ANN UAL REPORT 2012 13 TARA JEWELS LIMITED
VALUE ANN PROPOSITION AT TARA IS DRIVEN BY OUR BUSINESS MODEL.
CORPORATE REVIEW
SMART, SCALABLE, SUSTAINABLE AND TRANSPARENT, IT CREATES A BEAUTIFUL SYNERGY BETWEEN CUSTOMER ASPIRATIONS AND OUR DELIVERY CAPABILITIES.
TARA JEWELS LIMITED
2
AS ONE OF INDIA’S LEADING INTEGRATED JEWELLERY PLAYERS, WE CATER TO DOMESTIC RETAIL CUSTOMERS AND INTERNATIONAL CLIENTS WITH FASHION, BRIDAL AND HANDCRAFTED BESPOKE JEWELLERY. OFFERING A WIDE PORTFOLIO OF PRODUCTS IN DIAMOND AND GOLD (STUDDED WITH PRECIOUS AND SEMI-PRECIOUS STONES) AND MANY MORE AMONG OTHERS WE APPRECIATE THE DISCERNING CUSTOMER, WHO CAN BE PASSIONATE ABOUT JEWELLERY AND YET EVER WATCHFUL ABOUT THE RIGHT VALUE AT THE RIGHT PRICE. FOR OVER 17 YEARS, OUR EXPERIENCE AND EXPERTISE ARE FOCUSED ON MARRYING THE TWO.
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ANNUAL REPORT 2012-13
CON TENTS 6 10 12 14 18 22 24
CONVENTIONAL INDUSTRY. CONTEMPORARY IDEAS. CONSISTENT AND ROBUST PERFORMANCE A STAR IS BORN
CHAIRMAN’S
COMMUNIQUÉ
SMALL IS BIG DIFFERENT STROKES
26 28 30 32 34 67
A HAPPY HARMONY OF TECHNOLOGY AND CRAFTSMANSHIP
TRANSPARENCY IS OUR MOST IMPORTANT TRADE SECRET THE BOARD LEADERSHIP TEAM STATUTORY REPORTS FINANCIAL STATEMENTS
DARINGLY DIFFERENT
In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral – that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
CONVENTIONAL INDUSTRY
CONTEM 17+
EXPERIENCE IN JEWELLERY INDUSTRY
YEARS
AT TARA, WE HAVE HELPED ENRICH THE TIME-HONOURED BUSINESS OF JEWELLERY, JEWELLERY-MAKING AND RETAIL WITH OUR CONTEMPORARY IDEAS. THESE HAVE STRENGTHENED OUR BUSINESS PHILOSOPHY IN INDIA AND GLOBALLY. In India, we sell through our retail brand ‘Tara Jewellers’. Internationally, we have collaborated with various large retail chains and well-known designers.
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ACROSS THE GLOBE
OFFICES
50,000+ DESIGNS CATERING TO DIVERSE PREFERENCES
1,550+ EMPLOYEE STRENGTH CATERING TO INDIAN AND GLOBAL CUSTOMER DEMANDS TARA JEWELS LIMITED
6
PORARY
IDEAS
8+
TIE-UPS
WITH PROMINENT INTERNATIONAL RETAIL CHAINS
6
PROMOTED INTERNATIONALLY
BRANDS
OUR 35+ DESIGNERS AND 1,000+ CRAFTSMEN HELP DRIVE OUR VALUE PROPOSITION.
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ANNUAL REPORT 2012-13
CONVENTIONAL INDUSTRY. CONTEMPORARY IDEAS. PRESENCE IN THE VALUE CHAIN
High-end Jewellery
Presence of Tara
Branded Jewellery
Jewellery
Majority Indian Exporters
Job Work
Polished Diamonds
Rough Diamonds
AWARDS Twice awarded Global Supplier of the Year by Walmart in 2005 and 2007 Overall Excellence award, second-highest exporter in the category of studded precious metal jewellery exports in EPZ, by The Gem and Jewellery Export Promotion Council in 2007, 2008 and 2009
Conferred with the status of a ‘Star Trading House’ by the Ministry of Commerce & Industry and have been the highest exporter in gems and jewellery sector for 2009 and 2010 Bagged as the ‘Store Design of the Year’ by Economic Times Retail Awards 2013 Awarded the ‘Print Campaign of the Year’ by the 8th Retail Jeweller India Awards 2012 TARA JEWELS LIMITED
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50 RETAIL SHOWROOMS ACROSS 37 INDIAN CITIES
Punjab Delhi
• 37 operational showrooms* • 13 showrooms at launch stage*
Gujarat
MP Maharashtra
90+
Chhattisgarh
Goa
SHOWROOMS BY 2016-17 TO DRIVE PAN-INDIA PRESENCE
ON THE GLOBAL STAGE Caters to retailers across the US, the UK, European Union (12 countries in EU including Austria, Germany and Switzerland), Australia, China, South Africa, UAE and Canada
Los Angeles USA
Uttar Pradesh
Rajasthan
* As on 25th July 2013
Uttarakhand
Phase 1 Stores Phase 2 Stores
20 COUNTRIES CATERED TO ACROSS FIVE CONTINENTS
New York USA Dallas USA
Geneva Switzerland
Pan Yu China Mumbai India
Hong Kong China
Sydney Australia
Headquarters in Mumbai, India Sales and distribution offices Production units Design studios
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ANNUAL REPORT 2012-13
CONSISTENT AND
ROB UST PERFORMANCE
INCOME MIX
%
REGION-WISE EXPORTS
%
USA CHINA
(including Hong Kong)
46.29 39.71
UAE 7.34 UK + EUROPE 4.11 OTHERS 2.55
EXPORT 81 DOMESTIC 19
(Australia, Germany, South Africa, Austria and Belgium)
TARA JEWELS LIMITED
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TOTAL REVENUE CAGR ↑ 19.66%
` MN
EBITDA CAGR ↑ 25.75%
16,355
972
11-12
10-11
12-13
`
414
11-12
10-11
`
201
154
23.04
10-11
12-13
EBITDA MARGIN
%
124
11-12
12-13
ROCE
11-12
12-13
ANNUAL REPORT 2012-13
21
10-11
10-11
%
9.41 8.40
12-13
BOOK VALUE PER SHARE
29.84
23.13
11-12
11-12
35.73
29.94
11
12-13
EARNING PER SHARE (DILUTED)
35.81
10-11
737
539
EARNING PER SHARE (BASIC)
8.51
` MN
1,317
11,423
10-11
PAT CAGR ↑ 33.42%
1,537
13,991
10-11
` MN
22 20
11-12
12-13
11-12
12-13
`
Implemented SAP
Set up 35,000 square feet state-of-the-art manufacturing facility in SEEPZ, Mumbai
100% integration of operations into SAP
M Fabrikant becomes a strategic investor in Tara Jewels
2000 2001 2002 2003
A STAR BORN IS
2009
Added two more retail showrooms in India Launched labels - Facets of Love and Candy Hearts with H Samuel, part of the Signet Group, UK Launched Walmart’s co-branded fashion initiative Heart2Heart Appointed as a member of SEEPZ Authority Cell governed by the Ministry of Commerce
2010 2011 Added 26 retail showrooms in India Co-branded Sattva collection with H Samuel, part of the Signet Group, UK
Co-branded Bridal Programme Cherished Hearts with JC Penney, US Forayed into the Russia market Nominated for Regional Retail Chain of the Year Certified as Nominated Agency as per the Indian Foreign Trade Policy (RE 2008)
TARA JEWELS LIMITED
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Invention of turntable technology to maximise productivity Origination of key manufacturing technology for invisible-setting
Acquired the go-forward business of M Fabrikant
Established 40,000 square feet manufacturing facility in Panyu, China Tara’s CMD became the only Indian Director of Jewellers Board of Trade, USA Highest Export Performance Award (Gems & Jewellery Sector, SEEPZ SEZ) by SEEPZ SEZ
Launched India retail with three showrooms Won Highest Export Performance Award (Gems & Jewellery Sector, SEEPZ SEZ) by SEEPZ SEZ
2005 2006 2007 2008 Tara Jewels Office, SEEPZ, Mumbai
2012
Listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) Swarovski joins as strategic investor through one of its associates, Crystalon Finanz AG Awarded the Print Campaign of the Year by the 8th Retail Jeweller India Awards 2012 Co-branded Bridal Programme with Monique Lhuillier Added 30th showroom at GK1, Delhi
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ANNUAL REPORT 2012-13
2013
Opened seven new retail showrooms Awarded the Best Store Design of the year at the Economic Times Retail Awards
STATUTORY REPORTS
MANAGEMENT DISCUSSION AND ANALYSIS
ECONOMIC SCENARIO GLOBAL ECONOMY The financial year 2012-13 saw various challenges emanating from the Eurozone crisis, the US fiscal cliff and slowdown in the emerging economies. The economic activities remained subdued with diverging growth trajectories across different economies. However, there have been signs of revival with the economic indicators gaining traction in the US and improving customer sentiments in Eurozone. Emerging economies are also showing resilience. Amid adversities, China witnessed GDP growth of around 7.50% for two consecutive quarters of 2013. With the commitment of the governments of various countries to long-term growth, things are likely to improve going ahead.
Growth Projections (%) Region
2013
2014
Global Advanced economies USA Eurozone Emerging economies China
3.10 1.20 1.70 -0.60 5.00 7.80
3.80 2.10 2.70 0.90 5.40 7.70
(Source: IMF estimates, July 2013 Outlook)
INDIAN ECONOMY Indian economy had its share of domestic problems in addition to the uncertainty from the external environment. The country’s Gross Domestic Product (GDP) showed a modest growth of 5% in 2012-13, in comparison with 6.20% in 2011-12. Escalating inflation, Reserve Bank of India’s (RBI) stern outlook on interest rates and high fiscal deficit played spoilsport. Government has taken several reforms to tackle the deteriorating scenario. Such initiatives include Foreign Direct Investment (FDI) in retail sector, sugar decontrol, petrol and diesel price hikes and others. RBI has also changed its policy with repo rate being reduced thrice and cash reserve ratio once till June, 2013. These measures are likely to revive the economy from the dark shadows of economic slowdown.
SILVER LINING Inflation: Monthly wholesale inflation went below 5% in 2013-14 from the high levels of around 8% in the 2012-13. Fiscal Deficit: Fiscal deficit came down to 4.89% of GDP in 2012-13 from 5.76% of GDP in 2011-12. Going forward, it is estimated to reach 3% of GDP by 2016-17.
GEMS AND JEWELLERY INDUSTRY GLOBAL OVERVIEW Asia Pacific is the world’s largest jewellery market in terms of area globally, with India and China being the leading consumers of gold and jewellery processing and manufacturing hubs. However, the US jewellery market garners maximum revenue with half of its revenue pie being contributed by the diamond jewellery industry. The market size is projected to grow at a Compound
TARA JEWELS LIMITED
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Annual Growth Rate (CAGR) of 5% over coming five years to surpass USD 272 billion by 2018 (Source: the Global Gems and Jewellery Market Forecast & Opportunities, 2018 Report). Rising disposable incomes and changing lifestyles are set to take the global jewellery market growth northwards.
REGION-WISE GOLD JEWELLERY CONSUMPTION (%)
DIAMOND INDUSTRY MARKET The US The US, largest diamond market, worth USD 27 billion in 2012, has started recuperating from significant fall witnessed during 2008-09 financial crisis. It accounts for around 40% of the global diamond demand at present (Source: ‘The Global Diamond Industry’ – Bain & Company Report).
2012
28.90
GREATER CHINA
28.50
THE MIDDLE EAST
7.70
THE US
5.80
EUROPE (EX-CIS)
2.30
OTHER 26.80
China China is the second largest diamond market globally with revenues of USD 9 billion in 2012. The revenue grew by a CAGR of 10% during the last year owing to fast-expanding Chinese middle class and increasing individual wealth.
DIAMOND DEMAND 2020
2011
(%)
REGION-WISE GOLD JEWELLERY CONSUMPTION (%)
2011 2020
THE US
37
33
EUROPE
14 11
JAPAN
10 7
REST OF ASIA
10
12
2011
INDIA
31.40
GREATER CHINA
27.80
THE MIDDLE EAST
7.80
THE US
5.80 2.50
INDIA
9 12
EUROPE (EX-CIS)
CHINA
7 13
OTHER 24.70
OTHER
13 12
(Source: KPMG Quarterly Commodity Insights Bulletin, 2013)
GOLD INDUSTRY MARKET Annual gold consumption reached new heights in 2012, worth USD 236.4 billion. This is almost 15% higher than the average for previous five years.
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INDIA
ANNUAL REPORT 2012-13
(Source: ‘Gold Demand Trends Report’ by World Gold Council, 2013)
FINANCIAL STATEMENTS
BALANCE SHEET
AS AT MARCH 31, 2013
(`) As at March 31, 2013
As at March 31, 2012
1 2
245,774,820 4,556,143,253 4,801,918,073
180,000,000 2,540,302,345 2,720,302,345
3 4 5
62,709,486 35,286,225 97,995,711
69,395,145 9,271,553 33,713,577 112,380,275
6
2,499,091,167 2,822,153,526 112,692,043 73,086,491 5,507,023,227 10,406,937,011
2,502,234,094 3,401,651,807 116,721,350 114,671,140 6,135,278,391 8,967,961,011
721,732,070 30,459,943 8,521,830 169,474,546 8,750,667 128,276,188 1,067,215,244
745,142,432 12,094,016 1,365,000 41,808,704 35,669,186 836,079,338
5,759,924,368 2,376,008,268 1,073,817,730 118,283,741 11,687,660 9,339,721,767 TOTAL 10,406,937,011 Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.
5,145,606,751 2,644,773,240 188,748,654 106,375,126 46,377,902 8,131,881,673 8,967,961,011
Particulars
Note
EQUITY AND LIABILITIES
SHAREHOLDERS' FUNDS
Share capital Reserves and surplus
NON-CURRENT LIABILITIES
Long-term borrowings Deferred tax liabilities (Net) Long-term provisions
CURRENT LIABILITIES
Short-term borrowings Trade payables Other current liabilities Short-term provisions
7 8
TOTAL
ASSETS
NON-CURRENT ASSETS
Fixed assets Tangible assets Intangible assets Capital work-in-progress Non-current investments Deferred tax assets (Net) Long-term loans and advances
CURRENT ASSETS
Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets
As Per Our Attached Report of Even Date For C. B. Chhajed & Co. Chartered Accountants C. B. Chhajed Partner Place : Mumbai Date : May 16, 2013
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10 4 11
12 13 14 15 16
For and on Behalf of Board of Directors Rajeev Sheth Managing Director
Nalini Rajan Director
Amol Raje Company Secretary
TARA JEWELS LIMITED
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FINANCIAL STATEMENTS
STATEMENT OF PROFIT AND LOSS
FOR THE YEAR ENDED MARCH 31, 2013 (`) Particulars
Note
Year ended March 31, 2013
Year ended March 31, 2012
17 18
13,835,993,881 44,680,089 13,880,673,970
12,799,017,114 15,716,962 12,814,734,076
19 20 21 22 23 24 25
7,702,616,247 4,375,067,184 (520,924,818) 343,855,646 429,403,163 129,887,719 566,256,882 13,026,162,023 854,511,947
5,010,068,120 5,894,157,204 (333,645,772) 352,196,219 429,193,696 132,984,220 655,422,767 12,140,376,454 674,357,622
180,000,000 180,000,000 7,807,918 4,280,715 662,423,314
150,000,000 3,498,993 153,498,993 (1,397,579) 15,065,587 507,190,621
32.20 32.13
28.18 28.08
INCOME Revenue from operations Other income TOTAL REVENUE
EXPENSES Cost of materials consumed Purchases of stock-in-trade Changes in inventories of finished goods, work-in-process and Stock-in-Trade Employee benefits expense Finance costs Depreciation and amortization expense Other expenses TOTAL EXPENSES Profit before tax Tax expense Current tax Current tax Add: Minimum alternative tax credit utilised Net current tax Deferred tax Tax of earlier years Profit after tax Earning per equity share Basic Diluted
37
Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.
As Per Our Attached Report of Even Date For C. B. Chhajed & Co. Chartered Accountants C. B. Chhajed Partner Place : Mumbai Date : May 16, 2013
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ANNUAL REPORT 2012-13
For and on Behalf of Board of Directors Rajeev Sheth Managing Director Amol Raje Company Secretary
Nalini Rajan Director
TARA JEWELS LIMITED Registered Office Plot No. 122, 15th Road, Near IDBI Bank, MIDC, Andheri (East) Mumbai – 400 093, India Corporate Office Plot No. 29(P) & 30(P), Sub Plot A, SEEPZ SEZ, Andheri (East) Mumbai – 400 096, India www.tarajewels.in
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