Tara Jewels AR 2012-13

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ANN UAL REPORT 2012 13 TARA JEWELS LIMITED



VALUE ANN PROPOSITION AT TARA IS DRIVEN BY OUR BUSINESS MODEL.

CORPORATE REVIEW


SMART, SCALABLE, SUSTAINABLE AND TRANSPARENT, IT CREATES A BEAUTIFUL SYNERGY BETWEEN CUSTOMER ASPIRATIONS AND OUR DELIVERY CAPABILITIES.

TARA JEWELS LIMITED

2


AS ONE OF INDIA’S LEADING INTEGRATED JEWELLERY PLAYERS, WE CATER TO DOMESTIC RETAIL CUSTOMERS AND INTERNATIONAL CLIENTS WITH FASHION, BRIDAL AND HANDCRAFTED BESPOKE JEWELLERY. OFFERING A WIDE PORTFOLIO OF PRODUCTS IN DIAMOND AND GOLD (STUDDED WITH PRECIOUS AND SEMI-PRECIOUS STONES) AND MANY MORE AMONG OTHERS WE APPRECIATE THE DISCERNING CUSTOMER, WHO CAN BE PASSIONATE ABOUT JEWELLERY AND YET EVER WATCHFUL ABOUT THE RIGHT VALUE AT THE RIGHT PRICE. FOR OVER 17 YEARS, OUR EXPERIENCE AND EXPERTISE ARE FOCUSED ON MARRYING THE TWO.

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ANNUAL REPORT 2012-13


CON TENTS 6 10 12 14 18 22 24

CONVENTIONAL INDUSTRY. CONTEMPORARY IDEAS. CONSISTENT AND ROBUST PERFORMANCE A STAR IS BORN

CHAIRMAN’S

COMMUNIQUÉ

SMALL IS BIG DIFFERENT STROKES

26 28 30 32 34 67

A HAPPY HARMONY OF TECHNOLOGY AND CRAFTSMANSHIP

TRANSPARENCY IS OUR MOST IMPORTANT TRADE SECRET THE BOARD LEADERSHIP TEAM STATUTORY REPORTS FINANCIAL STATEMENTS

DARINGLY DIFFERENT

In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral – that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.



CONVENTIONAL INDUSTRY

CONTEM 17+

EXPERIENCE IN JEWELLERY INDUSTRY

YEARS

AT TARA, WE HAVE HELPED ENRICH THE TIME-HONOURED BUSINESS OF JEWELLERY, JEWELLERY-MAKING AND RETAIL WITH OUR CONTEMPORARY IDEAS. THESE HAVE STRENGTHENED OUR BUSINESS PHILOSOPHY IN INDIA AND GLOBALLY. In India, we sell through our retail brand ‘Tara Jewellers’. Internationally, we have collaborated with various large retail chains and well-known designers.

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ACROSS THE GLOBE

OFFICES

50,000+ DESIGNS CATERING TO DIVERSE PREFERENCES

1,550+ EMPLOYEE STRENGTH CATERING TO INDIAN AND GLOBAL CUSTOMER DEMANDS TARA JEWELS LIMITED

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PORARY

IDEAS

8+

TIE-UPS

WITH PROMINENT INTERNATIONAL RETAIL CHAINS

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PROMOTED INTERNATIONALLY

BRANDS

OUR 35+ DESIGNERS AND 1,000+ CRAFTSMEN HELP DRIVE OUR VALUE PROPOSITION.

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ANNUAL REPORT 2012-13


CONVENTIONAL INDUSTRY. CONTEMPORARY IDEAS. PRESENCE IN THE VALUE CHAIN

High-end Jewellery

Presence of Tara

Branded Jewellery

Jewellery

Majority Indian Exporters

Job Work

Polished Diamonds

Rough Diamonds

AWARDS Twice awarded Global Supplier of the Year by Walmart in 2005 and 2007 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 2007, 2008 and 2009

Conferred with the status of a ‘Star Trading House’ by the Ministry of Commerce & Industry and have been the highest exporter in gems and jewellery sector for 2009 and 2010 Bagged as the ‘Store Design of the Year’ by Economic Times Retail Awards 2013 Awarded the ‘Print Campaign of the Year’ by the 8th Retail Jeweller India Awards 2012 TARA JEWELS LIMITED

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50 RETAIL SHOWROOMS ACROSS 37 INDIAN CITIES

Punjab Delhi

• 37 operational showrooms* • 13 showrooms at launch stage*

Gujarat

MP Maharashtra

90+

Chhattisgarh

Goa

SHOWROOMS BY 2016-17 TO DRIVE PAN-INDIA PRESENCE

ON THE GLOBAL STAGE Caters to retailers across the US, the UK, European Union (12 countries in EU including Austria, Germany and Switzerland), Australia, China, South Africa, UAE and Canada

Los Angeles USA

Uttar Pradesh

Rajasthan

* As on 25th July 2013

Uttarakhand

Phase 1 Stores Phase 2 Stores

20 COUNTRIES CATERED TO ACROSS FIVE CONTINENTS

New York USA Dallas USA

Geneva Switzerland

Pan Yu China Mumbai India

Hong Kong China

Sydney Australia

Headquarters in Mumbai, India Sales and distribution offices Production units Design studios

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ANNUAL REPORT 2012-13


CONSISTENT AND

ROB UST PERFORMANCE

INCOME MIX

%

REGION-WISE EXPORTS

%

USA CHINA

(including Hong Kong)

46.29 39.71

UAE 7.34 UK + EUROPE 4.11 OTHERS 2.55

EXPORT 81 DOMESTIC 19

(Australia, Germany, South Africa, Austria and Belgium)

TARA JEWELS LIMITED

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TOTAL REVENUE CAGR ↑ 19.66%

` MN

EBITDA CAGR ↑ 25.75%

16,355

972

11-12

10-11

12-13

`

414

11-12

10-11

`

201

154

23.04

10-11

12-13

EBITDA MARGIN

%

124

11-12

12-13

ROCE

11-12

12-13

ANNUAL REPORT 2012-13

21

10-11

10-11

%

9.41 8.40

12-13

BOOK VALUE PER SHARE

29.84

23.13

11-12

11-12

35.73

29.94

11

12-13

EARNING PER SHARE (DILUTED)

35.81

10-11

737

539

EARNING PER SHARE (BASIC)

8.51

` MN

1,317

11,423

10-11

PAT CAGR ↑ 33.42%

1,537

13,991

10-11

` MN

22 20

11-12

12-13

11-12

12-13

`


Implemented SAP

Set up 35,000 square feet state-of-the-art manufacturing facility in SEEPZ, Mumbai

100% integration of operations into SAP

M Fabrikant becomes a strategic investor in Tara Jewels

2000 2001 2002 2003

A STAR BORN IS

2009

Added two more retail showrooms in India Launched labels - Facets of Love and Candy Hearts with H Samuel, part of the Signet Group, UK Launched Walmart’s co-branded fashion initiative Heart2Heart Appointed as a member of SEEPZ Authority Cell governed by the Ministry of Commerce

2010 2011 Added 26 retail showrooms in India Co-branded Sattva collection with H Samuel, part of the Signet Group, UK

Co-branded Bridal Programme Cherished Hearts with JC Penney, US Forayed into the Russia market Nominated for Regional Retail Chain of the Year Certified as Nominated Agency as per the Indian Foreign Trade Policy (RE 2008)

TARA JEWELS LIMITED

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Invention of turntable technology to maximise productivity Origination of key manufacturing technology for invisible-setting

Acquired the go-forward business of M Fabrikant

Established 40,000 square feet manufacturing facility in Panyu, China Tara’s CMD became the only Indian Director of Jewellers Board of Trade, USA Highest Export Performance Award (Gems & Jewellery Sector, SEEPZ SEZ) by SEEPZ SEZ

Launched India retail with three showrooms Won Highest Export Performance Award (Gems & Jewellery Sector, SEEPZ SEZ) by SEEPZ SEZ

2005 2006 2007 2008 Tara Jewels Office, SEEPZ, Mumbai

2012

Listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) Swarovski joins as strategic investor through one of its associates, Crystalon Finanz AG Awarded the Print Campaign of the Year by the 8th Retail Jeweller India Awards 2012 Co-branded Bridal Programme with Monique Lhuillier Added 30th showroom at GK1, Delhi

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ANNUAL REPORT 2012-13

2013

Opened seven new retail showrooms Awarded the Best Store Design of the year at the Economic Times Retail Awards


STATUTORY REPORTS

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC SCENARIO GLOBAL ECONOMY The financial year 2012-13 saw various challenges emanating from the Eurozone crisis, the US fiscal cliff and slowdown in the emerging economies. The economic activities remained subdued with diverging growth trajectories across different economies. However, there have been signs of revival with the economic indicators gaining traction in the US and improving customer sentiments in Eurozone. Emerging economies are also showing resilience. Amid adversities, China witnessed GDP growth of around 7.50% for two consecutive quarters of 2013. With the commitment of the governments of various countries to long-term growth, things are likely to improve going ahead.

Growth Projections (%) Region

2013

2014

Global Advanced economies USA Eurozone Emerging economies China

3.10 1.20 1.70 -0.60 5.00 7.80

3.80 2.10 2.70 0.90 5.40 7.70

(Source: IMF estimates, July 2013 Outlook)

INDIAN ECONOMY Indian economy had its share of domestic problems in addition to the uncertainty from the external environment. The country’s Gross Domestic Product (GDP) showed a modest growth of 5% in 2012-13, in comparison with 6.20% in 2011-12. Escalating inflation, Reserve Bank of India’s (RBI) stern outlook on interest rates and high fiscal deficit played spoilsport. Government has taken several reforms to tackle the deteriorating scenario. Such initiatives include Foreign Direct Investment (FDI) in retail sector, sugar decontrol, petrol and diesel price hikes and others. RBI has also changed its policy with repo rate being reduced thrice and cash reserve ratio once till June, 2013. These measures are likely to revive the economy from the dark shadows of economic slowdown.

SILVER LINING Inflation: Monthly wholesale inflation went below 5% in 2013-14 from the high levels of around 8% in the 2012-13. Fiscal Deficit: Fiscal deficit came down to 4.89% of GDP in 2012-13 from 5.76% of GDP in 2011-12. Going forward, it is estimated to reach 3% of GDP by 2016-17.

GEMS AND JEWELLERY INDUSTRY GLOBAL OVERVIEW Asia Pacific is the world’s largest jewellery market in terms of area globally, with India and China being the leading consumers of gold and jewellery processing and manufacturing hubs. However, the US jewellery market garners maximum revenue with half of its revenue pie being contributed by the diamond jewellery industry. The market size is projected to grow at a Compound

TARA JEWELS LIMITED

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Annual Growth Rate (CAGR) of 5% over coming five years to surpass USD 272 billion by 2018 (Source: the Global Gems and Jewellery Market Forecast & Opportunities, 2018 Report). Rising disposable incomes and changing lifestyles are set to take the global jewellery market growth northwards.

REGION-WISE GOLD JEWELLERY CONSUMPTION (%)

DIAMOND INDUSTRY MARKET The US The US, largest diamond market, worth USD 27 billion in 2012, has started recuperating from significant fall witnessed during 2008-09 financial crisis. It accounts for around 40% of the global diamond demand at present (Source: ‘The Global Diamond Industry’ – Bain & Company Report).

2012

28.90

GREATER CHINA

28.50

THE MIDDLE EAST

7.70

THE US

5.80

EUROPE (EX-CIS)

2.30

OTHER 26.80

China China is the second largest diamond market globally with revenues of USD 9 billion in 2012. The revenue grew by a CAGR of 10% during the last year owing to fast-expanding Chinese middle class and increasing individual wealth.

DIAMOND DEMAND 2020

2011

(%)

REGION-WISE GOLD JEWELLERY CONSUMPTION (%)

2011 2020

THE US

37

33

EUROPE

14 11

JAPAN

10 7

REST OF ASIA

10

12

2011

INDIA

31.40

GREATER CHINA

27.80

THE MIDDLE EAST

7.80

THE US

5.80 2.50

INDIA

9 12

EUROPE (EX-CIS)

CHINA

7 13

OTHER 24.70

OTHER

13 12

(Source: KPMG Quarterly Commodity Insights Bulletin, 2013)

GOLD INDUSTRY MARKET Annual gold consumption reached new heights in 2012, worth USD 236.4 billion. This is almost 15% higher than the average for previous five years.

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INDIA

ANNUAL REPORT 2012-13

(Source: ‘Gold Demand Trends Report’ by World Gold Council, 2013)


FINANCIAL STATEMENTS

BALANCE SHEET

AS AT MARCH 31, 2013

(`) As at March 31, 2013

As at March 31, 2012

1 2

245,774,820 4,556,143,253 4,801,918,073

180,000,000 2,540,302,345 2,720,302,345

3 4 5

62,709,486 35,286,225 97,995,711

69,395,145 9,271,553 33,713,577 112,380,275

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2,499,091,167 2,822,153,526 112,692,043 73,086,491 5,507,023,227 10,406,937,011

2,502,234,094 3,401,651,807 116,721,350 114,671,140 6,135,278,391 8,967,961,011

721,732,070 30,459,943 8,521,830 169,474,546 8,750,667 128,276,188 1,067,215,244

745,142,432 12,094,016 1,365,000 41,808,704 35,669,186 836,079,338

5,759,924,368 2,376,008,268 1,073,817,730 118,283,741 11,687,660 9,339,721,767 TOTAL 10,406,937,011 Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.

5,145,606,751 2,644,773,240 188,748,654 106,375,126 46,377,902 8,131,881,673 8,967,961,011

Particulars

Note

EQUITY AND LIABILITIES

SHAREHOLDERS' FUNDS

Share capital Reserves and surplus

NON-CURRENT LIABILITIES

Long-term borrowings Deferred tax liabilities (Net) Long-term provisions

CURRENT LIABILITIES

Short-term borrowings Trade payables Other current liabilities Short-term provisions

7 8

TOTAL

ASSETS

NON-CURRENT ASSETS

Fixed assets Tangible assets Intangible assets Capital work-in-progress Non-current investments Deferred tax assets (Net) Long-term loans and advances

CURRENT ASSETS

Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets

As Per Our Attached Report of Even Date For C. B. Chhajed & Co. Chartered Accountants C. B. Chhajed Partner Place : Mumbai Date : May 16, 2013

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10 4 11

12 13 14 15 16

For and on Behalf of Board of Directors Rajeev Sheth Managing Director

Nalini Rajan Director

Amol Raje Company Secretary

TARA JEWELS LIMITED

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FINANCIAL STATEMENTS

STATEMENT OF PROFIT AND LOSS

FOR THE YEAR ENDED MARCH 31, 2013 (`) Particulars

Note

Year ended March 31, 2013

Year ended March 31, 2012

17 18

13,835,993,881 44,680,089 13,880,673,970

12,799,017,114 15,716,962 12,814,734,076

19 20 21 22 23 24 25

7,702,616,247 4,375,067,184 (520,924,818) 343,855,646 429,403,163 129,887,719 566,256,882 13,026,162,023 854,511,947

5,010,068,120 5,894,157,204 (333,645,772) 352,196,219 429,193,696 132,984,220 655,422,767 12,140,376,454 674,357,622

180,000,000 180,000,000 7,807,918 4,280,715 662,423,314

150,000,000 3,498,993 153,498,993 (1,397,579) 15,065,587 507,190,621

32.20 32.13

28.18 28.08

INCOME Revenue from operations Other income TOTAL REVENUE

EXPENSES Cost of materials consumed Purchases of stock-in-trade Changes in inventories of finished goods, work-in-process and Stock-in-Trade Employee benefits expense Finance costs Depreciation and amortization expense Other expenses TOTAL EXPENSES Profit before tax Tax expense Current tax Current tax Add: Minimum alternative tax credit utilised Net current tax Deferred tax Tax of earlier years Profit after tax Earning per equity share Basic Diluted

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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. Chartered Accountants C. B. Chhajed Partner Place : Mumbai Date : May 16, 2013

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ANNUAL REPORT 2012-13

For and on Behalf of Board of Directors Rajeev Sheth Managing Director Amol Raje Company Secretary

Nalini Rajan Director


TARA JEWELS LIMITED Registered Office Plot No. 122, 15th Road, Near IDBI Bank, MIDC, Andheri (East) Mumbai – 400 093, India Corporate Office Plot No. 29(P) & 30(P), Sub Plot A, SEEPZ SEZ, Andheri (East) Mumbai – 400 096, India www.tarajewels.in

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