Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the Twenty Ninth Annual
Report on the business and operations of your Company for the year
ended March 31, 2015.
FINANCIAL RESULTS
(Rs in lacs)
Standalone Consolidated
2014-15 2013-14 2014-15 2013-14
Sales & Other Income 720983.03 734308.46 1157959.01 1244555.98
Expenditure 666305.00 694670.98 1047036.68 1163401.76
Finance Cost 52365.17 41418.56 90416.25 73631.46
Depreciation &
Ammortisation Expenses 459.11 476.14 4688.68 3827.33
Exceptional Items 0.28 (137.37) (6975.65) (73.47)
Profit before Taxes 1854.03 (2394.59) 8841.75 3621.97
Provision for Current Tax 370.00 - 858.42 769.37
Provision for Deferred Tax (32.38) (129.38) (194.64) (367.10)
Provision for
MAT (370.00) - (780.19) (374.60)
Net Profit / (loss) for
the year 1886.41 (2265.21) 8958.16 3594.30
COMPANY'S PERFORMANCE
During the year under review, standalone sales and other income stood
at Rs. 720983.03 lakhs. After meeting all expenditures, Company made a
net profit of Rs. 1886.41 lakhs on standalone basis.
Further during the year under review, consolidated sales and other
income stood at Rs. 1157959.01 lakhs. After meeting all expenditures,
Company made a net profit of Rs. 8958.16 lakhs on consolidated basis.
BUSINESS REVIEW Gitanjali Gems Ltd. (GGL)
"GGL" was incorporated in 1986 and was primarily engaged in the
traditional diamond cutting and polishing business. It also enjoys
sight holder status with the Diamond Trading Company. Currently GGL is
engaged in sourcing rough diamonds, cutting and polishing diamonds and
manufacturing jewellery. The jewellery manufactured is primarily to
service the group's international operations.
The diamond cutting and polishing process is labour- intensive and
requires a special skill set. The manufacturing facilities are
strategically located in Mumbai, Surat and Hyderabad where the diamond
industry thrives. Rough diamonds which are procured are sorted or
graded on the basis of colour, shape, clarity, cut and weight. In order
to ensure optimum yield of polished stones from the rough diamonds, the
cutting process is carefully planned. The key steps in the process are
Marking, Cleaving, Sawing, Cutting and Polishing. The final stages of
the diamond manufacturing process consist of checking for damage,
cleaning and the final sorting before marketing to the customer.
Over the years, GGL has incorporated and acquired many companies to
integrate vertically through the jewellery value chain and to graduate
from diamond and jewellery manufacturing to jewellery branding and
retailing. Gitanjali Gems is the strong leg in the entire supply chain
and is the strategic arm of the group which ensures a consistent supply
of cut and polished diamonds to the branded jewellery manufacturing
segment of the business thereby fuelling the company's growth in the
branding and retailing space. Spearheaded by a veteran like Mr. Mehul
Choksi, who has been a visionary, the company has, over the years,
expanded via strategic organic and inorganic endeavors and grown to
become one of the largest integrated jewellery players in the world.
Gitanjali Group
Gitanjali Group is one of the largest integrated branded jewellery
manufacturer-retailer with an annual turnover of around USD 2 billion.
The Group's activities are spread across the entire value chain from
rough diamond sourcing, cutting, polishing and distribution, to
jewellery manufacturing, branding and retailing in India and abroad.
Gitanjali Gems Limited, the flagship Company is the listed entity of
the group and it is the ultimate holding company of all the other
entities which are engaged in branding and retailing jewellery and
lifestyle products. Diamond and Jewellery Manufacturing Gitanjali is a
vertically integrated player in the jewellery space. Diamond sourcing
and jewellery manufacturing form the first leg of the jewellery value
chain for Gitanjali. For over five decades now, Gitanjali has been
sourcing rough diamonds and cutting and polishing them at its state of
the art manufacturing facilities. This is the traditional business of
the group and it is supported by strong back- end of the supply chain
which fuels the group's jewellery manufacturing, branding and
retailing endeavours. The group houses a team of top notch designers
who provide key inputs for manufacturing jewellery in sync with the
latest trends prevalent in the market. The group's designing
strengths is considered as its key asset. The group has been
consolidating its manufacturing facilities across the globe for optimal
production. Manufacturing facilities are strategically located in
India and Thailand. The group's facility in Thailand is one of the
largest in Thailand and manufactures modern jewellery collections.
Presence in manufacturing allows the group flexibility in adapting to
changing consumer trends and also provides a certain level of
immunization against price risks. Gitanjali is looking to further
strengthen its manufacturing capabilities to enable it to constantly
innovate and address evolving tastes and preferences of cousumer.
India Jewellery Branding and Retailing
The Group has been pioneer in the jewellery retail revolution in India.
It owns and distributes some of the major jewellery brands in the
country including Gili, Nakshatra, Asmi, D'Damas, Sangini, Nizam and
Parineeta to name a few. Gitanjali's vast array of brands was
developed primarily to cater to diverse age groups, occasions, price
points and geographies.
The group has leveraged upon this inherent brand strength by extending
its brands to include lifestyle categories such as apparels under the
Gili and Diya brands which have been reasonably successful ventures.
Gitanjali has been an innovator and has been continuously evolving to
cater to the changing consumer tastes and preferences. Gitanjali is
known for its product, design and channel innovations. In line with
this pioneering and innovative culture, Gitanjali has created a range
of "affordable jewellery" to resonate with the younger consumers ,
thereby widening its reach. This range has also been developed to
complement the group's growth via the Brick (SIS) and Click (E-Com)
Model.
The Group has a very strong retail presence, having explored multiple
retail formats over the years and currently it enjois one of the
strongest franchisee, distributors and retail network in the country.
Way back in 1994, Gitanjali took the initiative to change the way
jewellery was viewed in India, and today its changing the way jewellery
is bought in India by exploring innovative selling options such as
Online marketplaces, Television selling, Duty free stores at airports,
In-flight, Cruise liners, etc.
These innovative channels not only support the affordable jewellery
segment which is the company's growth engine going forward, but also,
in entirety promote the concept and idea of new-age jewellery shopping.
International Jewellery Branding and Retailing
The Group is present in the top five global diamond jewellery markets -
USA, Japan, Middle East, China and India.
USA is the world's largest diamond jewellery market. The company is
present in the US through its subsidiary Samuels Jewelers Inc - one of
the largest specialty jewellery retailer in the US. Samuels is
positioned at engagement and wedding rings with price point ofUS$600.
The Group acquired this chain in 2006, to strengthen its foothold in
the world's biggest diamond jewellery market. Gitanjali achieved
synergies due to in-house sourcing and cost optimization. The
integrated business model with strong sourcing, low cost manufacturing
capabilities and well established retail presence has been contributing
to increasing market share and profitability. The US being the largest
diamond jewellery market with superior margins, is one of the most
ambitious markets for Gitanjali.
The next focus market for Gitanjali is UAE. The entire region is
transforming from a gold heavy market to a studded jewellery market
offering immense potential for Gitanjali's brands. Gitanjali started
its Middle East retail operations in 2012. Currently there are 4 stores
in Dubai and over 52 points of sale through Shop in shops in local
malls across the Middle East. Gitanjali's plethora of Indian and
Italian brands finds an immediate connect with the tastes and
preferences of the Middle East market. Gitanjali is also present and
growing in China and Japan. In China the group is present through
Shop-in-shops. China is one of the largest and fastest growing diamond
jewellery markets in the world. Gitanjali has so far managed to
penetrate in shop-in-shops with its Italian diamond jewellery
collections and is looking to expand and position itself as a leading
Italian brand in this region and be available through multiple channels
in the near future.
Japan is the fourth largest diamond jewellery consuming market and
provides excellent margins to integrated players. In Japan, the company
gained the status of a preferred supplier to the 3rd largest jewellery
retail chain - Verite, through a minority stake in the same. The
company also acquired a 20% stake in the largest jewellery selling TV
channel - Gems TV, (IMACBC) to exploit one of the largest jewellery
markets in the world. Large existing proven distribution network in
Japan through Gems TV and Verite combined with low cost manufacturing
capabilities will enable the next phase of expansion for Gitanjali.
The company also caters to the European Region. It has distribution tie
ups with a few jewellery chains in Europe. The company acquired the
assets of DIT group in Italy in 2011 which led to the ownership of
popular brands like Stefan Hafner, IOSI, Porrati and Valente. The
Company leveraged its worldwide marketing and distribution strength to
increase the footprint of these brands across its network in India,
Russia, Italy, USA and Middle East. The rationale is to create a
bouquet of international brands across the rest of the world using the
strength of the Italian brands and the distribution / fulfillment
strength of the Indian parent.
The Company also distributes its jewellery internationally in other
markets like Hong Kong, Thailand. Belgium and Australia. Its customers
primarily include jewellery manufacturers, wholesalers and large
retailers.
DIVIDEND AND APPROPRIATION
In order to conserve the financial resources of the Company your
Directors have not recommended any dividend on equity shares. No
appropriations to free reserves are proposed to be made for the year
under consideration.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report of the financial
condition and result of operations of the Company for the year under
review as required under clause 49 of the listing agreement with stock
exchanges, is given under separate section forming part of this annual
report
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements. The
Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report. The requisite
Certificate from the Auditors of the Company confirming compliance with
the conditions of Corporate Governance as stipulated under the
aforesaid Clause 49 is attached to this Report.
SHARE CAPITAL
As on April 1, 2014 the paid up share capital of the Company was Rs.
92,06,54,910/- consisting of 9,20,65,491 equity shares of Rs. 10 each. On
June 4, 2014, 60,54,960 equity shares of Rs. 10 each were allotted at a
price of Rs. 64.41/- to D.B. Corp Limited (DBCL) pursuant to conversion
of fully convertible debenture held by DBCL. Consequent to the
conversion, the paid up capital of the Company increased from Rs.
92,06,54,910/- consisting of 9,20,65,491 equity shares of Rs. 10 each to
Rs. 98,12,04,510 consisting of 9,81,20,451 equity shares of Rs. 10 each.
Further, during the year under review, the Company has allotted
23,547,194 warrants on preferential basis to persons other than
promoters. The said warrants carries an option / entitlement to
subscribe to equivalent number of Equity Shares of Rs. 10/- each at a
future date, not exceeding 18 (eighteen) months from the date of issue
of such warrants at a price of Rs. 72.39/- which includes a premium of Rs.
62.39/- per share.
PUBLIC DEPOSITS
During the year under review, Company has not accepted any deposits
from public under chapter V of Companies Act, 2013. No deposits which
were due remained unpaid or unclaimed as at the end of the year nor
there has been any default in repayment of deposits or payment of
interest thereon during the year. Further, there are no deposits which
are not in compliance with the requirements of Chapter V of Companies
Act, 2013.
Out of the deposit accepted from the public in the previous year
2013-14, as on date Rs.173.36 lacs are outstanding which will mature in
current year and next year.
DISCLOSURE PURSUANT TO CLAUSE 5A (I) OF LISTING AGREEMENT
Pursuant to insertion of clause 5A (I) in Listing Agreement as per SEBI
notification no. SEBI/CFD/DIL/ LA/1/2009/24/04 dated April 24, 2009 the
details in respect of the shares lying in the Gitanjali Gems Limited -
Unclaimed Shares Demat Suspense Account till March 31, 2015 is as
under:
All the corporate benefits in terms of securities, accruing to on these
unclaimed shares shall be credited to such account. Voting rights on
these shares shall remain frozen till the rightful owner of such shares
claims the shares. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO
BE SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES
During the year under review, Jewelsouk Marketplace Limited (formerly
known as eGitanjali Limited), erstwhile a wholly owned subsidiary of
the Company made a preferential allotment to person other than the
Company to augment capital for its expansion. Pursuant to said
allotment, Company's stake in eGitanjali Limited came down to 40% and
as a result, its status changed from wholly owned subsidiary to an
associate company. Further, during the year under review, with a view
to rationalize the group structure, holding in some of the subsidiaries
e.g. Gitanjali Capital Private Limited, Shubhalavanyaa Jewel Crafts
Private Limited, Leading
Singapore Jewels Pte Ltd, and Gitanjali Resources BVBA was sold off and
they ceased to part of the group structure.
The Company through its wholly owned subsidiary Gitanjali Infratech
Limited incorporated Vidarbha Multi Products SEZ Limited to set up a
Special Economic Zone unit for dealing in multi products.
The Policy for determining material subsidiaries as approved may be
accessed on the Company's website at
http://media.corporate-ir.net/media_files/
IROL/19/196729/Policies_&_Codes/Policy%20for%20
Determining%20Material%20Subsidiary.pdf
A statement containing salient features of the financial statement and
related information of the subsidiaries in the prescribed format AOC-1
is provided as Annexure A to the consolidated financial statement and
hence not repeated here for the sake of brevity.
SCHEME OF AMALGAMATION
Subsequent to the year under review, at the Meeting of Board of
Directors of the Company held on April 21, 2015, the Board has approved
the "Scheme of Amalgamation" [Scheme] under Section 391 to 394 of
the Companies Act, 1956 and relevant Sections of the Companies Act
2013, to the extent applicable, for amalgamation of Gitanjali Exports
Corporation Limited (GECL), a wholly owned subsidiary with the Company,
subject to the approval of the Scheme by Stock Exchanges, Shareholders
and Creditors of the respective Companies, Hon. Bombay High Court and
subject to approval of any other statutory authorities as may be
required. Once sanctioned, the Scheme will be effective from the
appointed date i.e. April 1, 2014. In terms of circular bearing no.
CIR/CFD/DIL/5/2013 dated February 04, 2013 as amended from time to time
issued by Securities and Exchange Board of India, the Company is in the
process of obtaining an approval of shareholders by way of postal
ballot for approving the scheme.
Further, Board of Directors of the respective Companies at their
respective meeting held on April 21, 2015, approved the "Scheme of
Amalgamation" [Scheme] under Section 391 to 394 of the Companies Act,
1956 and relevant Sections of the Companies Act 2013, to the extent
applicable, for Merger of Asmi Jewellery India Limited and Spectrum
Jewellery Limited with Nakshatra Brands Limited and Merger of Gitanjali
Jewellery Retail Limited and Gitanjali Lifestyle Limited with GILI
India Limited, subject to the approval of the Scheme by Hon. Bombay
High Court and subject to approval of any other statutory authorities
as may be required. Once sanctioned, the Scheme will be effective from
the appointed date i.e. April 1, 2014.
NUMBER OF MEETINGS OF THE BOARD
The board met 5 times in financial year 2014-15, the details of which
are given in corporate governance report section that forms part of
this annual report. The intervening gap between two consecutive board
meetings did not exceed 120 days.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from each independent director
under section 149(7) of Companies Act, 2013 that he/she meets the
criteria of independence laid down in Section 149(6) of Companies Act,
2013 and clause 49 of listing Agreement.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of executive and
independent directors to maintain the independence of the board. The
Company has put in place a policy on Directors' appointment and
remuneration including criteria for determining qualifications,
positive attributes, independence of a Director and other matters
provided under section 178(3) of Companies Act, 2013 appended as
Annexure 1. The same can also be viewed by visiting following link:
http://media.corporate-ir.net/media_files/
IROL/19/196729/Policies_&_Codes/Nomination%20
and%20Remuneration%20of%20Directors,%20Key%20
Managerial%20Personnel%20and%20Senior%20 Management%20Policy.pdf
FAMILIARISATION PROGRAMMES FOR BOARD MEMBERS
The Board members are provided with necessary documents/brochures,
reports and internal policies to enable them to familiarise with the
Company's procedures and practices.
Periodic presentations are made at the Board Meetings, on business and
performance updates of the Company, global business environment,
business strategy and risks involved. The details of such
familiarization programmes for Independent Directors are posted on the
website of the Company and can be accessed at the following link :
http://media.corporate-ir.net/media_files/
IROL/19/196729/Policies_&_Codes/Familiarisation%20
Programme%20for%20Independent%20Directors.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL
On the recommendation of nomination and remuneration committee, the
board appointed Ms. Nazura Ajaney independent director with effect from
August 13, 2014. The shareholders of the Company in the Annual General
Meeting held on September 29, 2014 appointed Ms. Nazura Ajaney as
independent director to hold office for a term upto September 30, 2018.
Subsequent to year under review, Mr. Swaminathan Sundararajan Mittur
resigned from the post of Director of the Company due to pre
occupation. The board recorded its appreciation for the contribution
made by Mr. Swaminathan Sundararajan Mittur during his tenure as
Director.
The Board of Directors at its meeting held on August 14, 2015 appointed
Mr. Vinod Juneja to act as an Alternate Director to Mr. Nehal Modi
during his absence from the country.
In accordance with Section 152 and other applicable provisions of
Companies Act, 2013, Nehal Modi (DIN 02861450), being Non- Executive
Director, retires by rotation and being eligible offers himself for re-
appointment at the ensuing Annual General Meeting. The Board recommends
his re appointment for your approval. Further, in view of resignation
of Mr. Kapil Khandelwal as Chief Financial Officer of the Company, the
board of directors of the Company at its meeting held on May 30, 2014
appointed Mr. Chandrakant Karkare as Chief Financial Officer (in the
category of key managerial personnel) of the Company, in terms of
Section 203 of the Companies Act, 2013 read with Companies(Appointment
& Remuneration of Managerial Personnel) Rules, 2014.
EVALUATION
Clause 49 of listing agreement mandates that board shall monitor and
review board evaluation framework. The Companies Act, 2013 states that
formal evaluation needs to be made by the board of its own performance
and that of its committees and individual directors. Further Schedule
IV of Companies Act, 2013 states that the performance evaluation of
independent directors shall be done by entire Board of Directors,
excluding director being evaluated. The evaluation of all the directors
and the board as a whole was conducted based on the criteria adopted by
the board.
The evaluations for the Directors and the Board were done through
circulation of questionnaires which assessed the performance of the
Board on select parameters related to roles, responsibilities and
obligations of the Board and functioning of the Committees including
assessing the quality, quantity and timeliness of flow of information
between the company management and the Board that is necessary for the
Board to effectively and reasonably perform their duties. The
evaluation criterion for the Directors was based on their
participation, contribution and offering guidance to and understanding
of the areas which are relevant to them in their capacity as members of
the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134 (5) of the Companies Act,
2013, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
(a) in the preparation of the annual accounts for the financial year
ended March 31, 2015, the applicable accounting standards have been
followed and there are no material departures from the same;
(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 as at March 31, 2015 and of the profit of the company
for the said period;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 2013 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; and
(e) the Directors, have laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and are operating effectively.
(f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements are provided in this
Annual Report which have been prepared in accordance with relevant
Accounting Standards issued by the Institute of Chartered Accountants
of India. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments are given in the notes to
the Financial Statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES REFERRED TO IN SECTION 188
None of the transactions with any of related parties were in conflict
with the Company's interest. The Company's major related party
transactions are generally with its subsidiaries. The related party
transactions are entered into based on considerations of various
business exigencies such as synergy in operations, Company's
long-term strategy for investments, optimization of market share,
profitability, liquidity ,capital resources of subsidiaries, etc.
During the year under review, the contracts or arrangements with
related parties referred to in section 188 of Companies Act, 2013 have
been on arms length and in ordinary course of business and they were
not material in nature. Accordingly, the particulars of the
transactions as prescribed in Form AOC - 2 of the rules prescribed
under Chapter IX relating to Accounts of Companies under the Companies
Act, 2014 are not required to be disclosed as they are not applicable.
The Policy on dealing with related party transactions as approved by
the Board may be accessed on the Company's website at
http://media.corporate-ir.net/media_files/
IROL/19/196729/Policies_&_Codes/Related%20
Party%20Transactions%20Policy.pdf CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review, the Board of Directors at its meeting
held on May 30, 2014 had constituted Corporate Social Responsibility
(CSR) Committee in accordance with Section 135 of Companies Act, 2013
read with rules formulated therein. The Company pursuant to the
recommendation of the CSR Committee had adopted a detailed policy on
Corporate Social Responsibility.
Annual report on CSR activities as required under the Companies
(Corporate Social Responsibility Policy) Rules, 2014 has been appended
as Annexure 2 to this Report.
PARTICULARS OF EMPLOYEES
The details in terms of Section 197 of the Companies Act, 2013 read
with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, are forming part of this report as
Annexure 3A and the statement containing particulars of employees as
required under Section 197(12) of the Companies Act, 2013 read with
Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is forming part of this report as Annexure 3B
AUDIT COMMITTEE:
The Audit Committee of the company consists of the following Directors:
Mr. S. Krishnan - Chairman
Ms. Nazura Ajaney
Mr. Mehul C. Choksi
The board accepted all the recommendations made by the audit committee
during the year under review. The details of terms of reference, number
of audit committee meetings held during the year under review,
attendance, etc are separately given in the section of corporate
governance.
VIGIL MECHANISM
In terms of the section 177(9) of companies act, 2013 and rules framed
thereunder, the Company has framed a Whistle Blower Policy with vigil
mechanism with an objective of encouraging the employees of the Company
to raise any concern about Company's operations and working
environment, including possible breaches of Company's policies and
standards, without fear of adverse managerial action being taken
against such employees.
It provides a channel to the employees to report to the management
concerns about unethical behavior, actual or suspected fraud or
violation of any code of conduct or policy in force. The mechanism
provides for adequate safeguards against victimization of employees to
avail of the mechanism and also provide for direct access to the
Chairman of the Audit Committee in exceptional cases. The reported
concerns, if found appropriate, would be fully investigated and acted
upon.
RISK MANAGEMENT POLICY The Company has adopted a Risk Management Policy
duly approved by the Board and also in place a mechanism to identify,
assess, monitor and mitigate various risks to key business objectives.
Major risks identified by the businesses and functions are
systematically addressed through mitigating actions on a continuing
basis. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form
MGT 9 is annexed herewith as Annexure 4 to this Director's Report.
AUDITORS & AUDITORS REPORT
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the present
Statutory Auditors retire at the ensuing Annual General Meeting and are
eligible for re-appointment. The company proposes to re-appoint M/s.
Ford, Rhodes, Parks & Co., Chartered Accountants as Statutory Auditors
of the company from the conclusion of the ensuing Annual General
Meeting up to the conclusion of the next Annual General Meeting of the
company.
The Audit Committee and the Board recommend the appointment of M/s.
Ford, Rhodes, Parks & Co., Chartered Accountants as Statutory Auditors
of the company.
The Company has received letter from statutory auditors that their
re-appointment, if made, would be within prescribed limits under
section 141(3)(g) of companies act, 2013 and they are not disqualified
for re-appointment. The auditor in their report on standalone
financial statements for the year ended March 31, 2015 have stated
emphasis of matter. The response of your directors on the same are as
follows:
Response to point (a)
Since 2013, the Company is passing through difficult financial
conditions due to extraneous factors beyond its control viz,
unfavourable regulatory changes and adverse forex movement. Due to
liquidity challenges, there remained an overdue of principal amount and
liquid reserve was not created. However, management is confident of
clearing the outstanding dues shortly and also complying with the
requirement of reserve creation. Response to point (b)
Due to liquidity challenges as mentioned above, there have been
occasions during FY 2014-15 where there were few overdrawn position in
some accounts. However, from time to time, the Company has been
clearing the said overdrawn positions and is making best efforts to
regularize the status.
Response to point (c)
The Company has been regularly honoring all its debt obligations/
statutory dues with some delays. Multiple extraneous factors as stated
earlier, have made significant negative impact on the liquidity status
of the Company. The Company however is committed to pay all its
outstanding undisputed statutory dues and liabilities and will pay the
same gradually.
With regard to points raised in audit report on consolidated financial
statements for the year ended March 31, 2015, on emphasis of matter,
the directors comments are covered in reply on emphasis of matter to
standalone financial statement for year ended March 31, 2015
SECRETARIAL AUDITORS & THEIR REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company had appointed M/s. Manish Ghia &
Associates, Practicing Company Secretaries, to undertake the
Secretarial Audit of the Company for the financial year 2014-2015. The
Secretarial Audit Report has been appended as Annexure 5 to this
Report.
The Secretarial Audit Report does not contain any qualification.
PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, EXPENDITURE
ON RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE INFLOW/OUTFLOW, ETC.
A. CONSERVATION OF ENERGY
The operations of your company is not energy intensive. However, the
Company makes its best efforts for conservation of energy in its
factory and office premises.
B. TECHNOLOGY ABSORPTION,ADAPTATIONS & INNOVATION
The Company has not carried out any specific research and development
activities. The Company uses indigenous technology for its operations.
Accordingly, the information related to technology absorption,
adaptation and innovation is reported to be NIL.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO The details of foreign exchange
earings and expenditure are as follows.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY
There have been no material changes and commitments, if any, affecting
the financial position of the Company which have occurred between the
end of the financial year of the Company to which the financial
statements relate and the date of the report.
INTERNAL CONTROL AND ITS ADEQUACY
The company has adequate internal controls and processes in place with
respect to its financial statements which provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements. These controls and processes are driven through
various policies, procedures and certifications. The processes and
controls are reviewed periodically.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION & REDRESSAL) ACT 2013
Gitanjali's quest for competitive excellence consists of its
commitment to lawful and ethical conduct and adherence to its values.
Integrity, honesty and respect for people remain some of its core
values. The Company is committed to provide a safe & conducive work
environment to its employees and has formulated 'Policy for
Prevention of Sexual Harassment' to prohibit, prevent or deter any
acts of sexual harassment at workplace and to provide the procedure for
the redressal of complaints pertaining to sexual harassment, thereby
providing a safe and healthy work environment.
During the year under review, no case of sexual harassment was
reported.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
2. Issue of sweat equity shares to employees of the Company under any
scheme
3. Issue of shares under Employee Stock Option Scheme
4. The Managing Director of the Company is not in receipt of any
commission from the Company nor he received any remuneration or
commission from any of the subsidiary of the Company.
5. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and
Company's operations in future.
ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by the employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, co-operation,
and support.
We thank the Governments of various countries where we have operations.
We also thank the Government of India, Ministry of Commerce & Industry,
Ministry of Corporate Affairs, Ministry of Finance, Department of
Economic Affairs, Customs & Excise Departments, Income Tax Department,
Reserve Bank of India, BSE, NSE, NSDL, CDSL and various bankers,
various State Governments and other Government Agencies for their
support, and look forward to their continued support in the future.
On behalf of the Board of Directors
Mehul C. Choksi
Chairman and Managing Director
Place : Mumbai
Date : August 14, 2015
Mar 31, 2014
Dear Members
The Directors are pleased to present the 28th Annual Report on the
business and operations of the Company for the year ended March 31,
2014.
FINANCIAL RESULTS
(Rs in lacs)
Standalone
2013-14 2012-13
Sales & Other Income 734308.46 1039978.77
Expenditure 694670.98 989147.91
Finance Cost 41418.56 23873.57
Depreciation & Ammortisation Expenses 476.14 487.85
Exceptional Items (137.37) 9.77
profit / (loss) before Taxes (2394.59) 26479.21
Provision for Current Tax - 5188.20
Provision for Deferred Tax (129.38) 74.85
Provision for MAT - (5300.00)
Net profit / (loss) for the year (2265.21) 26516.16
Consolidated
2013-14 2012-13
Sales & Other Income 1244555.98 1642847.75
Expenditure 1163401.76 1530983.24
Finance Cost 73631.46 46131.99
Depreciation & Ammortisation Expenses 3827.33 3665.66
Exceptional Items (73.47) 9.77
profit / (loss) before Taxes 3621.97 62076.64
Provision for Current Tax 769.37 10408.77
Provision for Deferred Tax (367.10) 187.97
Provision for MAT (374.60) (8042.79)
Net profit / (loss) for the year 3594.30 59522.69
COMPANY''S PERFORMANCE
It was one of the toughest years for the Indian economy with the GDP
growth falling below 5%. Your Company is no exception and faced a
challenging time during the year 2013-14. Customer sentiments were
affected by the infation and uncertain economic conditions. During the
year under review, Reserve Bank of India initiated measures to contain
the Current Account Defcit by imposing restrictions on gold import for
domestic consumption. At the same time customs department increased the
import duty on gold to 10%. Further, the Indian Rupee weakened
considerably during the year.
During the year, financial performance of the Company stood as follows:
> Sales and Other Income as on March 31, 2014 stood at Rs. 734308.46
lakhs as against Rs. 1039978.77 lacs
> Net Loss as on March 31, 2014 is Rs. 2265.21 lacs as against profit of Rs.
26516.16 lakhs of previous year.
It can be seen from the above that in the trying times also, percentage
level of gross margins has been maintained. However, finance cost shot
up significantly resulting in the loss for the current year.
BUSINESS REVIEW
1. DIAMOND AND JEWELLERY
MANUFACTURING SEGMENT
Gitanjali is a vertically integrated player in the jewellery industry
and is engaged in diamond and jewellery manufacturing, jewellery
branding and retailing. Its presence across the entire value chain
gives it the scale that it enjoys. It is engaged in the entire process
from sourcing rough diamonds, cutting and polishing them to
manufacturing jewellery. The diamond cutting and polishing process is
labour-intensive and requires a special skill set. The Group''s
factories are strategically located in surat and Hyderabad where the
diamond industry thrives. Rough diamonds which are procured are sorted
or graded on the basis of colour, shape, clarity, cut and weight. In
order to ensure optimum yield of polished stones from the rough
diamonds, the cutting process is carefully planned. The key steps in
the process are Marking, Cleaving, Sawing, Cutting and Polishing. The
final stages of the diamond manufacturing process consist of checking
for damage, cleaning by boiling in various acids and the final sorting
before marketing to the customer.
The branded jewellery that Gitanjali manufactures includes diamond
studded and other precious stones studded jewellery. The Group has
produced branded jewellery in India for over 20 years. During the year
Gitanjali upgraded all its diamond and studded jewellery manufacturing
facilities based in Hyderabad, Mumbai, Jaipur, China and has also added
the Thailand facility - which is one of the largest of its kind.
Gitanjali is looking to further strengthen its manufacturing
capabilities to enable it to constantly innovate and adapt to changing
consumer trends.
2. BRANDED JEWELLERY AND RETAIL SEGMENT
Gitanjali over the years has graduated through the various stages of
the value chain to move from the diamond manufacturing business to
jewellery manufacturing and retailing to unlock maximum value which
accrues through downstream expansion.
Having introduced the frst diamond jewellery brand "Gili" in India in
1994, Gitanjali has pioneered the branded jewellery revolution in the
country. It has changed the way jewellery was viewed in India. Ever
since then, Gitanjali added a plethora of brands such as Nakshatra,
Asmi, Sangini, D''damas to name a few to cater to diverse age groups,
occasions, price points and geographies.
Recently Gitanjali made a foray into affordable fne jewellery with its
Viola Italia range of jewellery. This vibrant new collection is the
company''s endeavour to cater to a wider audience and ensure that
need-gaps in the market are addressed.
Gitanjali''s brands enjoy tremendous recall and the group has leveraged
upon this by extending its brands to include lifestyle categories such
as apparels under the Gili and Diya brands which have been reasonably
successful ventures.
The Group has actively pursued not only product and design innovations
but also channel innovations. Currently the company distributes its
jewellery through around 360 distributors, who cater to more than 3000
retailers. The company also enjoys a significant retail presence through
around 239 Own Stores, 305 franchisees and 640 Shop-in-shops.
Gitanjali is also strongly exploring newer channels
such as e-commerce and has launched exclusive as well as multi-brand
portals and has also created an online market place. The Group''s retail
operations are supported by a strong inventory management system.
3. INTERNATIONAL DISTRIBUTION AND RETAIL SEGMENT
The Group is present across in the top five global diamond jewellery
markets  USA, Japan, Middle East, China and India.
USA is the largest diamond jewellery market in the world. Gitanjali
enjoys a retail presence through over 104 doors of its retail chain
Samuels Jewels Inc. The Samuels chain has exclusive designer jewellery
collections and a large selection of loose and mounted diamonds under
brands such as "Samuels Jewelers", "Schubach Jewelers", "Samuels
Diamonds", "Rogers Jewelers" and "Andrews Jewelers" which are primarily
targeted at middle and upper middle class consumers in the United
States. Samuels'' retail chain is positioned as a wedding jeweller with
category focus on bridal collections in the United States. The Group
also distributes its jewellery to other local players in the US. The
Group''s US business has been witnessing a steady growth of around
10-12% on year on year basis. US being the largest diamond jewellery
market with superior margins, is one of the most ambitious markets for
Gitanjali.
UAE is another significant market for jewellery in the world. Gitanjali
retails its Jewellery from the bouquet of Gitanjali''s Indian brands
such as "Nakshatra", "Gili", "Asmi", as well as the collection of
Italian brands such as "Stefan Hafner", "Nouvelle Bague", "IO SI",
"Porratti" and "Valente". Gitanjali also recently entered into a tie-up
with Paris Gallery to retail its jewellery throughout UAE. The Group
currently distributes its jewellery through 4 retail stores and over 50
SIS in local jewellers as well as through duty free stores at Dubai
airport.
Japan is also one of the largest consumers of diamond jewellery in the
world. The Group has a minority stake in a listed Japanese entity Â
Verite and supplies to over 100 stores of Verite in Japan. The Group
also has 20% stake in Gems TV which is a jewellery selling TV channel
in Japan. The
Group incorporated Leading Jewels of Japan KK (LJJ) which sources
jewellery from Gitanjali Group''s manufacturing facilities in India,
China and Thailand and distributes this jewellery to some of the
largest customers in Japan. The large team of Jewellery designers from
India, China and Thailand supports to customize according to local
tastes and requirements of Japan. LJJ also distributes the Group''s
Italian brands "Stefen Hafner", Nouvelle Bague", "IO SI", "Porrati" and
" Valente" to customers in Japan.
Other International Markets- The Company distributes its jewellery
internationally through its subsidiaries in USA, Hong Kong, Thailand,
Belgium, Italy and China. These subsidiaries supply within their local
markets as well as other global markets such as Australia, Russia, UK
and other parts of Europe. Its customers include jewellery
manufacturers, wholesalers and large retailers.
DIVIDEND AND APPROPRIATION
As the Company has incurred a loss during the financial year 2013-14,
your directors do not recommend any dividend. No appropriations to free
reserves are proposed to be made for the year under consideration.
CAPITAL
On December 05, 2012, Company issued 1 (one) Zero Percent Fully
Convertible Debenture (FCD) having face value of Rs. 39,00,00,000/-
(Rupees Thirty Nine Crores only) on preferential basis to D. B. Corp
Limited (DBCL). The said FCD were compulsorily convertible into such
number of equity shares with face value of Rs. 10 each at the end of 18
months from the date of allotment at a price determined as per
Securities and Exchange Board of India (Issue of Capital and Disclosure
requirements) Regulations, 2009.
Accordingly, on June 4, 2014, 60,54,960 equity shares of Rs. 10 each were
allotted at a price of Rs. 64.41/- to DBCL pursuant to conversion of said
FCD. Consequent to aforesaid conversion the paid up capital of the
Company has increased from Rs. 92,06,54,910/- consisting of 9,20,65,491
equity shares of Rs. 10 each to Rs. 98,12,04,510 consisting of 9,81,20,451
equity shares of Rs. 10 each.
AUDITORS & AUDITORS REPORT
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the present
Statutory Auditors retire at the ensuing Annual General Meeting and are
eligible for re-appointment. The
company proposes to re-appoint M/s. Ford, Rhodes, Parks & Co.,
Chartered Accountants as Statutory Auditors of the company from the
conclusion of the ensuing Annual General Meeting up to the conclusion
of the next Annual General Meeting of the company.
The Audit Committee and the Board recommend the appointment of M/s.
Ford, Rhodes, Parks & Co., Chartered Accountants as Statutory Auditors
of the company.
The Company has received letter from statutory auditors that their
re-appointment, if made, would be within prescribed limits under
section 141(3)(g) of companies act, 2013 and they are not disqualified
for re-appointment.
The auditor in their report on standalone financial statements for the
year ended March 31, 2014 have stated emphasis of matter. The response
of your directors on the same are as follows:
Response to point (a)
The Company is passing through diffcult financial conditions due to
extraneous factors beyond its control viz, restrictions imposed in
revised gold policy, increase in import duty on gold, adverse forex
movement and significant weakening of rupee against dollar. The Company
is in discussion with LIC for realignment of outstanding debt
obligations in respect of non convertible debentures and the management
is confdent that the same will be realigned shortly. Once it is
realigned, cash deposit will be created as required by circular 4/2013
dated February 11, 2013 issued by ministry of corporate affairs.
Response to point (b)
The overdue installment of ECB as at of March 31, 2014 was paid in June
2014. The delay was due to liquidity challenges which Company is facing
as mentioned in above point.
Response to point (c)
Due to liquidity challenges as mentioned above, there have been
occasions during FY 2013-14 where there were few overdrawn position in
some accounts. However, from time to time, the Company tried to clear
said overdrawn positions as and when it is possible.
Response to point (d)
The management is confdent that Company will be successful in getting
the order in its favour in respect of disputed outstanding taxes.
Response to point (e)
The Company has been regularly honoring all its debt obligations/
statutory dues. However, multiple factors as stated earlier, such as
restrictions imposed in revised gold policy, increase in import duty on
gold, adverse forex movement and significant weakening of rupee against
dollar had significant impact on the Company. The Company is committed
to pay all its outstanding undisputed statutory dues and will pay the
same gradually.
Response to point (f)
The Company is in process of approaching expert in the feld and will
act according to the opinion it obtains.
With regard to points raised in audit report on consolidated financial
statements for the year ended March 31, 2014, the directors comments on
it are covered in reply on emphasis of matter on standalone financial
statement for the year ended March 31, 2014.
SUBSIDIARIES
The Ministry of Corporate Affairs, Government of India vide circular
no. 2/2011 dated 8th February, 2011 has granted general exemption from
attaching the Balance Sheet, profit and Loss Account and other documents
of the subsidiary companies with the Balance Sheet of the Company, as
set out in sub-section (1) of Section 212 of the Companies Act, 1956.
Accordingly, the Board of Directors in their Meeting held on May 30,
2014 passed a resolution giving consent for not attaching the Balance
Sheet, profit and Loss Account and other documents of the subsidiary
companies with the Balance Sheet of the Company. A statement containing
brief financial details of the Company''s subsidiaries for the financial
year ended March 31, 2014 is included in the Annual Report.
The Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be available for
inspection at the registered office of the Company. The Company shall
furnish a copy of details of annual accounts of subsidiaries to any
member on demand. We believe that the consolidated accounts present a
full and fair picture of the state of affairs and the financial
condition and are accepted globally. The Consolidated Financial
Statements presented by the Company includes the financial results of
its subsidiary companies.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Your Company continues to do its bit for the society in various felds
such as health, education empowerment, etc. Few of the programs that
company is undertaking as part of its corporate social responsibility
initiative is as under:
SUJYOT : The Company conducts and actively support and participate in
programs such as cataract eye camp, blood donation, etc. Under this
initiative, Company also runs a medical van in palanpur village in the
state of Gujarat.
SAKSHAR : The Company supports educational institutes in the form of
material scholarships, food, tuition, etc
SAKSHAM : Its an initiative of Company for empowerment through training
and employment of persons with disabilities. The Company has trained
many rural disabled youth in diamond and jewellery manufacturing in
Hyderabad.
SNEH: It aims to build relationships with organisations and individuals
who are active in the feld and execute projects for the upliftment of
society by partnering with them.
SRUSHTI: It organises drive for conserving enrgy and water resources,
organising tree plantations drive, etc
VIGIL MECHANISM
Subsequent to year under review, in terms of the section 177 of
companies act, 2013 and rules framed thereunder, the Company has framed
a ''Whistle Blower Policy'' with an objective of encouraging the
employees of the Company to raise any concern about Company''s
operations and working environment, including possible breaches of
Company''s policies and standards, without fear of adverse managerial
action being taken against such employees.
It provides a channel to the employees to report to the management
concerns about unethical behavior, actual or suspected fraud or
violation of any code of conduct or policy in force. The mechanism
provides for adequate safeguards against victimization of employees to
avail of the mechanism and also provide for direct access to the
Chairman of the Audit Committee in exceptional cases. The reported
concerns, if found appropriate, would be fully investigated and acted
upon.
BOOK CLOSURE
As mentioned earlier, the directors are not recommending any dividend
for the year under review. However, the members and share transfer
books will remain closed from Saturday, September 20, 2014 to Monday,
September 29, 2014 (both days inclusive) in terms of clause 16 of
listing agreement for the purpose of Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)
Subsequent to the year under review, the Board of Directors at its
meeting held on May 30, 2014 has constituted Corporate Social
Responsibility (CSR) Committee in accordance with Section 135 of
Companies Act, 2013 read with rules formulated therein with Mr.
Swaminathan Sundararajan Mittur as its Chairman and Mr. S. Krishnan and
Mr. Dhanesh Sheth as its members.
The role and responsibility of CSR Committee shall include the
following:
a) Formulate and recommend to the Board, a Corporate Social
Responsibility Policy which shall indicate the activities to be
undertaken by the Company as specified;
b) recommend the amount of expenditure to be incurred on the activities
to be undertaken by the Company as specified in Schedule VII of
Companies Act, 2013.
c) Monitor the implementation of Corporate Social Responsibility Policy
of the Company from time to time;
NOMINATION AND REMUNERATION
COMMITTEE
Your Directors, at their meeting held on May 30, 2014 reconstituted
remuneration committee as "Nomination and remuneration Committee" in
accordance with Section 178 of Companies Act, 2013 read with rules
formulated therein with Mr. Swaminathan Sundararajan Mittur as its
Chairman and Mr. S. Krishnan and Mr. Dhanesh Sheth as its members.
The role of and responsibility of Nomination and Remuneration Committee
is as follows:
a) To identify persons who are qualified to become directors and who may
be appointed in senior management in accordance with the criteria laid
down, recommend to the Board their appointment and removal and shall
carry out evaluation of every director''s performance.
b) To formulate the criteria for determine qualification, positive
attributes and independence of a director and recommend to the Board a
policy, relating to the remuneration for the directors, KMPs and other
employees.
c) To formulate criteria for evaluation of Independent Directors and
the Board.
STAKEHOLDERS RELATIONSHIP COMMITTEE
In terms of section 178(5) of Companies Act, 2013, your directors have
reconstituted Shareholders/Investor''s Grievance Committee as
Stakeholders Relationship Committee with Mr. Swaminathan Sundararajan
Mittur as its Chairman and Mr. S. Krishnan as other member of the
Committee. The role of the Committee is to deal with matters relating
to transfer/transmission of shares and monitor redressal of the
grievances of the security holders of the Company relating to
transfers, non-receipt of Balance Sheet, non-receipt of dividends
declared, etc.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the consolidated financial
statement pursuant to Clause 32 of the Listing Agreement entered into
with Stock Exchange and prepared in accordance with applicable
accounting standards prescribed by Institute of Chartered Accountants
of India in this regard.
RELATED PARTY TRANSACTIONS
Related party transactions have been disclosed in the notes to
accounts.
FIXED DEPOSITS
During the year under review, the Company accepted fixed deposit from
the public pursuant to provisions of section 58A, 58AA and other
relevant provisions of Companies Act, 1956 read with the Companies
(Acceptance of Deposits) Rules, 1975 made thereunder. The Company
accepted total amount of Rs. 2,38,59,000 /- as deposit from public during
financial year 2013-14. Till date, company has refunded Rs. 46,00,000/- to
deposit holders. As on date, outstanding deposits received from public
stood at Rs. 1,92,59,000/- .
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTIN FUND
In terms of Section 205A and 205C of the Companies Act, 1956, the
Company is required to transfer the amount of dividend remaining
unclaimed and due for refund for seven years to the Investor Education
and Protection
Fund (IEPF) after the period of seven years. Shareholders are requested
to ensure that they claim the dividend(s) from the company before
transfer to the IEPF.
The cumulative amount transferred to IEPF during the financial year
2013-14 is Rs. 1,27,916/-. Pursuant to the provisions of Investor
Education and Protection Fund (Uploading of Information regarding
unpaid and unclaimed amounts lying with Companies), Rules 2012, the
Company has uploaded the details of unpaid and unclaimed amounts lying
with the company on the website of Ministry of Corporate Affairs.
DIRECTORS
Ms. Nazura Ajaney is appointed as Additional Director on August 13,
2014. Ms. Nazura Ajaney is a Non Executive Independent Director. As per
the provisions of Section 161 of companies act 2013, Ms. Nazura Ajaney
hold office only up to the date of the forthcoming Annual General
Meeting (AGM) of the Company and is eligible for appointment as
Director. The Company has received notices under Section, 160 of
companies act 2013, in respect of Ms. Nazura Ajaney, from a member of
the Company proposing her appointment as a Director of the Company.
Resolution seeking approval of the members for the appointment of Ms.
Nazura Ajaney as Director of the Company have been incorporated in the
Notice of the forthcoming AGM along with brief details about her.
Mr. Sujal Shah retired by rotation on September 30, 2013 and did not
offered himself for reappointment. Mr. Sunil Varma, Whole Time
Director, tendered his resignation from the board with effect from
November 14, 2013. Mr. Sunil Varma has taken a complete charge of the
overseas business and affairs of the Company. Further, Mr. Nitin
Potdar, Independent Director tendered his resignation from the board as
a Director with effect from February 14, 2014. The Board recorded its
appreciation for the valuable services rendered by them during their
tenure.
Mr. Dhanesh Sheth is retiring by rotation and being eligible have
offered himself for reappointment. Your Directors recommend his
re-appointment for your approval.
A Brief profle of all the Directors on the Board has been given in
Separate Section of the Annual Report.
KEY MANAGERIAL PERSONNEL
In view of resignation of Mr. Kapil Khandelwal as Chief Financial
officer of the Company, the board of directors
of the Company at its meeting held on May 30, 2014 appointed Mr.
Chandrakant Karkare as Chief Financial officer (in the category of key
managerial personnel) of the Company, in terms of Section 203 of the
Companies Act, 2013 read with Companies(Appointment & Remuneration of
Managerial Personnel) Rules, 2014. Mr. Chandrakant Karkare is MBA in
Finance stream with professional experience of over 28 years. He has
very rich experience in Financial Operations, Accounts, Administration,
Banking & Treasury Operations, and Cash & Forex Management. He also has
in depth exposure of heading Corporate Finance and Treasury activities
including Fund raising mobilization, cash fow monitoring, credit
rating, due diligence.
The Board recorded its appreciation for the valuable service rendered
by Mr. Kapil Khandelwal during his tenure as Chief Financial officer of
the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed.
(i) that in the preparation of the annual accounts, for the financial
year ended March 31, 2014, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
(ii) that 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 as at March 31, 2014 and of the loss of the
Company for the said period;
(iii) that the Directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the accounts for the financial
year ended March 31, 2014 on a ''going concern'' basis.
The above statements have been reviewed by the Audit Committee at its
meeting held on 30 May, 2014.
POLICY FOR PREVENTION OF SEXUAL HARASSMENT
Gitanjali''s quest for competitive excellence consists of its commitment
to lawful and ethical conduct and adherence to its values. Integrity,
honesty and respec for people remain some of its core values. The
Company is committed to provide a safe & conducive work environment to
its employees and has formulated ''Policy for Prevention of Sexual
Harassment'' to prohibit, preven or deter any acts of sexual harassment
at workplace and to provide the procedure for the redressal of
complaints pertaining to sexual harassment, thereby providing a safe
and healthy work environment.
During the year under review, no case of sexua harassment was reported.
POSTAL BALLOT
The Board of Directors of the Company at its meeting held on August 1,
2014 , interalia, has proposed to seek approval of shareholders of the
Company through posta ballot pursuant to section 110 of companies act,
2013 fo the following matters:
1. To raise funds upto Rs. 175 crores by issue o Convertible Warrants to
persons other than Promoters by way of preferential allotment in
accordance with provisions of Companies Act, 2013 and the Securities
and Exchange Board of India (Issue of Capital and Disclosure
Requirements Regulations, 2009 and other applicable statutory
provisions.
2. To borrow upto a limit of Rs. 10,000 crores pursuan to provisions of
section 180(1)(c) of the Companies Act, 2013.
3. To create charge /hypothecation/mortgage o movable and immovable
properties of the Company under Section 180(1)(a) of Companies Act,
2013 upto a limit not exceeding Rs. 10,000 crores.
4. To Make loans(s) and/or give any guarantee (s) provide any
security(ies) under section 186 o Companies Act, 2013 upto a limit not
exceeding Rs. 7,500 crores.
The process of postal ballot is currently underway and the results of
the same will be announced on Tuesday September 9, 2014 at the
registered office of the Company
DISCLOSURE PURSUANT TO CLAUSE 5A OF LISTING AGREEMENT
Pursuant to insertion of clause 5A in listing Agreement as per SEBI
notifcation no. SEBI/CFD/DIL/ LA/1/2009/24/04 dated April 24, 2009 the
details in respect of the shares lying in the Gitanjali Gems Limited Â
Unclaimed Shares Demat Suspense Account till March 31, 2014 is as
under:
SI. Description No. of No. of
NO. Cases Shares
i) Aggregate number of 24 973
shareholders and the outstanding shares in the
suspense account lyingas on April 1, 2013
ii) Number of shareholders who 0 0
approached the Company for transfer of share from
suspense account during the year 2013-14
iii) Number of shareholders 0 0
to whom shares were transferred from
suspense account during the yea 2013-14
iv) Aggregate number of 24 973
shareholders and the outstanding shares in the
suspense account lying as on March 31, 2014
All the corporate benefits in terms of securities, accruing to on these
unclaimed shares shall be credited to such account. Voting rights on
these shares shall remain frozen till the rightful owner of such shares
claims the shares.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report of financial condition and
results of operations of the Company for the year under review as
required under Clause 49 of the Listing Agreement with the Stock
Exchanges, is given as a separate statement forming part of this Annual
Report.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the
Corporate Governance requirements set out by SEBI. The Company has also
implemented several best corporate governance practices as prevalent
globally. The Report on Corporate Governance as stipulated under Clause
49 of the Listing Agreement forms part of the Annual Report. The
requisite Certifcate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49 is attached to this Report.
EMPLOYEE RELATIONS
Employee relations continued to be cordial during the year. The Company
continued its thrust on Human Resource Development. The Board wishes to
place on record its sincere appreciation to all the employees of the
Company for their sustained efforts and immense contribution to the
Company.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors'' Report. Having regard to the
provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report
excluding the aforesaid information is being sent to the members of the
Company. Any member interested in obtaining such particulars may write
to the Company Secretary of the Company.
ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by the employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, co-operation,
and support.
We thank the Governments of various countries where we have operations.
We also thank the Government of India, Ministry of Commerce & Industry,
Ministry of Corporate Affairs, Ministry of Finance, Department of
Economic Affairs, Customs & Excise Departments, Income Tax Department,
Reserve Bank of India, BSE, NSE, NSDL, CDSL and various bankers,
various State Governments and other Government Agencies for their
support, and look forward to their continued support in the future.
For and On behalf of the Board of Directors
Mehul C. Choksi
Chairman & Managing Director
Place : Mumbai
Date : August 14, 2014
Mar 31, 2013
Dear Members
The Directors are pleased to present the 27th Annual Report on the
business and operations of the Company for the year ended March 31,
2013.
FINANCIAL RESULTS
(Rs in Million)
Standalone Consolidated
2012-13 2011-12 2012-13 2011-12
Sales & Other Income 103,997.87 77,899.96 164,893.08 125,763.96
Expenditure 98,914.78 73,495.87 153,706.64 116,906.98
Finance Cost 2,387.36 1,879.29 4,613.20 3,377.37
Depreciation &
Ammortisation Expenses 48.79 34.66 366.57 294.70
Exceptional Items 0.98 97.23 0.98 50.54
Profit before Taxes 2,647.92 2,587.37 6,207.65 5,235.45
Provision for
Current Tax 518.82 519.00 1,040.88 920.52
Provision for
Deferred Tax 7.49 3.98 18.80 21.19
Provision for
MAT (Credit) (530.00) (519.00) (804.28) (601.27)
Net Profit for the year 2,651.61 2,583.39 5,952.26 4,895.01
Profit brought
forward from
earlier Years 9,671.23 7,920.56 14,445.57 10,387.29
Amount available for
Appropriation 12,322.84 10,503.95 20,235.62 15,278.29
Appropriations:
Proposed Dividend
(including Dividend
Tax) 327.64 317.72 327.64 317.72
Transfer to General
Reserve 270.00 265.00 270.00 265.00
Capital Redemption Reserve - - - -
Debenture Redemption
Reserve 250.00 250.00 250.00 250.00
Balance Carried to
Balance Sheet 11,475.20 9,671.23 19,387.98 14,445.57
(1 Million = 10 Lakhs)
TURNOVERS & PROFITS
Your Directors wish to inform you that despite volatile regulatory
environment and inflationery pressure, your Company continues to grow
strongly. During the financial year ended March 31, 2013 the sales and
other income increased from Rs. 77,899.96 Million to Rs. 103,997.87
Million. The net profit before tax stood at Rs. 2,647.92 Million as
against Rs. 2,587.37 Million in the previous year. The net profit after
tax stood at Rs. 2,651.61 Million as against Rs. 2,583.39 Million in
the previous year.
BUSINESS REVIEW
1. DIAMOND AND JEWELLERY
MANUFACTURING SEGMENT
The company is engaged in the diamond and jewellery manufacturing. It
is present in the entire process right from sourcing rough diamonds,
cutting and polishing them to manufacturing jewellery. The diamond
cutting and polishing process is labour-intensive and requires
specialised skills. Rough (uncut and unpolished) diamonds acquired are
sorted or graded on the basis of colour, shape, clarity, cut and
weight. In order to ensure optimum recovery of polished stones from the
rough diamonds, the cutting process is carefully planned. The key
steps in the process are Marking, Cleaving, Sawing, Cutting and
Polishing. The final stages of the diamond manufacturing process
consists of checking for damage, cleaning by boiling in various acids
and the final sorting before marketing to the customer.
The branded jewellery that the company manufactures includes diamond
studded and other precious metal jewellery. There are currently over
200,000 active SKUs. The company has produced branded jewellery in
India for approximately 20 years. It started as an outsourcing partner
for leading international jewellery brands and then transitioned to
cater to its own brandedjewellery distribution and retailing. The
majority of the branded jewellery that is produced in-house is used in
the company''s own distribution and retailing network. The company
makes use of sophisticated jewellery manufacturing facilities in India
that incorporate CAD (Computer Aided Designing) and CAM (Computer Aided
Manufacturing) technology, that is overseen by a highly skilled design
team. The multiple manufacturing locations mitigate risks associated
with a single site manufacturing facility. In addition, the company is
situated in strategic locations to take advantage of the supply of
skilled labourers that may be specific to a region. Our manufacturing
facilities are also located at logistical hubs for efficient supply
chain management beginning with raw material sourcing and ending with
easier access to consumers.
2. BRANDED JEWELLERY AND RETAIL SEGMENT
The company believes that it has been a pioneer in the branded
jewellery segment and is amongst the first few companies to launch its
own outlets to sell branded jewellery in India. The "Gili" brand of
jewellery, introduced in 1994, was among the first branded jewellery
lines introduced in India. The company''s brands and sub-brands are
aimed at different customer profiles, various markets and price
segments and enjoy significant brand equity and market share.
The company''s distribution channels include exclusive distributors
for jewellery products, direct sales to large department stores and
direct sales to end customers through retail operations. The company
sells diamond and other jewellery products in India through its
nationwide sales and distribution network that consisted of 360
distributors, 259 Company-owned stores, 391 stores set up through
franchisee arrangements and 643 shop-in-shops located in department
stores. The company is also strongly exploring newer channels of
distribution such as e-commerce and e-franchising to capitalize on the
trend of consumer preferences changing in favour of modern retail
formats and new buying methods. The company''s retail operations are
carried out through it various subsidaries and are supported by a
strong inventory management system.
3. INTERNATIONAL DISTRIBUTION AND RETAIL SEGMENT
The company has also established a significant retail and distribution
presence in the United States, the Middle East and certain regions in
Asia through it overseas subsidiaries.
In the United States, the company operates a retail network of 104
stores through its subsidiary Samuels Jewelers, Inc. which was acquired
in 2006. The Samuels chain has exclusive designer jewellery
collections and a large selection of loose and mounted diamonds under
brands such as "Samuels Jewelers", "Schubach Jewelers",
"Samuels Diamonds", "Rogers Jewelers" and "Andrews
Jewelers" which are primarily targeted at middle and upper middle
class consumers in the United States. Headquartered in Austin, Texas,
Samuels'' retail chain is positioned as a wedding jeweller with
category focus on bridal collections in the United States.
In the Middle East, the company operates four stores in Dubai and also
sells to approximately 50 prominent retailers. The company targets the
Indian diaspora who are familiar with its brands.
The company has incorporated a subsidiary in Singapore, Leading
Singapore Jewels Pte. Limited in order to expand its Asian retail
presence. In 2012, the company opened its first retail store in
Singapore.
The Company is also present in Japanese market through it strategic
stakeholding in IMACBC and Verite Co. Limited. Aston Luxury Group
Limited, a Hong Kong based wholly owned subsidiary of the Company, owns
20% stake in IMACBC and 15.03% stake in Verite Co. Limited
The company has also increased its global presence in Italy through
brand acquisitions and increased access to distribution networks on
account of strategic acquisitions and investments, in Italy.
The company, through its subsidiary Alfred Terry, in the United Kingdom
has gained access to a strong distribution network in the UK and rest
of Europe.
The company also acquired Crown Aim Limited, a Hong Kong based company
that has strong distribution network to Hong Kong, China, Japan, the
US, Middle East and Europe.
DIVIDEND
Your Directors recommended a dividend of Rs 3/- per equity share for
the year ended March 31, 2013. The payment of dividend is subject to
the approval of shareholders at the ensuing Annual General Meeting.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 270.00 Million to the general
reserve out of the total amount of Rs. 12,322.84 Million available for
appropriations as on March 31, 2013.
SUBSIDIARIES
The Company has the following Subsidiaries/ Step down Subsidiaries as
on date:
1. eGitanjali Limited
2. Gitanjali Exports Corporation Limited
3. Gitanjali Brands Limited
4. Gitanjali Infratech Limited
5. Hyderabad Gems SEZ Limited
6. Gitanjali Lifestyle Limited
7. N & J Finstocks Private Limited
8. Nashik Multi Services SEZ Limited
9. Gitanjali Jewellery Retail Limited
10. Decent Securities & Finance Private Limited
11. Decent Investment & Finance Private Limited*
12. Eureka Finstocks Private limited
13. MMTC Gitanjali Limited
14. Samuels Jewelers Inc.
15. Gitanjali USA, Inc.
16. Gitanjali Ventures DMCC
17. Aston Luxury Group Limited
*Acquired during the year
STEP DOWN SUBSIDIARIES
1. Maya Retail Limited (Subsidiary of Gitanjali Lifestyle Limited)
2. MobileNxt Teleservices Private Limited(Subsidiary of Gitanjali
Lifestyle Limited)
3. Ivida Technologies Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
4. Gitanjali Realtors Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
5. Coronet Gems Private Limited (Subsidiary of Gitanjali Lifestyle
Limited)
6. Damas Gems-N-Jewels (I) Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
7. Gitanjali Capital Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
8. Gili India Limited (Subsidiary of Gitanjali Brands Limited)
9. Nakshatra Brands Limited (Subsidiary of Gitanjali Brands Limited)
10. D''Damas Jewellery (India) Private Limited (Subsidiary of
Gitanjali Brands Limited)
11. Shubhalavanya Jewel Crafts Private Limited (Subsidiary of
Gitanjali Brands Limited)
12. Asmi Jewellery India Limited (Subsidiary of Gitanjali Brands
Limited)
13. Spectrum Jewellery Limited (Subsidiary of Gitanjali Brands
Limited)
14. Tri-Star Worldwide LLC (Subsidiary of Gitanjali USA, Inc.)
15. GGL Diamonds LLC (Subsidiary of Gitanjali USA, Inc.)
16. Diamlink Inc. USA (Subsidiary of Gitanjali USA, Inc.)
17. Diamlink Jewelery Inc. (Subsidiary of Diamlink Inc. USA)
18. Jewelry Marketing Company, LLC (Subsidiary of Diamlink Jewelery
Inc.)
19. LJOW Holdings, LLC (Subsidiary of Diamlink Jewelery Inc.)
20. Gitanjali Resources (Subsidiary of Aston Luxury Group Limited)
21. Leading Italian Jewels SRL (Subsidiary of Aston Luxury Group
Limited)
22. Crown Aim Limited (Subsidiary of Aston Luxury Group Limited)
23. Aston Diamond Resources SA Proprietary Limited (Subsidiary of
Aston Luxury Group Limited)
24. Abbeycrest (Thailand) Limited (Subsidiary of Aston Luxury Group
Limited)
25. Leading Jewels of Japan KK (Subsidiary of Aston Luxury Group
Limited)
26. Leading Italian Jewels (Singapore) Pte. Limited (Subsidiary of
Aston Luxury Group Limited)
27. Alfred Terry Limited (Subsidiary of Aston Luxury Group Limited)
28. BLU SRL (Subsidiary of Crown Aim Limited)
A statement containing brief financial details of subsidiaries is
included in the annual report.
SUBSIDIARIES
The Ministry of Corporate Affairs, Government of India vide circular
no. 2/2011 dated 8th February, 2011 has granted general exemption from
attaching the Balance Sheet, Profit and Loss Account and other
documents of subsidiary companies with the Balance Sheet of the
Company, as set out in sub-section (1) of Section 212 of the Companies
Act, 1956. Accordingly, the Board of Directors in their Meeting held on
May 28, 2013, passed a resolution giving consent for not attaching the
Balance Sheet, Profit and Loss Account and other documents of the
subsidiary companies with the Balance Sheet of the Company. A statement
containing brief financial details of the Company''s subsidiaries for
the financial year ended March 31, 2013 is included in the Annual
Report.
The Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be available for
inspection as above at office of the Company situated at A-1, 7th
Floor, Laxmi Towers, Bandra Kurla Complex, Bandra (East), Mumbai - 400
051. The Company shall furnish a copy of details of annual accounts of
subsidiaries to any member on demand. We believe that the consolidated
accounts present a full and fair picture of the state of affairs and
the financial condition and are accepted globally. The Consolidated
Financial Statements presented by the Company includes the financial
results of its subsidiary companies.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the consolidated financial
statement pursuant to Clause 32 of the Listing Agreement entered into
with Stock Exchange and prepared in accordance with applicable
accounting standards prescribed by Institute of Chartered Accountants
of India in this regard. The Auditors report on consolidated financial
statement does not contain any qualification.
RELATED PARTY TRANSACTIONS:
Related party transactions have been disclosed in the notes to
accounts.
FIXED DEPOSITS:
During the financial year 2012-13, your Company has neither invited nor
accepted any fixed deposits from the public within the meaning of
Section 58A of the Companies Act, 1956.
In the year 2013-14 the Company has started accepting Fixed Deposits
from the public pursuant to the provisions of Section 58A and 58AA and
other relevant provisions of the Companies Act, 1956 read with the
Companies (Acceptance of Deposit) Rules, 1975 made thereunder. Fixed
Deposit received from public as on date stood at Rs. 2.19 crores.
DIRECTORS:
In accordance with the Articles of Association, Mr. Sujal A. Shah and
Mr. Nitin Potdar, Directors of the Company are retiring at the ensuing
Annual General Meeting. Mr. Nitin Potdar, being eligible, offers
himself for re-appointment. Mr. Sujal Shah expressed his desire to
retire at ensuing Annual General Meeting due to pre- occupation.
AUDITORS & AUDITORS REPORT:
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the present
Statutory Auditors retire at the ensuing Annual General Meeting and are
eligible for re-appointment u/s 224 (1B) of the Companies Act, 1956.
The company proposes to re-appoint M/s. Ford, Rhodes, Parks & Co.,
Chartered Accountants as Statutory Auditors of the company from the
conclusion of the ensuing Annual General Meeting up to the conclusion
of the next Annual General Meeting of the company.
The Audit Committee and the Board recommended appointment of M/s. Ford,
Rhodes, Parks & Co., Chartered Accountants as Statutory Auditors of the
company.
In respect of the observations made by Auditors in their report, your
Directors wish to state that the respective notes to the Accounts are
self explanatory and therefore do not call for any further comments.
COST AUDITOR:
As per the Order F. No. 52/26/CAB-2010 dated November 06, 2012 issued
by Ministry of Corporate Affairs, Cost Audit Branch, the Company is
required to get its cost accounting record audited, in respect of each
of its financial year commencing on or after 1 st day of January, 2013,
by a cost auditor. M/s. Ajekar Shivaraya Kini, Cost Accountants have
been appointed as the Cost Auditors for the Company by the Board of
Directors in their meeting held on May 28, 2013 to conduct the cost
audit for the Financial Year 2013-2014.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217(2 A A) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed:
(i) that in the preparation of the annual accounts, for the financial
year ended March 31, 2013, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
(ii) that 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 as at March 31, 2013 and of the profit of the
Company for the said period;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the accounts for the financial
year ended March 31, 2013 on a ''going concern'' basis.
The above statements have been reviewed by the Audit Committee at its
meeting held on May 28, 2013.
SIGNIFICANT DEVELOPMENTS DURING THE YEAR
a) During the year, Aston Luxury Group Limited, a Hong Kong based
wholly owned subsidiary of the Company has acquired 15.03% stake in
Verite Co. Limited in Japan. Verite Co. Limited is a listed entity on
the Tokyo Stock Exchange and operates a network of 101 jewellery retail
stores in Japan.
b) During the year, Board of Directors of the Company in its meeting
held on November 09, 2012 gave in-principle approval to merge Gitanjali
Infratech Limited, wholly owned subsidiary of the Company, into
Gitanjali Gems Limited
c) During the year, the Company has acquired jewellery brands, Nirvana
and Viola through Spectrum Jewellery Limited, a step-down subsidiary of
the Company.
d) During the year, the Company has allotted 1(One) Zero Percent Fully
Convertible Debenture (FCD) to D. B. Corp Limited having face value of
Rs. 39,00,00,000/- on preferential basis as per SEBI (Issue of Capital
and Disclosure Requirement) Regulations, 2009.
e) During the year, the Company allotted 943,396 equity shares of Rs.
10/- each upon conversion of 943,396 warrants issued in previous year
to Bennett Coleman and Company Limited (BCCL) on Preferential basis at
the price of Rs. 424/- per warrant. Consequently, paid up capital of
the Company increased from Rs. 911,220,950/- consisting of 91,122,095
equity shares of Rs.10/- each to Rs. 920,654,910/- consisting of
92,065,491 equity shares of Rs. 10/- each.
f) In terms of Section 205C of the Companies Act, 1956, the application
money received by companies for allotment of any securities and due for
refund and lying unpaid or unclaimed for a period of seven years from
the date they became due for payment, shall be transferred by the
companies to the Investor Education and Production Fund (IEPF)
established by the Central Government.
During the financial year 2012-13, the Company has transferred the
unclaimed share application money amounting to Rs. 22,56,935 (Rupees
twenty two lacs fifty six thousand nine hundred thirty five only)
received during the Initial Public Offer of the Company to Investor
Education and Production Fund (IEPF).
RECENT DEVELOPMENT
a) M/s. Gems London Co. Limited in which the company was holding
strategic stake to the extent of 30% through it Hong Kong based wholly
owned subsidary Aston Luxury Group Limited was merged with Tokyo based
Imacbc Co. Limited with effect from April 01, 2013. This merger with
IMACBC, a jewellery manufacturing Company was a strategic move with a
view to avail synergies of an integrated business model.
DISCLOSURE PURSUANT TO CLAUSE 5A OF LISTING AGREEMENT
Pursuant to insertion of clause 5A in listing agreement as per SEBI
notification no. SEBI/CFD/DIL/ LA/1/2009/24/04 dated April 24, 2009 the
details in respect of the shares lying in the Gitanjali Gems Limited -
Unclaimed Shares Suspense Account till March 31, 2013 is as under:
SI. Description No. of No. of
No. Cases Shares
i) Aggregate number of shareholders and
the outstanding shares in the suspense
account lying as on April 01, 2012 25 1008
ii) Number of shareholders who approached
the Company for transfer of share from
suspense account during the year 2012-13 1 35
iii) Number of shareholders to whom shares
were transferred from suspense account
during the year 2012-13 1 35
iv) Aggregate number of shareholders and
the outstanding shares in the suspense
account lying as on March 31, 2013 24 973
All the corporate benefits in terms of securities, accruing to on these
unclaimed shares shall be credited to such account. Voting rights on
these shares shall remain frozen till the rightful owner of such shares
claims the shares.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report of financial condition
and results of operations of the Company for the year under review as
required under Clause 49 of the Listing Agreement with the Stock
Exchanges, is given as a separate statement forming part of this Annual
Report.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company has also implemented several best corporate
governance practices as prevalent globally. The Report on Corporate
Governance as stipulated under Clause 49 of the Listing Agreement forms
part of the Annual Report. The requisite Certificate from the Auditors
of the Company confirming compliance with the conditions of Corporate
Governance as stipulated under the aforesaid Clause 49 is attached to
this Report.
EMPLOYEE RELATIONS
Employee relations continued to be cordial during the year. The Company
continued its thrust on Human Resource Development. The Board wishes to
place on record its sincere appreciation to all the employees of the
Company for their sustained efforts and immense contribution to the
high level of performance and growth of the business during the year.
PARTICULARS OF EMPLOYEES
The Board of Directors wishes to express its appreciation to all
employees for their outstanding contribution in the operations of the
Company during the year.
During the year under review there were no employees drawing
remuneration covered under the Sub-Section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended. Hence no particulars in this regard are
furnished in the report.
INFORMATION UNDER SECTION 217(1)(e) OF COMPANIES ACT, 1956 READ WITH
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF
DIRECTORS) RULES 1988:
A. CONSERVATION OF ENERGY
The Disclosure of particulars with respect to conservation of energy
pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are not applicable to the Company. However, the
Company makes its best efforts for conservation of energy.
B. TECHNOLOGY ABSORPTION, ADAPTATIONS & INNOVATION
The Company has not carried out any specific research and development
activities. The Company uses indigenous technology for its operations.
Accordingly, the information related to technology absorption,
adaptation and innovation is reported to be NIL.
ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by the employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, co-operation,
and support.
We thank the Governments of various countries where we have operations.
We also thank the Government of India, Ministry of Commerce & Industry,
Ministry of Corporate Affairs, Ministry of Finance, Department of
Economic affairs, Customs & Excise Departments, Income Tax Department,
Reserve Bank of India, BSE, NSE, NSDL, CDSL and our bankers, various
State Governments and other Government Agencies for their support, and
look forward to their continued support in the future.
On behalf of the Board of Directors
Mehul C. Choksi
Chairman & Managing Director
Place : Mumbai
Date : August 14, 2013
Mar 31, 2012
Dear Members,
The Directors are pleased to present the 26th Annual Report on the
business and operations of the Company for the year ended March 31,
2012.
FINANCIAL RESULTS: (Rs. in Millions)
Standalone Consolidated
2011-12 2010-11 2011-12 2010-11
Sales & Other Income 78,530.12 51,303.47 126,463.83 94,809.63
Expenditure 73,495.87 47,938.72 116,906.98 88,376.11
Finance Cost 2,509.45 1,043.98 4,077.24 2,217.70
Depreciation &
Ammortisation Expenses 34.66 33.56 294.70 563.72
Exceptional Items 97.23 2.44 50.54 180.67
Profit before Taxes 2,587.37 2,289.65 5,235.45 3,832.77
Provision for Current Tax 519.00 45.00 920.52 404.13
Provision for Deferred Tax 3.98 (1.38) 21.19 (137.01)
Provision for MAT (Credit) (519.00) -- (601.27) --
Net Profit for the Year 2,583.39 2,246.03 4895.01 3,565.65
Profit brought forward
from earlier Years 7,920.56 6,450.45 10,387.29 7,601.60
Amount available for
Appropriation 10,503.95 8,696.48 15,278.29 11,166.53
Appropriations:
Proposed Dividend
(including Dividend Tax) 317.72 295.92 317.72 295.92
Transfer to General Reserve 265.00 230.00 265.00 230.00
Capital Redemption Reserve - - - 3.33
Debenture Redemption
Reserve 250.00 250.00 250.00 250.00
Balance Carried to
Balance Sheet 9,671.23 7,920.56 14,445.57 10,387.29
(1 Million=10 Lakhs)
TURNOVERS & PROFITS
Your Directors wish to inform you that during the financial year ended
March 31, 2012 the sales and other income increased from Rs. 51303.47
Million to Rs. 78530.12 Million. The net profit before tax stood at Rs.
2587.37 million as against Rs. 2289.65 million in the previous year.
The net profit after tax stood at Rs. 2583.39 million as against Rs.
2246.03 million in the previous year.
BUSINESS REVIEW
1. DIAMOND AND JEWELLERY MANUFACTURING
SEGMENT
The Company is engaged in an end-to-end diamond processing chain which
begins with Marking, Cleaving, Sawing, Cutting and finally, Polishing.
Gitanjali procures rough diamonds from various major reputed diamond
suppliers across the globe. These rough diamonds are processed and
polished in modern diamond manufacturing facilities. The Company is
making conscientious efforts in addressing the large market
opportunities that exist in the Diamond Segment both in India and
abroad. Converting diamonds into jewellery is a lucrative proposition
and the company also has state of the art jewellery manufacturing
facilities catering to domestic as well as International requirements.
2. BRANDED JEWELLERY AND RETAIL SEGMENT
The branded jewellery segment of the company is an India focused
segment, which sells jewellery through over 4,000 points of sales
across the country. Gitanjali owns 8 out of the top 10 brands in the
country. The Group's ÃGilià brand of jewellery, introduced in 1994, was
among one of the first jewellery brand introduced in India. The Group's
brands and sub-brands are aimed at different customer profiles, various
markets and price segments and enjoy significant brand equity and
market share. Gitanjali's brand portfolio includes leading jewellery
brands like GILI, Nakshatra, Asmi, Sangini, D'damas, Maya Gold, etc.
The other important brands under various sections including jewellery,
fashion accessories, watches and silver ware are Vivaaha, Glitterati,
Diya, Stefen Hafner, Shuddhi, Nizam, Lucera, Revv, Rivaaz, Giantti,
World of Solitaire, Me Solitaire, World of Silver, Bezel, Morellato
etc.
Asmi, Gili, Nakashtra and D'Damas have become leading brands today in
the jewellery segment in India. Gitanjali has also launched new brands
such as Amore and GDivas in India as part of its constant endeavour to
extend its product range thereby, rapidly filling gaps and addressing
an ever-growing demand for branded jewellery in India.
Consumer preferences have changed and lifestyles have improved in
India. Retailing in India has also undergone a transformation. This has
filtered through to the jewellery business creating opportunities for
modern retail formats and chains. Gitanjali has been the pioneer in the
branded jewellery segment and is amongst the first few companies to
launch its own outlets to sell branded jewellery in India. Gitanjali is
present across most modern retail formats such as shop-in- shops in
large departmental stores and both, multi-brand outlets and exclusive
brand outlets under owned and franchised stores. Gitanjali has extended
its retail presence across outlets through an increase in the number of
doors in order to take advantage of these opportunities. Gitanjali has
a retail footprint of 1.7 mn sq. ft. It is focused strategically on
expanding through the franchisee channel. This has allowed it an access
to markets in smaller Indian towns and cities rapidly.
3. INTERNATIONAL DISTRIBUTION AND RETAIL SEGMENT
Besides operations in India, Gitanjali has a strong presence in leading
jewellery markets of the world. It has the retail chain of
Samuels in USA with 110 stores. In the Middle East, it has four stores
in Dubai and over 50 distribution points through leading retail chains
of GCC countries.
In China, Gitanjali has distribution through a chain of 40 stores and a
manufacturing facility for local as well as international supply. In
Japan, it has a significant stake in Gems London Company Ltd which owns
Gems TV, one of the leading Jewellery selling TV Channels of the world
as well as a strong distribution network supplying to other leading
retail chains of Japan. In the design capital of the world, Italy,
Gitanjali owns leading brands such as Stefan Hafner, Io Si, Nouvelle
Bague, Porrati and Valente. The Italian brands and designs are
available to penetrate markets such as Russia, Saudi Arabia, China and
the Far-east. Through its recent acquisition, Gitanjali also has a well
established distribution chain in UK supplying its jewellery to leading
retail chains in UK and in the rest of Europe.
DIVIDEND
Your Directors recommended a dividend of Rs 3/- per equity share for
the year ended March 31, 2012. The payment of dividend is subject to
the approval of shareholders at the ensuing Annual General Meeting.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 265.00 million to the general
reserve out of the total amount of Rs. 10503.95 million available for
appropriations as on March 31, 2012.
CAPITAL
The Company issued 943396 warrants convertible into equal number of
Equity Shares on Preferential Basis at a price of Rs. 424/- per
Warrant to Bennett Coleman and Company Limited (BCCL). Pursuant to
notice received from BCCL for conversion of Warrants Company allotted
943396 equity shares of Rs. 10 each on 4th August, 2012. Consequent to
aforesaid conversion the paid up capital of the Company has increased
from Rs. 911,220,950/- consisting of 91122095 equity shares of Rs. 10
each to Rs. 920,654,910/- consisting of 92065491 equity shares of Rs.
10/- each.
FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs)
The Company had raised USD 110 Million by way of issuance of FCCBs as
per Offering Circular dated November 26, 2006 for utilization of funds
towards overseas acquisition and infrastructure activities and
development of Special Economic Zone (SEZ). Till the date of maturity,
FCCBs worth USD 69.74 Million were converted into 12748162 Equity
shares of Rs. 10 each of the Company at applicable conversion rates. On
November 25, 2011 balance amount of outstanding FCCBs of Rs. 40.26
million were redeemed at a premium of 42.052%.
GLOBAL DEPOSITORY RECEIPTS (GDRs)
The Company had a balance of USD 0.066 million from its GDR Proceeds as
on 1st April, 2011. During the year ended March 31, 2012 the Company
has not utilized any GDR proceeds. Further, during the year under
review the Company has earned an interest of USD 0.006 million on the
said deposit. As on March 31, 2012 the balance net proceeds of GDR of
USD 0.072 million were kept as deposits with overseas banks pending
utilization.
EXTERNAL COMMERCIAL BORROWING (ECB)
During the year under review the Company has raised funds through ECB
routes from Banks aggregating to USD 107.19 million.
Out of the above ECB proceeds USD 57.19 million was utilized for
redemption of outstanding FCCBs and USD 50 Million was utilized towards
CAPEX in SEZ unit in Hyderabad and investment in overseas subsidiaries.
DELISTING OF GLOBAL DEPOSITORY RECEIPTS (GDRS) FROM LONDON STOCK
EXCHANGE AND FOREIGN CURRENCY CONVERTIBLE BONDS (FCCBs) FROM SINGAPORE
STOCK EXCHANGE
As 1% Foreign Currency Convertible Bonds (FCCBs) of the Company listed
on Singapore Stock Exchange have matured and been redeemed and also the
entire Global Depositary Receipts listed on London Stock Exchange has
been converted into Equity Shares of the Company, both securities have
been delisted/cancelled from the respective Stock Exchanges.
SUBSIDIARIES
The Company has the following Subsidiaries/ Step down Subsidiaries as
on date:
1. Gitanjali Limited
2. Gitanjali Exports Corporation Limited
3. Gitanjali Brands Limited
4. Gitanjali Infratech Limited
5. Hyderabad Gems SEZ Limited
6. Gitanjali Lifestyle Limited
7. Nashik Multi Services SEZ Limited
8. Gitanjali Jewellery Retail Limited
9. Samuels Jewelers Inc.
10. Gitanjali USA, Inc.
11. Gitanjali Ventures DMCC
12. Decent Securities & Finance Private Limited
13. Eureka Finstocks Private Limited
14. MMTC Gitanjali Private Limited
15. Gitanjali Capital Pvt Ltd.
16. Aston Luxury Group Limited
17. N&J Finstocks Private Limited
STEP DOWN SUBSIDIARIES
1. Tri-Star Worldwide LLC (Subsidiary of Gitanjali USA, Inc.)
2. Maya Retail Limited (Subsidiary of Gitanjali Lifestyle Limited)
3. MobileNxt Teleservices Pvt. Ltd (Subsidiary of Gitanjali Lifestyle
Limited)
4. Diamlink Inc. USA (Subsidiary of Gitanjali USA, .Inc)
5. Diamlink Jewelery Inc. (Subsidiary of Diamlink Inc. USA)
6. Jewelry Marketing Comp, LLC (Subsidiary of Diamlink Jewelery Inc)
7. LJOW Holdings, LLC (Subsidiary of Diamlink Jewelery Inc)
8. Gili India Limited (Subsidiary of Gitanjali Brands Limited)
9. Brightest Circle Jewellery Limited (Subsidiary of Gitanjali Brands
Limited)
10. D'Damas Jewellery (India) Private Limited (Subsidiary of Gitanjali
Brands Limited)
11. Shubhalavanya Jewel Crafts Private Limited (Subsidiary of
Gitanjali Brands Limited)
12. Asmi Jewellery India Limited (Subsidiary of Gitanjali Brands
Limited)
13. Spectrum Jewellery Limited (Subsidiary of Gitanjali Brands
Limited)
14. Gitanjali Resources BVBA (Subsidiary of Aston Luxury Group Ltd)
15. GGL Diamonds LLC (Subsidiary of Gitanjali USA)
*16. Leading Jewels of Japan KK (Subsidiary of Aston Luxury Group Ltd)
*17. Leading Singapore Jewels Pte Ltd (Subsidiary of Aston
Luxury Group Ltd)
18. Leading Italian Jewels SRL (Subsidiary of Aston
LuxuryGroup Ltd)
*19. Alfred Terry Limited (Subsidiary of Aston Luxury Group Ltd)
(Formerly known as Alfred Terry Holding Limited)
*20. Terry Alfred Limited (Subsidiary of Alfred Terry Limited)
(Formerly known as Alfred Terry Limited)
21. BLU Srl (Subsidiary of Leading Italia Jewels Srl)
*22. Crown Aim limited (Subsidiary of Aston Luxury Group Ltd)
*23. Forever Prime Inc (Subsidiary of Aston Luxury Group Ltd)
*24. Aston Luxury Retails Ltd (Subsidiary of Forever Prime
Inc)
*Acquired/Incorporated during the year
Notes:
a. West Bengal SEZ Limited, Kolkata Axis Mall Limited, Raigad Gems SEZ
Limited, Gitanjali Retail Ventures Limited, Cria Jewellery Private
Limited and Mohar Jewels Limited were struck off from the register of
Companies of ROC, Mumbai under Fast Track Exit mode for defunct
companies under section 560 of the Companies Act,1956.
b. Modali Gems Private Limited have made an application under Fast
Track Exit mode for defunct companies under section 560 of the
Companies Act, 1956 to ROC, Mumbai. The same is under process of Strike
off.
c. A statement containing brief financial details of subsidiaries is
included in the annual report.
SUBSIDIARIES
The Ministry of Corporate Affairs, Government of India vide circular
no. 2/2011 dated 8th February, 2011 has granted general exemption from
attaching the Balance Sheet, Profit and Loss Account and other
documents of the subsidiary companies with the Balance Sheet of the
Company, as set out in sub-section (1) of Section 212 of the Companies
Act, 1956. Accordingly, the Board of Directors in their Meeting held on
21st May, 2012, passed a resolution giving consent for not attaching
the Balance Sheet, Profit and Loss Account and other documents of the
subsidiary companies with the Balance Sheet of the Company. A
statement containing brief financial details of the Company's
subsidiaries for the financial year ended March 31, 2012 is included in
the Annual Report.
The Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be available for
inspection as above at office of the Company situated at Bldg. No.
2/101, Jogani Complex, Behind Amar à Brass, Manipada Road, Kalina,
Santacruz (E), Mumbai à 400 098. The Company shall furnish a copy of
details of annual accounts of subsidiaries to any member on demand. We
believe that the consolidated accounts present a full and fair picture
of the state of affairs and the financial condition and are accepted
globally. The Consolidated Financial Statements presented by the
Company includes the financial results of its subsidiary companies.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the consolidated financial
statement pursuant to Clause 32 of the Listing Agreement entered into
with Stock Exchange and prepared in accordance with applicable
accounting standards prescribed by Institute of Chartered Accountants
of India in this regard. The Auditors report does not contain any
qualification.
RELATED PARTY TRANSACTIONS
Related party transactions have been disclosed in the notes to
accounts.
FIXED DEPOSITS AND LOANS & ADVANCES
During the year under review, your Company has neither invited nor
accepted any fixed deposits from the public within the meaning of
Section 58A of the Companies Act, 1956.
DIRECTORS
Mr. M. S. Sundararajan and Mr. Sunil Varma have been appointed as
Additional Directors on March 21, 2012 and May 21, 2012 respectively.
Mr. M. S. Sundararajan is an Independent Director and Mr. Sunil Varma
is an Executive Director. As per the provisions of Section 260 of the
Act, both the Directors hold office only up to the date of the
forthcoming Annual General Meeting (AGM) of the Company and are
eligible for appointment as Directors. The Company has received notices
under Section 257 of the Act, in respect of the above persons, from a
member of the Company proposing their appointment as a Director of the
Company. Resolutions seeking approval of the members for the
appointment of Mr. M. S. Sundararajan and
Mr. Sunil Varma as Directors of the Company have been incorporated in
the Notice of the forthcoming AGM along with brief details about them.
Mr. Sunil Varma is appointed as Whole Time Director of the Company
w.e.f. May 21, 2012 upto May 20, 2017 and will not be liable to retire
by rotation.
The term of appointment of Mr. Mehul C. Choksi as Managing Director
came to an end on 31st July, 2012 and he was reappointed for a further
period of 5 years with effect from 1st August, 2012 to till 31st July,
2017 in Board of Directors Meeting held on 21st May, 2012. He will not
be liable to retire by rotation.
Mr. Nehal Modi and Mr. S. Krishnan, Directors, are retiring by rotation
and being eligible have offered themselves for re- appointment. Your
Directors recommend their re-appointment for your approval.
A Brief profile of all the Directors on the Board has been given in
Separate Section of the Annual Report.
REGISTERED OFFICE ADDRESS
The registered office of the Company has been shifted from 801/802,
Prasad Chambers, Opera House, Mumbai à 400 004 to A-1, 7th Floor, Laxmi
Tower, Bandra à Kurla Complex, Bandra (E), Mumbai à 400 051. The same
was approved by the Board of Directors in their meeting held on 11th
August, 2012.
AUDITORS & AUDITORS REPORT:
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the present
Statutory Auditors retire at the ensuing Annual General Meeting and are
eligible for re-appointment u/s 224 (1B) of the Companies Act, 1956.
The company proposes to re-appoint M/s. Ford, Rhodes, Parks & Co.,
Chartered Accountants as Statutory Auditors of the company from the
conclusion of the ensuing Annual General Meeting up to the conclusion
of the next Annual General Meeting of the company.
The Audit Committee and the Board recommend the appointment of M/s.
Ford, Rhodes, Parks & Co., Chartered Accountants as Statutory Auditors
of the company.
In respect of the observations made by Auditors in their report, your
Directors wish to state that the respective notes to the Accounts are
self explanatory and therefore do not call for any further comments.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, it is
hereby confirmed:
(i) that in the preparation of the annual accounts, for the financial
year ended March 31, 2012, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
(ii) that 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 as at March 31, 2012 and of the profit of the
Company for the said period;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the accounts for the financial
year ended March 31, 2012 on a Ãgoing concern' basis.
The above statements have been reviewed by the Audit Committee at its
meeting held on 21st May, 2012.
SIGNIFICANT DEVELOPMENTS DURING THE YEAR
(a) As a part of the restructuring exercise of the Company as being
advised by KPMG inorder to consolidate and realign the Branded
Jewellery business, the Company has transferred its entire stake of
following Subsidiaries to Gitanjali Brands Limited another Subsidiary
of the Company:
1. Gili India Limited
2. Brightest Circle Jewellery Limited
3. D'Damas Jewellery (India) Private Limited
4. Asmi Jewellery India Limited
5. Spectrum Jewellery Limited
6. Shubalavnyaa Jewel Crafts Private Limited
(b) During the year, the Company through its Hong Kong based wholly
owned subsidiary Aston Luxury Group Limited has incorporated a wholly
owned subsidiary (WOS) In the name of "Leading Singapore Jewels Pte.
Ltd" in Singapore with a view to expand it's business in Singapore and
the Far Eastern regions.
(c) During the year, as a part of an ongoing exercise of re- aligning
and restructuring of the International business of the Company, the
Company has transferred it's stake In 'Leading Italian Jewels S.R.L.'
to 'Aston Luxury Group Limited', a Hong Kong based wholly owned
subsidiary of the Company. Further Giantti Italia S.r.l, a Milan based
subsidiary of the Company has merged with Leading Italian Jewels S.r.l.
(d) During the year, Aston Luxury Group Limited , a wholly owned
subsidiary of the Company has acquired entire stake in Crown Aim
Limited. It is a Hong Kong based company engaged in the business of
distribution of Jewellery to china, Japan, USA, middle east and Europe.
In Addition, Crown Aim has a Jewellery manufacturing unit in China and
plans to setup retailing of Jewellery in China. With the above
acquisition company has acquired control over its subsidiaries which
are engaged in the business of distribution of Jewellery in UK.
(e) During the year, Aston Luxury Group Limited , a wholly owned
subsidiary of the Company has acquired entire stake in
Leading Jewels of Japan KK with a view to expand its business in Japan
and the adjoining region.
The main activity of Leading Jewels of Japan KK is Production, sales,
purchase, import, and export of diamonds, precious stones, jewels and
jewellery.
RECENT DEVELOPMENTS
(a) The Company issued 943396 warrants convertible into equal number of
Equity Shares on Preferential Basis at a price of Rs. 424/- per Warrant
to Bennett Coleman and Company Limited (BCCL). Pursuant to notice
received from BCCL for conversion of Warrants Company allotted 943396
equity shares of Rs. 10 each on 4th August, 2012.
(b) The Board of Directors of the Company at their meeting held on 11th
August, 2012 decided to issue 1 (one) Zero Percent Fully Convertible
Debenture (FCD) having face value of Rs. 39,00,00,000/- (Rupees Thirty
Nine Crores only) on preferential basis in accordance with the SEBI
(Issue of Capital and Disclosure Requirements) Regulations, 2009 as
amended from time to time to D. B. Corp Limited which is subject to
approval of shareholders in ensuing Annual General Meeting.
All the corporate benefits in terms of securities, accruing to on these
unclaimed shares shall be credited to such account. Voting rights on
these shares shall remain frozen till the rightful owner of such shares
claims the shares.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report of financial condition
and results of operations of the Company for the year under review as
required under Clause 49 of the Listing Agreement with the Stock
Exchanges, is given as a separate statement forming part of this Annual
Report.
OUTLOOK FOR 2012-13
Currently, India is the world's leading diamond cutting and polishing
country and also the largest consumer of polished diamonds after the US
and Japan. Urbanization and a rapidly expanding middle class have
helped trigger Indian consumerism especially in the gems and jewellery
sector.
Overall the year 2012-13 will be a year where Gitanjali plans to
increase the number of owned stores and franchisees in India and
overseas. All the Company's stores will be on revenue sharing models
whereby the rentals and the capital expenditure will be borne by the
developer/owner. The Company will have a variable outflow of revenue
share against its investment in capex and monthly rentals. Besides, the
company's core focus is to expand through the franchising route and to
open some flagship stores and attract franchisees.
The growth potential of the Indian business and profit unlocking from
the brands converting into retail chains have a huge upside in the
valuation of the company. The existing shareholders will also benefit
from the business restructuring undertaken by the company under the
advice of KPMG, as the exercise has significant value unlocking
potential for the shareholders.
The company would continuously strive to gain by capitalizing on the
business model and the Indian demand for diamond jewellery and share
the resultant benefits with its stakeholders.
AWARDS AND RECOGNITIONS
9 The Company has won the Blue Dart Global CSR Award for
ÃBest Corporate Social Responsibility Practice Overall' at a glittering
ceremony on 18th February 2012. The Hon'ble Union Minister of Corporate
Affairs, Dr. M. Veerappa Moily presented the global CSR award.
0 The Company has won 'Category Leader - Luxury eRetailer of the Year'
and 'Special Award - Most Innovative eRetailer of the Year' Awards at
recently held Indian eRetail awards, 2012.
These awards recognised the efforts of the Company in the creation of
path breaking trends and unprecedented innovations in the online retail
industry.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company has also implemented several best corporate
governance practices as prevalent globally. The Report on Corporate
Governance as stipulated under Clause 49 of the Listing Agreement forms
part of the Annual Report. The requisite Certificate from the Auditors
of the Company confirming compliance with the conditions of Corporate
Governance as stipulated under the aforesaid Clause 49 is attached to
this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Gitanjali Gems Limited spread its wings in the social sector under its
CSR umbrella à SAMBHAVÃ.
The company continues to do its bit for the society in the field of
health, education and empowerment through its programs SUJYOT,SAKSHAR
AND SAKSHAM.
The new addition to its CSR initiative is SUJYOT a medical van that
runs in rural areas of Palanpur in Gujarat in collaboration with the
Wockhardt foundation. More than 6000 people have been benefitted from
the same.
The company maintains a stern focus on its empowerment initiative
Saksham where the strength of the specially disabled employees (PWD)
has gradually increased from 118 in 2009 to 245 in 2012.Efforts were
put in to design and conceptualize the Training Manual / handbook for
Inclusion of Specially disabled.
The CSR department also conducted various awareness seminars and first
aid training along with social activities like blood donation camps,
visit to the schools for underprivileged by its employees.
The detailed CSR initiatives undertaken by the Company is also
available on the Company's website www.gitanjaligroup.com.
INDUSTRIAL RELATIONS
Employee relations continued to be cordial during the year. The
Company continued its thrust on Human Resource Development. The Board
wishes to place on record its sincere appreciation to all the employees
of the Company for their sustained efforts and immense contribution to
the high level of performance and growth of the business during the
year.
PARTICULARS OF EMPLOYEES
The Board of Directors wishes to express its appreciation to all
employees for their outstanding contribution to the operations of the
Company during the year.
During the year under review there were no employees drawing
remuneration covered under the Sub-Section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended. Hence no particulars in this regard are
furnished in the report.
INFORMATION UNDER SECTION 217(1)(e) OF COMPANIES ACT, 1956 READ WITH
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF
DIRECTORS) RULES 1988:
A. CONSERVATION OF ENERGY
The Disclosure of particulars with respect to conservation of energy
pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are not applicable to the Company. However, the
Company makes its best efforts for conservation of energy.
B. TECHNOLOGY ABSORPTION, ADAPTATIONS & INNOVATION
The Company has not carried out any specific research and development
activities. The Company uses indigenous technology for its operations.
Accordingly, the information related to technology absorption,
adaptation and innovation is reported to be NIL.
ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by the employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, co-operation,
and support.
We thank the Governments of various countries where we have operations.
We also thank the Government of India, Ministry of Commerce & Industry,
Ministry of Corporate Affairs, Ministry of Finance, Department of
Economic affairs, Customs & Excise Departments, Income Tax Department,
Reserve Bank of India, BSE, NSE, NSDL, CDSL and various bankers,
various State Governments and other Government Agencies for their
support, and look forward to their continued support in the future.
On behalf of the Board of Directors
Place : Mumbai Mehul C. Choksi
Date : August 11, 2012 Chairman & Managing Director
Mar 31, 2011
The members of
Gitanjali Gems Limited
The Directors are pleased to present the 25th Annual Report on the
business and operations of the Company for the year ended 31st March,
2011.
FINANCIAL RESULTS
(Rs. in millions)
Standalone Consolidated
2010-11 2009-10 2010-11 2009-10
Sales & Other Income 51,232.7 33,552.52 94,723.96 65,302.17
Expenditure 47,906.04 31,008.41 88,420.94 60,885.06
Interest 1,003.44 1,011.14 2,087.20 1,724.31
Depreciation 33.56 39.41 563.72 445.41
Exceptional Items - - 180.67 -
Profit Before Taxes 2,289.65 1,493.56 3,832.77 2,247.39
Provision for Income Tax 45.00 69.50 404.13 244.20
Earlier Years (Excess)/
Short Provision - 2.20 - -
Provision for Deferred Tax (1.38) 0.95 (137.01) (12.30)
Provision for Fringe
Benefit Tax - - - (0.00)
Net Profit for the Year 2,246.03 1,420.91 3,565.65 2,015.49
Profit brought forward
from earlier Years 6,450.46 5,604.65 7,601.60 6,197.38
Amount available for
Appropriation 8,696.49 7,025.56 11,166.53 8,176.71
Appropriations:
Proposed Dividend
(including Dividend Tax) 295.91 197.18 295.91 197.18
Transfer to General Reserve 230.00 120.00 230.00 120.00
Capital Redemption Reserve - 7.93 3.33 7.93
Debenture Redemption Reserve 250.00 250.00 250.00 250.00
Balance Carried to
Balance Sheet 7,920.57 6,450.45 10,387.29 7,601.60
TURNOVERS & PROFITS
The Directors wish to inform you that during the financial year ended
31st March, 2011 the sales and other income increased from Rs. 33552.52
millions to Rs. 51232.7 millions. The net profit before tax stood at Rs.
2289.65 millions as against Rs. 1493.56 millions in the previous year.
The net profit after tax stood at Rs. 2246.03 millions as against Rs.
1420.91 millions in the previous year.
BUSINESS REVIEW
1. DIAMOND AND JEWELLERY MANUFACTURING SEGMENT
The Company engages in an end-to-end diamond processing chain which
begins with Marking, Cleaving, Sawing, Cutting and finally, Polishing.
It procures rough diamonds from various major reputed diamond suppliers
across the globe. Tese rough diamonds are processed and polished in the
modern diamond processing units.
The Company is making conscientious efforts in addressing the large
market opportunities that exist in the Diamond Segment both in India
and abroad. Exports of Gems and Jewellery are also on the upswing.
Large opportunities exist in exports by converting diamond into
Jewellery before exports.
The Company also has state of art manufacturing facilities of Jewellery
catering to its domestic as well as International distribution.
2. BRANDED JEWELLERY SEGMENT
Branded Jewellery Segment is India Focused Segment of the group, which
caters to over 3600 points of sales across the country. Gitanjali owns
8 out of top 10 brands in the country. Asmi, Gili, Nakashtra, and
D'Damas have become most dominating brand today in the jewellery
segment in India. All these brands are housed in separate legal
entities with their manufacturing strength offers India's largest
jewellery distribution and retail model under this segment.
Multi-brands retail outlets are also under this segment to develop
company owned and franchise formats for the group. This segment holds
Gitanjali's lifestyle business of accessories and watches.
Gitanjali has been the pioneer in the branded jewellery segment and is
amongst the first few companies to launch its own outlets to sell
branded jewellery in India. The Group's "Gili" brand of jewellery,
introduced in 1994, was among the first branded jewellery introduced in
India. The Group's brands and sub-brands are aimed at different customer
profiles, various markets and price segments and enjoy significant
brand equity and market share.
Gitanjali's brand portfolio includes leading jewellery brands like
GILI, Nakshatra, Asmi, Sangini, D'damas etc. The other important brands
under various sections including jewellery, fashion accessories,
watches and silver ware are Collection G, Gold Expressions, Vivaaha,
Glitterati, Maya Gold, Diya, Stefen Hafner, Shuddhi, Lucera, Hoop,
Bella, Revv, Rivaaz, Giantti, World of Solitaire, Me Solitaire, World
of Silver, Bezel, Morellato etc.
3. INTERNATIONAL DISTRIBUTION AND RETAIL SEGMENT.
Gitanjali forayed into the US market by acquiring Samuels and Rogers, a
retail chain in USA. Gitanjali now has 111 stores in USA.
International segment also caters to retail and distribution in Middle
East, China and Japan and other jewellery consumption countries.
Recent acquisition of DIT Group's assets in Italy aims to target
Italian designs of jewellery for Russian and Saudi Arbian Markets while
Indian designs have penetrated in Asian Sub-continent.
International segment will compliment company's vision to become worlds
largest jewellery player with integrated model.
DIVIDEND
Your Directors recommended a dividend of Rs. 3.00 per equity share for
the year ended 31st March, 2011 at their meeting held on 27th May,
2011. Subsequently on 3rd August, 2011, the Company issued 611795
Equity Shares of Rs. 10 each upon conversion of FCCBs worth USD 3
millions. The said shares ranks pari passu with the existing shares and
are entitled to get all benefits of existing shares. The payment of
dividend is subject to the approval of shareholders at the ensuing
Annual General Meeting.
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 230 millions to the general reserve
out of the total amount of Rs. 8696.49 millions available for
appropriations as on 31st March, 2011.
AUTHORISED SHARE CAPITAL
During the year under review, the Authorised Share Capital of the
Company was increased from Rs. 120,00,00,000/- (Rupees One Hundred and
Twenty crores) divided into 12,00,00,000 (Twelve crores) equity shares
of Rs. 10 (Rupees Ten Only) each to Rs. 150,00,00,000/- (Rupees One
Hundred and Fifty crores Only) divided into 15,00,00,000 (Fifteen
crores) equity shares of Rs. 10 (Rupees Ten only) each. The Authorised
Share Capital has been increased in order to facilitate raising funds
through issuance of new securities.
PAID UP SHARE CAPITAL
On 8th January, 2011 the Company issued 601598 Equity shares of Rs. 10
each upon conversion of FCCBs worth USD 2.95 millions. Further on 3rd
August, 2011 Company issued 611795 Equity shares of Rs. 10 each upon
conversion of FCCBs worth USD 3 millions.
Consequently, paid up capital of the Company increased from Rs.
84,27,00,000 consisting of 8,42,70,000 Equity shares of Rs. 10 each at
the begining of the year to Rs. 85,48,33,930 consisting of 8,54,83,393
Equity shares of Rs. 10 each as on date.
FUND UTILISATION:
1. FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB)
As on 1st April, 2010 the Company had a balance of USD 2 millions from
the net proceeds of FCCBs in deposits pending utilisation. During the
year, the Company has utilised entire FCCB proceeds and as on 31st
March, 2011 the Company has NIL balance of FCCBs proceeds.
2. GLOBAL DEPOSITORY RECEIPTS (GDRS)
The Company had a balance of USD 2.215 millions from its GDR Proceeds as
on 1st April, 2010. After utilisation of funds towards the objects for
which it was raised as on 31st March, 2011 the balance net proceeds of
GDR of USD 0.066 millions was kept as deposits with overseas banks
pending utilisation.
SUBSIDIARIES
The Company had the following Subsidiaries/ Step down Subsidiaries at
the beginning of the year:
1. Mehul Impex Limited
2. Gitanjali Exports Corporation Limited
3. Shubalavanyaa Jewel Crafts Private Limited
4. Gili India Limited
5. Gitanjali Brands Limited (formerly known as Fantasy Jewellery
Private Limited )
6. Brightest Circle Jewellery Limited (formerly known as Brightest
Circle Jewellery Private Limited)
7. D'Damas Jewellery (India) Private Limited
8. Asmi Jewellery India Limited (formerly known as Asmi Jewellery
India Private Limited)
9. Gitanjali Lifestyle Limited
10. CRIA Jewellery Private Limited
11. Gitanjali Infratech Limited
12. *Aurangabad SEZ Limited
13. *Nanded SEZ Limited
14. *Nagpur Multi-Product Services SEZ Limited
15. Hyderabad Gems SEZ Limited
16. Raigad Gems SEZ Limited
17. Nashik Multi Services SEZ Limited
18. Gitanjali Jewellery Retail Private Limited
19. Mohar Jewels Limited
20. Samuels Jewelers Inc.
21. Gitanjali USA, Inc.
22. Gitanjali Ventures DMCC
23. Gitanjali Retail Ventures Limited
24. Modali Gems Private Limited
25. Decent Securities & Finance Private Limited
26. Eureka Finstock Private Limited
27. West Bengal SEZ Limited
28. *Gitanjali Holdings Limited
29. MMTC Gitanjali Private Limited
30. Spectrum Jewellery Limited (formerly known as Spectrum Jewellery
Private Limited)
31. Gitanjali Capital Private Limited (formerly known as Bezel India
Private Limited)
STEP DOWN SUBSIDIARIES
1. Tri-Star Worldwide LLC (Subsidiary of Gitanjali USA, Inc.)
2. **Lucera Retail Venture Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
3. **Trinity Expositions Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
4. **Hoop Retail Ventures Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
5. Kolkata Axis Mall Limited (Subsidiary of Gitanjali Infratech
Limited)
6. Maya Retail Limited (formerly known as Salasar Retail Limited -
Subsidiary of Gitanjali Lifestyle Limited)
7. MobileNXT Teleservices Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
8. ***Alliance Jewelleries Private Limited (Subsidiary of Brightest
Circle Jewellery Limited)
9. Diamlink Inc. USA (Subsidiary of Gitanjali USA, .Inc)
10. Diamlink Jewelery Inc. (Subsidiary of Diamlink Inc. USA )
11. Jewelry Marketing Comp, LLC (Subsidiary of Diamlink Jewelery Inc )
12. LJOW Holdings, LLC (Subsidiary of Diamlink Jewelery Inc)
The following subsidiaries/step-down subsidiaries were wholly / partly
acquired or incorporated during the year:
1. N&J Finstocks Private Limited
2. Gitanjali Resources
3. Giantii Italia SRL
4. ***Pink Jewellery Private Limited (subsidiary of Brightest Circle
Jewellery Limited)
Notes:
* Aurangabad SEZ Limited, Nanded SEZ Limited and Nagpur Multi-Product
Services SEZ Limited were struck off under Easy Exit Scheme, 2011.
Further Gitanjali Holdings Ltd, U.A.E. has been deregistered as there
were no operations in it.
** Hoop Retail Ventures Private Limited, Trinity Expositions Private
Limited and Lucera Retail Venture Private Limited, step down
subsidiaries were amalgamated with Gitanjali Lifestyle Limited, wholly
owned subsidiary as per Bombay High Court Order dated May 06, 2011.
*** Pink Jewellery Private Limited and Alliance Jewelleries Private
Limited, stepdown Subsidiaries were amalgamated with Brightest Circle
Jewellery Limited, wholly owned Subsidiary as per Bombay High Court
Order dated April 15, 2011.
A statement containing brief financial details of subsidiaries is
included in the annual report.
As required under listing Agreements with the Stock Exchanges, a
consolidated financial statement of the Company and all it's
subsidiaries is attached. The consolidated financial statement has been
prepared in accordance with accounting standard 21, 23 and 27 issued by
Institute of Chartered Accountants of India and show the financial
resources, assets, liabilities, income, profits and other details of
the Company, its subsidiaries and Joint ventures.
PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT, 1956
The Ministry of Corporate Affairs, Government of India vide circular no.
2/2011 dated 8th February, 2011 has granted general exemption from
attaching the Balance Sheet, Profit and Loss Account and other
documents of the subsidiary companies with the Balance Sheet of the
Company as set out in sub-section (1) of Section 212 of the Companies
Act, 1956. Accordingly, the Board of Directors in their Meeting held on
27th May, 2011 passed a resolution giving consent for not attaching the
Balance Sheet, Profit and Loss Account and other documents of the
subsidiary companies with the Balance Sheet of the Company. A
statement containing brief financial details of the Company's
subsidiaries for the financial year ended 31st March, 2011 is included
in the Annual Report.
The Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. The annual
accounts of the subsidiary companies will also be available for
inspection at the Corporate Office of the Company. The Company shall
furnish a copy of details of annual accounts of subsidiaries to any
member on demand. We believe that the consolidated accounts present a
full and fair picture of the state of affairs and the financial
condition and are accepted globally.
CONSOLIDATED FINANCIAL STATEMENTS
Your Directors have pleasure in attaching the consolidated financial
statement which is prepared in accordance with applicable accounting
standards prescribed by Institute of Chartered Accountants of India in
this regard. The Auditors report does not contain any qualification.
RELATED PARTY TRANSACTIONS:
Related party transactions have been disclosed in the notes to
accounts.
FIXED DEPOSITS AND LOANS & ADVANCES:
During the year under review, your Company has neither invited nor
accepted any fixed deposits from the public within the meaning of
Section 58A of the Companies Act, 1956.
DIRECTORS:
In accordance with the Articles of Association, Mr. Dhanesh Sheth,
Director retires by rotation and being eligible, offers himself for
re-appointment. Your Directors recommend his re-appointment for your
approval.
Brief resume of all the Directors on the Board has been given in the
Annual Report in "Corporate Governance Report" section.
GROUP:
Pursuant to intimation from the Promoters, the names of the Promoters
and entities comprising the 'group' are disclosed in the Annual Report
for the purpose of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997.
AUDITORS & AUDITORS REPORT:
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the present
Statutory Auditors retire at the ensuing Annual General Meeting and are
eligible for re-appointment u/s 224 (1B) of the Companies Act, 1956. Te
Company proposes to re-appoint M/s. Ford, Rhodes, Parks & Co.,
Chartered Accountants as Statutory Auditors of the Company from the
conclusion of the ensuing Annual General Meeting up to the conclusion
of the next Annual General Meeting of the Company.
The Audit Committee and the Board recommend the appointment of M/s.
Ford, Rhodes, Parks & Co., Chartered Accountants as Statutory Auditors
of the Company.
In respect of the observations made by Auditors in their report, your
Directors wish to state that the respective notes to the Accounts are
self explanatory and therefore do not call for any further comments.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibility Statement, it is
hereby confirmed:
(i) that in the preparation of the annual accounts, for the financial
year ended 31st March, 2011, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
(ii) that 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 as at 31st March, 2011 and of the profit of
the Company for the said period;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the accounts for the financial
year ended 31st March, 2011 on a 'going concern' basis.
The above statements have been reviewed by the Audit Committee at its
meeting held on 27th May, 2011.
SIGNIFICANT DEVELOPMENTS DURING THE YEAR
(a) During the year, the Company has acquired 100% Shares of N&J
Finstocks Private Limited (N&J), By way of this acquisition, N&J has
become a wholly owned subsidiary of the Company.
(b) During the year, the Company has acquired 100% stake in 'Giantti
Italia S.R.L.', a Company based in Milan, Italy. By virtue of this
acquisition 'Giantti Italia S.R.L.' has become a direct subsidiary of
the Company. The said acquisition will be useful for growth of the
branded jewellery business overseas and gain the designing and branding
concepts expertise from Italy.
(c) During the year with a view to rationalise the group structure, the
Company has acquired entire stake in "Pink Jewellery Private Limited"
(PJPL) through Brightest Circle Jewellery Limited, a wholly owned
subsidiary of the Company.
(d) During the year, the Company has incorporated a wholly owned
subsidiary (WOS) In the name of "Gitanjali Resources" in Belgium with a
view to explore and expand its businesses in Europe. The main object of
this WOS is to focus on the business of the Company in European Region
and conduct core diamond and jewellery business in that continent.
RECENT DEVELOPMENTS
(a) The Company has incorporated a wholly owned subsidiary in the name
of Leading Italian Jewels SRL (LIJ) in Italy with the view to expand
its business in Italy and adjoining region. The main activity of LIJ is
trading in precious stones, diamonds jewellery, pearls etc.
(b) The Company has sold its entire 51% stake in Shubalavanyaa Jewel
Crafts Private Limited, a Subsidiary of the Company to Gitanjali Brands
Limited, a wholly owned Subsidiary of the Company. Consequent to the
said transfer Shubalavanyaa Jewel Crafts Private Limited has become a
Subsidiary of Gitanjali Brands Limited.
(c) The Company has acquired assets of DIT Group S.p.A (DIT) Italy
alongwith the trust constituted as operating vehicle i.e 'BLU S.r.l' a
Company governed by Italian law with headquarters in Milan. DIT engages
in Jewellery manufacturing and sale business.
(d) The Company decided to explore the potential merger of subsidiaries,
demerger and other forms of restructuring, or acquisition, or spin-off
with the ultimate object of enhancing and unlocking shareholder value.
Accordingly, Pink Jewellery Private Limited and Alliance Jewelleries
Private Limited, stepdown Subsidiaries were amalgamated with Brightest
Circle Jewellery Limited, wholly owned Subsidiary as per Honorable
Bombay High Court Order dated April 15,2011. Further, Hoop Retail
Ventures Private Limited, Trinity Expositions Private Limited and
Lucera Retail Venture Private Limited, step down subsidiaries were
amalgamated with Gitanjali Lifestyle Limited, wholly owned subsidiary
as per Honorable Bombay High Court Order dated May 06, 2011
(e) The Company has incorporated wholly owned subsidiary in the name of
Aston Luxury Group Ltd. in Hong Kong.
(f) The Company has incorporated GGL Diamond LLC in United States of
America through its wholly owned subsidiary Gitanjali USA Inc.
DISCLOSURE PURSUANT TO CLAUSE 5A OF LISTING AGREEMENT
Pursuant to insertion of clause 5A in listing Agreement as per SEBI
notification no. SEBI/CFD/DIL/LA/1/2009/24/04 dated 24th April, 2009
the details in respect of the shares lying in the Gitanjali Gems
Limited à Unclaimed Shares Demat Suspense Account till 31st March, 2011
is as under.
Sl.
No Description No. of
Cases No. of
Shares Remarks
i) Aggregate number of shareholders and the
outstanding shares in the 27 1078
suspense account lying as on 1st April, 2010.
ii) Number of shareholders who approached the
Company for transfer of shares 1 35
from suspense account during the year
2010-2011
iii) Number of shareholders to whom shares were
transferred from suspense 1 35
account during the year 2010-2011
iv) Aggregate number of shareholders and the
outstanding shares in the 26 1043
suspense account lying as on 31st March, 2011
All the corporate benefits in terms of securities, accruing to on these
unclaimed shares shall be credited to such account. Voting rights on
these shares shall remain frozen till the rightful owner of such shares
claims the shares.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report of financial condition and
results of operations of the Company for the year under review as
required under Clause 49 of the Listing Agreement with the Stock
Exchanges, is given as a separate statement forming part of this Annual
Report.
OUTLOOK FOR 2011-12
The Jewellery business will continue its growth path through various
nitiatives, including launching of new collections, setting up large
format stores, increasing share of studded jewellery and achieving
design leadership.
Overall, the year 2011-12 will be a year where the Company would drive
for strong and profitable growth in all its Indian consumer businesses,
retain focus on elimination of wasteful costs, and skillfully navigate
the nternational businesses which will continue to pose challenges due
to sluggish demand in some of the geographies.
AWARDS AND RECOGNITION
- The Company has been awarded the Outstanding CSR in the Gems &
Jewellery sector at the first CSR TLC held on 19th February, 2011, from
the hands of Shri Salman Khurshid, Honorable Union Cabinet Minister for
Water Resources, and for Minority Affairs. The Company has received this
prestigious award as recognition for its efforts in the field of
community health and welfare.
- The Company has been awarded the 5th INDY's award for Excellence in
Corporate Social Responsibility Practice. The award recognised the
Company for systematically planning and carrying out socia activities
within the organisation. The jury was extremely impressed with the
involvement of the employees and the array of activities being carried
out like blood donation camp, eye check up camp, first aid training,
cleanliness drive etc.
- It was a proud moment for the Company as 'Saksham' one of the
projects under the Company's CSR initiative 'Sambhav', was acknowledged
and awarded the prestigious NCPEDP- Shell Helen Keller Award, 2010
under Category C meant for Companies/ Organisations/Institutions who
through their policies and practices demonstrate their belief in equal
rights and gainful employment for people with disabilities. The award,
was given at a simple ceremony at India International Centre
Auditorium, Max Mueller Marg on 2nd December, 2010 on the eve of World
Disability Day. Hon'ble Home Minister and chief guest for the evening,
Shri P. Chidambaram presented the award to the Company. The Saksham
initiative of the Company is focused on empowerment of People with
Disabilities (PWD's) through a six month training programme and
creating conditions for their rehabilitation and integration into
society. Nearly 250 such people are employed at the Company's factory
located at Rajiv Gems Park at Hyderabad and the Company plans to
significantly increase this number in the coming year.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements as set
out by SEBI. The Company has also implemented several best corporate
governance practices as prevalent globally. The Report on Corporate
Governance as stipulated under Clause 49 of the Listing Agreement forms
part of the Annual Report. The requisite Certificate from the Auditors
of the Company confirming compliance with the conditions of Corporate
Governance as stipulated under the aforesaid Clause 49, is attached to
this Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has devoted time, attention and resources to long cherished
dream that the Company have held - that of giving back to the society
at large. The Company's CSR initiative under the name Sambhav has
brought together the different social programs that the Company has
been associated with over the years. Tese are programs in the fields of
education, health, providing employment to PWDs. The Company will be
integrating all of them and in own different initiatives like Saksham,
Saakshar, Sujyot and Sneh. The focus will be both on strengthening the
existing programs as well as developing new ones too. The Company is now
aiming to take this CSR initiative to new heights and are in the
process of channelising all the strengths and efforts to form a strong
CSR team within the Company to encourage and promote a wide range of
social welfare activities internally or in partnering with other NGOs
and government bodies. The detailed Corporate Sustainability Report is
also available on the Company's website www.gitanjaligroup.com
INDUSTRIAL RELATIONS
Employee relations continued to be cordial during the year. The Company
continued its thrust on Human Resource Development. The Board wishes to
place on record its sincere appreciation to all the employees in the
Company for their sustained efforts and immense contribution to the
high level of performance and growth of the business during the year.
PARTICULARS OF EMPLOYEES
The Board of Directors wishes to express its appreciation to all
employees for their outstanding contribution to the operations of the
Company during the year.
During the year under review there were no employees drawing
remuneration covered under the Sub-Section (2A) of Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended. Hence no particulars in this regard are
furnished in the report.
INFORMATION UNDER SECTION 217(1)(e)OF COMPANIES ACT, 1956 READ WITH
COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF
DIRECTORS) RULES 1988:
A. CONSERVATION OF ENERGY
The Disclosure of particulars with respect to conservation of energy
pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are not applicable to the Company. However, the
Company makes its best efforts for conservation of energy
B. TECHNOLOGY ABSORPTION, ADAPTATIONS & INNOVATION
The Company has not carried out any specific research and development
activities. The Company uses indigenous technology for its operations.
Accordingly, the information related to technology absorption,
adaptation and innovation is reported to be NIL.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
(Rs. in millions)
2011 2010
Foreign Exchange Earnings:
FOB Value 30,298.04 19,449.31
Foreign Exchange Outgo:
Value of Imports on CIF basis 17,694.60 14,854.93
Expenditure in Foreign Exchange 47.16 31.72
ACKNOWLEDGEMENT
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by the employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, co-operation,
and support.
We thank the Governments of various countries where we have operations.
We also thank the Government of India, Ministry of Commerce & Industry,
Ministry of Corporate Affairs, Ministry of Finance, Department of
Economic affairs, Customs & Excise Departments, Income Tax Department,
Reserve Bank of India, Stock Exchanges, NSDL, CDSL, various bankers,
State Governments and other Government Agencies for their support, and
look forward to their continued support in the future.
On behalf of the Board of Directors
Mehul C. Choksi
Place: Mumbai Chairman & Managing Director
Date: 12th August, 2011
Mar 31, 2010
The Directors are pleased to present the 24th Annual Report on the
business and operations of the Company for the year ended March 31,
2010.
(Rs. in Millions)
FINANCIAL RESULTS
Standalone Consolidated
2009-10 2008-09 2009-10 2008-09
Sales & Other Income 33,552.52 26,940.64 65,302.17 50,911.12
Expenditure 31,008.41 25,136.69 60,885.06 48,012.19
Interest 1,011.14 453.39 1,724.31 978.40
Depreciation 39.41 43.36 445.41 335.96
Proft before Taxes 1,493.56 1,307.20 2,247.39 1,584.57
Provision for
Income Tax 69.50 35.00 244.20 129.61
Earlier Years
(Excess)/ Short
Provision 2.20 - - -
Provision for
Deferred Tax 0.95 2.50 (12.30) (108.77)
Provision for
Fringe Beneft Tax - 2.01 (0.00) 10.94
Net Proft for
the Year 1,420.91 1,267.69 2,015.49 1,552.79
Proft brought
forward from
earlier Years 5,604.65 4,624.10 6,197.38 4,970.46
Amount available
for Appropriation 7,025.56 5,891.79 8,176.71 6,484.51
Appropriations
Proposed Dividend
(including
Dividend Tax) 197.18 179.14 197.18 179.14
Transfer to
General Reserve 120.00 108.00 120.00 108.00
Capital
Redemption Reserve 7.93 - 7.93 -
Debenture
Redemption Reserve 250.00 - 250.00 -
Balance Carried
to Balance Sheet 6,450.45 5,604.65 7,601.60 6,197.38
(1 Million=10 Lakhs)
Turnovers & Profts
The Directors wish to inform you that during the fnancial year ended
March 31, 2010 the sales and other income increased from 26,940.64
Million to Rs. 33,552.52 Million. The net proft before tax stood at
Rs. 1,493.56 million as against Rs. 1,307.20 million in the previous
year. The net proft after tax stood at Rs. 1,420.91 million as against
Rs. 1267.69 million in the previous year.
Business Review
1. Diamond Segment
Gitanjali procures rough diamonds from various major reputed diamond
suppliers across the globe. These rough diamonds are processed and
polished in the modern diamond processing units located at Surat Ã
Gujrat, Dhaisar à Mumbai and Rajiv Gems Park à Hyderabad. Gitanjalis
diamond sales accounted for Rs. 20,972 million in 2009-10 recording a
growth of Rough diamonds are being processed and polished in the modern
diamond processing units located at Surat à Gujrat, Dhaisar à Mumbai
and Rajiv Gems Park à Hyderabad.
29%. Gitanjali exports diamond jewellery as well. Diamond export
countries include the U.S., Hong Kong, Japan, China, Middle East and
Thailand.
Gitanjalis end-to-end diamond processing chain activities include
Marking, Cleaving, Sawing, Cutting and fnally polishing. The Companys
quality sourcing facilities helps the company to establish competitive
prices, and enjoy a consistent market demand.
2. Jewellery Segment
Gitanjali manufactures gold jewellery and diamond studded jewellery in
its various state of the art facilities. The manufacturing activities
are supported by a strong product development and design function. The
manufacturing process includes designing, model and mould making,
waxing and wax setting, casting, sprue binding, flling, polishing,
metal setting and rodium polish. The Export processing unit is located
at SEEPZ - Andheri, Mumbai with more than 500 workers. The other
domestic manufacturing units are also located at Goregaon & Andheri -
Mumbai, Surat à Gujarat, Rajiv Gems Park - Hyderabad and Manikanchan
SEZ - Kolkata.
The revenue from the jewellery segment accounted for 38% of the total
revenue in 2009-10. The jewellery segment grew by 18% in 2009-10 to Rs.
12,578 million. Gitanjalis growth can be attributed to branding,
promotion, and expansion of its retail network.
3. Branding and Retail Expansion
Gitanjali has several jewellery brands under its umbrella which offer
designs for all ages, all occasions, and all customer segments.
Gitanjalis brand portfolio includes Gili, Nakshatra, Asmi, Sangini,
Ddamas etc. The other important brands under various sections
including jewellery, fashion accessories, watches and silverware are
Vivaaha, Glitterati, Maya Gold, Diya, Stefen Hafner, Lucera, Hoop,
Bella, Revv, Rivaaz, Giantti, World of Solitaire, Me Solitaire, World
of Silver, Bezel, Morellato etc.
Gitanjali forayed into the US market by acquiring Samuels and Rogers,
USA. Gitanjali now has 126 stores in USA. In India, Gitanjali has a 60%
share in the branded jewellery segment of the total mall space. During
FY 2009-10, Gitanjalis retail space in India increased by 33% to
around 1,000,000 sq. ft. The number of company operated stores
increased to 185 in 2009-10; and the number of franchisee stores
increased to 215 in 2009-10.
Gitanjali has an aggressive domestic retail expansion plan for the
several brands it owns through multiple channels in place. Gitanjalis
products are sold in super stores and department stores, reputed
jewellery retailers, owned retail stores which are managed by group,
franchised stores, dedicated jewellery marts
and chain stores supported by international certifcations of
scientifcally tested purity and authenticity. Gitanjali placed its
jewellery brands in retail stores at the time when the overall shopping
environment went in for a change, with global brands entering India.
Gitanjali has offered high visibility to all its brands through
promotions which roped in well known personalities. With these multi Ã
tiered mobilization of formats, Gitanjali is well placed to realize its
vision of global leadership.
4. Lifestyle
Gitanjalis foray into the lifestyle segment was as a result of rising
disposable incomes and per capita consumptions. There has been
continuous change in the trends and in the mindsets of people. People
have become ready for innovative jewellery, watches and other
accessories. Gitanjali, as part of its lifestyle business provides
luxury products like watches, silverware, perfumes, luxury artefacts,
apparels, leather goods, writing instruments, silver and other fashion
jewellery and accessories. Gitanjali has embarked upon diverse
alliances with global players to bring unique and tailor made designs
on to the domestic market.
The lifestyle wing ventured in to the area of media and entertainment
and has taken up production, marketing and advertisements of flms,
television serials, software and other entertainment related programs
via media like T.V., Radio, Newspaper, Outdoor Hoardings and other
available advertising media. It has also taken up promotional
activities via Music Launch, press conference, City Visits of Artists,
Mass scale events etc.
5. Special Economic Zone at Hyderabad
GiGtanjalis Rajiv Gems Park at Hyderabad SEZ, has developed fve modern
state of art manufacturing facilities for commercial production and a
training center. The said facilities are up and running and are
employing nearly 1500 workers. The unit provides extensive tax benefts
and holidays including the 10 year income tax holiday and 5 year income
tax breaks for all frms within the SEZ. World During the year company
bought back and extinguished 7,92,883 equity shares and subsequently
the outstanding equity share capital of the Company was reduced to Rs.
84,27,00,000 comprising of 8,42,70,000 equity shares of Rs. 10 each.
class in house facilities are being provided for all leading
diamond/Jewellery manufacturers.
Dividend
Your Directors recommended a dividend of Rs 2.00 per equity share for
the year ended March 31, 2010. The payment of dividend is subject to
the approval of shareholders at the ensuing Annual General Meeting.
Transfer to Reserves
The Company proposes to transfer Rs. 120 million to the general reserve
out of the total amount of Rs. 7,025.56 million available for
appropriations as on March 31, 2010.
Buy-Back of Equity Shares
Subsequent to the approval of the board in their meeting held on
December 19, 2008 and after necessary approvals from Securities and
Exchange Board of India (SEBI), the Company commenced buyback of its
equity shares from the open market through stock exchange mechanism on
August 19, 2009. The buyback of equity shares of the Company was closed
on December 18, 2009 and till that date Company bought back and
extinguished 7,92,883 equity shares of Rs.10/- each at an average rate
of Rs. 115.95 /- per equity share through Bombay Stock Exchange Limited
(BSE) and National Stock Exchange of India Limited (NSE). Subsequent to
extinguishment, outstanding equity share capital of the Company is Rs.
84,27,00,000 comprising of 8,42,70,000 equity shares of Rs. 10 each.
Share Capital
At present, the Company has only one class of share i.e. equity share
of the face value of Rs. 10/- each. During the year company bought
back and extinguished 7,92,883 equity shares and subsequently the
outstanding equity share capital of the Company was reduced from Rs.
85,06,28,830 comprising of 8,50,62,883 equity shares of Rs. 10 each to
Rs. 84,27,00,000 comprising of 8,42,70,000 equity shares of Rs. 10
each.
Debentures
On 22nd June, 2009 the company issued 1,250, 12% secured redeemable
Non-Convertible Debentures (NCDs) of Rs. 10,00,000/- each at par on
private placement basis to Life Insurance Corporation of India. The
said NCDs are listed on the debt segment of Bombay Stock Exchange
Limited.
Fund Utilisation
1. Foreign Currency Convertible Bonds (FCCB)
As on 31st March, 2009 the company had a balance of USD 2 million from
the net proceeds of FCCBs in deposits pending utilisation. During the
year, the Company has not utilized FCCB proceeds and as on March 31,
2010 the entire USD 2 million were kept in deposits pending
utilisation.
2. Global Depository Receipts (GDRs)
The Company had a balance of USD 21.335 million from its GDR Proceeds
as on 1st April, 2009. During the year ended March 31, 2010 the Company
utilized USD 19.12 million towards investment in subsidiaries, general
corporate purposes and working capital requirement. As on March 31,
2010 the balance net proceeds of GDR of USD 2.215 million was kept as
deposits with overseas banks pending utilization.
Subsidiaries
The Company had the following Thirty Six (36) Subsidiaries/ Step down
Subsidiaries at the beginning of the year.
1. Mehul Impex Limited
2. Gitanjali Exports Corporation Limited
3. Shubalavnya Jewel Crafts Private Limited
4. Gili India Limited
5. Fantasy Jewellery Private Limited (formerly known as Fantasy
Diamond Cuts Pvt. Ltd )
6. Brightest Circle Jewellery Private Limited
7. DDamas Jewellery (India) Private Limited
8. Asmi Jewellery India Private Limited (formerly known as Desire
Lifestyle Private Limited)
9. Gitanjali Lifestyle Limited
10. CRIA Jewellery Private Limited
11. Gitanjali Infratech Limited
12. Hyderabad Gems SEZ Limited
13. Raigad Gems SEZ Limited
14. Aurangabad SEZ Limited
15. Nanded SEZ Limited
16. Nagpur Multi-Product SEZ Limited
17. Nashik Multi Services SEZ Limited
18. Gitanjali Jewellery Retail Private Limited (formerly known as
Modali Jewels Private Limited)
19. Mohar Jewels Limited
20. * Ivida Technologies Private Limited
21. Samuels Jewelers Inc.
22. Gitanjali USA, Inc.
23. Rogers Ltd., Inc.
24. Gitanjali Ventures DMCC
25. Gitanjali Retail Ventures Limited
26. Modali Gems Private Limited
27. Decent Securities & Finance Private Limited
28. Eureka Finstocks Private Limited
29. West Bengal SEZ Limited
30. Gitanjali Holdings Limited
31. MMTC Gitanjali Private Limited
Step Down Subsidiaries
1. Tri-Star Worlwide LLC (Subsidiary of Gitanjali USA, Inc.)
2. Lucera Retail Venture Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
3. Trinity Expositions Private Limited (formerly known as Trinity
Watch Company Private Limited - Subsidiary of Gitanjali Lifestyle
Limited)
4. Hoop Retail Ventures Private Limited (Subsidiary of Gitanjali
Lifestyle Limited)
5. Kolkata Axis Mall Limited (Subsidiary of Gitanjali Infratech
Limited)
The following Nine subsidiaries/step-down subsidiaries were acquired
wholly / partly during the year:
1. Spectrum Jewellery Pvt. Ltd
2. Bezel India Pvt. Ltd (Formerly known as Morellato India Private
Limited)
3. Salasar Retail Limited (subsidiary of Gitanjali Lifestyle Limited)
4. MobileNxt Teleservices Pvt. Ltd. (subsidiary of Gitanjali Lifestyle
Limited)
5. Alliance Jewelleries Pvt. Ltd (Subsidiary of Brightest Circle
Jewellery Pvt. Ltd)
6. Diamlink Inc. USA (Subsidiary of Gitanjali USA, .Inc)
7. Diamlink Jewelery Inc. (Subsidiary of Diamlink Inc. USA)
8. Jewelry Marketing Comp, LLC (Subsidiary of Diamlink Jewelery Inc)
9. LJOW Holdings, LLC (Subsidiary of Diamlink Jewelery Inc)
* During the year, with an intention to focus over core area of
business, the Company sold its entire stake in Ivida Technologies
Private Limited
There has been no material change in the nature of business of
subsidiaries. A statement containing brief fnancial details of
subsidiaries is included in the annual report.
As required under listing Agreements with the Stock Exchanges, a
consolidated fnancial statement of the company and all its
subsidiaries is attached. The consolidated fnancial statement has been
prepared in accordance with accounting standard 21, 23 and 27 issued by
Institute of Chartered Accountants of India and show the fnancial
resources, assets, liabilities, income, profts and other details of the
Company, its subsidiaries and Joint ventures.
Particulars Under Section 212 of the
Companies Act
Ministry of Corporate Affairs, Government of India has granted approval
that the requirement to attach various documents in respect of
subsidiary companies, as set out in sub-section (1) of Section 212 of
the Companies Act, 1956, shall not apply to the Company. Accordingly,
the Balance Sheet, Proft and Loss Account and other documents of the
subsidiary companies are not being attached with the Balance Sheet of
the Company. Financial information of the subsidiary companies, as
required by the said approval, is disclosed in the Annual Report. The
Company will make available the Annual Accounts of the subsidiary
companies and the related detailed information to any member of the
Company who may be interested in obtaining the same. We believe that
the consolidated accounts present a full and fair picture of the state
of affairs and the fnancial condition and are accepted globally.
Further, as required, the brief fnancial data of the subsidiaries has
been furnished under the head ÃStatement pursuant to section 212(8) of
the Companies Act, 1956, related to Subsidiary Companiesà forming part
of the Annual Report.
Related Party Transactions
Related party transactions have been disclosed in the notes to
accounts.
Fixed Deposits
During the year under review, your Company has neither invited nor
accepted any fxed deposits from the public within the meaning of
Section 58A
On the basis of export performance, the Company has been recognised as
a ÃStar Trading House and further designated as ÃNominated Agency for
the purpose of direct import of gold, silver and other precious metals.
of the Companies Act, 1956.
Directors
In accordance with section 260 of the Companies act, 1956 Mr. Nehal
Modi and Mr. Nitin Potdar were appointed as Additional Directors of the
Company on October 29, 2009 and January 30, 2010 respectively who hold
offce upto the date of ensuing Annual General Meeting.
Mr. G.K. Nair, Executive Director has tendered his resignation from the
board as a Director with effect from November 13, 2009 while Mr. Suresh
Chukkapalli and Mr. Prakash Shah, Independent Directors tendered their
resignation with effect from October 29, 2009 and January 25, 2010
respectively. The Board recorded its appreciation for the valuable
services rendered by them during their tenure.
In accordance with the Articles of Association, Mr. Sujal Shah,
Director retires by rotation and being eligible, offers himself for
re-appointment. Your Directors recommend his re-appointment for your
approval.
Brief resume of all the Directors on the Board has been given in the
Annual Report in ÃCorporate Governance Reportà section.
Auditors & Auditors Report
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the present
Statutory Auditors retire at the ensuing Annual General Meeting and are
eligible for re-appointment u/s 224 (1B) of the Companies Act, 1956.
The company proposes to re- appoint M/s. Ford, Rhodes, Parks & Co.,
Chartered Accountants as Statutory Auditors of the company from the
conclusion of the ensuing Annual General Meeting up to the conclusion
of the next Annual General Meeting of the company.
The Audit Committee and the Board recommend the appointment of M/s.
Ford, Rhodes, Parks & Co., Chartered Accountants as Statutory Auditors
of the company.
In respect of the observations made by Auditors in their report, your
Directors wish to state that the respective notes to the Accounts are
self explanatory and therefore do not call for any further comments.
Directors Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors Responsibility Statement, it is
hereby confrmed:
(i) that in the preparation of the annual accounts, for the fnancial
year ended March 31, 2010, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
(ii) that 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 as at March 31, 2010 and of the proft of the
Company for the said period;
(iii) that the Directors have taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the accounts for the fnancial
year ended March 31, 2010 on a Ãgoing concern basis.
The above statements have been reviewed by the Audit Committee at its
meeting held on May 29, 2010.
Signifcant Developments during the Year
(a) The Companys wholly owned subsidiary, Gitanjali Lifestyle Limited
entered into Joint Venture Agreement with Damas LLC on August 14, 2009
to form a joint venture Company with the primary objective of carrying
on the business of single brand retail trading of all kinds jewellery
and accessories. To pursue the objectives of MOU, Damas Gems - N -
Jewels (I) Private Limited was incorporated on September 7, 2009.
(b) On the basis of export performance, the Company has been recognised
as a ÃStar Trading House by Ministry of Commerce and Industry (said
ministry), Government of India. Further Company has been designated as
ÃNominated Agency by the said ministry for the purpose of direct
import of gold, silver and other precious metals vide its certifcate
dated October 1, 2009.
(c) During the year, the Company acquired ÃAlliance Jewelleries Pvt.
Ltdà (ÃAllianceÃ) through its wholly owned subsidiary Brightest Circle
Jewellery Pvt. Ltd. Alliance is engaged in the business of
manufacturing of gold and diamond studded jewellery etc.
(d) During the year the Company undertook a major brand valuation
excercise for its four prominent jewellery brands viz. Gili, Nakshatra,
Ddamas and Asmi. Brand Finance, renowned UK based frm in marketing and
brand valuation was commissioned to evaluate these brands. The total
worth of these four brands were valued to be Rs. 1500 crores.
(e) The Company has acquired additional Shares of ÃSpectrum Jewellery
Private Limited (Spectrum), earlier a Joint Venture Company. By way of
this acquisition, the Company has become majority stake owner in
Spectrum, which is owner of brand ÃSangini.
(f) The Companys wholly owned subsidiary, Gitanjali Lifestyle Limited
has acquired 76% stake in Salasar Retail Limited, a company engaged in
the business of retailing, selling, trading and distributing all kinds
of cloth, cotton, synthetics, silk yard, readymade garments etc.
(g) During the year, the Company has acquired 100% Shares of Bezel
India Private Limited (Bezel), (formerly known as Morellato India Pvt.
Ltd), earlier a Joint Venture Company. By way of this acquisition,
Bezel has become a wholly owned subsidiary of the Company.
Disclosure Pursuant to Clause 5A of Listing
Agreement
Pursuant to insertion of clause 5A in listing Agreement as per SEBI
notifcation no. SEBI/CFD/DIL/LA/1/2009/24/04 dated April 24, 2009 the
details in respect of the shares lying in the Gitanjali Gems Limited Ã
Unclaimed Shares Demat Suspense Account till March 31, 2010 is as
under.
Description No. of Cases No. of Shares
Aggregate number of shareholders and
the outstanding shares in the suspense 33 1317
account lying as on April 1, 2009
Number of shareholders who approached
the Company for transfer of shares from 6 239
suspense account during the year
2009- 2010
Number of shareholders to whom shares
were transferred from suspense account 6 239
during the year 2009 Ã 2010
Aggregate number of shareholders and
the outstanding shares in the suspense 27 1078
account lying as on March 31, 2010
All the corporate benefts in terms of securities, accruing to on these
unclaimed shares shall be credited to such account. Voting rights on
these shares shall remain frozen till the rightful owner of such shares
claims the shares.
Management Discussion and Analysis
Report
The Management Discussion and Analysis Report of fnancial condition and
results of operations of the Company for the year under review as
required under Clause 49 of the Listing Agreement with the Stock
Exchanges, is given as a separate statement forming part of this Annual
Report.
Corporate Governance
A Report on Corporate Governance for the fnancial year 2009-10 along
with the Auditors Certifcate on its compliance is provided in the
corporate governance report section of this Annual Report.
Industrial Relations
Employee relations continued to be cordial during the year. The Company
continued its thrust on Human Resource Development. The Board wishes to
place on record its sincere appreciation to all the employees in the
Company for their sustained efforts and immense contribution to the
high level of performance and growth of the business during the year.
Particulars of Employees
In terms of provisions of Section 217 (2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975, the
names and other particulars of employees are set out in the Annexure to
the Directors Report. However, having regard to the provisions of
Section 219 (1) (b)(iv) of the Companies Act, 1956, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary of the
Company.
The Company became majority stake owner in Spectrum Jewellery Pvt.
Ltd., the owner of brand ÃSangini.
Information Under Section 217(1)(e) Of Companies Act, 1956 Read With
Companies (Disclosure of particulars in the report of the Board of
Directors) Rules 1988:
A. Conservation of Energy
The Disclosure of particulars with respect to conservation of energy
pursuant to Section 217 (1)(e) of the Companies Act, 1956 read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 are not applicable to the Company. However, the
Company makes its best efforts for conservation of energy.
B. Technology Absorption, Adaptations & Innovation
The Company has not carried out any specifc research and development
activities. The Company uses indigenous technology for its operations.
Accordingly, the information related to technology absorption,
adaptation and innovation is reported to be NIL.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Current Year Previous Year
A. Foreign Exchange Earnings: (Rs. in Millions) (Rs. in Millions)
FOB Value 19,449.31 14,170.31
B. Foreign Exchange Outgo:
Value of Imports on CIF basis 14,854.93 11,156.88
Expenditure in Foreign Exchange 31.72 18.72
Acknowledgement
We thank our customers, vendors, investors and bankers for their
continued support during the year. We place on record our appreciation
of the contribution made by the employees at all levels. Our consistent
growth was made possible by their hard work, solidarity, co-operation,
and support.
We thank the Governments of various countries where we have operations.
We also thank the Government of India, Ministry of Commerce & Industry,
Ministry of Corporate Affairs, Ministry of Finance, Department of
Economic affairs, Customs & Excise Departments, Income Tax Department,
Reserve Bank of India, various bankers, various State Governments and
other Government Agencies for their support, and look forward to their
continued support in the future.
On behalf of the Board of Directors
Place : Mumbai Mehul C. Choksi
Date : August 7, 2010 Chairman & Managing Director