsidiary Company 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) Loan from related party is interest free and repayable on demand. iii. Other Disclosures
(a) The carrying amounts of financial and non-financial assets pledged as security for current and non current borrowings are disclosed in Note 40.
(b) Amount and period of default in repayment of borrowings
(Amount in `)
Particulars As at March 31, 2017
Amount Period of Default
Term Loans from Others
Principal 445,237 1 - 60 days
Interest 170,696 1 - 60 days
Loans repayable on demand from Banks
Principal 469,176,099 1 - 90 days
Interest 5,804,928 1 - 90 days
Annual Report 2016-17 187
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
18. OTHER FINANCIAL LIABILITIES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
(i) Financial Liabilities at amortised cost
Current maturities of long term debts 4,565,200 4,465,565 8,405,544
Current maturities of finance lease obligations - - 614,157
Interest accrued and due on borrowings 6,960,484 - -
Interest accrued but not due on borrowings 6,220,199 4,472,899 354,034
Unpaid dividends 5,065 5,065 5,065
Others
Bank Overdraft 24,372,532 19,383,813 12,479,458
Other Payables 7,839,624 18,916,097 7,947,116
49,963,104 47,243,439 29,805,374
(ii) Financial Liabilities carried at fair value through profit and loss
Derivatives not designated as hedge
- Foreign Exchange forward contracts 19,521,757 - -
19,521,757 - -
Total 69,484,861 47,243,439 29,805,374
19. TRADE PAYABLES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Trade Payables to Micro, Small and Medium Enterprises - 77,787 77,000
Trade Payables to Others 3,879,902,428 4,819,755,988 3,016,916,810
Total 3,879,902,428 4,819,833,775 3,016,993,810
Includes dues to related parties (refer note 34)
20. OTHER LIABILITIES
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Current
Statutory Liabilities 59,462,634 34,724,886 28,326,577
Others* 179,577,405 142,777,709 189,192,007
Total 239,040,039 177,502,595 217,518,584
*Others includes expenses payable, advance received from customer and deposits.
Tara Jewels Limited188
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
21. PROVISIONS
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Non Current
Provision for employee benefits
Gratuity (Refer Note 31) 30,609,587 20,546,146 32,166,555
Leave encashment 12,925,127 9,897,758 13,839,101
Total 43,534,714 30,443,904 46,005,656
Current
Provision for employee benefits
Gratuity (Refer Note 31) 1,436,784 5,193,974 1,194,124
Leave encashment 791,838 968,436 687,834
Total 2,228,622 6,162,410 1,881,958
22. CURRENT TAX LIABILITY(NET)
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Opening balance 276,348,921 198,551,899 198,551,899
Add: Current tax and earlier tax payable 24,090,275 99,303,009 -
Add: Provision for interest payable on current tax 55,000,000 24,000,000 -
Less: Taxes paid (42,324,276) (45,496,901) -
Translation Difference (612,850) (9,086) -
Closing Balance 312,502,070 276,348,921 198,551,899
23. REVENUE FROM OPERATIONS
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Sale of products 15,527,257,864 17,953,688,253
Sale of services 294,563 98,733
Labour charges
Other Operating Revenues - 137,089
15,527,552,427 17,953,924,075
Annual Report 2016-17 189
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
24. OTHER INCOME
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Interest income on
Bank fixed deposits 39,758,934 46,542,552
Loans to others - 56,051
Dividend income 8,185 259,972
Other Non Operating Income
Net gain on sale of Investments 1,370,671 (69,574)
Others
Rent received 5,170,454 2,331,000
Commission received 43,322 185,347
Sundry balances written back 4,594,055 66,965,580
Miscellaneous income - 2,769,678
50,945,621 119,040,606
25. COST OF MATERIALS CONSUMED
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
As at beginning of the year 972,925,085 1,076,294,849
Add: Purchases 11,479,850,811 12,471,611,691
Less : As at end of the year 682,109,423 972,925,085
Translation Difference 634,608 9,592,148
11,771,301,081 12,584,573,603
26. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Inventories as at the beginning of the year
Work - in - process 3,545,356,247 2,855,679,544
Finished goods 1,280,262,337 1,780,418,557
Stock-in-trade 26,208 4,777,054
4,825,644,792 4,640,875,155
Less : Inventories as at the end of the year
Work - in - process 3,239,898,159 3,545,356,247
Finished goods 1,288,783,652 1,280,262,337
Stock-in-trade 26,208 26,208
4,528,708,019 4,825,644,792
Translation Difference (14,659,086) 33,778,538
Net decrease / (increase) in inventories 282,277,687 (150,991,099)
Tara Jewels Limited190
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
27. EMPLOYEE BENEFITS EXPENSE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Salaries, wages and bonus 354,112,214 408,829,400
Contribution to provident and other funds 21,856,090 23,994,927
Share based payments to employees 447,460 895,107
Staff welfare expenses 7,988,349 19,826,149
Gratuity Expense 3,834,815 2,013,098
388,238,928 455,558,681
28. FINANCE COST
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Interest expense on debts and borrowings 711,662,889 616,091,223
Interest on income tax 55,000,000 24,000,000
Other borrowing costs 77,920,068 68,000,571
844,582,957 708,091,794
29. DEPRECIATION AND AMORTISATION EXPENSE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Depreciation on tangible assets 214,582,514 208,471,232
Amortisation on intangible assets 8,617,976 8,640,205
223,200,490 217,111,437
30. OTHER EXPENSES
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Manufacturing Expenses
Wages, allowances and bonus 98,622,620 124,752,628
Import clearing charges 33,546,077 17,741,599
Labour charges 312,580,812 161,198,515
Electric power, fuel and water 32,386,699 40,486,367
Repairs and maintenance
Factory Building 1,063,096 2,668,451
Plant and Machinery 2,775,897 6,812,170
Foreign Exchange fluctuation loss (47,779,419) (126,495,554)
Stores, consumables and packing material 39,415,416 116,112,081
472,611,198 343,276,257
Annual Report 2016-17 191
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Selling, Administration and Other Expenses
Advertisement 394,242 8,266,732
Payments to auditors (Refer note below) 6,915,000 7,668,500
Bad Debts written off 99,292,404 64,809,862
Credit insurance 21,862,549 28,651,495
Electricity charges 1,668,486 3,093,399
Export clearing charges 13,842,899 14,752,272
Fixed assets written off 4,347,902 11,323,405
House Keeping Expenses 4,601,934 5,446,607
Insurance 26,349,380 21,812,654
Legal and professional fees 124,152,503 113,531,343
Net loss on disposal of property, plant and equipment 6,175,932 6,759,433
Rates and taxes 4,711,993 8,231,998
Rent 41,011,976 75,346,362
Repairs & maintenance - other 12,191,961 11,856,446
Sales promotion expenses 66,988,837 52,064,616
Security charges 8,232,505 13,437,456
Telephone and internet expenses 4,946,364 6,762,394
Travelling & conveyance expenses 24,539,928 22,808,689
Allowance for doubtful debts (14,785,854) 50,466,745
Bank charges 44,754,201 72,158,339
Fair value loss on financial instrument at Fair value through profit and loss 18,143,004 925,729
Miscellaneous expenses 24,721,627 39,599,154
545,059,773 639,773,630
Total 1,017,670,971 983,049,887
Details of Payments to auditors (Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Audit Fee 1,500,000 2,000,000
Tax audit fee 1,500,000 1,500,000
Limited review fees 1,000,000 1,000,000
Services for tax matters 1,500,000 1,500,000
Certification and consultation 1,100,000 1,308,000
Service Tax 315,000 360,500
6,915,000 7,668,500
Tara Jewels Limited192
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
31. EMPLOYEE BENEFIT OBLIGATIONS
(Amount in `)
As at March 31, 2017 As at March 31, 2016
Current Non Current Total Current Non Current Total
Leave obligations 791,838 12,925,127 13,716,965 968,436 9,897,758 10,866,194
Gratuity 1,436,784 30,609,587 32,046,371 5,193,974 20,546,146 25,740,120
Total Employee Benefit Obligation
2,228,622 43,534,714 45,763,336 6,162,410 30,443,904 36,606,314
(i) Leave Obligations The leave obligations cover the Holding company’s liability for sick and earned leave. The amount of the provision of ` 791,838 (Previous Year : ` 968,436) is presented as current, since the Holding company
does not have an unconditional right to defer settlement for any of these obligations.
(ii) Post Employment obligations a) Gratuity The Holding company provides for gratuity for employees in india as per the Payment of Gratuity Act, 1972.
Employees who are in continuous service for a period of five years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied by number of years of service.
The gratuity plan is a funded plan and the Holding company makes contributions to recognised funds in India. The
Holding company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.
The amount recognised in the balance sheet and the movement in the net defined benefit obligation over the period are as follows
(Amount in `)
Particulars Present value of obligation
Fair value of plan assets
Net amount
As at April 1, 2015 33,513,587 (152,908) 33,360,679
Current service cost 3,006,728 3,006,728
Interest expense/(income) 2,681,087 2,681,087
Total amount recognised in profit or loss 5,687,815 - 5,687,815
Remeasurements
Return of plan assets, excluding amount included in interest (income)
(12,233) (12,233)
(Gain)/Loss from change in demographic assumptions -
(Gain)/Loss from change in financial assumptions 551,601 (535) 551,066
Experience (gains)/losses (6,749,359) (6,749,359)
Total amount recognised in other comprehensive income (6,197,758) (12,768) (6,210,526)
Employer contributions -
Benefit payments (7,097,848) (7,097,848)
As at March 31, 2016 25,905,796 (165,676) 25,740,120
Current service cost 3,861,587 3,861,587
Interest expense/(income) 1,878,170 (12,012) 1,866,158
Total amount recognised in profit or loss 5,739,757 (12,012) 5,727,745
Annual Report 2016-17 193
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Present value of obligation
Fair value of plan assets
Net amount
Remeasurements
Return of plan assets, excluding amount included in interest (income)
- - -
(Gain)/Loss from change in demographic assumptions 153,631 153,631
(Gain)/Loss from change in financial assumptions 5,460,489 5,460,489
Experience (gains)/losses 625,360 (1,656) 623,704
Total amount recognised in other comprehensive income 6,239,480 (1,656) 6,237,824
Employer contributions -
Benefit payments (5,659,318) (5,659,318)
As at March 31, 2017 32,225,715 (179,344) 32,046,371
The net liability disclosed above relates to funded and unfunded plans are as follows:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Present value of funded obligations 32,225,715 25,905,796 33,513,587
Fair value of plan assets (179,344) (165,676) (152,908)
Deficit of funded plan 32,046,371 25,740,120 33,360,679
Unfunded plans - - -
Deficit of gratuity plan 32,046,371 25,740,120 33,360,679
The significant actuarial assumptions were as follows:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Discount rate 7.25% 8.00%
Expected return on plan assets 7.25% 7.99%
Salary growth rate 3.50% 2.50%
Attrition rate 1% to 4% 1% to 3%
Life expectation for
Male 60 Years 60 years
Female 60 Years 60 years
A quantitative sensitivity analysis for significant assumption as at March 31, 2017 is shown below:
Assumptions Discount rate Salary growth rate
Sensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decrease
March 31, 2016
Impact on defined benefit obligation (129,400) 130,735 34,462 (34,052)
March 31, 2017
Impact on defined benefit obligation (1,735,769) 1,897,725 1,959,837 (1,804,161)
Sensivities due to mortality, attrition and withdrawals are insignificant and therefore ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.
Tara Jewels Limited194
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined beenfit obligation as a result of reasonable changes in key assumptions occuring at the end of the reporting period. The following payments are expected contributions to the defined benefit plan in future years:
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Within the next 12 months 1,616,128 6,398,609
Between 2 and 5 years 9,211,898 8,536,487
Between 5 and 10 years 7,285,680 -
Beyond 10 years - -
Total expected payments 18,113,706 14,935,096
(iii) Defined contribution plans The Holding company also has defined contribution plans. Contributions are made to provident fund in India for
employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The Holding company has also contributed towards employee’s state insurance scheme and maharsahtra labour welfare fund. The obligation of the Holding company is limited to the amount contributed and it has no further contractual nor any contructive obligation.
During the year, the Holding Company has recognised the folllowing amounts in the Statement of Profit and Loss:
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
Employer's contribution to provident fund 16,320,666 18,243,875
Employer's contribution to employee's state insurance 4,918,041 5,179,455
Employer's contribution to maharashtra labour welfare fund 78,516 92,233
21,317,223 23,515,563
32. SHARE BASED PAYMENTS
(a) Employee stock option plan The Employee Stock Option Plan (ESOP) is designed to provide incentives to employees above the designation of
managers to deliver long term returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.
Once vested, the options remain exercisable for a period of 4 years. When exercisable, each option is convertible
into one equity share of ` 10 each. The exercise price of the share options is ` 230.
Movement during the period The number and weighted average exercise prices (WAEP) of the options and movement during the period is as
follows:
Particulars Year ended March 31, 2017 Year ended March 31, 2016
No. of options WAEP No. of options WAEP
Opening balance 111,678 230 111,678 230
Granted duing the period - - - -
Exercised during the period - - - -
Forfeited /lapsed during the period (5,395) - - -
Expired during the period - - - -
Closing balance 106,283 230 111,678 230
Vested and exercisable 63,770 33,503
Annual Report 2016-17 195
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Share options outstanding at the end of the period have the following expiry date and exercise prices
(Amount in `)
Particulars Grant date Expiry date Exercise price (`.)
Share options
Share options
Share options
As at March 31,
2017
As at March 31,
2016
As at April 1,
2015
ESOP 2013 - Grant C 25-Jul-13 25-Jul-17 230 106,283 111,678 111,678
Total 106,283 111,678 111,678
Weighted average remaining contractual life of options outstanding at the end of period
0.32 Years 1.32 Years 2.32 Years
(b) Expense arising from share based payment transactions Total expenses arising from share based payment transactions recognised in profit or loss as part of employee
benefit expense were as follows:(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Employee stock option 447,460 895,107
Total employee share-based payment expense 447,460 895,107
33. COMMITMENTS AND CONTINGENCIES
A. Commitmentsi. Capital Commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as
follows:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Property, plant and equipment 10,400,445 11,515,601 43,687,095
ii. Other Commitments(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Future Minimum Royalty payable 16,047,900 30,919,460 51,949,700
iii. Leases Operating lease commitments - as lessee The Group’s significant leasing arrangements are in respect of residential flats and commercial 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 year and included under Rent (disclosed under Other Expenses).
Tara Jewels Limited196
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Commitments for minimum lease payments in relation to non cancellable operating leases are as follows
Within one year 19,332,125 18,879,248 20,490,586
Later than one year but not later than five years 98,971,582 69,416,003 10,819,943
later than five years - 28,240,594 -
118,303,707 116,535,845 31,310,529
Rents recognised as expense in the period 41,011,976 75,346,362
Operating lease commitments - as lessor
The Holding Company has entered into operating leases for its commercial property. These leases have terms of between 11 months and 3 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total rents recognised as income during the year is ` 51,70,454 (Previous Year : ` 23,31,000).
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Minimum lease rentals receivables in relation to non cancellable operating leases are as follows
Within one year 4,800,000 - -
Later than one year but not later than five years 7,880,000 - -
later than five years - - -
12,680,000 - -
B. Contingent Liabilities(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Claim against the group not acknowledged as debt
(a) Custom duty matters 1,900,563 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 6,723,389
(d) Other matter 1,004,921 2,085,723 2,085,723
Breif description of the nature of each contingent liability (a) Custom duty matters Two show cause notices have been issued against holding Company by Assistant Commissioner of Customs, Mumbai,
regarding shortage of gold and misuse of wastage norms. Also Additional Assistant Commissioner of Customs, Mumbai has imposed fine for import without a license that could not be cleared as prototype samples. Holding Company has filed appeals before the Commissioner of Customs / Additional Commissioner of Customs and matters are pending.
Annual Report 2016-17 197
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(b) Property tax Bill of Property Tax issued by MCGM mentioned an old outstanding amount to be paid by Holding company, which as
per Holding company were not payable and the same has been settled during the year. (c) Service tax matter Joint Commissioner, Service Tax- I, Mumbai has issued a show cause notice to Holding Company for service tax demand
for the Taxation of Services (Provided from Outside India and Received in India). The Holding Company has filed an appeal before the Commissioner of Central Excise against the order and the matter is currently pending.
(d) Other matter American Express Bank on his credit card bill to the Holding Company is showing an outstanding amount for interest
payable on account of delay in payment of regular credit card outstanding in past. This amount has been disputed by the Holding company and matter is not yet settled.
Income Tax Assessment The Income- Tax assessments of the Holding Company have been completed up to Assessment Year 2014-15. The disputed
demand outstanding up to the said assessment year is approximately `56,500,000 Based on the decisions of the appellate authorities and the interpretations of other relevant provisions, the Holding Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.
34. RELATED PARTY TRANSACTIONS
i. List of related parties as per the requirements of Ind-AS 24 - Related Party DisclosuresKey Management Personnel1. Mr. Rajeev Sheth2. Mr.Ravindran M. P.3. Mr. Sanjay Sethi (Upto 11-02-2016)4. Mr. Vishnu Prakash Garg (From 23-05-2016)5. Ms. Fern Mallis6. Mr. Nikkhil Vaidya7. Mr. Rakesh Kalra8. Mr. Shanti Saroop Khindria9. Mr. Rajiv Jain10. Mr. Francois Arpels (Upto 11-02-2016)11. Mr. Mariano De La Torre (Upto 09-12-2016)12. Mr. Jeffery Shlakman (From 02-09-2016)13. Mr. Stuart Marcus (From 02-09-2016)14. Ms. Alison Lazerwitz (From 09-12-2016)15. Mr. Bimal Desai (Upto 13-05-2016)16. Mrs. Nivedita Nayak
Relatives of Directors 1. Mrs. Aarti Sheth2. Mrs. Divya Sheth3. Mrs. Purnima Sheth4. Mrs. Rama Ravindran Menon
Entities in which Key Managerial Personnel/ their relatives are able to exercise significant influence or control 1. F. T. Diamonds2. 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 Corporation7. Brahma Designs Inc. (From 02-09-2016)8. Direct Partners Inc. (From 02-09-2016)
Tara Jewels Limited198
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
ii. Transactions during the year ended Mar 31, 2017
(Amount in `)
Particulars Key Management Personnel/ Relatives
Entities in which Key Managerial Personnel/ their
relatives have significant influence or control
Current Year
Previous Year
Current Year
Previous Year
Sale of Goods
F. T. Diamonds - - 164,497,155 39,943,220
Purchase of Goods
Aarti Jewellers Pvt Ltd. - - 108,000 78,023
F. T. Diamonds - - 145,552,019 -
Labour Charges Paid
F. T. Diamonds - - 1,159,269 -
Labour Charges Received
Aarti Jewellers Pvt Ltd. - - - 71,342
F. T. Diamonds - - 27,988 22,324
Directors' Remuneration and Commission
Mr. Rajeev Sheth 12,000,000 12,000,000 - -
Mr. Sanjay Sethi - 5,136,207 - -
Mr. Vishnu Prakash Garg 4,430,543 - - -
Mr. Ravindran M. P. 2,947,049 2,767,264
Commission and other benefits to Independent Directors 500,000 3,560,000 - -
Salary and Professional Fees paid
Mr. Bimal Desai 652,759 1,867,370
Ms. Aarti Sheth 3,246,335 3,720,000 - -
Ms. Divya Sheth 2,299,067 2,187,165 - -
Other Key Managerial Personnel 629,039 611,175 - -
Professional Fees paid
Mrs. Rama Ravindran Menon 1,901,880 1,654,992 - -
Brahma Designs Inc. - - 531,311 -
Direct Partners Inc. - - 307,472 -
Sales Promotion Expenses
Aarti Jewellers Pvt Ltd. - - 146,744 -
Unsecured Loan Taken
Mr.Rajeev Sheth 10,664,008 - - -
F.T. Diamonds - - 617,765 -
Repayment of Unsecured Loan Taken
Mr.Rajeev Sheth 2,600,000 - - -
Tara Duniya Corporation - - 7,044,450 -
Annual Report 2016-17 199
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
iii. Key management personnel compensation
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Salaries and other employee benefits to whole time directors and Key Management Personnel
26,204,791 28,289,181
Provision for Post employment benefits to whole time directors and Key Management Personnel*
1,349,977 -
Commission and other benefits to non-executive / independent directors 500,000 3,560,000
Share based payments - -
28,054,768 31,849,181
* The amount for year ended March 31, 2016 excludes post employment benefit viz. gratuity which can not be separately identified from the composite amount advised by the Actuary. iv. Closing Balances as on March 31, 2017
(Amount in `)
Particulars Key Management Personnel/ Relatives
Entities in which Key Managerial Personnel/ their
relatives have significant influence or control
Current Year
Previous Year
Current Year
Previous Year
Trade Receivables
F. T. Diamonds Inc. - - - 41,322,872
Aarti Jewellers Pvt Ltd. - - 52,903 71,794
Trade Payables
F. T. Diamonds Inc. - - 35,396,027 628,639
Investments
Divya Jewels International Pvt. Ltd. - - 175,000 175,000
Short Term Borrowings
Mr.Rajeev Sheth 8,064,008 - - -
F.T. Diamonds - - 15,319,228 15,060,492
Tara Duniya Corporation - - 24,905,355 32,444,789
Director Remunaration payable
Mr.Rajeev Sheth 984,912 5,567,343 - -
Mr.Vishnu Prakash Garg 577,133 - - -
Mr.Ravindra P. Menon 352,156 165,439 - -
Commission and other benefits to Independent Directors 2,866,100 5,444,420 - -
Salary and Professional Fees payable
Mr. Bimal Desai - 297,634 - -
Ms. Aarti Sheth 1,359,935 647,707 - -
Ms. Divya Sheth 117,507 71,983 - -
Mrs. Rama Ravindran Menon 470,448 - - -
Other Key Managerial Personnel 108,269 45,364 - -
Tara Jewels Limited200
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
v. Terms and conditions of transactions with related parties The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year end are unsecured and interest free. For the year ended March 31, 2017, the Group has not recorded any impairment of receivables relating to amount owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and market in which the related party operates.
35. SEGMENT REPORTING
A. Information about Primary Business Segment The Group is exclusively engaged in the “Diamond and Gold Jewellery” Business Segment.
B. Information about Secondary Geographical Segment.(Amount in `)
April 1, 2016 to March 31, 2017
Particulars India Outside India* Total
External Revenue 3,081,244,909 12,446,307,518 15,527,552,427
(3,741,809,572) (14,212,114,503) (17,953,924,075)
As at March 31, 2017
Carrying Amount of Segment Assets 6,880,024,150 11,056,449,299 17,936,473,449
(7,499,469,964) (11,283,395,109) (18,782,865,073)
April 1, 2016 to March 31, 2017
Capital Expenditure 114,313,913 1,333,816 115,647,729
(322,756,621) (744,672) (323,501,293)
* Includes mainly United States of America, Australia, China (including Hong kong), United Arab Emirates, Europe, South- Africa, Canada, Singapore and United kingdom
Note: The figures in brackets are in respect of the previous year ended March 31, 2016
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.
36. EARNINGS PER SHARE
(Amount in `)
Particulars Year ended March 31, 2017
Year ended March 31, 2016
Profit / (Loss) after tax (`) (46,209,097) 179,073,386
Weighted average number of equity shares 24,622,850 24,622,850
Nominal value per share (`) 10.00 10.00
Basic and Diluted Earning / (Loss) per Equity Share (`) (1.88) 7.27
Annual Report 2016-17 201
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
37. FAIR VALUE MEASUREMENTS
i. Financial Instruments by Category(Amount in `)
Particulars Carrying Amount Fair Value
As at March 31,
2017
As at March 31, 2016
As at April 1, 2015
As at March 31,
2017
As at March 31, 2016
As at April 1, 2015
FINANCIAL ASSETS
Amortised cost
Trade Receivables 10,525,268,953 10,557,797,700 7,833,174,486 10,525,268,953 10,557,797,700 7,833,174,486
Loans 3,753,527 2,720,393 3,873,021 3,753,527 2,720,393 3,873,021
Cash and Cash Equivalents 16,862,384 34,579,208 73,851,243 16,862,384 34,579,208 73,851,243
Other Bank Balances 739,041,995 746,958,353 773,622,148 739,041,995 746,958,353 773,622,148
Other Financial Assets 15,485,608 27,899,788 37,719,876 15,485,608 27,899,788 37,719,876
FVTOCI
Investment in Equity Instruments 1,419,250 903,770 1,459,990 1,419,250 903,770 1,459,990
FVTPL
Investments in Mutual Funds 24,880,621 59,601,833 47,641,964 24,880,621 59,601,833 47,641,964
Total 11,326,712,338 11,430,461,045 8,771,342,728 11,326,712,338 11,430,461,045 8,771,342,728
FINANCIAL LIABILITIES
Amortised cost
Borrowings 7,420,097,490 7,388,889,828 6,657,310,269 7,420,097,490 7,388,889,828 6,657,310,269
Trade Payables 3,879,902,428 4,819,833,775 3,016,993,810 3,879,902,428 4,819,833,775 3,016,993,810
Other financial liabilities 49,963,104 47,243,439 29,805,374 49,963,104 47,243,439 29,805,374
FVTPL
Derivative instruments 19,521,757 - - 19,521,757 - -
Total 11,369,484,779 12,255,967,042 9,704,109,453 11,369,484,779 12,255,967,042 9,704,109,453
The management assessed that the fair value of cash and cash equivalent, other bank balances, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
The fair values for security deposits were calculated based on cash flows discounted using a current lending rate. They are
classified as level 3 fair values in the fair value hierarchy and their fair values are assessed as approximate to their carrying amounts.
The fair values of non current borrowings are based on discounted cash flows using a current borrowing rate. They are
classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. The own non performance risk as at reporting date was assessed to be insignificant and therefore fair values approximate their carrying amounts.
ii. Fair Value Hierarchy This section explains the judgments and estimates made in determining the fair values of the financial instruments
that are recognised and measure at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table:
Tara Jewels Limited202
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Assets and liabilities measured at fair value - recurring fair value measurement:
Particulars Fair value measurement using Total
Quoted prices in active markets (Level 1)
Significant Observable
Inputs (Level 2)
Significant Unobservable
Inputs (Level 3)
As at March 31, 2017
Financial Assets
Financial Investments at FVTPL
Quoted Mutual Funds 7,380,621 - - 7,380,621
Unquoted Mutual Funds - 17,500,000 - 17,500,000
Financial Investments at FVTOCI
Quoted equity shares 1,244,250 - - 1,244,250
Unquoted equity shares - - 175,000 175,000
Total Financial Assets 8,624,871 17,500,000 175,000 26,299,871
Financial Liabilities at FVTPL
Derivative instruments - 19,521,757 - 19,521,757
Total Financial Liabilities - 19,521,757 - 19,521,757
As at March 31, 2016
Financial Assets
Financial Investments at FVTPL
Quoted Mutual Funds 42,101,833 - - 42,101,833
Unquoted Mutual Funds - 17,500,000 - 17,500,000
Financial Investments at FVTOCI
Quoted equity shares 728,770 - - 728,770
Unquoted equity shares - - 175,000 175,000
Total Financial Assets 42,830,603 17,500,000 175,000 60,505,603
Financial Liabilities at FVTPL
Derivative instruments - - - -
Total Financial Liabilities - - - -
As at April 1, 2015
Financial Assets
Financial Investments at FVTPL
Quoted Mutual Funds 30,141,964 - - 30,141,964
Unquoted Mutual Funds - 17,500,000 - 17,500,000
Financial Investments at FVTOCI
Quoted equity shares 1,284,990 - - 1,284,990
Unquoted equity shares - - 175,000 175,000
Total Financial Assets 31,426,954 17,500,000 175,000 49,101,954
Annual Report 2016-17 203
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
There have been no transfers among Level 1, Level 2 and Level 3 during the period Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity
instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2 - The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3 - If one or more of the significant inputs are not based on observable market data, the instrument is included in level
3. This is the case for unlisted equity shares, contingent consideration and indemnification assets included in level 3.
iii. Valuation technique used to determine fair value Specific Valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments - the fair value of the remaining financial instruments is determined using discounted cash flow analysis
iv. Valuation inputs and relationships to fair value The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The
valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate of fair value for these unquoted equity investments.
v. Valuation processes The finance department performs the valuations of financial assets and liabilities required for financial reporting
purposes, including level 3 fair values. The department reports directly to the chief financial officer (CFO) and the audit committee. Discussions of valuation processes and results are held between the CFO, Audit Committee and the valuation team periodically
vi. Reconciliation of fair value measurement of financial assets carried at fair value (Level 3): There is no change in fair value of unquoted equity shares.
38. FINANCIAL RISK MANAGEMENT
The group’s activity expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the group, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
(A) Credit risk Credit risk is the risk that the counterparty will not meet its obligations leading to a financial loss. Credit risk arises
from cash and cash equivalents, investments carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables.
i. Credit risk management Credit risk has always been managed by the group through credit approvals, obtaining credit reports,
establishing credit limits, taking credit limits and continuously monitoring the creditworthiness of customers to which the group grants credit terms in the normal course of business.
The group considers the probability of default upon initial recognition of asset and whether there has been
a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.
Tara Jewels Limited204
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
A default on a financial asset is when the counterparty fails to make contractual payments of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.
ii. Provision for expected credit losses The group follows ‘simplified approach’ for recognition of impairment loss allowance on Trade receivables
As a practical expedient, the group uses a provision matrix to determine impairment loss allowance on
portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
iii. Reconciliation of loss allowance provision - Trade receivables
Particulars (Amount in `)
Loss allowance on April 1, 2015 60,939,952
Changes in loss allowance 50,466,745
Translation difference 93,500
Loss allowance on March 31, 2016 111,500,197
Changes in loss allowance (14,785,854)
Translation difference (318,500)
Loss allowance on March 31, 2017 96,395,843
(B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, group maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the group’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. In addition, the group’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
Maturities of financial liabilities The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual
maturities for:- all non-derivative financial liabilities, and- net and gross settled derivative financial instruments for which the contractual maturities are essential for an
understanding of the timing of the cash flows. The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Group can be required to pay. In the table below, borrowings include both interest and principal cash flows. To the extent that the interest rates are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.
Annual Report 2016-17 205
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Contractual maturities of financial liabilities
Particulars Carrying Amount
Contractual Cash Flows
Total Less than 1 year
Between 1 and 3 years
More than 3 years
March 31, 2017
Non-derivatives
Borrowings 7,420,097,490 7,871,908,906 7,856,283,771 8,651,302 6,973,833
Trade payables 3,879,902,428 3,879,902,428 3,879,902,428 - -
Other financial liabilities 49,963,104 49,963,104 49,963,104 - -
Total non derivative liabilities 11,349,963,022 11,801,774,438 11,786,149,303 8,651,302 6,973,833
Derivatives (net settled)
Foreign exchange forward contracts 19,521,757 19,521,757 19,521,757 - -
Total derivative liabilities 19,521,757 19,521,757 19,521,757 - -
March 31, 2016
Non-derivatives
Borrowings 7,375,033,041 8,107,001,699 8,086,766,723 9,237,260 10,997,716
Trade payables 4,819,833,775 4,819,833,775 4,819,833,775 - -
Other financial liabilities 47,243,439 47,243,439 47,243,439 - -
Total non derivative liabilities 12,242,110,255 12,974,078,913 12,953,843,937 9,237,260 10,997,716
April 1, 2015
Non-derivatives
Borrowings 6,661,483,140 7,276,594,743 7,271,486,953 3,571,644 1,536,146
Trade payables 3,016,993,810 3,016,993,810 3,016,993,810 - -
Other financial liabilities 29,805,374 29,805,374 29,805,374 - -
Total non derivative liabilities 9,708,282,324 10,323,393,927 10,318,286,137 3,571,644 1,536,146
(C) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
change in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk such as equity price risk and commodity price risk.
(i) Foreign currency risk The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and
loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than functional currency of the Holding Company.
Considering the countries and economic environment in which the Holding Company operates, its operations are subject to risks arising from fluctuation in exchange rates in those countries. The risk primarily relate to fluctuations in US Dollars(USD). Other Currencies in which risk of fluctuation is not significant are Great Britain Pound(GBP) and Euro(EUR) against the functional currency of the Holding Company.
The Group, as per its risk management policy uses derivative instruments primarily to hedge foreign exchange.
The Group evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risk. It hedges a part of this risk by using derivative financial instruments in line with risk management policies.
Tara Jewels Limited206
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(a) Foreign currency risk exposure The Group’s exposure to foreign currency risk at the end of the reporting period expressed in Indian
Rupees are as follows(Amount in `)
Particulars USD Others Total
March 31, 2017
Trade Receivables 10,297,531,695 79,718 10,297,611,413
Cash and Bank balances 62,119,923 - 62,119,923
Other Financial Assets 705,459 - 705,459
Foreign Currency loans (4,161,510,905) - (4,161,510,905)
Trade Payables (3,634,737,921) (14,033,572) (3,648,771,493)
Derivative Instruments (19,521,757) - (19,521,757)
Other Financial Liabilities (3,970,719) - (3,970,719)
Net exposure to foreign currency risk 2,540,615,775 (13,953,854) 2,526,661,921
March 31, 2016
Trade Receivables 10,551,783,526 86,452 10,551,869,978
Cash and Bank balances 67,074,564 - 67,074,564
Other Financial Assets 722,931 722,931
Foreign Currency loans (4,322,119,727) - (4,322,119,727)
Trade Payables (4,256,436,635) (52,377,569) (4,308,814,204)
Other Financial Liabilities (15,836,818) - (15,836,818)
Net exposure to foreign currency risk 2,025,187,841 (52,291,117) 1,972,896,724
April 1, 2015
Trade Receivables 7,822,211,472 86,356 7,822,297,828
Cash and Bank balances 83,189,513 - 83,189,513
Other Financial Assets 25,286
Foreign Currency loans (3,377,441,082) - (3,377,441,082)
Trade Payables (2,705,230,415) (52,116,987) (2,757,347,402)
Net exposure to foreign currency risk 1,822,754,774 (52,030,631) 1,770,698,857
(b) Foreign currency sensitivity 1% increase or decrease in foreign exchange rates will have the following impact on profit before tax and OCI:
Year ended March 31, 2017 Year ended March 31, 2016
1% Increase 1% Decrease 1% Increase 1% Decrease
Impact in Profit or Loss
USD 23,998,183 (23,998,183) 20,029,398 (20,029,398)
Others (139,539) 139,539 (522,911) 522,911
Net Increase/(decrease) in profit or loss Impact in OCI
23,858,645 (23,858,645) 19,506,487 (19,506,487)
USD 1,407,975 (1,407,975) 222,480 (222,480)
Net Increase/(decrease) in profit or loss 1,407,975 (1,407,975) 222,480 (222,480)
(ii) Interest rate risk The company’s main interest rate risk arises from borrowings with variable rates, which expose the company to
cash flow interest rate risk. During March 31, 2017, March 31, 2016 and April 1, 2015, the group’s borrowings at variable rate were mainly denominated in Rupees and USD.
Annual Report 2016-17 207
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
The group’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market.
(a) Interest rate risk exposure The exposure of the group’s borrowing to interest rate changes at the end of the reporting period are as follows:
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Variable rate borrowings 7,327,137,784 7,308,062,195 6,587,548,853
Fixed rate borrowings 97,524,906 85,293,198 78,781,117
Total borrowings 7,424,662,690 7,393,355,393 6,666,329,970
% of borrowings at variable rate 98.69 98.85 98.82
(b) Sensitivity Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.
Particulars Impact on profit before tax
Year ended March 31, 2017
Year ended March 31, 2016
Interest rates - increase by 50 basis points (50 bps)* (36,635,689) (36,540,311)
Interest rates - decrease by 50 basis points (50 bps)* 36,635,689 36,540,311
* holding all other variables constant
(iii) Price risk Commodity price risk - The group is affected by the price volatility of certain commodities. Its operating activities
require the ongoing purchase and manufacture of Jewellery and therefore require a continuous supply of mainly Gold and Diamond. Due to the volatility in the price of Gold and Diamond, the company is exposed to commodity price risk. Historically, the group has been able to increase prices to reflect changes in commodity cost.
Equity / Units price risk - The group’s exposure to listed and unlisted equity / debt securities price risk arises from investments held by the group and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.
To manage its price risk arising from investments in equity securities, the group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the group. Reports on the equity / debt portfolio are submitted to the senior management on a regular basis. The majority of the group’s equity / debt investments are publicly traded.
Equity / debt price sensitivity The analysis is based on the assumption that the stock market index had increased by 1% or decreased by 1% with
all other variables held constant, and that all the group’s equity / debt instruments moved in line with the index.
Particulars Impact on profit before tax Impact on other component of equity
Year ended March 31,
2017
Year ended March 31,
2016
Year ended March 31,
2017
Year ended March 31,
2016
Stock Market Index - increase 1% (2016 - 1%) 73,806 421,018 12,443 7,288
Stock Market Index - decrease 1% (2016 - 1%) (73,806) (421,018) (12,443) (7,288)
Profit for the period would increase/decrease as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value though other comprehensive income.
Tara Jewels Limited208
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
39. CAPITAL MANAGEMENT
For the purpose of the group’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Holding Company. The primary objective of the group’s capital management is to maximise the shareholder value.
The group manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The group monitors capital using a gearing ratio, which is Total outside liabilities (TOL) divided by Total net worth (TNW). TOL includes interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
Borrowings 7,420,097,490 7,388,889,828 6,657,310,269
Trade payables 3,879,902,428 4,819,833,775 3,016,993,810
Other payables 69,484,861 47,243,439 29,805,374
Less: cash and cash equivalents 16,862,384 34,579,208 73,851,243
Less: Other bank balances 739,041,995 746,958,353 773,622,148
TOL 10,613,580,400 11,474,429,481 8,856,636,062
Total Equity 5,969,683,225 6,036,440,201 5,819,409,909
TNW 5,969,683,225 6,036,440,201 5,819,409,909
Gearing ratio (TOL / TNW) 1.78 1.90 1.52
40. ASSETS PLEDGED AS SECURITY
The carrying amount of assets pledged as security for current and non current borrowings are:(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
CURRENT ASSETS
i. Financial Assets
Trade Receivables 10,525,268,953 10,557,797,700 7,833,174,486
Cash and Cash Equivalents 15,903,336 30,078,652 71,409,983
Other Bank Balances 739,041,995 746,958,353 744,270,386
Loans 3,755,939 2,720,393 3,873,021
Other Financial Assets 9,651,427 10,771,524 12,420,485
ii. Non Financial Assets
Inventories 5,212,479,078 5,801,102,772 5,744,388,911
Other Current Assets 125,810,136 181,736,227 188,739,985
Total current assets pledge as security 16,631,910,864 17,331,165,621 14,598,277,257
NON CURRENT ASSETS
Property, Plants and equipments 727,828,130 767,661,130 619,526,789
Total non current assets pledge as security 727,828,130 767,661,130 619,526,789
Annual Report 2016-17 209
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
41. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELO MENT ACT, 2006 (MSMED ACT, 2006)
(Amount in `)
Particulars As at March 31, 2017
As at March 31, 2016
As at April 1, 2015
a) Principal amount due and remaining unpaid - 55,624 77,000
b) Interest due on above - 3,498 271
c) Payment made beyond the appointed day during the year 245,905 489,630 583,788
d) Interest Paid on above - - -
e) Interest due and payable for the period of delay 7,439 12,821 18,276
f) Interest accrued and remaining unpaid 7,439 16,319 18,547
g) Amount of further interest remaining due and payable in succeeding years
115,189 107,750 91,431
The information has been given in respect of such vendors to the extent they could be identified as “Micro and Small” enterprises on the basis of information available with the Holding Company. 42. DISCLSOURE ON SPECIFIED BANK NOTES (SBNS)
During the year, the Holding Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:
Particulars SBNs* Other Denomination
Notes
Total
Closing cash in hand as on 08-11-2016 53,612,000 318,808 53,930,808
Add : Permitted receipts # - 2,438,551 2,438,551
Less : Permitted payments - 499,527 499,527
Less : Amount deposited in Banks 53,612,000 130,591 53,742,591
Closing cash in hand as on 30-12-2016 - 2,127,241 2,127,241 * For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning as provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E), dated the November 8, 2016.
# Includes withdrawals from Banks `5,23,000
43. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the previous financial year, the Holding company has constituted the Corporate Social Responsibility Committee in terms of Section 135 of the Companies Act, 2013 and the board had adopted a CSR Policy as recommended by the Committee. However during the financial year under review, the Holding Company has not made any expenditure on CSR as the Holding Company is still in the process of identifying the eligible project, by which the public can be benefited appropriately. The Holding Company intends to contribute to the money for CSR activities as soon as the project is identified.
Tara Jewels Limited210
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
44. ADDITIONAL INFORMATION
Additional Information, as required under Schedule III to the Companies Act, 2013, of enterprises consolidated as Subsidiary / Associates / Joint-Ventures is as under:
(Amount in `)
Name of the Enterprise Net Assets i.e. total assetsminus total liabilities
Share inprofit or loss
Share in Total Comprehensive Income
As % of consolidated
net assets
Amount As % of consolidated profit or loss
Amount As % of consolidated
Comprehensive Income
Amount
Parent
Tara Jewels Limited 88.34 5,416,800,701 276.61 (118,207,264) 191.23 (121,867,197)
Subsidiaries
Indian - - - - - -
Foreign
1. Tara Jewels Holdings, Inc. * 4.92 301,462,700 (38.11) 16,283,965 (14.39) 9,172,056
2. Tara (Hong Kong) Limited 6.68 409,343,963 (136.37) 58,275,180 (75.79) 48,303,479
3. Tara China Jewelry Limited 0.07 4,073,119 (2.14) 913,763 (1.04) 661,967
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 - - - - - -
100 6,131,680,483 100 (42,734,356) 100 (63,729,695)
Less : Adjustments arising out of consolidation
161,997,258 3,474,741 3,474,741
Total 5,969,683,225 (46,209,097) (67,204,436)
45. SALIENT FEATURES
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 Holdings, Inc. *
Tara (Hong Kong) Limited
Tara China 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***
Annual Report 2016-17 211
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Sl. No. I II III
Name of the subsidiary Tara Jewels Holdings, Inc. *
Tara (Hong Kong) Limited
Tara China Jewelry Limited **
5. Share capital 113,299,500 464,117 4,134,035
6. Reserves & surplus (including foreign currency translation reserve)
188,163,200 408,879,846 (60,916)
7. Total assets 2,407,254,658 2,533,203,903 10,411,294
8. Total Liabilities 2,105,791,958 2,123,859,940 6,338,175
9. Investments - 4,135,007 -
10. Turnover 4,956,962,113 8,485,767,683 4,482,216
11. Profit before taxation 31,770,014 66,879,406 913,763
12. Provision for taxation 15,486,049 8,604,226 -
13. Profit after taxation 16,283,965 58,275,180 913,763
14. Other Comprehensive Income (7,111,909) (9,971,701) (251,796)
15. Total Comprehensive Income 9,172,056 48,303,479 661,967
16. Proposed Dividend - - -
17. % 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 = `64.84
Part “B”: Associates and Joint VenturesStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures is not applicable to the company since, there are no associates or joint ventures of the Company.
46. FIRST TIME ADOPTION OF IND AS
These are the group’s first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 (the group’s date of transition). In preparing its opening Ind AS balance sheet, the group has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the group’s financial position, financial performance and cash flows is set out in the following tables and notes.
A. Exemptions and exceptions availed Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition
from previous GAAP to Ind AS.
1. Ind AS optional exemptions i. Business combinations Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a
specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The group elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.
Tara Jewels Limited212
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
ii. Deemed cost Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property,
plant and equipment and intangible assets covered by Ind AS 38 - Intangible Assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for investment property covered by Ind AS 40 Investment Properties since there is no change in the functional currency. Accordingly, the group has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.
iii. Designation of previously recognised financial instruments Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the
facts and circumstances at the date of transition to Ind AS. The group has elected to apply this exemption for its investment in quoted and unquoted equity investments.
iv. Estimates The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates
in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:
- FVTOCI – unquoted equity shares
- FVTPL – unquoted mutual funds
- Impairment of financial assets based on expected credit loss model
The estimates used by the group to present these amounts in accordance with Ind AS reflect conditions at April 1, 2015, the date of transition to Ind AS and as of March 31, 2016.
v. Share based payment transactions A first-time adopter is encouraged, but not required, to apply Ind AS 102 Share-based Payment to
equity instruments that were vested on or before the date of transition to Ind AS. However, if a first-time adopter elects to apply Ind AS 102 to such equity instruments, it may do so only if the entity has disclosed publicly the fair value of those equity instruments determined at the measurement date as defined in Ind AS 102.
Therefore, Ind AS 102 Share-based Payment has been applied to equity instruments in share-based payment transactions that vested before April 1, 2015.
2. Ind AS mandatory exceptions i. De-recognition of financial assets and liabilities Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively
for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the group’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The group has elected to apply the de-recognition provisions of Ind AS 109 retrospectively from the date of transition to Ind AS.
ii. Classification and measurement of financial assets Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in
debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
B. Reconciliations between previous GAAP and Ind AS Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The
following tables represent the reconciliations from previous GAAP to Ind AS.
Annual Report 2016-17 213
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
i. Reconciliation of equity as at date of transition (April 1, 2015) (Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
ASSETS
Non-Current Assets
Property, Plant and Equipment 9 1,105,275,398 (14,796,969) 1,090,478,429
Capital Work-in-Progress - - -
Intangible Assets 9 23,961,473 1,046,147 25,007,620
Financial Assets
Investments 1 37,189,202 11,912,752 49,101,954
Other Financial Assets 25,274,105 - 25,274,105
Deferred Tax Asset (Net) 2 38,737,668 34,744,830 73,482,498
Other Non-Current Assets 14,759,503 - 14,759,503
1,245,197,349 32,906,760 1,278,104,109
Current assets
Inventories 5,764,453,826 - 5,764,453,826
Financial Assets
Trade Receivables 3 7,892,549,688 (59,375,202) 7,833,174,486
Cash and Cash Equivalents 73,851,243 - 73,851,243
Other Bank Balances 773,622,148 - 773,622,148
Loans 3,873,021 - 3,873,021
Other Financial Assets 12,445,771 - 12,445,771
Current Tax Assets (Net) - - -
Other Current Assets 247,952,855 - 247,952,855
14,768,748,552 (59,375,202) 14,709,373,350
TOTAL 16,013,945,901 (26,468,442) 15,987,477,459
EQUITY AND LIABILITIES
Equity
Equity Share capital 246,228,500 - 246,228,500
Other Equity 7, 8 5,599,649,851 (26,468,442) 5,573,181,409
5,845,878,351 (26,468,442) 5,819,409,909
Liabilities
Non Current Liabilities
Financial Liabilities
Borrowings 4,846,830 - 4,846,830
Provisions 46,005,656 - 46,005,656
50,852,486 - 50,852,486
Current Liabilities
Financial Liabilities
Borrowings 4 6,652,463,439 - 6,652,463,439
Tara Jewels Limited214
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
Trade Payables
Micro, Small and Medium Enterprises 77,000 - 77,000
Others 3,016,916,810 - 3,016,916,810
Other Financial Liabilities 29,805,374 - 29,805,374
Other Current Liabilities 217,518,584 - 217,518,584
Provisions 1,881,958 - 1,881,958
Current Tax Liabilities (Net) 198,551,899 - 198,551,899
10,117,215,064 - 10,117,215,064
TOTAL 16,013,945,901 (26,468,442) 15,987,477,459
ii. Reconciliation of equity as at March 31, 2016(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
ASSETS
Non-Current Assets
Property, Plant and Equipment 9 1,160,250,145 (9,775,868) 1,150,474,277
Capital Work-in-Progress 28,293,589 - 28,293,589
Intangible Assets 9 16,927,542 1,305,800 18,233,342
Financial Assets
Investments 1 50,452,047 10,053,556 60,505,603
Other Financial Assets 16,405,333 - 16,405,333
Deferred Tax Asset (Net) 2 30,774,351 44,403,435 75,177,786
Other Non-Current Assets 38,406,386 - 38,406,386
1,341,509,393 45,986,923 1,387,496,316
Current assets
Inventories 5,810,279,063 - 5,810,279,063
Financial Assets
Trade Receivables 3 10,667,639,647 (109,841,947) 10,557,797,700
Cash and Cash Equivalents 34,579,208 - 34,579,208
Other Bank Balances 746,958,353 - 746,958,353
Loans 2,720,393 - 2,720,393
Other Financial Assets 11,494,455 - 11,494,455
Current Tax Assets (Net) - - -
Other Current Assets 231,539,585 - 231,539,585
Annual Report 2016-17 215
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
17,505,210,704 (109,841,947) 17,395,368,757
TOTAL 18,846,720,097 (63,855,024) 18,782,865,073
EQUITY AND LIABILITIES
Equity
Equity Share capital 246,228,500 - 246,228,500
Other Equity 7, 8 5,854,066,725 (63,855,024) 5,790,211,701
6,100,295,225 (63,855,024) 6,036,440,201
Liabilities
Non Current Liabilities
Financial Liabilities
Borrowings 18,322,352 - 18,322,352
Provisions 30,443,904 - 30,443,904
48,766,256 - 48,766,256
Current Liabilities - -
Financial Liabilities
Borrowings 4 7,370,567,476 - 7,370,567,476
Trade Payables
Micro, Small and Medium Enterprises 77,787 - 77,787
Others 4,819,755,988 - 4,819,755,988
Other Financial Liabilities 47,243,439 - 47,243,439
Other Current Liabilities 177,502,595 - 177,502,595
Provisions 6,162,410 - 6,162,410
Current Tax Liabilities (Net) 276,348,921 - 276,348,921
12,697,658,616 - 12,697,658,616
TOTAL 18,846,720,097 (63,855,024) 18,782,865,073
iii. Reconciliation of total comprehensive income for the year ended March 31, 2016(Amount in `)
Particulars Notes IGAAP Adjustments IND AS Balance
REVENUE
Revenue from operations (net) 17,953,924,075 - 17,953,924,075
Other income 1 119,417,853 (377,247) 119,040,606
Total Revenue 18,073,341,928 (377,247) 18,072,964,681
EXPENSES
Cost of materials consumed 9 12,618,352,141 (33,778,538) 12,584,573,603
Purchases of stock-in-trade 2,997,569,090 - 2,997,569,090
Changes in inventories of finished goods, work-in-process and Stock-in-Trade
9 (184,769,637) 33,778,538 (150,991,099)
Excise duty 3,265,750 - 3,265,750
Tara Jewels Limited216
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
(Amount in `)
Particulars Notes IGAAP Ind-AS Adjustments
Ind-AS
Employee benefits expense 5, 6 452,465,472 3,093,209 455,558,681
Finance costs 708,091,794 - 708,091,794
Depreciation and amortization expense 9 220,897,711 (3,786,274) 217,111,437
Other expenses 1, 3, 5, 9
895,543,150 87,506,737 983,049,887
Total Expenses 17,711,415,471 86,813,672 17,798,229,143
Profit/(loss) before tax 361,926,457 (87,190,919) 274,735,538
Tax expense:
Current tax 9 99,546,266 (243,257) 99,303,009
Adjustment of tax relating to earlier periods - - -
Deferred tax 2 7,963,317 (11,604,174) (3,640,857)
107,509,583 (11,847,431) 95,662,152
Profit/(loss) for the year 254,416,874 (75,343,488) 179,073,386
OTHER COMPREHENSIVE INCOME
A. Other Comprehensive income not to be reclassified to profit and loss in subsequent periods:
Foreign Currency Translation Reserve 9 - 33,556,832 33,556,832
Remeasurement of gains (losses) on defined benefit plans
5 - 6,210,526 6,210,526
Income tax effect 2 - (2,149,339) (2,149,339)
Equity Instruments through Other Comprehensive Income
1 - (556,220) (556,220)
Income tax effect - - -
Other Comprehensive income for the year, net of tax
- 37,061,799 37,061,799
Total Comprehensive Income for the year, net of tax
254,416,874 (38,281,689) 216,135,185
* The previous GAAP figures have been reclassified to confirm to Ind AS presentation requirements for the purpose of this note
iv. Reconciliation of total equity as at March 31, 2016 and April 1, 2015(Amount in `)
Particulars Notes March 31, 2016 April 1, 2015
Total equity (shareholder’s funds) as per previous GAAP 6,100,295,225 5,845,878,351
Adjustments:
Fair valuation of investments 1 10,053,556 11,912,752
Provision for expected credit losses on trade receivables 3 (109,841,947) (59,375,202)
Effect of translating foreign operations from functional currency to presentation currency
9 (8,470,068) (13,574,032)
Recognisiton of Deferred tax asset on unrealised profits of group companies
2 6,389,334 14,019,470
Tax effects of adjustments 2 38,014,101 20,548,570
Total adjustments (63,855,024) (26,468,442)
Total equity as per Ind AS 6,036,440,201 5,819,409,909
Annual Report 2016-17 217
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
v. Reconciliation of total comprehensive income for the year ended March 31, 2016(Amount in `)
Particulars Notes As at March 31, 2016
Profit after tax as per previous GAAP 254,416,874
Adjustments:
Fair valuation of investments 1 (1,302,976)
Share based payment transaction 6 (895,107)
Provision for expected credit losses on trade receivables 3 (50,466,745)
Effect of translating foreign operations from functional currency to presentation currency 9 (28,452,868)
Remeasurements of post-employment benefit obligations 5 (6,210,526)
Effect of recognisiton of Deferred tax asset on unrealised profits of group companies 2 (7,630,136)
Tax effects of adjustments 2 19,614,870
Total adjustments (75,343,488)
Profit after tax as per Ind AS 179,073,386
Other comprehensive income 8 37,061,799
Total comprehensive income as per Ind AS 216,135,185
C. Notes to first-time adoption: Note 1: Fair valuation of investmentsUnder the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2016. This increased the retained earnings by `9,431,186 as at March 31, 2016 (April 1, 2015 - `10,734,162). Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognised in FVOCI – FVTOCI reserve as at the date of transition and subsequently in the other comprehensive income for the year ended March 31, 2016. This increased other reserves by `622,370 as at March 31, 2016 (April 1, 2015 - `1,178,590).
Consequent to the above, the total equity as at March 31, 2016 increased by `10,053,556 (April 1, 2015 - `11,912,752) and profit and other comprehensive income for the year ended March 31, 2016 decreased by ̀ 1,302,976 and ̀ 556,220 respectively. Note 2: Deferred tax Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. Also Under previous GAAP, tax expense in the consolidated financial statements was computed by performing line by line addition of tax expense of the parent and its subsidiaries. No adjustments to tax expense was made on consolidation. Under Ind AS, deferred taxes are also recognised on unrealised profits on transactions with subsidiaries and undistributed profits of subsidiaries.
On the date of transition, the net impact on deferred tax assets is of `34,744,830 (March 31, 2016: `44,403,435)
Tara Jewels Limited218
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED MARCH 31, 2017
Note 3: Trade and Other Receivables Under Indian GAAP, the group has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Due to ECL model, the group impaired its trade receivable by `5,93,75,202 on April 1, 2015 which has been eliminated against retained earnings. The impact of `5,04,66,745 for year ended on March 31, 2016 has been recognized in the statement of profit and loss. Under Indian GAAP, the group had de-recognised the borrowings in the nature of bills discounted as the same had been set off against the related trade receivables and had been disclosed under contingent liabilities. Under Ind AS, as the trade receivables cannot be de-recognised till the risk of default does not get transferred, the bills discounting facility availed against such trade receivables has to be recognised separately as short term borrowings.
Note 4: Borrowings Under Indian GAAP, the group had not recognised the borrowings in the nature of bills discounted as the same had been set off against the related trade receivables and had been disclosed under contingent liabilities. Under Ind AS, as the trade receivables cannot be de-recognised till the risk of default does not get transferred, the bills discounting facility availed against such trade receivables has to be recognised separately as short term borrowings. Note 5: Remeasurements of post-employment benefit obligations Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 decreased by `6,210,526. There is no impact on the total equity as at March 31, 2016. Note 6: Employee stock option expense Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognised based on the fair value of the options as at the grant date. Consequently, the amount recognised in share option outstanding account increased by `3,473,102 as at March 31, 2016 (April 1, 2015: `2,577,509). The profit for the year ended March 31, 2016 decreased by `895,107. There is no impact on total equity. Note 7: Retained earnings Retained earnings as at April 1, 2015 has been adjusted consequent to the above Ind AS transition adjustments. Note 8: Other comprehensive income Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations, effective portion of gains and losses on cash flow hedging instruments and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP. Note 9: Translation of foreign operations Under Indian GAAP, foreign subsidiaries were classified as integral operations and accordingly translated for the purpose of consolidation. Under Ind AS, the functional currency of these operations was assessed as currency other than the functional currency of parent and therefore, these operations were translated from their functional currency to presentation currency of the parent as prescribed under para 38 to 41 of Ind AS 21.
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 Ravindran M. P. Nivedita NayakPartner Managing Director Executive Director Company Secretary (DIN NO:00266460) (DIN : 07188069) [FCS:8479]
Place : Mumbai Dated : 29.05.2017
Annual Report 2016-17 219
Notice is hereby given that the SIXTEENTH (16th) Annual General Meeting (AGM) of the Members of Tara Jewels Limited will be held on Thursday, September 28, 2017 at 03.00 p.m. at Hotel Suncity Residency, Emerald - 1, Basement, 16th Road, Marol MIDC, 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, 2017
together with the Report of the Directors’ 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. 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 retire by rotation shall not in any way constitute a break in his existing office as a Managing Director of the Company.”
3. To appoint the auditors of the Company, and to fix their remuneration and for that purpose to pass the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 (“Act”) and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, M/s GMJ & Co, Chartered Accountants (Firm Registration No. 103429W), be and are hereby appointed as Auditors of the Company in place of the retiring auditors M/S C.B. Chhajed & Co., Chartered Accountants (Firm Registration No. 101796W), to hold office from the conclusion of this Annual General Meeting (“AGM”) till the conclusion of the twenty-first AGM to be held in the year 2022 (subject to ratification of their appointment at every AGM), at such remuneration, as may be mutually agreed between the Board of Directors of the Company and the Auditors.”
SPECIAL BUSINESS:4. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution: "RESOLVED THAT Mr. Sanjay Sethi (DIN 01152580) who was appointed by the Board of Directors as an Additional
Director of the Company with effect from August 10, 2017 and who holds office up to the date of this Annual General Meeting of the Company in terms of Section 161(1) of the Companies Act, 2013 (“Act”), but who is eligible for appointment and in respect of whom the Company has received a notice in writing from a Member under Section 160(1) of the Act proposing his candidature for the office of Director of the Company, 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 a Special Resolution: “RESOLVED THAT pursuant to the provisions of Sections 196, 197,198 and other applicable provisions, if any, of the
Companies Act, 2013 (Act) read with Schedule V to the Act and the applicable Rules made thereunder, the approval of the Members of the Company be and is hereby accorded for the appointment of Mr. Sanjay Sethi (DIN: 01152580) as a Whole-Time Director for a period of three years, with effect from August 10, 2017 on the following terms and conditions including remuneration:
Particulars Amount Per Month (in Rs.)
Basic Salary 2,16,700/-
Allowances 2,96,113/-
Bonus 753/-
Provident Fund 1800/-
Other benefits 26,301
Total Monthly Gross Salary 5,41,667
NOTICE
Tara Jewels Limited220
“RESOLVED FURTHER THAT in pursuance of the provisions of Section 197(3) and other applicable provisions, if any, of the Companies Act, 2013, and the Rules framed thereunder, Mr. Sanjay Sethi, Whole-Time Director, shall be paid the above mentioned remuneration with authority to the Board to grant increments and vary terms of his appointment from time to time so however that the aggregate remuneration at any time will not exceed a sum of Rs. 8 lacs p.m. during his tenure. However in the event of absence or inadequacy of profits in any financial year during the term of his office as a Whole-Time Director, remuneration will not exceed the limits specified under Section II of Part II of Schedule V to the Companies Act, 2013, or such other limits as may be prescribed by the Central Government from time to time as minimum remuneration under the Companies Act, 2013.”
“RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all such acts, deeds, matters and things as it may in its absolute discretion consider necessary and also to file necessary e-forms with the Ministry of Corporate Affairs to give effect to the above resolution under the Act.”
Registered Office: By Order of the Board of DirectorsPlot No. 122, 15th Road For Tara Jewels LimitedNear IDBI Bank, M.I.D.C Andheri (East)Mumbai – 400 093. Sd/-
Nivedita NayakMumbai, August 10, 2017 Company Secretary CIN: L52393MH2001PLC131252Tel.:022 66774444Website:www.tarajewels.inE-mail:[email protected]
NOTICE
Annual Report 2016-17 221
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. 3 being Ordinary Business and 4 to 5, the Special Business as 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 Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are provided in the “Annexure A” to the Notice.
6. The Registers required to be maintained under the Companies Act, 2013 i.e. the Register of Directors and Key Managerial Personnel and their Shareholding in the Company under Section 170 of the Companies Act, 2013 and Register of Contracts in which Directors are intrested under Section 189 of the Companies Act, 2013 will be available for inspection by the Members at the AGM.
7. The Register of Members and Share Transfer Books will remain closed from September 22, 2017 to September 28, 2017 (both days inclusive).
8. Section 72 of the Companies Act, 2013 read with Rule 19(1) of the Rules made thereunder, 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. to 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 101, 247 Park, L.B.S Marg, Vikroli West, Mumbai- 400083.
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
NOTICE
Tara Jewels Limited222
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 also be 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 voting 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.
18. Since the securities of the Company are compulsorily tradable in electronic form, to ensure better investor service and elimination of risk of holding securities in physical form, it is requested that the members holding shares in physical form to get their shares dematerialized art the earliest.
The instructions for shareholders voting electronically are as under:
(i) The voting period begins on September 25, 2017 at 9.30 A.M and ends on September 27, 2017 at 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 21, 2017, 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 of the cut-off date i.e. September 21, 2017 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.
(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)• 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 the 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.
NOTICE
Annual Report 2016-17 223
• 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].
19. a) Mr. K.C Nevatia, FCS, Practicing Company Secretary (CP No.2348) 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 a consolidated Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company or in his absence any other director so authorized by the Board, who shall countersign the same and declare the result of the voting forthwith.
NOTICE
Tara Jewels Limited224
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. 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. 3This explanatory Statement is provided though strictly not required as per section 102 of the Act.Section 139(2) of the Companies Act, 2013 provides that no listed Company shall appoint a firm of Auditors for more than two terms of five consecutive years. However under the third proviso to said sub-section (2) in case of an exisiting Company i.e. as on 1st April, 2014 if an Auditor has already completed the abovementioned term, then the said firm can continue for a period of another three years commencing from the date of the 1st Annual General Meeting of the Company held from the commencement of the Companies Act, 2013. The exisiting Auditors of the Company M/s. C.B. Chajjed and Co., Chartered Accountants (Firm Registration No. 101796W) shall be completing their term of extended three years at the conclusion of the ensuing Annual General Meeting and therefore the Company has to appoint another firm of Auditors at the ensuing Annual General Meeting.
The Board of Directors has, based on the recommendation of the Audit Committee, at its meeting held on August 10, 2017, proposed the appointment of M/s GMJ & Co, Chartered Accountants (Firm Registration No. 103429W) as the Statutory Auditors of the Company for a period of 5 years, to hold office from the conclusion of this AGM till the conclusion of the twenty-first AGM to be held in the year 2022 (subject to ratification of their appointment at every AGM).
M/s GMJ & Co, Chartered Accountants have consented to their appointment as Statutory Auditors and have confirmed that if appointed, their appointment will be in accordance with the conditions as prescribed under section 139 and also that they meet the criteria provided in section 141 of the Act.
The Board commends the Ordinary Resolution set out at Item No. 3 of the Notice for approval by the Members. None of the Directors or Key Managerial Personnel of the Company or their relatives is, in any way, concerned or interested in the Resolution set out at Item No. 3 of the Notice.
ITEM NO. 4 & 5The Board of Directors of the Company at their meeting held on August 10, 2017, had appointed Mr.Sanjay Sethi 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. Sanjay Sethi 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. Sanjay Sethi for being elected as a Director liable to retire by rotation. He does not hold any equity shares of the Company.
Mr. Sanjay Sethi 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 and 5 of the notice as Ordinary and Special Resolutions respectively.
NOTICE
Annual Report 2016-17 225
Except Mr. Sanjay Sethi, none of the other 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 and 5.
The information of Mr. Sanjay Sethi to be provided under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Annexure A to this Notice.
INFORMATION AS REQUIRED IN SECTION II OF PART II OF SCHEDULE V:I. General Information:
(1) Nature of Industry- Manufacturing of Jewellery
(2) Date or expected date of commencement of commercial production-N.A.
(3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus-N.A.
(4) Financial performance based on given indicators- Given in Financial Statement
(5) Foreign investments or collaborations, if any- The Company has not entered into any foreign collaboration and no direct capital investment has been made in the Company. As regards foreign investors mainly, foreign bodies corporate and foreign nationals are investors in the Company on account of past public issue of securities and secondary market purchases.
II. Information about the appointee:
(1) Background details- He is Chartered Accountant by Profession and has around 27 years of experience in respective field.
(2) Past remuneration- N.A.
(3) Recognition or awards- NIL
(4) Job profile and his suitability- Included in Annexure “A” to the Notice.
(5) Remuneration proposed- as mentioned in resolution.
(6) Comparative remuneration profile with respect to industry, size of the company, profile of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin)-Not Comparable.
(7) Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any- None
III. Other Information:
(1) Reasons of loss or inadequate profits- Adverse Market Conditions and increase in cost of input.
(2) Steps taken or proposed to be taken for improvement- Efforts to create new market and reduction in cost.
(3) Expected increase in productivity and profits in measurable terms- Cannot be ascertained in measurable terms.
Registered Office: By Order of the Board of DirectorsPlot No. 122, 15th Road For Tara Jewels LimitedNear IDBI Bank, M.I.D.C Andheri (East)Mumbai – 400 093. Sd/-
Nivedita NayakMumbai, August 10, 2017 Company Secretary CIN: L52393MH2001PLC131252Tel.:022 66774444Website:www.tarajewels.inE-mail:[email protected]
NOTICE
Tara Jewels Limited226
ANNEXURE ADetails of the Directors seeking re-appointment/ appointment in the Sixteenth Annual General Meeting pursuant to Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
Particulars Mr. Rajeev Sheth Mr. Sanjay Sethi
Date of Birth 16/11/1958 07/05/1965
Age 59 years 52 years
DIN 00266460 01152580
Date of appointment/reappointment October 1 2015 August 10, 2017
Date of first appointment on Board March 16, 2001 August 10, 2017
Terms and Conditions of appointment As mentioned in resolution and the explanatory statement annexed to the Notice
As mentioned in resolution and the explanatory statement annexed to the Notice
Relationship with other Directors, Manager and other Key Managerial Personnel of the company NIL NIL
Remuneration sought to be paidAs mentioned in resolution and the explanatory statement annexed to the Notice
As mentioned in resolution and the explanatory statement annexed to the Notice
Remuneration Last Drawn Gross Rs. 10,00,000/- p.m N.A
Qualification& Experience in specific functional area
He holds a graduate degree in commerce from Mumbai University. He also holds a diploma in gemology from Gemological Institute of America. Mr. Sheth has approximately 35 years of experience in jewellery business.
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 27 years of experience with various organizations.
No. of Meetings of the Board attended during the year
4 NIL #
Directorships held in other companies* NIL NIL
Memberships/ Chairmanships of Committee in other public limited companies (includes only Audit & Shareholders’/ Investors’ Grievance Committee)
NIL NIL
No of shares held in Company 14,502,893 NIL
*excludes Directorships in Private Limited Companies, Foreign Companies and Government bodies.# Appointed as Additional and Executive Director w.e.f August 10, 2017.
ANNEXURE BThe 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 14,502,893 58.90
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 14,779,998 60.02
NOTICE
Annual Report 2016-17 227
NOTES
Tara Jewels Limited228
NOTES
TARA JEWELS LIMITED
REGISTERED OFFICEPlot No. 122, 15th Road, Near IDBI Bank, M.I.D.C, Andheri (East), Mumbai- 400093, India.
CORPORATE OFFICEPlot No. 29(P), & 30(P), Sub Plot A, SEEPZ SEZ, Andheri (East), Mumbai- 400096,
India.
www.tarajewels.in