Gitanjali Gems Limited
Annual Report 2008-09
Forward-looking statement
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 realised, although we believe we
have been prudent in our assumptions. The achievements of results is 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 statement,
whether as a result of new information, future events or otherwise.
Contents
01
Introduction
02
Financial Highlights
04
Chairman’s Message
06
Notice
08
Directors’ Report
18
Management Discussion & Analysis
24
Report on Corporate Governance
36
Standalone Financial Statements
68
Balance Sheet Abstract
69
Statement under section 212 (8)
71
Consolidated Financial Statements
97
Corporate Information
Annual Report 2008-09
Introduction
to Gitanjali
Group
A pioneer among major diamond and jewellery houses and
armed with over four decades of experience, Gitanjali Group
today is one of India’s leading integrated diamond and jewellery
retailing and manufacturing companies.
An authorised DTC Sightholder, it has a large business portfolio
spanning mines to retail shelves. Business model now integrates
all operations i.e. from rough diamond sourcing, cutting,
polishing, jewellery manufacture and distribution to jewellery
branding and retail, as well as global lifestyle brands, in India
and abroad.
Gitanjali Group hosts a portfolio of leading jewellery brands
such as Gili, Nakshatra, Asmi, Sangini, D’damas, Vivaaha and
Giantti among others. It offers jewellery in diverse styles:
traditional, international classic, and casual for consumers of all
age groups, tastes and budgets. With a manufacturing presence
in India, its operations span the globe from USA, UK, Belgium,
Italy and the Middle East to Thailand, South East Asia and
Japan.
A strong retail and distribution network is one of its core
strengths with more than 2000 outlets including 200 distributors,
94 exclusive stores and 63 franchisee stores. An impressive
design setup and state-of-the art manufacturing facilities has
helped the group to continually press ahead with innovations in
design and meet the market demand in India and abroad.
A futuristic group with a well configured expansion and
diversification strategy in place, Gitanjali today is a name we all
would love to associate with and believe in.
1
Financial
Highlights
Annual Report 2008-09
3
4
Gitanjali Gems Limited
Chairman’s
Message
Mehul C Choksi
The Indian gems and jewellery sector is going
through rough patches since 2008 with more
portion of gold jewellery manufactured in India is consumed in
the domestic market.
than 100,000 skilled and unskilled labourer
Global economic crisis posed as a challenge leading to rising
being laid off due to poor demand from the
situation in the United States, a key export market.
US market as it is reeling under the current
global economic downturn. Exports to the
finance cost, foreign currency fluctuations and a recessionary
Gitanjali maintained a turnover of a billion dollars and reported
a strong growth across its jewellery sales, led by a robust
largest market –the US declined by over 25
domestic demand, and a strong portfolio of brands that service
per cent in 2008. With increasing raw material
the Indian retail jewellery consumer. We also maintained a
costs and inflation stabilized , gold prices are
touching high records and people are left with
low disposable income to purchase the luxury
reasonable profit margin though impacted adversely by a
general slowdown in the global economy.
Our effective cost control and efficiency strategy coupled with
an integrated business model was successful in countering
goods.
the impact of the global slowdown which resulted in higher
Year 2008 has been exciting as well as challenging for Gitanjali.
carrying cost.
Exciting because of growth in domestic demand as a result of
growth in Indian retail scenario which has been increasing at the
rate of 30 to 40 percent annually and it is estimated at US$5ll
billion in 2008 and expected to rise to US$ 833 billion in 2013.
India is also one the largest consuming markets for jewellery
and is the largest consumer of gold in the world. A predominant
inventories, increased receivables and as a result, a higher
A well defined expansion and diversification strategy has
been driving growth at Gitanjali. We have diversified into the
lifestyle space as Gitanjali Lifestyle to focus on distribution of
luxury and lifestyle products. A 200 acres gems and jewellery
SEZ in Hyderabad is being developed. We plan to expand our
Annual Report 2008-09
5
A 200 acres gems and jewellery SEZ in Hyderabad is being developed. We plan to expand our retail
base from the present 2000 outlets to 5000 outlets in the coming years. Thus with an aim of further
integration within the jewellery value chain and to diversify our business model leveraging our key
strengths we are right on track to realize our goals.
retail base from the present 2000 outlets to 5000 outlets in the
joining me to congratulate the entire team at Gitanjali for having
coming years. Thus with an aim of further integration within
achieved such inspiring results despite of trying times.
the jewellery value chain and to diversify our business model
leveraging our key strengths we are right on track to realize our
goals.
With a portfolio of leading jewellery brands in India, we have
I also thank all our other stakeholders for standing by us in one
of the toughest years in world economic history and keeping
the faith on us. I am confident that we will give everyone a
reason to smile year after year.
successfully established multiple jewellery brands across all
products and customer segments. Most high recall brands
Warm Regards,
come from the Gitanjali stable such as – Nakshatra, Gili,
Mehul C Choksi
D’Damas, Asmi and Sangini amongst others.
We have taken effective steps to optimize production costs
further and improve profitability. At the same time, the balance
sheet is being made stronger through a gradual reduction in the
finance cost to preserve profitability and increase shareholder
value.
Gitanjali expects that all these strategies will ensure its profitable
growth in the near future.
Our human assets have contributed significantly to our growth.
It is through their dedication and extreme hard work that we are
able to overcome any situation. I would like all stakeholders in
6
Gitanjali Gems Limited
Notice
NOTICE IS HEREBY GIVEN that the Twenty–Third Annual General Meeting (AGM) of Gitanjali Gems Limited will be held on Saturday,
September 19, 2009 at 3.00 P.M. at M.C. Ghia Hall, 2nd Floor, Bhogilal Hargovindas Building, 18/20, K. Dubhash Marg, Kala Ghoda,
Mumbai – 400001 to transact the following business:
ORDINARY BUSINESS
1.
To receive, consider and adopt the Audited Balance Sheet as at March 31, 2009 and the Profit & Loss Account for the year ended on
that date and the reports of Board of Directors and Auditors thereon.
2.
To declare Dividend on Equity Shares.
3.
To appoint a Director in place of Mr. Dhanesh Sheth, who retires by rotation, and being eligible, offers himself for re-appointment.
4.
To appoint a Director in place of Mr. S. Krishnan, who retires by rotation, and being eligible, offers himself for re-appointment.
5.
To appoint auditors and fix their remuneration.
By order of the Board of Directors
Pankhuri Warange
Company Secretary
Place :Mumbai
Dated :28th July, 2009
Regd office:
801 / 802, Prasad Chambers
Opera House, Mumbai: 400 004
Notes:
A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD
OF HIMSELF ON A POLL ONLY AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. INSTRUMENT OF PROXIES, IN
ORDER TO BE EFFECTIVE, SHOULD BE DULY STAMPED, COMPLETED, SIGNED AND DEPOSITED AT THE REGISTERED OFFICE OF THE
COMPANY NOT LESS THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING.
a)
Corporate Members intending to send their authorized representatives to attend the meeting are requested to send a certified copy of
the Board Resolution authorizing their representatives to attend and vote at the AGM.
b) For convenience of the Members and for proper conduct of the meeting, members/ proxies are requested to bring copy of annual
report along with the Attendance Slip duly filled in and signed for attending the AGM.
c)
Members who hold shares in dematerialized form are requested to write their Client ID and DP ID numbers and those who hold shares
in physical form are requested to write their Folio Number in the Attendance Slip for attending the meeting, to facilitate identification
of membership at the meeting.
d) In case of joint holders attending the meeting, only such joint holder who is higher in the order of names will be entitled to vote.
e)
Members who would like to ask any questions on the accounts are requested to send their questions to the Company at least seven
days before the Annual General Meeting to enable the management to answer their queries at the meeting satisfactorily.
f)
The Register of Members and Share Transfer Books of the Company will remain closed from September 5, 2009 to September 19, 2009
(Both days inclusive).
g) If dividend on equity shares as recommended by the Board of Directors is declared at the AGM, payment of such dividend will be made
to those members whose names appear on the Register of Members as on September 5, 2009. In respect of shares held in electronic
form, dividend will be payable to the beneficial owners of shares as at the end of business hours on September 4, 2009 as per details
furnished by the Depositories for this purpose.
h)
Non-resident Indian members are requested to inform the Registrar Karvy Computershare Private Limited immediately on:
i)
Change in the residential status on return to India for permanent settlement.
ii)
The particulars of the bank accounts maintained in India with complete name, branch, and account type, account number and
address of the bank, if not furnished earlier.
i)
Members, who wish to avail the ECS facility, may provide the Company with ECS mandate for crediting the future dividend payment
directly to their respective bank accounts. The Company shall be able to coordinate with the bankers only on receipt of the necessary
information. The main information required therein is the type of account, name of the bank and the account number. It should be
signed by all the holders, as per the specimen signature recorded with the Company/Depository Participant.
j)
Members who hold shares in physical form are requested to notify any change in their addresses to the Company’s Registrar & Transfer
Agents, M/s Karvy Computershare Private Limited, Plot No 17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad - 500081 and to their
respective depository participants, in case shares are held in electronic mode.
Annual Report 2008-09
7
k)
Members who wish to obtain information on the Company or view the accounts for the financial year ended March 31, 2009, may visit
the Company’s corporate website www.gitanjaligroup.com.
l)
The Company has designated an exclusive email ID viz. investors@gitanjaligroup.com which would enable the investor to post their
grievances and monitor its redressal. Any member having any grievance can post the same to the said email address for its quick
redressal.
m) In order to avoid fraudulent encashment of dividend warrants, Members who hold shares in physical form are requested to intimate
the Company’s Registrar & Transfer agents, under the signature of the Sole/ First joint holder, the following information for enabling the
corresponding particulars to be incorporated on dividend warrants, as and when issued
i)
Name of the Sole/ First joint holder and the Folio Number (ii) Particulars of Bank Account, viz.
(a) Name of Bank
(b) Name of the Branch
(c) Complete address of the Bank with Pin Code Number
(d) Account type, whether Savings Account or Current Account
(e) Bank Account Number
n)
Members who hold shares in dematerialized form may kindly note that their bank details, as furnished by their Depositories to the
Company, will be printed on their dividend warrants as per the applicable regulations of the Depositories and the Company will not
entertain any direct request from such Members for deletion of or change in such Bank Account details. Further, instructions, if any,
already given by them in respect of shares held in physical form will not be automatically applicable to shares held in electronic form.
Members who wish to change such Bank Account details are therefore requested to advise their Depository Participants about such
change with complete details of Bank Account.
o) As per the provisions of the Companies Act, 1956, facility for making nominations is available to the shareholders in respect of the
shares held by them. The Nomination form 2B in duplicate prescribed by the Government can be obtained from the Company’s
Registrar & Transfer Agent, M/s Karvy Computershare Private Limited, Hyderabad.
p) Please note that in terms of SEBI circular No. MRD/ DoP/ Cir -05/2009 dated May 20, 2009, it is mandatory for the transferee(s) to submit
copies of their PAN card along with request for transfer of shares of listed Companies in physical form. Accordingly, all transferees are
requested to submit self – attested copies of their PAN card along with their request for transfer of shares of the Company in physical
form in compliance with the above circular, failing which their request for transfer of shares will be returned under objection.
q) The details pertaining to Directors liable to retire by rotation as required to be provided pursuant to Clause 49 of the Listing Agreement
with the Stock Exchanges are as follows:
Name of the Director
Date of Birth
Date of Appointment
Expertise in specific function area
Mr. Dhanesh Sheth
11.07.1957
01.08.1990
Expertise in sourcing and marketing of
rough and polished diamonds
Mr. S. Krishnan
13.12.1945
25.10.2005
Wide experience in banking, fund
management and capital market
operations
Qualification
List of outside Directorships held as on March 31, 2009
Bachelor of Commerce
1.Priyanka Gems Private Limited
M.Com, D..M.M, M.F.M
1. Rane Holdings Limited
2. Goa Glass Fibre Limited
3. Interactive Realities International
Private Limited
4. Interactive Entertainment Private
Limited
Chairman/Member of the Committee of the Board of
Directors of the Company as on March 31, 2009
1. Member of Allotment Committee
5. Sangaman Homes Private Limited
6. Rane Investments Limited
1. Member of Audit Committee
2. Member of shareholders / Investors
Grievances Committee
Chairman/Member of the Committee of the Board of
Directors of other Companies as on March 31, 2009
3. Member of Investment Committee
4. Member of Borrowing Committee
5. Member of Buy – Back Committee
NIL
1. Rane Holdings Limited - Chairman
of Audit Committee
2. Goa Glass Fibre Limited - Chairman
of Audit Committee
Number of shares held in the Company as on March 31,
2009
4876
NIL
Directors’ Report
Your Directors are pleased to present the 23rd Annual Report on the business and operations of the Company for the year ended
March 31, 2009.
FINaNCIal RESUlTS
(Rs. in millions)
2008-09
Sales & Other Income
Expenditure
Interest
Depreciation
Profit before Taxes
Provision for Income Tax
Provision for Deferred Tax
Provision for Fringe Benefit Tax
Net Profit for the Year
Profit brought forward from earlier Years
Amount available for Appropriation
Appropriations:
Proposed Dividend (including Dividend Tax)
Transfer to General Reserve
Balance Carried to Balance Sheet
2007-08
26,940.64
25,136.69
453.39
43.36
1,307.20
35.00
2.50
2.01
1,267.69
4,624.10
5,891.79
26,549.08
24,850.16
177.92
34.25
1,486.75
102.50
1.11
1.59
1,381.55
3,561.69
4,943.24
179.14
108.00
5,604.65
179.14
140.00
4,624.10
(1 Million=10 Lakhs)
Annual Report 2008-09
9
The Company is making conscientious efforts in addressing the large market opportunities that exist
in the Diamond Segment both in India and abroad. India, China, Israel and Belgium are the leading
players in the diamond cutting and polishing industry. India accounts for 60% of the global polished
diamonds in value terms, 80% in caratage and 90% in pieces.
TURNOVERS & PROFITS
BUSINESS
The Directors wish to inform you that during the financial year
A.DIAMOND SEGMENT
ended March 31, 2009 the sales and other income increased
from 26,549.08 Million to Rs. 26,940.64 Million. The net profit
before tax stood at Rs. 1,307.20 million as against Rs. 1,486.75
million in the previous year. The net profit after tax stood at Rs.
1,267.69 million as against Rs. 1,381.55 million in the previous
The Company is making conscientious efforts in addressing the
large market opportunities that exist in the Diamond Segment
both in India and abroad. India, China, Israel and Belgium are the
leading players in the diamond cutting and polishing industry.
year.
India accounts for 60% of the global polished diamonds in value
DIVIDEND
Exports of Gems and Jewellery are also on the upswing. Large
Your Directors recommended a dividend of Rs. 1.80 per
equity share for the year ended March 31, 2009. The payment
terms, 80% in caratage and 90% in pieces.
opportunities exist in exports by converting diamond into
Jewellery before exports.
of dividend is subject to the approval of shareholders at the
The Company has quality sourcing facilities accruing to
ensuing Annual General Meeting.
competitive prices and consistent market demand. Modern
processing facilities are located at Borivali-Mumbai & Rajiv
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 108 million to the
general reserve out of the total amount of Rs. 5,891.79 available
for appropriations as on March 31, 2009.
Gems Park (SEZ), Hyderabad. The Rajiv Park SEZ at Hyderabad
is on an expansion drive with 2 operational polishing units, a
workforce of 950 to 1,100 people and a monthly production of
85,000 to100,000 pieces.
The Company engages in an end-to-end diamond processing
BUY-BACK OF EQUITY SHARES
Subsequent to the approval of the Board in their meeting held on
December 19, 2008, the Company made public announcement
on April 9, 2009 for buying back its paid up equity shares of Rs.
10/- each not exceeding 12,000,000 equity shares from open
market through stock exchange mechanism in accordance with
chain which begins with Marking, Cleaving, Sawing, Cutting and
finally, Polishing.
Diamond export countries include the U.S., Hong Kong, Japan,
China, Middle East and Thailand.
B.JEWELLERY SEGMENT
applicable rules, regulations, legislations and enactments at
The Indian Jewellery market is thriving. What with societal and
a price not exceeding Rs. 120/- per equity share. In terms of
structural transformations, change in mindsets and spread of
approval given by Securities and Exchange Board of India, the
organized retail, brands have bombarded the Jewellery scene
Company will commence its by back of equity shares shortly.
with great aplomb. India remains to be one of the largest players
in jewellery retail with 90% of the business conducted through
CREDIT RATING
family jewelers. The Indian paradigm shifts such as from
Credit Analysis & Research Ltd (CARE), has enhanced the rating
investment jewellery to fashion jewellery, the traditional to the
assigned to the long term facilities of the Company from CARE
A (single A) to CARE A + (single A plus). This rating is applicable
for facilities having tenure of more than one year. Instruments
with this rating are considered to offer adequate safety for
timely servicing of debt obligations and carry low credit risk.
family jewelers to branded, gold to diamond studded jewellery,
fashionable and innovative, marriage season peak sales to
wear ability oriented all year spread, jewellery sold on labour
cost to jewellery sold on per piece cost etc. have greatly
favoured Indian players to spread their distribution networks,
innovate on designs and build successful global brands. The
Term facilities of the Company. This rating is applicable for
key attributes of a successful brand can be penned down to
the image, aesthetic designs, marketing and promotion and a
facilities having tenure up to one year. Instruments with this
strong distribution network. Increasing disposable incomes,
rating would have strong capacity for timely payment of short-
discretionary spending and Government measures have also
term debt obligations and carry lowest credit risk.
greatly influenced this segment.
Further, CARE has retained “PR 1” (PR One) rating for the Short
10
Gitanjali Gems Limited
The Company has carved out a resounding presence in the leading jewellery markets in the
world. Gitanjali’s sectoral presence in terms of value in both diamond and plain gold jewellery is
considerable.
The Company has carved out a resounding presence in the
Gold Expressions, Vivaaha, Glitterati, Maya Gold, Diya, Stefen
leading jewellery markets in the world. Gitanjali’s sectoral
Hafner, Shuddhi, Lucera, Hoop, Bella, Revv, Rivaaz, Giantti,
presence in terms of value in both diamond and plain gold
World of Solitaire, Me Solitaire, World of Silver, Bezel, Morellato
jewellery is considerable.
etc.
USA and India can be parallely considered to be the largest
D. SPECIAL ECONOMIC ZONE
catchment areas for the segment. 50% of the worldwide
diamond sales are made in USA. The market can be defined
to be fragmented with a number of scattered players, retailers
and national houses. Gitanjali has made strategic acquisitions
across USA, including Samuels and Rogers, and now has 150
Gitanjali has commissioned SEZ in Hyderabad for its operations.
The developments within the unit include, five facilities for
commercial production and a dedicated training center in
Hyderabad SEZ with the present capacity to train upto 1,500
stores USA, being expanded to 200 stores in the near future.
employees.
India promises a bright retail future for the jewellery segment
The unit provides extensive tax benefits and holidays namely, a
and for Gitanjali in particular. Gitanjali has a 60% share of the
mall space dedicated to its brands, An exceedingly strong
distribution channel which includes sales through network, to
department stores and reputed jewellery retailers and through
retail stores owned or managed by the group, ensures that
Gitanjali enjoys a protracted presence and visibility.
Jewellery manufacturing for exports is done through Gitanjali’s
various state of the art facilities. A strong product development
and design function supports the manufacturing. The process
followed for the manufacturing of diamond studded and other
jewellery flows from Designing, Model and mould making,
Waxing and wax setting, Casting, Sprue binding, Filling,
Polishing, Metal setting and Rodium Polish.
10 year income tax holiday and 5 year income tax breaks for all
firms within the system. World class in house facilities are being
provided for all leading diamond/Jewellery manufacturers.
E.LIFESTYLE
Gitanjali is expanding into the lifestyle segment after careful
research of the Indian market and leverage on their prior
experience of consumer behaviour. The Indian market is
poised for change as the disposable incomes and thereby
per capita consumption continue to increase. Discretionary
expenditure is on the rise and thereby, a substantial portion
of the population is ready for innovation in jewellery and lean
towards appropriate accessorizing. The luxury products include
watches, silverware, perfumes, luxury artefacts, apparels,
Export processing unit is located at Andheri, Mumbai with
leather goods, writing instruments, silver and other fashion
950 workers and 40,000 pieces a month. The domestic
jewellery and accessories.
manufacturing units are also located at Andheri and small
facilities are located at Surat in Gujarat. The Rajiv gems park
in Hyderabad is operational with 100 to 1,250 trainees,(being
scaled up to 2,000 to 2,500 in the next 6 months). A targeted
Based on the above, Gitanjali has embarked upon diverse
alliances with global players to bring unique and tailor made
designs on to the domestic market.
production of 10,000 to 12,000 pieces is to be achieved in the
The lifestyle wing has also taken initiatives to venture in to
next 6 months.
the area of media and entertainment. It intends to take up
production, marketing and advertisements of films, television
C. BRANDS
The Company directly and through subsidiaries have over the
decades established brands and reinvented designs to suit the
constantly changing eco-socio dynamics. Today, Gitanjali has a
brand for every reason, accruing from diverse inspirations and
catering to various targeted needs.
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,
serials, software and other entertainment related programs via
media like T.V., Radio, Newspaper, , Outdoor Hoardings and
other available advertising media. It also intends to take up
promotional activities via Music Launch, press conference, City
Visits of Artists, Mass scale events etc.
F. RETAIL EXPANSION
The Changing Socio – economic factors in India created a
clear opportunity in Lifestyle and Luxury markets in India.
These changes in retail environment has created opportunity
for establishment of modern retail formats. Keeping this in
Annual Report 2008-09
11
Gitanjali placed its jewellery brands right into the context of the new consumer’s shopping environment
of new and global branded personal goods and accessories. Gitanjali supported its brand with highvisibility positional branding in both mass and local up-market media.
view Gitanjali has embarked on an aggressive domestic retail
expansion plan.
Gitanjali’s notable innovation has been its dramatic breakthrough
from the confines of traditional distribution of jewellery and
launching of mass distribution through variety of channels. By
passing the old world of neighborhoods proprietary jewellery
stores, it brought it’s new world branded jewellery into the
world of super stores and department stores, dedicated
jewellery marts and chain stores supported by international
certifications of scientifically tested purity and authenticity.
Gitanjali is even marketing its branded jewellery directly by mail
order catalogue
Gitanjali placed its jewellery brands right into the context of
the new consumer’s shopping environment of new and global
branded personal goods and accessories. Gitanjali supported
its brand with high-visibility positional branding in both mass
and local up-market media. With this multi – tiered mobilization
of formats, Gitanjali is well placed to advance and realize its
vision of global leadership.
As on March 31, 2008 the company had a balance of US$
5.75 million from the net proceeds of FCCBs. During the
year, the Company has utilized US$ 3.75 million towards
overseas investments/ infrastructure. As on March 31,
2009 the Company had US$ 2.00 million in deposits
pending utilization.
3. Global Depository Receipts (GDRs)
The Company had a balance of US$ 94.30 million from its
GDR Proceeds as on April 1, 2008. During the year ended
March 31, 2009 the Company had utilized US$ 72.965
million towards investment in subsidiaries & General
Corporate purpose. As on March 31, 2009 the balance
net proceeds of GDR of US$ 21.335 million was kept as
deposits with overseas banks pending utilization.
SUBSIDIARIES
The Company had the following twenty seven (27) subsidiaries/
Step down Subsidiaries at the beginning of the year.
SHARE CAPITAL
During the year under review there was no change in capital
structure of the Company.
1.Mehul Impex Limited
2. Gitanjali Exports Corporation Limited
3. Shubalavnya Jewel Crafts Private Limited
FUND UTILISATION
4. Gili India Limited
1. Initial Public Offering (IPO)
2. Foreign Currency Convertible Bonds (FCCBs)
5. Fantasy Jewellery Private Limited (formerly known as
The Company had a balance of Rs. 1,050 millions from
its IPO proceeds as on April 1, 2008. During the year
ended on March 31, 2009 the Company utilized the IPO
Fantasy Diamond Cuts Pvt. Ltd )
6. Brightest Circle Jewellery Private Limited
7.D’Damas Jewellery (India) Private Limited
proceeds as follows:
(Rs. in Millions)
8.Asmi Jewellery India Private Limited (formerly known as
Desire Lifestyle Private Limited)
Investment in subsidiaries, joint
ventures & associates
Working Capital Requirement
Investment in setting up Diamond
Manufacturing facility in SEZ,
Hyderabad
General Corporate Purpose
Total
300.00
450.00
80.00
10.CRIA Jewellery Private Limited
11.Gitanjali Infratech Limited
12.Hyderabad Gems SEZ Limited
220.00
1,050.00
As on March 31, 2009 the Company fully utilized the
entire IPO Proceeds.
9. Gitanjali Lifestyle 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.Modali Jewels Private Limited
19.Mohar Jewels Limited
12
Gitanjali Gems Limited
The Company entered into Memorandum of Understanding (MOU) on August 25, 2008 with MMTC
Limited to form a joint venture Company with the primary objective of carrying on the business of
establishing, acquiring, developing, managing and maintaining jewellery showrooms in India.
20.Ivida Technologies Private Limited
to attach the Director’s Report,
21.Samuels Jewelers Inc.
and Loss Account of our Subsidiaries. We had applied to the
22.Gitanjali USA, Inc.
Balance Sheet and
Profit
Government of India for an exemption from such attachment
as we present the audited consolidated financial statements in
23.Rogers Ltd., Inc.
the annual report. We believe that the consolidated accounts
24.Gitanjali Ventures DMCC
presents a full and fair picture of the state of affairs and the
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 Watch Company Private Limited (Subsidiary of
Gitanjali Lifestyle Limited)
The following Nine subsidiaries/step-down subsidiaries were
setup/acquired during the year:
1. Gitanjali Retail Ventures Limited
2. * Modali Gems Private Limited
financial condition and are accepted globally. We will make
available the audited annual accounts and related information
of subsidiaries, where applicable, upon request by any of our
investors.
Further, as required, the brief financial data of the subsidiaries
has been furnished under the head “Statement pursuant to
section 212(8) of the Companies Act, 1956, related to Subsidiary
Companies” forming part of the Annual Report.
RELATED PARTY TRANSACTIONS
Related party transactions have been disclosed in the notes to
accounts.
3. Decent Securities & Finance Private Limited
FIXED DEPOSITS
4. Eureka Finstocks private Limited
During the year under review, your Company has neither invited
5. West Bengal SEZ Limited
nor accepted any fixed deposits from the public within the
6. **Gitanjali Holdings Limited
meaning of Section 58A of the Companies Act, 1956.
7. Hoop Retail Ventures Private Limited (Subsidiary of
DIRECTORS
Gitanjali Lifestyle Limited)
8. Kolkata Axis Malls limited (Subsidiary of Gitanjali Infratech
Limited)
9. MMTC Gitanjali Private Limited
Mr. Adrianus Voorn, Executive Director has tendered his
resignation from the board as a Director with effect from March
16, 2009. The Board recorded its appreciation for the valuable
services rendered by him during his tenure.
* Included in consolidated accounts as a joint venture company since
became a subsidiary only on March 30, 2009.
In accordance with the Articles of Association, Mr. Dhanesh
** Not included in the consolidated accounts since newly formed.
Sheth, Director retires by rotation and being eligible, offers
There has been no material change in the nature of business
of subsidiaries. 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 its
subsidiaries is attached. The consolidated financial statement
himself for re-appointment. Your Directors recommend his reappointment for your approval.
In accordance with the Articles of Association, Mr. S. Krishnan,
Director retires by rotation and being eligible, offers himself for
re-appointment. Your Directors recommend his re-appointment
for your approval.
has been prepared in accordance with accounting standard 21,
Brief resume of all the Directors on the Board has been given in
23 and 27 issued by Institute of Chartered Accountants of India
the Annual Report in “Corporate Governance Report” section.
and show the financial resources, assets, liabilities, income,
profits and other details of the Company, its subsidiaries and
AUDITORS & AUDITORS REPORT
Joint ventures.
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, the
PARTICULARS UNDER SECTION 212 OF THE COMPANIES ACT
As per section 212 of the Companies Act, 1956. we are required
present Statutory Auditors retire at the ensuing Annual General
Meeting and are eligible for re-appointment u/s 224 (1B) of the
Annual Report 2008-09
13
The Company’s wholly owned subsidiary, Gitanjali Lifestyle Limited has entered into an agreement for
70% stake in MobileNXT Teleservices Pvt. Ltd, a company engaged in the business of retailing mobile
phones, accessories, connections, operator services, value added services and after sale services.
Companies Act, 1956. The company proposes to re-appoint
(b)The Company entered into Memorandum of Understanding
M/s. Ford, Rhodes, Parks & Co., Chartered Accountants as
(MOU) on August 25, 2008 with MMTC Limited to form a
Statutory Auditors of the company from the conclusion of the
joint venture Company with the primary objective of carrying
ensuing Annual General Meeting up to the conclusion of the
on the business of establishing, acquiring, developing,
next Annual General Meeting of the company.
managing and maintaining jewellery showrooms in India.
The Audit Committee and the Board recommend the
appointments 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, 2009, 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, 2009 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, 2009 on a ‘going concern’
basis.
The above statements have been reviewed by the Audit
Committee at its meeting held on July 28, 2009.
SIGNIFICANT DEVELOPMENTS DURING THE YEAR
(a)The Company increased its stake in Gitanjali Exports
Corporation Limited (GECL) and by virtue of this increase,
GECL became a wholly owned subsidiary.
To pursue the objectives of MOU, MMTC Gitanjali Private
Limited (MGPL) was incorporated on October 31, 2008.
(c)The Company has acquired the balance Shares of ‘Modali
Gems Pvt. Ltd.’ (Modali) on March 30, 2009, earlier a Joint
Venture Company. By way of this acquisition, Modali has
become a wholly owned subsidiary of the Company.
(d)The Company increased its stake in Tri – Star Worldwide
LLC, through its wholly owned subsidiary Gitanjali USA, Inc.
By way of this acquisition, Tri-Star Worldwide LLC became a
wholly owned subsidiary of Gitanjali USA, Inc.
RECENT DEVELOPMENTS
The Company divested its stake in Ivida Technologies Pvt
Ltd, with a view to concentrating on its core business.
The Company, after having obtained CARE A+ [Single A
Plus] rating from Credit Analysis & Research Limited (CARE)
raised a sum of Rs. 125 Crores by way of issue of 1,250 12%
Secured Redeemable Non-Convertible Debentures (NCDs)
of Rs.1,000,000/- each, at par on private placement basis to
Life Insurance Corporation of India which is being listed on
BSE.
The Company’s wholly owned subsidiary, Gitanjali Lifestyle
Limited has entered into an agreement for 70% stake in
MobileNXT Teleservices Pvt. Ltd, a company engaged
in the business of retailing mobile phones, accessories,
connections, operator services, value added services and
after sale services.
The Company’s wholly owned subsidiary Gitanjali USA Inc.,
has acquired 51% stake in Diamlink Inc. Diamlink, a US
based Company is engaged in the business of diamond and
diamond studded jewellery.
14
Gitanjali Gems Limited
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.
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 suspense account till March 31, 2009 is as under.
Description
No.of Cases
No.of Shares
1.
Aggregate number of shareholders and the outstanding shares in the suspense account lying
as on April 1, 2008
48
1865
2.
Number of shareholders who approached the Company for transfer of shares from suspense
account during the year 2008-09
16
583
3.
Number of shareholders to whom shares were transferred from suspense account during the
year 2008-09
15
548
4.
aggregate number of shareholders and the outstanding shares in the suspense account lying
as on March 31, 2009
33
1317
All the unclaimed shares are being credited to a demat suspense account and 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
(Particulars of Employees) Rules, 1975, as amended, regarding
employees is given in Annexure ‘A’ forming part of this Report.
condition and results of operations of the Company for the
INFORMATION UNDER SECTION 217 (1)(e) OF COMPANIES
year under review as required under Clause 49 of the Listing
ACT, 1956 READ WITH COMPANIES (DISCLOSURE OF
Agreement with the Stock Exchanges, is given as a separate
PARTICULARS IN THE REPORT OF THE BOARD OF
statement forming part of this Annual Report.
DIRECTORS) RULES 1988
CORPORATE GOVERNANCE
A. CONSERVATION OF ENERGY
A Report on Corporate Governance for the financial year 2008-
The Disclosure of particulars with respect to conservation of
09 along with the Auditor’s Certificate on its compliance is
energy pursuant to Section 217 (1)(e) of the Companies Act,
provided in the corporate governance report section of this
1956 read with the Companies (Disclosure of Particulars in the
Annual Report.
Report of Board of Directors) Rules, 1988 are not applicable to
INDUSTRIAL RELATIONS
the Company. However, the Company makes its best efforts for
conservation of energy.
Employee relations continued to be cordial during the year. The
Company continued its thrust on Human Resource Development.
B. TECHNOLOGY ABSORPTION, ADAPTATIONS & INNOVATION
The Board wishes to place on record its sincere appreciation to
The Company has not carried out any specific research
all the employees in the Company for their sustained efforts
and development activities. The Company uses indigenous
and immense contribution to the high level of performance and
technology for its operations. Accordingly, the information
growth of the business during the year.
related to technology absorption, adaptation and innovation is
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section
217(2A) of the Companies Act, 1956, read with the Companies
reported to be NIL.
Annual Report 2008-09
15
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.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
We thank the Governments of various countries where we
(Rupees in Million)
2009
2008
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
Foreign Exchange Earnings:
of India, various bankers, various State Governments and other
FOB Value
Foreign Exchange Outgo:
Value of Imports on CIF basis
Expenditure in Foreign Exchange
14,170.31 14,104.96
Government Agencies for their support, and look forward to
11,156.88 12,400.20
18.72
8.14
On behalf of the Board of Directors
their continued support in the future.
ACKNOWLEDGEMENT
Mehul C. Choksi
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
Chairman & Managing Director
Place :Mumbai
Dated :28th July, 2009
work, solidarity, co-operation and support.
ANNEXURE ‘A’ TO THE DIRECTORS’ REPORT
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES
(PARTICULARS OF EMPLOYEES) RULES, 1975:
Details of persons employed for whole year :
Particulars
Mr. Mehul C. Choksi
Mr. Prashant Rege
Mr. G. K. Nair
Designation
Remuneration Received
Nature of employment
Other Terms and Conditions
Qualification
Experience
Chairman & Managing Director
Rs. 4,800,000/Non Rotational Director
As applicable
B.Com
31 years of experience in the diamond industry having an exposure
to the entire range of activities,
from buying roughs to jewellery
sales. He has been pioneer in corporatizing the jewellery industry in
India. He has been instrumental in
branding jewellery in India and has
launched several successful brands.
President
Rs. 3,630,222/Salaried Employee
As applicable
B.E. (Production)
19 years of experience in
gems and jewellery industry
with expertise in operational
manage¬ment.
Executive Director
Rs. 2,400,000/Non rotational Director
As applicable
B.Com and A.C.A
23 years of experience in various
operational and functional areas
including finance and accounting
functions, MIS, personnel and
administration. He has expertise in
macro level strategy formulation,
resource mobilization, corporate
planning & restructuring and
identifying global opportunities etc.
Date of
Commencement of
Employment
01/08/1994
19/11/2007
01/09/1999
Relationship with other
Director
N.A.
N.A.
N.A.
Age
Last Employment
% of Equity shares held in the
Company
50 years
Not Applicable
42.71%
40 years
Reliance Retail Ltd.
NIL
48 years
LKP Merchants Financing Ltd.
NIL
16
Gitanjali Gems Limited
Details of persons employed for part of the year with an average salary not less than Rs. 2 lakh per month
Particulars
Mr. Adrianus Voorn
Mr. Rahul Vira
Mr. V.R. Ganesan
Designation
Executive Director (Manufacturing)
Vice President (Retail &
Marketing)
Chief Financial Officer
Remuneration Received
Nature of employment
Other Terms and Conditions
Qualification
Experience
Rs. 3,039,957/Non Rotational Director
As applicable
H.T.S (Mechanical Engineer)
He is the 3rd Generation in the
diamond manufacturing activity
and has specialization in Fine cut
diamond and Belgium cut diamond.
17/04/1999
Rs. 800,000/Salaried Employee
As applicable
MBA - Marketing
Over 12 years of experience
in Retail and Marketing
Rs. 250,000/Salaried Employee
As applicable
B.Com, C.A.
Over 30 years experience in audit,
finance, accounts and corporate
planning.
01/12/2005
01/03/2009
N.A.
N.A.
N.A.
Age
Last Employment
64 years
Not Applicable
35 years
Idendesign Strategies Pvt.
Ltd. (Retail Consulting)
50 years
Technova Imaging Systems Private
Limited
% of Equity shares held in the
Company
NIL
NIL
NIL
Date of
Commencement of
Employment
Relationship with other
Director
Annual Report 2008-09
17
Gems and jewellery has been used by the Indian civilisation since ages for both its aesthetic as
well as investment purposes. Precious metals and stones have been an integral part of the Indian
civilisation since its recorded history. India has the distinction of being the first country to introduce
diamonds to the world. The country was also the first to mine, cut & polish and trade in diamonds.
Management
Discussion and
Analysis
INDUSTRY OVERVIEw
SECTOR STRUCTURE/maRkET SIZE
Gems and jewellery has been used by the Indian civilisation
The Indian gems and jewellery industry is one of the fastest
since ages for both its aesthetic as well as investment
growing segments in the Indian economy with an annual growth
purposes. Precious metals and stones have been an integral
rate of approximately 15 per cent.
part of the Indian civilisation since its recorded history. India has
the distinction of being the first country to introduce diamonds
to the world. The country was also the first to mine, cut & polish
and trade in diamonds.
The gems and jewellery industry can be classified into various
sub segments like diamonds, coloured stones, gold and silver
jewellery, pearls, etc. However, the two major segments in India
are gold and diamonds. India dominates the diamond processing
trade with 11 out of 12 diamonds being cut and polished in
The domestic market is estimated to be around US$ 16.1 billion
and the All India Gems and Jewellery Trade Federation, a nodal
agency representing 300,000 jewellers across the country,
expects it to grow to US$ 25.2 billion in two to three years.
The country is also the largest consumer of gold in the world.
It consumes nearly 800 tonnes of gold that accounts for 20 per
cent of world gold consumption, of which nearly 600 tonnes go
into making jewellery.
India. India also dominates the gold and silver consumption
India is also emerging as the world’s largest trading centre for
globally.. The industry holds prominent significance as it is a net
gold targeting US$ 16 billion by 2010. The industry has the best
exporter and provides employment to 1.3 million people directly
skilled manpower for designing and producing high volumes of
and indirectly.
exquisite jewellery at low labour costs.
The industry is characterised by highly unorganised trade,
The Indian consumer population is among the youngest in the
labour intensive operations, working capital & raw material
world with nearly two-thirds of the population below 35 years
intensiveness, price volatility of gold especially and export
of age. The proportion of working pollution has also been
orientation. Demand for gold and diamond jewellery is driven
consistently increasing along with the increasing per capita
by festivals and wedding, increasing affluent and middle class
income. This has resulted in increasing disposable income
population, increase in per capita spend on luxury items, etc.
and discretionary spending by Indian consumers leading into
a change in consumer behavior towards demand for branded
and luxury products.
Annual Report 2008-09
19
India is the largest diamond cutting and polishing centre in the world—the industry enjoys 60 per cent
value share, 82 per cent carat share and 95 per cent share of the world market in terms of number of
pieces. In other words, nearly 9 out of 10 diamonds sold worldwide are cut and polished in India. India
exported cut and polished diamonds worth US$ 13.02 billion in 2008-09.
Research indicates that the rural jewellery market in India is
diamonds sold worldwide are cut and polished in India. India
set to grow strongly despite the global economic meltdown.
exported cut and polished diamonds worth US$ 13.02 billion
Overall sales of jewellery dominated by the plain gold variety in
in 2008-09.
India through 2008 rose by 23 per cent over 2007 to Rs. 86,000
crores (US$ 17.6 billion) and rural areas accounted for Rs. 52,000
RETaIl SECTOR
crores (US$ 10.64 billion). Last year rural areas witnessed a 24
The Indian gems and jewellery market continues to be dominated
per cent growth in gold jewellery sales in terms of value.
by the unorganised sector. However, with the Indian consumer
The reasons attributed for the growth are: (I) The majority of
becoming more aware and quality conscious, branded jewellery
working women in rural India do not invest in stocks and shares
is becoming very popular and the market for branded jewellery
or use other investment instruments and they usually invest their
is likely to be worth US$ 2.2 billion by 2010.
surplus money in jewellery (ii) The rural families allocate fixed
Moreover, the government allows 51 per cent FDI in single
budgets to buy jewellery for weddings and they buy jewellery at
brand retail outlets, attracting both global and domestic players
this time irrespective of whether gold prices are high or not. (iii)
to this sector.
Rural markets are less affected by the global meltdown as they
are agriculture-based.
Research indicates that the jewellery and watches market is
pegged at about US$ 13.70 billion. It is expected to register a
dIamONdS
12 per cent growth by 2012, touching US$ 23.60 billion.
India is the largest diamond cutting and polishing centre in
The World Gold Council recently estimated the size of India’s
the world—the industry enjoys 60 per cent value share, 82 per
gold coin market at about US$ 2.11 billion.
cent carat share and 95 per cent share of the world market in
terms of number of pieces. In other words, nearly 9 out of 10
In order to increase the demand during recession, jewelers are
concentrating on newer designs in light weight jewellery.
laRGE maRkET OPPORTUNITY
Changing trends leading to increased consumerism in the Indian retail market:
YESTERDAY
TODAY
Unbranded, from Family Jeweller
Branded
Gold Jewellery
Diamond Studded Jewellery
Jewellery for Investment
Jewellery for Fashion
Traditional Ethnic and Chunky
designs
Fashionable, lightweight and
innovative designs
Marriage and Festival Season
as peak seasons
"Wearability" and Gifts spreading
the demand through the year
Jewellery sold on commodity
basis with labour charges
Jewellery being sold on a per
piece basis
20
Gitanjali Gems Limited
Gitanjali has combined a world class manufacturing discipline with a reach-enhancing retail strategy
to emerge as one of the most valuable jewellery conglomerates in the country today.
Exports
What started off as a sub-prime crisis in the US housing
mortgage sector has turned successively into a global banking
crisis, global financial crisis and global economic crisis – resulted
in Great Recession of 2008-09.
The government has lowered import duty on platinum and
has exempted rough coloured precious gems stones from
customs duty.
Rough, semi-precious stones are also exempt from import
duty.
However, India’s gem and jewellery exports grew by 1.45 per
Duty-free import of consumables for metals other than gold
cent to US$ 21.1 billion in the financial year 2008-09, compared
and platinum up to 2 per cent of freight on board (f.o.b) value
with US$ 20.8 billion in the previous fiscal year, according to
of exports.
figures released by the Gems and Jewellery Export promotion
Council (GJEPC). The growth in the sector was mainly driven
by gold jewellery exports, which rose nearly 24 per cent to US$
6.86 billion, the GJEPC said.
Exports grew annually despite falling 19 per cent in the second
half of the fiscal year, which was hit by the slow down in the
United States, the world’s biggest jewellery market. The SEEPZ
jewellery manufacturing hub in Mumbai, which is primarily
dependent on US, also saw a sharp decline of 21.61 per cent in
exports versus a year ago, GJEPC noted.
The modest overall export growth was partly offset by a fall in
India’s cut and polished diamond exports, which dropped 8.24
per cent to US$ 13.02 billion in the fiscal, from US$ 14.2 billion
a year earlier. In volume terms, polished diamond export fell 7
per cent to 40.2 million carats year on year.
Coloured gemstone exports decreased by 3.68 per cent in dollar
terms to US$ 265.95 million in 2008-09.
India’s biggest export destination during the year was the
United Arab Emirates (UAE), which accounted for 31 per cent
of all gems and jewellery exports, followed by Hong Kong at 25
per cent and the US at 20 per cent.
Duty-free import entitlement for rejected jewellery up to 2
per cent of f.o.b value of exports.
Import of gold of 18 carat and above under the replenishment
scheme.
Setting up of SEZs and gems and jewellery parks to promote
investment in the sector.
In May 2007, the government abolished import duty on
polished diamonds.
The government has raised the limit value of jewellery
parcels for export through foreign post office (including via
speed post) from US$ 50,000 to US$ 75,000 and the time
period for re-import of branded jewellery remaining unsold
has been extended from 180 days to 365 days.
The export of coloured gemstones on a consignment basis
has been allowed.
Company Overview
Gitanjali Gems Limited (GGL) is an integrated diamond and
jewellery manufacturer and retailer established in 1986. The
Company`s activities are spread across the entire value chain
The industry has undergone challenging times in the fiscal year
from sourcing and processing rough diamonds to manufacturing,
2008-09. The US slowdown in the second half of 2009 affected
branding and retailing gold and diamond jewellery.
the industry greatly and the gem and jewellery sector witnessed
a decrease in exports in the last two quarters of the year. In
spite of slowdown in the second half the industry achieved flat
growth and performed reasonably close to its target of US$
21.9 billion.
Government Initiatives
The Indian government has provided an impetus to the booming
gems and jewellery industry with favourable foreign trade
policies:
100 per cent foreign direct investment (FDI) in gems and
jewellery through the automatic route is allowed.
Gitanjali Gems Ltd., part of the Gitanjali Group of Companies
promoted by Mr. Mehul Choksi, is one of the largest and fastest
growing diamond and jewellery businesses in the world. The
Group has been the pioneers of the jewellery retail revolution,
with several of their brands enjoying strong equity amongst
consumers, including Gili, Asmi, D’Damas, Maya & Sangini.
Gitanjali’s brands are thus, the most visible jewellery brands in
the Indian market today.
Gitanjali has combined a world class manufacturing discipline
with a reach-enhancing retail strategy to emerge as one of the
most valuable jewellery conglomerates in the country today.
Annual Report 2008-09
21
Gitanjali has ensured a strong manufacturing base through a contemporary saleable manufacturing
setup. It owns seven factories in India across diamond and jewellery manufacturing. A strong product
development and design function supports the manufacturing.
Gitanjali has four decades of experience, being one of the
Gitanjali Group has highly modernised diamond cutting and
earliest diamond houses in India. The Company was accorded a
polishing facilities at Mumbai, Surat and Hyderabad and a
Sightholder status by the Diamond Trading Company Ltd (now
marketing network spread across Europe, Hong Kong, USA and
known as De Beers UK Ltd)., London as early as 1968, making it
Japan.
amongst the first Sightholders in this part of the world. Having
received over 50 National and Council awards from the Ministry
of Commerce for outstanding exports, it is today one of the
largest diamond exporting companies in India. Presently the
Being a DTC Sightholder, a diamond and jewellery manufacturer,
the Group has strategically positioned itself to manufacture and
promote diamonds as well as studded jewellery all the way to
the retail level.
Integrated Business Model
Business model of Gitanjali Group now integrates all operation from rough diamond sourcing, cutting, polishing and distribution, and
jewellery manufacture, to jewellery branding and retail, as well as global lifestyle brands, in India and abroad.
Export
Sourcing rough &
uncut diamonds
Diamond
Processing
Manufacturing Gold Jewellery
Diamond Jewellery
Processing
Sourcing
Export
Jewellery
Branding
Manufacturing
International Retail
Domestic Retail
Branding & Retailing
Prestigious sight holder
position
Four modern processing
facilities
Three state-of-the-art
functional facilities
Pioneers of branded
jewellery in India
Enables quality supply at
efficient prices
Additional facilities
commence post SEZ
completion
More upcoming facilities
in SEZ
Excellent set of brands
Exhaustive sales and
distribution networks
SEZ completion will assist both processing and manufacturing
functions of the Company
Gitanjali boasts of a strong retail and distribution network
Strong design and manufacturing
Gitanjali has ensured a strong manufacturing base through a
contemporary saleable manufacturing setup. It owns seven
factories in India across diamond and jewellery manufacturing.
A strong product development and design function supports
the manufacturing.
operational. Targeted production of 10,000 to 12,000 pieces is
to be achieved here in the next six months.
with a monthly target of 85,000 to 1,00,000 pieces.
distributorship:-
infrastructure
Multi-channel distributor network can be divided into three
main heads
along
with
distributor network for each brand to sell to jewellery retailers
across the country.
2) Sales to department stores and reputed jewellery retailers:
Besides production two polishing factories are also operational
retail
distributors, exclusive stores and franchisees.
1) Sales through exclusive distributor network: Exclusive
State-of-the-art Rajiv Gems Park SEZ in Hyderabad is now
Strong
with pan-India presence of more than 2,000 outlets including
multi-channel
This includes large jewellery stores, shopping malls and
department stores such as Shoppers Stop, Globus, Westside
and Gold Souk.
3) Sales through retail stores owned/managed by the group:
The retail operations of the group are classified into three
22
Gitanjali Gems Limited
Gitanjali Group boasts of a strong portfolio of brands which cover products ranging from loose
diamonds, diamond and other stone-studded jewellery in gold, silver and combinations, as well as
high-end watches, jewellery-watches, luxury artefacts and accessories.
different formats i.e. retail stores owned by the group, shop
2,000 outlets to almost 5,000 outlets in the next few years. The
in shop outlets in department stores and franchisee stores.
Company ,which is increasingly focusing on its retail business,
Strong portfolio of Brands
Gitanjali Group boasts of a strong portfolio of brands which
cover products ranging from loose diamonds, diamond and
other stone-studded jewellery in gold, silver and combinations,
is likely to display premium jewellery brands besides its in-store
labels in the new outlets.
Acquisitions
including
Samuels,
Rogers
and
Tri-Star
demonstrating a cohesive US strategy is to continue.
as well as high-end watches, jewellery-watches, luxury artefacts
Gitanjali has entered into a JV with state-run trading agency -
and accessories.
MMTC Limited . It has plans to open another set of Jewellery
Some of the most notable brands of this group are:
1) Gili - As India’s first jewellery brand Gili pioneered the concept
of extempore jewellery gifting. Gili range includes diamond
stores in India over the next 2 years as a part of the JV.
Gitanjali’s foray into lifestyle products has been done with a view
to leverage existing customer base and domain knowledge
studded branded jewellery at reasonable prices. With a pan-
Hyderabad SEZ is being developed to a world class
India retail presence of approximately 150 outlets Gili was
manufacturing facility.
awarded Superbrand status in 2004 by ICSC.
2) Nakshatra - This includes entire range including bridal
jewellery. Nakshatra was awarded Superbrand in 2004 by
ICSC. It is India’s most reputed diamond jewellery brands.
3) Asmi - The Asmi Diamond Jewellery Collection is designed
and carefully crafted to complement the individuality of the
modern woman, her drive, her attitude to work and life;
its signature style, a complex of curves and lines around
a central stone of 5 points and above. Contemporary,
distinctive, affordable at multiple price points.
Human Resources
The Company believes investing in people through creating
an environment where people are valued as individuals and
are given equal opportunities for achieving professional and
personal goals.
The Company’s focus on development of Special Economic
Zones includes huge employment opportunities and the
Company already initiated through setting up training centre in
SEZ Hyderabad which has a capacity to train more than 1,500
workers in diamond and jewellery manufacturing.
4) D’damas - Product of a joint venture between Gitanjali Gems
and the Dubai based D’damas Group, the D’DAMAS brand
combines international quality with a distinctively Indian
aesthetic. It is one of India’s most popular jewellery brands
today with a presence in over 130 towns and cities.
5) Vivaaha - Vivaaha collection offers plain gold as well as
diamond jewellery for weddings.
Financial Review
Gitanjali Gems consolidated results of operations for the year
ended March 31, 2009 include business and operations of the
various subsidiaries/joint ventures.
The company has achieved overall sales growth for the year
ended March 31, 2009 of about 5% compared to last year.
6) Maya - MAYA is the brand from the Gitanjali Gold Collection
The gross revenue from diamond segment has decreased by
specifically aimed at the Indian wedding market and similar
10% whereas the gross revenue from jewellery segment has
festivities and traditional occasions for gift-giving, especially
substantially increased by 24% and thus the ratio of diamond
from parents to daughters.
and jewellery in the sales mix accordingly has improved more
7) Giantti - Giantti is a high end jewellery brand sold through
signature stores.
Expansion Strategy
favorably towards jewellery from 55:45 last year to 47:53 for the
year ended March 31, 2009.
Performance
Income
Gitanjali Group has a well defined expansion strategy for retail
through organic, inorganic and partnership routes.
Gitanjali Group plans to expand its retail base from the present
The company has recorded a total income of Rs.50,911.12
million (Previous year Rs.48,362.32 million) for the year
ended March 31, 2009, primarily due to income from sale
Annual Report 2008-09
23
The company has recorded a total income of Rs.50,911.12 million (Previous year Rs.48,362.32 million)
for the year ended March 31, 2009, primarily due to income from sale of diamonds Rs.23,949.79 million
and sale of jewellery products Rs.26,938.97 million which collectively amounted to Rs.50,888.76
million (Previous Year Rs.48,317.36 million).
of diamonds Rs.23,949.79 million and sale of jewellery
of Rs.1,584.57 million (Previous Year Rs.1,949.98 million) for
products Rs.26,938.97 million which collectively amounted
the year ended March 31, 2009.
to Rs.50,888.76 million (Previous Year Rs.48,317.36 million).
The company also received other income of Rs.22.36 million
(Previous Year Rs.44.96 million) primarily from dividends,
Taxes
labour / job work charges and other miscellaneous income.
benefit tax liabilities and deferred tax liabilities. For the year
Expenditure
of Rs.129.61 million (Previous Year Rs.204.42 million), fringe
The company has recorded a total expenditure (excluding
benefit tax of Rs.10.94 million (Previous Year Rs.9.60 million)
depreciation / amortization and interest) of Rs.48,012.19
and deferred tax asset of Rs.108.77 million (Previous Year
million (Previous Year Rs. 45,762.95 million) for the year
Rs.1.42 million).
ended March 31, 2009 the company had current tax liabilities
ended March 31, 2009.
Major expenditure can further be subdivided into:
Cost of goods sold of Rs.42,382.69 million (Previous
Net profit
from associates of Rs.46.96 million (Previous Year Rs.143.09
increase in business volume.
million) and Nil (Previous Year Rs.12.64million) respectively,
Due to the increased number of employees on account
the company recorded a net profit for the year ended March
of expansion of existing business, further acquisition
31, 2009 of Rs.1,505.83 million (Previous Year Rs. 1,606.93
and consolidation, the company recorded staff costs of
million). Of the recorded net profit as above, the company
Rs.2,165.79 million (Previous Year Rs.1,519.96 million)
has transferred Rs.108.00 million (Previous Year Rs.140.00
primarily comprising of salary, bonus and allowances
million) to General Reserve.
paid to employees as well as costs incurred in connection
with staff welfare.
The company also recorded other expenditure of
Rs.3,463.71 million (Previous Year Rs.2,573.98 million).
This increase is on account of increase in administrative
expenses and selling and distribution expenses.
Depreciation & Amortization
For the year ended March 31, 2009 the company has incurred
depreciation charges of Rs.335.96 million (Previous Year Rs.
200.97 million) primarily due to expansion of business as
well as consolidation of the existing business.
Interest
For the year ended March 31, 2009, the company has
incurred interest costs of Rs.978.40 million (Previous Year
Rs.448.42 million) paid to banks and financial institutions
towards working capital facilities that consist primarily
of packing credit and post shipment credit. This increase
was mainly due to higher borrowing and increased cost of
funding.
Net profit before taxes
Due to the reasons discussed above and on account of
adjustment in respect of minority interest and share of profits
Year Rs.41,669.01 million.) This increase is on account of
Provision for taxes includes current tax liabilities, fringe
Due to the reasons discussed above, the company has
recorded a net profit before taxes and extraordinary items
Share Capital
At present, the company has only one class of share i.e.
Equity Share of face value of Rs.10/- each. As on 31st
March, 2009, the issued, subscribed and paid up capital was
Rs.850.63 million divided into 85,062,883 equity shares of
Rs.10/- each.
Report on
Corporate
Governance
COMPANY’S
PHIlOSOPHY
GOVERNANCE
ON
CORPORATE
Management is the trustee of the shareholders’ capital and
not the owner.
The Company’s philosophy of Corporate Governance is based
The Company has complied in all material respects with the
on preserving core values and ethical business conduct,
requirements of Corporate Governance in terms of clause 49 of
commitment to maximize shareholder value on a continuous
the Listing Agreement executed with the Stock Exchanges. The
basis while looking after the welfare of all the stakeholders
details of compliance are as follows:
which is primary responsibility of the Board of Directors,
Management and employees.
BOARD OF DIRECTORS
The Compliance of clause 49 of the listing agreement has
COmPOSITION OF THE BOaRd
undoubtedly raised the standard of Corporate Governance in
India. However, regulatory directives and enforcement will not
be sufficient to create a best in class transparent organisation.
Our corporate governance philosophy is based on the following
principles:
Satisfy the spirit of the law and not just the letter of the law.
Be transparent and maintain a high degree of disclosure
levels.
Continuously innovate and adapt the Corporate Governance
Practices so as to meet new demands and tap new
opportunities.
Comply with the laws in all the countries in which we
operate.
As of March 31, 2009 the Company’s Board comprises
Seven Directors, including four independent Directors. The
composition of Board is in conformity with clause 49 of the
Listing Agreement which stipulates that 50 percent of the
Board should comprise of non-executive directors and where
the Chairman of the Board is Executive Director, at least half of
the Board should comprise of Independent Directors.
Annual Report 2008-09
25
The Company’s philosophy of Corporate Governance is based on preserving core values and ethical
business conduct, commitment to maximize shareholder value on a continuous basis while looking
after the welfare of all the stakeholders which is primary responsibility of the Board of Directors,
Management and employees.
The composition of and the category of Directors on the Board of the Company were as under:
Category
Name
Designation
Promoter Director
Executive Director
Non – Executive Non-Independent Director
Independent Directors
Mr. Mehul C. Choksi
Mr. G. K. Nair
Mr. Dhanesh V. Sheth
Mr. Prakash D. Shah
Mr. Sujal A. Shah
Mr. S. Krishnan
Mr. Suresh Chukkapalli
Chairman & Managing Director
Executive Director
Director
Director
Director
Director
Director
The Independent Directors are eminent professionals with wide range of knowledge and experience in various spheres of trade, industry,
finance and law. A brief profile of all the Board members are as under:MEHUL C. CHOKSI (50)
SUJAL A. SHAH (41)
A commerce graduate has been associated with the gems
A qualified Chartered Accountant has a post qualification
and jewellery industry for over three decades. He has wide
experience of 18 years. He has his own practicing firm SSPA
experience in the diamond industry having an exposure to the
& Co., Chartered Accountants. His main areas of practice are
entire range of activities, from buying roughs to jewellery sales.
mergers & acquisitions, restructuring of companies, valuation
He has been instrumental in branding jewellery in India and has
of business / shares, due diligence review, etc.
launched several successful brands like GILI, D’ Damas, and
Giantti. He plays a crucial role in deciding the positioning for
PRAKASH D. SHAH (55)
brands such as Nakshatra and Asmi. Mr. Choksi has also been
A Commerce and Law graduate with over 25 years of experience.
a pioneer in corporatising the jewellery industry in India. He
Mr. Prakash Shah is a practicing Advocate at the Bombay
steers the group vision and strategy with his deep knowledge
High Court. He is the proprietor of PDS Legal, a solicitors
and foresight.
and advocates firm. He has tremendous breadth of specialist
G.K.NAIR (48)
experience in advising on complex legal issues in the fields of
Banking & Finance, Conveyance, Direct and Indirect Taxation,
A commerce graduate and a Chartered Accountant, has been
Intellectual Property and General Commercial Litigation such as
with Gitanjali Group for over 10 years and has been on the
Bank Suits, Summary Suits, Short Cause and Long Cause Suits
Board since 1999. He oversees resource mobilization, corporate
etc.
planning, restructuring of various group companies and heading
the corporate finance team. He is responsible for the finance
S. KRISHNAN (63)
and accounting functions, MIS, personnel and administration.
A Masters Degree holder in commerce besides being a D.M.M.,
He is also responsible for shaping the corporate strategy and
M.F.M., he is a leading professional in the financial services
identifying global opportunities for the company in assisting the
industry and has vast experience in banking, fund management
macro level strategy formulation in the company and he has
and capital market operations. He has held top management
a wide experience in various operational and functional areas
positions in TAIB Bank E.C., TAIB Securities, Everest Fund,
having worked in the non-banking finance industry for over 12
Aldercrest Trading Limited and First Bank with Professional
years with LKP Merchant Financing Ltd.
experience in USA, Europe, Middle East, Africa and India.
DHANESH V. SHETH (52)
SURESH CHUKKAPALLI (49)
A Commerce Graduate has been associated with Gitanjali for
A Bachelor in Mechanical Engineering and leading industrialist
the past two decades, having been a Director for almost 19
with administrative and technical expertise in infrastructure
years. He advises the company on its marketing operations,
industry. He is a Director and Founder Promoter of the Lanco
the buying and selling of rough diamonds and other aspects of
Group of Companies whose activities spread across Power,
Business Development.
26
Gitanjali Gems Limited
Conduct of Board Proceedings
Steel Cement, Construction and Software Development. He
is a Director on Board of Sahara Asset Management Company
The day to day matters concerning the business is conducted
Pvt. Ltd. and is the Managing Trustee of Lanco Institute of
by the Executives of the Company under the direction of Whole
General Humanitarian Trust – Charitable organization involved in
Time Directors with the supervision of the Board. The Board
supporting humanitarian causes. Mr. Chukkapalli is a Member
holds its meetings at regular intervals to review and discuss the
of International Association of Business Leaders. He was a
performance of the Company, its future plans, strategies and
former member of Confederation of Indian Industry (Southern
other pertinent issues relating to the Company.
Region), heading important committee in the areas of Power,
HR and Information Technology. He has acted as president of
Automobile Association of India (Guntur District) and served as
Board Agenda
member of Advisory Committee of Bank of Baroda, member of
Meetings are governed by a structured agenda. All agenda
Zonal Railway Users Consultative Committee and Central Board
items are backed by comprehensive background information
of Film Certification.
to enable the Board to take informed decisions. The Board
Members are presented in advance with the detailed agenda in
respect of all Board meetings.
Attendance of the Directors at Board Meetings and at previous AGM
Name of the Director
Status
No. of Board meetings No of Board Meetings
held during the tenure attended
of Directors
Attendance at last
AGM
Mr. Mehul C. Choksi
C.M.D.
6
6
Yes
Mr. G. K. Nair
*Mr. Adrianus B. Voorn
E.D.
E.D.
6
6
6
1
Yes
No
Mr. Dhanesh V. Sheth
Mr. Prakash D. Shah
Mr. Sujal A. Shah
Mr. S. Krishnan
Mr. Suresh Chukkapalli
N.E.D.
I. N.E.D.
I. N.E.D.
I. N.E.D.
I. N.E.D.
6
6
6
6
6
6
5
6
6
1
Yes
Yes
Yes
Yes
No
C.M.D.
E.D.
N.E.D.
I. N.E.D.
Chairman & Managing Director
Executive Director
Non Executive Director
Independent Non Executive Director
Notes:
Board Meetings held during the year 2008-2009
a. None of the Directors is related to any other Director.
b. None of the Directors received any loans and advances from the Company
during the year.
c. Mr. Adrianus B. Voorn, resigned from the board w.e.f March 16, 2009
The Board held six meetings during the year. The meetings
of the Board of Directors are scheduled well in advance. The
intervening period between two Board meetings was well within
the maximum period of four months prescribed under Cause 49
Annual Report 2008-09
27
of the Listing Agreement. The details of Board Meetings are as
3.Audit committee
under:
The Audit Committee of the Board, inter alia, provides
Date
Board
Strength
May 28, 2008
June 30, 2008
July 31, 2008
October 25 ,2008
December 19, 2008
January 31, 2009
8
8
8
8
8
8
No. of
Directors
present
reassurance to the Board on the existence of an effective
internal control environment.
The terms of reference of the Committee are as per the
guidelines set out in Clause 49 of the listing agreement with the
5
7
7
6
6
6
Stock Exchanges and Section 292A of the Companies Act, 1956
and it inter alia includes the following
To review compliance with internal control systems;
To hold periodic discussions with the Statutory Auditors
of the Company concerning the accounts of the Company,
internal control systems, scope of audit and observations of
The Board in addition to the review of the corporate plans,
the Auditors;
strategies and financials, takes periodical review of compliance
To review the quarterly, half-yearly and annual financial
reports of all laws applicable to the Company.
results of the Company before submission to the Board;
Other Directorships and Committee Membership
To make recommendations to the Board on any matter
relating to the financial management of the Company;
None of the Directors holds Directorships in more than fifteen
Public Limited Companies nor is any Director, Chairman of more
Recommending to the Board, the appointment, re-
than 5 Committees. The details of Directorship and Committee
appointment and if required, the replacement and removal
Membership & Chairmanship held by the Directors as on March
of Statutory Auditors and fixation of Audit fees.
31, 2009 are as follows:
Name of the Director
Mr. Mehul C. Choksi
Mr. G. K. Nair
Mr. Dhanesh V. Sheth
Mr. Prakash D. Shah
Mr. Sujal A. Shah
Mr. S. Krishnan
Mr. Suresh Chukkapalli
Composition
No. of other
Directorships
(Including
GGL)
15
15
1
3
4
4
10
Committee
(Including
GGL)
Committee
(Including
GGL)
Member
2
2
1
1
–
1
–
Chairman
–
1
–
2
3
2
–
Krishnan, Mr. Prakash D. Shah, all Independent Directors and
Mr. G. K. Nair, Executive Director.
Notes:
1. The Directorships held by Directors as mentioned above, do
not include Alternate Directorships, Directorships of Foreign
Companies, Section 25 Companies and Private Limited
The Audit Committee comprises of Mr. Sujal A. Shah, Mr. S.
Mr. Sujal A. Shah is the Chairman of the Committee. Ms.
Pankhuri Warange, Company Secretary is Secretary of the
Committee. The Composition of the Audit Committee meets
the requirements of Section 292A of the Companies Act,
1956 and Clause 49 of the Listing Agreement with the Stock
Exchanges. All the members of the Audit Committee are
financially literate.
Meetings and Attendance
During the financial year ended March 31, 2009, six meetings
of the committee were held. The attendance of committee
members at the meetings was as follows:
Name of Member
Status
No. of
Meetings
Held
No. of
Meetings
Attended
Mr. Sujal A. Shah
Mr. G.K. Nair
Mr. Prakash D. Shah
Mr. S. Krishnan
Chairman
Member
Member
Member
6
6
6
6
6
6
5
6
companies.
2. In accordance with Clause 49 of the Listing Agreement,
Membership/ Chairmanship of only the Audit Committees
and Shareholders’/ Investors’ Grievance Committees of all
Public Limited Companies have been considered.
28
Gitanjali Gems Limited
4. Shareholders’ / Investors’ Grievance Committee
5. Remuneration committee
The Committee looks into the redressal of shareholders’/
The Remuneration Committee recommends the remuneration
investors’ complaints, issue of duplicate/consolidated share
payable to Executive Directors in accordance with section 198,
certificates, allotment and listing of securities and review of cases
269, 310 and 311 read with schedule XIII of the Companies Act,
for refusal of transfer/ transmission of shares and reference to
1956 and any increments thereof with in the maximum limits as
statutory and regulatory authorities. The Committee oversees
approved by the shareholders from time to time.
the performance of the Registrars and Transfer Agents of the
Composition
Company and recommends measures for overall improvement
in the quality of investor services.
Shah and Mr. Prakash D. Shah, both Independent Directors.
Composition
The
Shareholders’/
Investors’
Grievance
Committee
Committee.
Mr. G .K. Nair, Executive Director, and Mr. Dhanesh V. Sheth,
Non-Executive Director.
Mr. Sujal A. Shah is Chairman of the Committee. Ms.
Pankhuri Warange, Company Secretary is Secretary of the
comprises of Mr. Prakash D. Shah, Independent Director,
The Remuneration Committee comprises of Mr. Sujal A.
Remuneration of Non-Executive Directors and their
shareholding
Mr. Prakash D. Shah is Chairman of the Committee. Ms.
Pankhuri Warange, Company Secretary is Secretary of the
Name of the Director
Sitting Fees Paid (Rs.)
Committee.
Meetings and Attendance
Board
Audit
Meeting Committee
During the financial year ended March 31, 2009, twenty
Mr. Dhanesh V. Sheth
Mr. Prakash D. Shah
Mr. Sujal A. Shah
Mr. S. Krishnan
Mr. Suresh Chukkapalli
three meetings of the committee were held. The attendance
of Committee members at the meetings was as follows:Name of Member
Status
No. of
No. of
Meetings Meetings
Held
Attended
Mr. Prakash D. Shah
Mr. G.K.Nair
Mr. Dhanesh V. Sheth
Chairman
Member
Member
23
23
23
No. of
Shares
held
Nil
50,000/60,000/60,000/10,000/-
Nil
50,000/60,000/60,000/Nil
4876
Nil
3000
Nil
Nil
Apart from the sitting fees that are paid to the non-executive
directors for attending the board / committee meetings,
23
22
23
no other fees / commission were paid during the year. No
significant material transactions have been made with the
Non-Executive Directors vis-à-vis the Company.
Status of Shareholders’/Investors’ Complaints
Particulars
No. of
Complaints
Complaints pending as on April 1, 2008
Complaints received during the period April
1, 2008 to March 31, 2009
Nil
96
Complaints disposed off during the period
April 1, 2008 to March 31, 2009
96
Complaints outstanding as on March 31,
2009
Nil
Remuneration
of
Executive
Directors
and
their
shareholding
Name of the Directors
Mr. Mehul C. Choksi
Mr. G. K. Nair
Mr. Adrianus B. Voorn
Remuneration Number of
paid shares held
Rs. 48,00,000/- 36326500
Rs. 24,00,000/- Nil
Rs. 30,39,957/- Nil
All decisions relating to the remuneration of Directors are
taken by the Remuneration Committee in accordance,
with the approval received from Board as well as the
members of the Company.
Annual Report 2008-09
The Directors’ remuneration as mentioned above consists
of fixed salary component payable to them. There is no
29
6. Name, designation, address of the compliance
officer
performance linked incentives payable to directors for
Name
: Ms. Pankhuri Warange
achievement of targets.
Designation
: Company Secretary
Address
: B Wing, 1st Floor, Office No. 6 Laxmi Towers,
During 2008– 09, the Company did not issue any stock
options neither did it advance any loans to any of its
Bandra Kurla Complex Bandra (East), Mumbai-
Directors.
400051
Tel : +91- 022 – 40102000/01
Fax : +91- 022 - 40102042
Email
: investors@gitanjaligroup.com
7. General Body Meetings
(A) Annual General Meetings:
Location, time and date where the three immediately preceding Annual General Meetings of the Company were held are given
below:
Financial
Year
Day & Date
Time
Venue
Special Resolutions passed
2005-06
September 21, 2006
2.30 p.m.
M.C.Ghia Hall, 2nd Floor, Bhogilal Hargovindas Building, 18/20, K. Dubhash
Marg, Kala Ghoda, Mumbai-400001
1.Authority to the Board of Directors to
create/ offer/issue/ allot FCCBs, GDRs,
ADRs convertible into equity shares at
the option of the Company.
2.Remuneration payable to Managing
Director/ Whole time Directors/ Executive Directors.
2006-07
September 20, 2007 3.00 p.m.
M.C.Ghia Hall, 2nd Floor, Bhogilal
Hargovindas Building, 18/20,
K. Dubhash Marg, Kala Ghoda,
Mumbai-400001
1.Authority under section 161 of the
Companies Act, 1956 for keeping the
Statutory Registers at the Corporate
Office of the company.
2.Re-appointment of Mr. Mehul C.
Choksi as the Managing Director for a
fresh period of 5 Years
2007-08
September 18, 2008
3.00 p.m.
M.C.Ghia Hall, 2nd Floor, Bhogilal
Hargovindas Building, 18/20,
K. Dubhash Marg, Kala Ghoda,
Mumbai-400001
(B) Extra Ordinary General Meetings
No Extraordinary General Meeting was held during the financial year 2008 – 09.
(C) Special Resolution passed through Postal Ballot:
No postal ballot was conducted during the financial year 2008 – 09.
Nil
30
Gitanjali Gems Limited
8.Disclosures
10.A) Compliance
The Register of Contracts containing the transactions in
which Directors are interested is placed before the Board
mandatory
a) Management Discussion and Analysis
A management discussion and analysis report forms part
regularly for its approval. There are no materially significant
of the Annual Report and includes discussion on various
related party transactions which have potential conflict
matters specified under clause 49(IV) (F) of the Listing
with the interest of the Company at large. Transactions
Agreement.
with related parties are disclosed separately as Annexure
in the Notes to Accounts in the Annual Report.
b) Subsidiaries
(ii) No Penalties or Strictures
other
requirements
(i) Related Party Transactions
with
All the Subsidiary Companies are Board managed with
their Boards having the rights and obligations to manage
the Company in the best interest of the stakeholders.
No penalties or strictures have been imposed on the
As a majority stakeholder, the Company monitors the
Company by the Stock Exchanges or SEBI or any other
performance of such companies.
Statutory Authority on any matter related to capital
markets during the last three years.
Mr. Prakash D. Shah, an Independent Director, who was
appointed as a Director on the Board of Gitanjali Exports
9.Means of communication
Corporation Limited (GECL), continues to be on the Board
The quarterly and annual results of the Company are published
of GECL, a material non listed subsidiary of the Company
in ‘The Free Press Journal’, and ‘Navshakti’.
in terms of Clause 49 of the Listing Agreement with the
Stock Exchanges.
Annual report containing inter alia Audited Annual Accounts,
Consolidated
Financial
Statements,
Directors
Report,
Management Discussion & Analysis (MD&A) Report, Auditor’s
c) Secretarial Audit for reconciliation of capital
A qualified Practicing Company Secretary has carried out
Report and other information is circulated to members and
secretarial audit for every quarter to reconcile the total
others who are entitled to it.
admitted capital with both the depositories; viz. National
All important information relating to Company and its
Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL) and the total
performance including the financial results and shareholding
issued and listed capital. The audit confirms that the total
pattern are displayed on the Company’s website www.
issued/paid up capital is in agreement with the aggregate
gitanjaligroup.com. The website also displays all official press
releases issued by the Company.
total number of shares in physical form, shares allotted &
The Company puts all the price sensitive information’s in to
total number of dematerialized shares held with NSDL and
advised for demat credit but pending execution and the
public domain by way of intimating the same to Stock Exchange
CDSL. The Company had submitted the secretarial audit
immediately.
report to BSE and NSE within 30 days from the end of
each quarter in accordance with the SEBI requirements.
As per the requirements of Clause 51 of the Listing Agreement
with the Stock Exchanges, all the data relating to the
quarterly financial results, shareholding pattern, etc. are being
electronically filed on the Electronic Data Information Filing
d) Code for prevention of Insider Trading
of insider trading. The Code is in compliance with
& Retrieval (EDIFAR) website of SEBI (www.sebiedifar.nic.in)
the provisions of SEBI (Prohibition of Insider Trading)
within the timeframe prescribed in this regard.
The Company has designated an e-mail for registering investor
complaints in the name of investors@gitanjaligroup.com.
The Company has a comprehensive code on prevention
Regulations, 1992 as amended from time to time.
e) CEO/CFO Certification
A certificate as required under clause 49(V) of listing
agreement from Managing Director and Executive
Director was placed before the Board.
Annual Report 2008-09
f) Risk Management
However the Company publishes its results on its
The Company has laid down procedures to inform the
website at www.gitanjaligroup.com, which is accessible
members of the Board about the risk assessment and
to the public at large. Besides it is also available at www.
minimization procedures. The Company has framed the
sebiedifar.nic.
risk assessment and minimization procedure which is
periodically reviewed by the Board.
d)Audit Qualification
During the year under review, there is no audit qualification
g) Code of Conduct
in Company’s financial statements. The Company
As provided under Clause 49 of the Listing Agreement
continues to adopt best practices to ensure regime of
and in line with the Company’s objective of following
unqualified financial statements.
the best Corporate Governance Standards the Board of
Directors has laid down a Code of Conduct for all Board
Members and Senior Management of the Company. The
e) Whistle Blower Policy
activities and employees of the Company are free to
and Senior Management and the same had been put on
report existing/probable violations of laws, rules or un-
the Company’s website www.gitanjaligroup.com. The
ethical conduct to the management. The management of
Board Members and the Senior Management personnel
the Company is obligated to maintain confidentiality of
have affirmed their compliance with the Code of Conduct
such reporting and ensure that nobody is subjected any
for the year ended March 31, 2009.
B) Compliance
with
non-
discriminatory practice.
mandatory
requirements
a) Board
The Company has not adopted any Whistle Blower Policy.
However the Company promotes ethical behaviour in its
code has been circulated to all the members of the Board
31
11.General shareholders information
a)Annual General Meeting
Date & Time : September 19, 2009
The Board has an executive Chairman. There is no fixed
Venue
tenure for the independent directors on the Board.
Hargovindas Building, 18/20, K. Dubhash
The Independent directors on the Board hold requisite
Marg, Kala Ghoda, Mumbai-400001
qualifications and experience which enables them to
make effective contribution to the Company in their
capacity as an Independent director, which is very useful
to the Company.
b) Remuneration Committee
b) Financial Year: April 1 to March 31.
c)Dates of Book Closure
Our register of members and share transfer books will
remain closed from September 5, 2009 to September 19,
The Company has set up a remuneration committee
2009 (both days inclusive) to determine the entitlement
which is vested with the powers to recommend the
of shareholders to receive the final dividend as may be
remuneration payable to Managerial Personnel in
declared at the ensuing Annual General Meeting.
accordance with section 198, 269, 310 and 311 read
with schedule XIII of the Companies Act, 1956 and
any increments thereof with in the maximum limits as
approved by the shareholders from time to time. All the
members of remuneration committee are independent
directors.
c) Shareholder’s Right
: M.C.Ghia Hall, 2nd Floor, Bhogilal
A half yearly declaration of financial performance including
summary of the significant events is presently not being
sent to each household of shareholders.
d)Dividend Payment Date
The proposed Dividend, if approved by shareholders
at the ensuing Annual General Meeting will be made
payable on or after September 24, 2009
e)Listing on Stock Exchanges
(i) Equity Shares :
Bombay Stock Exchange Ltd., Mumbai, Phiroze
Jeejeebhoy Towers, Dalal Street, Mumbai - 400
001.
32
Gitanjali Gems Limited
National Stock Exchange of India Ltd., Exchange
g) Stock Code
Plaza, Bandra Kurla Complex, Bandra (E), Mumbai 400 051.
Name of the Stock
Exchange
Stock
Code/
Symbol
ISIN
The Bombay Stock
Exchange Limited
532715
INE346H01014
The National Stock
Exchange of India Limited
GITANJALI INE346H01014
Singapore Exchange
Securities Trading Limited
(FCCBs)
London Stock Exchange
(UK Listing Authority )
–
XS0275853454
GITG
US3763642044
(ii) Foreign Currency Convertible Bonds
Singapore Exchange Securities Trading Limited,
2, Shenton Way, #19-00 SGX Centre Singapore
068804.
(iii)Global Depository Receipts
London Stock Exchange, 10, Paternoster Square,
London EC4M, 7LS
f)Listing Fees
Listing fees as required have been paid to the above
stock exchanges.
h)Market Price Data
The equity shares of the Company are listed on the Bombay Stock Exchange Ltd. and National Stock Exchange of India Ltd. The
monthly high/low of the Company’s price is as follows:
Stock Exchange
Month
April-08
May-08
June-08
July-08
August-08
September-08
October-08
November-08
December-08
January-09
February-09
March-09
i) Registrars & Share Transfer Agents
Bombay Stock Exchange Limited
National Stock Exchange of India Limited
High
Rs.
Low
Rs.
High
Rs.
Low
Rs.
295.00
315.90
301.50
283.00
282.00
251.00
194.90
98.50
79.80
77.95
54.75
47.00
211.50
265.00
240.40
218.50
228.40
171.00
69.40
57.25
61.00
47.40
37.70
32.50
294.70
315.70
301.90
282.00
276.25
248.00
194.95
98.75
80.15
78.40
54.45
47.15
211.35
267.05
232.70
218.20
229.05
171.00
68.10
57.35
60.95
48.00
37.60
32.00
j) Share Transfer System
Gitanjali Gems Limited Unit,
Transfer of the shares held in the dematerialized form is
Plot No. 17 to 24, Vittal Rao Nagar,
done through the Depositories with no involvement of
Madhapur, Hyderabad - 500081
the Company. As regards transfer of shares in physical
Tel
: +91-040-23420815/ 16/ 17
form, the transfer documents can be lodged with
Fax
: +91-040-23420814
Registrars & Share Transfer Agents of the Company, Karvy
e-mail
: einward.ris@karvy.com
Computershare Private Limited at the address mentioned
Website
: www.karisma.karvy.com
above. Transfer of shares in physical form is normally
processed within 15 days from the date of receipt, if the
documents are complete in all respects.
Annual Report 2008-09
33
k)Distribution of Share Holding
As on March 31, 2009
No. of Shares
Shareholders
As on March 31, 2008
Shareholders
Shareholders
001 to 500
501 to 1000
1001 to 2000
2001 to 3000
3001 to 4000
4001 to 5000
5001 to 10000
10001 and above
Nos.
47133
1053
411
140
59
52
93
113
%
Nos.
96.08 3469417
2.15
835159
0.84
619820
0.29
352944
0.12
209829
0.10
243791
0.19
686853
0.23 78645070
%
4.08
0.98
0.73
0.41
0.25
0.29
0.81
92.45
Nos.
41089
502
225
54
30
32
56
120
%
Nos.
97.58 2444251
1.19
397255
0.53
334787
0.13
136604
0.071
105172
0.076
149404
0.13
415401
0.28 81080009
%
2.87
0.47
0.40
0.16
0.12
0.17
0.49
95.32
Total
49054
100 85062883
100
42108
100 85062883
100
l)Dematerialization of equity shares
o) Corporate Identification Number (CIN)
As on March 31, 2009, 24,41,468 Equity shares of the
The Corporate Identification Number (CIN) allotted by
Company constituting 2.87 per cent of the share capital
Ministry of Corporate Affairs, Government of India is
were held in physical form and the balance 8,26,21,415
L36911MH1986PLC040689 and Company registration
equity shares constituting 97.13 per cent of the share
number is 11 - 040689. The Company is registered in
capital were held in dematerialized form.
the state of Maharashtra with Registrar of Companies,
m)Liquidity
Shareholders
The equity shares of the Company are actively traded
Mumbai , Maharashtra.
LOCATION
ADDRESS
Mumbai
1)Dattapada Road, Opp. Cable Corporation
of India Limited, Borivali (E), Mumbai-400
066.
on Bombay Stock Exchange Ltd. and National Stock
Exchange of India Ltd.
n) Outstanding GDRs /ADRs / Warrants or any convertible
instruments
2)Plot No.61, SEEPZ, Andheri (E), Mumbai
3)Plot No.16 (Part), 17,28,29(Part),SEEPZ,
Andheri (E), Mumbai
i) GDRs
Out of the total 18,614,271 GDRs issued , 52,52,600
4)A-10, P.S. House, MIDC, Marol, Andheri
(E), Mumbai
GDRs were outstanding as on March 31, 2009. Each
GDR represents one equity share of Rs. 10/- each.
ii) Convertible Warrants
As on March 31, 2009 10 million share warrants
Surat
Surat Special Economic Zone, Unit No. 378,
Plot No.24, Surat, Gujarat
Hyderabad
Survey NO.1/1, Raviryala Village Road, Maheshwaram Mandal, R.R. District, Hyderabad – 501510.
Mould No. – 4NE, 4th floor, SF Building,
Manikanchan SEZ, Salt lake City, Kolkata –
700 091
convertible into equity shares of the Company issued
during the previous year were outstanding.
iii) FCCBs
Out of the total FCCBs of USD 110 millions issued
by the Company, FCCBs of US$ 73.86 million were
outstanding as on March 31, 2009.
Kolkata
34
Gitanjali Gems Limited
q) Shareholding Pattern as on March 31, 2009
Category
Code
A
B
Category of Shareholder
Shareholding of Promoter and Promoter Group
1) Indian
a) Individuals/ Hindu Undivided Family
b) Central Government/ State Govermnent(s)
c) Bodies Corporate
d) Financial Institutions/ Banks
e) Any Other (specify)
Sub-Total (A)(1)
3
0
4
0
0
7
36817128
0
6550488
0
0
43367616
43.28
0.00
7.70
0.00
0.00
50.98
2) Foreign
a) Individuals (Non- Resident Individuals/ Foreign Individuals)
b) Bodies Corporate
c) Institutions
d) Any Other (specify)
Sub-Total (A)(2)
Total Shareholding of Promoter and Promoter Group A)= (A)(1)+(A)(2)
0
1
0
0
1
8
0
10000
0
0
10000
43377616
0.00
0.01
0.00
0.00
0.01
50.99
6
4
0
0
0
31
0
0
41
5786997
370440
0
0
0
15697102
0
0
21854539
6.80
0.44
0.00
0.00
0.00
18.45
0.00
0.00
25.69
883
6027074
7.09
46093
5028408
5.91
22
414976
0.49
438
200
3
1
1362
49002
49043
49051
212998
276403
2420717
54
197498
14578128
36432667
79810283
0.25
0.32
2.85
0.00
0.23
17.14
42.83
93.83
1
5252600
6.17
49052
85062883
100.00
Public Shareholding
1) Institutions
a) Mutual Funds/ UTI
b) Financial Institutions/ Banks`
c) Central Government/ State Govermnent(s)
d) Venture Capital Funds
e) Insurance Companies
f) Foreign Institutional Investors
g) Foreign Venture Capital Investors
h) Any Other
Sub-Total (B)(1)
2) Non-Institutions
a) Bodies Corporate
b) Individuals
i) Individual shareholders holding nominal
Share capital up to Rs.1 lakh.
ii) Individual shareholders holding nominal
share capital in excess of Rs.1 lakh
c) Any Other(specify)
NRI
Clearing Member
Foreign Companies
Trust
HUF
Sub-Total (B)(2)
Total Public Shareholding (B)= (B)(1)+(B)(2)
Total (A)+(B)
C
Number of
Total Number Percentage of
Shareholders
of Shares
Shareholding
Shares held by Custodians and against which
Depository Recipts have been issued
Grand Total (A)+(B)+( C )
Annual Report 2008-09
r)Address for Correspondence
Shareholding related queries
Karvy Computershare private Limited
Gitanjali Gems Limited Unit,
Plot No. 17 to 24, Vittal Rao Nagar,
Madhapur, Hyderabad - 500081
Tel: +91-040-23420815/ 16/ 17
Fax: +91-040-23420814
e-mail: einward.ris@karvy.com
Website: www.karisma.karvy.com
General correspondence:
Gitanjali Gems Limited
B-6, 1st Floor , Laxmi Towers,
Bandra Kurla Complex
Bandra (East), Mumbai- 400051
Tel: +91-022-40102000/01
Fax: +91-022-40102003/42
Email : investors@gitanjaligroup.com
Depository
National Securities Depository Limited,
Central Depository Services (India) Limited,
Trade World, A Wing, 4th Floor, Kamala Mills Compound,
Phiroze Jeejeebhoy Towers,
Senapati Bapat Marg,
16th Floor,
Lower Parel,
Dalal Street, Fort
Mumbai – 400013
Mumbai – 400001
Tel – 022-24994200
Tel – 022-22723333
Fax – 022-24976351
Fax – 022-22723199
e-mail – info@nsdl.co.in
e-mail – investors@csdslindia.com
website – www.nsdl.co.in
website – www.cdslindia.com
35
36
Gitanjali Gems Limited
Financial
Statements
Annual Report 2008-09
Auditors’ Report
To,
The members of Gitanjali Gems Limited,
We have audited the attached Balance Sheet of Gitanjali Gems Limited having their registered office at 801/802, Prasad
Chambers, Opera House, Mumbai – 400 004 as at 31st March 2009 and the Profit and Loss Account and the Cash
Flow Statement of the Company for the year ended on that date annexed thereto. These financial Statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made
by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
I.
As required by the Companies (Auditor’s report) Order, 2003 ( as amended ) issued by the Central Government in
terms of Section 227(4A) of the Companies Act, 1956 (the Act), and on the basis of such checks as we considered
appropriate and according to the information and explanations given to us during the course of the audit, we annex
hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order :
II.
Further to our comments in the Annexure referred to above, we report that:
a)
We have obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit;
b) In our opinion, proper books of accounts as required by Law have been kept by the Company so far as appears
from our examination of those books of the Company.
c)
The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in
agreement with the books of account of the Company.
d) In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report
comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act,
1956.
e)
On the basis of the written representations received from the directors of the Company as on 31st March 2009,
and taken on record by the Board of Directors of the Company, we report that none of the directors is disqualified
as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274
of the Companies Act, 1956.
f)
In our opinion and to the best of our information and according to the explanations given to us, the said Balance
Sheet and the Profit and Loss Account read together with notes thereon appearing in schedule 17 give the
information required by the Companies Act, 1956 in the manner so required, and give a true and fair view in
conformity with the accounting principles generally accepted in India ;
(i)
in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2009,
(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date
and
(iii) in the case of the Cash Flow Statement , of the cash flows of the Company for the year ended on that
date.
For Ford , Rhodes , Parks & Co.
Chartered Accountants
A.D.SHENOY
Partner
Membership No. 11549
Place :Mumbai
Dated :29th June, 2009
37
38
Gitanjali Gems Limited
Annexure to the Auditors’ Report
(Referred to in paragraph I of our report of even date)
1.
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation
of its fixed assets.
(b) The fixed assets of the Company have been physically verified by the management at reasonable intervals during
the year which, in our opinion is reasonable having regard to the size of the Company and the nature of its assets
and no material discrepancies were noticed on such verification.
(c) During the year, the Company has not disposed off any substantial part of fixed assets.
2.
(a) The inventory has been physically verified by the management during the year and also at the year end.
(b) The procedures of physical verification of inventory followed by the management is reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical
verification.
3.
(a) The Company has granted unsecured loans / Advances to its companies, firms or other parties covered in the
register maintained under section 301 of the Act. The number of parties are Sixteen and amount outstanding as
at 31st March 2009 is Rs. 3,220.11 Millions (Previous year Rs. 38.85 Millions and Number of Parties : Two)
(b) The Company has taken unsecured loans from Companies, firms and other parties covered under section 301 of
the Act. The number of parties are two and the amounts outstanding as at 31st March 2009 is Rs. 10.07 Millions
(Previous Year Rs. 10.89 Millions and Numbers of parties : Three).
(c) The above loan is interest free except in respect of one of the wholly owned subsidiary companies and no
conditions as to repayment of principal amount have been stipulated.
(d) In respect of the said wholly owned subsidiary company, the loan amount carries interest and the repayment is
regular.
(e) In respect of other companies, as no installments of repayment of principal amounts have been stipulated the
question of repayment being regular does not arise.
4. (a) In our opinion and according to the information and explanations given to us, there are adequate internal control
procedures commensurate with the size of the Company and the nature of its business, for the purchase of
inventory, fixed assets and for the sale of goods and services.
(b) During the course of our audit, no major weakness has been noticed in the internal control system in respect of
these areas.
5. According to the information and explanations provided by the management, we are of the opinion that the particulars
of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained
under Section 301 have been so entered in respect of certain transactions have been made in pursuance of such
contracts or arrangements exceeding value of Rupees Five Lakhs entered into during the financial year, and the
transactions have been made at prevailing market price at the relevant time.
6.
7.
The Company has not accepted any deposits from the public.
The Company has engaged an independent internal auditor to carry out the internal audit of the company. In our
opinion, the internal audit system is commensurate with its size and nature of its business.
8.
The Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies
Act, 1956 for any of the products of the Company.
9. (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees’ state
insurance, income tax, sales tax, service tax, custom duty, cess and other statutory dues have generally been
regularly deposited with the appropriate authorities. According to the information and explanations given to us,
no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’
Annual Report 2008-09
Annexure to the Auditors’ Report
(Referred to in paragraph I of our report of even date) (Contd.)
state insurance, income tax, sales tax, service tax, custom duty, cess and other statutory dues were outstanding
at the year end for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us by Management and the records of the Company
examined by us there were no disputed dues in respect of Custom Duty,Income Tax, Wealth-tax, Excise Duty and
Cess not deposited as at 31st March 2009.
10. The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in
the current and immediately preceeding finacial year.
11. Based on our audit procedures and as per the information and explanations given to us by the management, we are
of the opinion that the Company has not defaulted in repayment of its dues to any financial institution or bank during
the year.
12. The Company has not granted loans and advances on the basis of security of pledge of shares, debentures and other
securities.
13. The provisions of Clause 4 (xiii) of the Order (as amended) are not applicable as the Company is not a chit fund
company or nidhi/mutual benefit fund/society.
14. The Company has not dealt or traded in shares, securities, debentures or other investments during the year. Hence
provisions of Clause 4 (xiv) of the Order (as amended) are not applicable.
15. According to the information given to us and managements’ representation, the Company has given guarantees of
Rs. 2,828.70 Millions for the loans taken by its wholly owned subsidiary companies from banks/ financial
institutions.
16. The Company did not avail any term loans during the year.
17. According to the information and explanations given to us and overall examination of the Balance Sheet and Cash
Flow Statement of the Company we report that no funds raised on short term basis have been used for long term
investments.
18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in
the Register maintained under section 301 of the Act.
19. The Company has not issued any debentures during the year.
20. The Company has disclosed on the end use of money raised by public issue and same has been verified. (Refer Note
No. 2.3 to Notes to Accounts)
21. Based upon the audit procedure performed for the purpose of reporting the true and fair view of the financial
statements and as per the information and explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit.
For Ford, Rhodes , Parks & Co.
Chartered Accountants
A.D.SHENOY
Partner
Membership No. 11549
Place :Mumbai
Dated :29th June, 2009
39
40
Gitanjali Gems Limited
Balance Sheet
as at 31st March,
(Rupees in Millions)
Schedules
2009
2008
SOURCES OF FUNDS
Shareholders' Funds
a. Share Capital
1
850.63
850.63
b. Reserves and Surplus
2
18,065.56
16,977.01
c. Share Warrants
312.00
312.00
19,228.19
18,139.64
Loan Funds
a. Secured Loans
3
9,001.10
b. Unsecured Loans
4
3,757.00
7,459.11
2,974.15
12,758.10
10,433.26
8.26
5.77
31,994.55
28,578.67
Deferred Tax Liability (Net)
Total
APPLICATION OF FUNDS
Fixed Assets
5
a. Gross Block
709.93
b. Less: Depreciation
210.90
637.32
172.78
c. Net Block
Investments
6
499.03
464.54
8,385.18
5,954.36
Current Assets, Loans & Advances
a. Inventories
7
7,581.13
5,105.95
b. Sundry debtors
8
15,899.66
12,524.43
c. Cash and bank balances
9
2,386.28
9,095.14
d. Loans and advances
10
5,559.67
4,458.10
31,426.74
31,183.62
7,719.97
8,465.80
Less : Current Liabilities and Provisions
a. Current liabilities
11
b. Provisions
12
596.43
558.05
8,316.40
9,023.85
Net Current Assets
Total
Significant Accounting Policies and Notes To Accounts
23,110.34
22,159.77
31,994.55
28,578.67
17
Schedules 1 To 17 annexed hereto form part of the
Balance Sheet and Profit & Loss Account
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
Annual Report 2008-09
Profit & Loss Account
for the year ended 31st March,
(Rupees in Millions)
Schedules
2009
2008
INCOME
Sales
13
26,938.47
Other Income
14
2.17
26,543.29
5.79
26,940.64
26,549.08
EXPENDITURE
Cost of Trading Goods/Materials Consumed
15
24,300.05
24,262.57
Operating Expenses
16
836.64
587.59
Interest (net)
453.39
177.92
Depreciation
43.36
34.25
Profit Before Taxation
25,633.44
25,062.33
1,307.20
1,486.75
35.00
102.50
2.01
1.59
Provision for Taxation
- Current Tax
- Fringe Benefit Tax
2.50
1.11
Profit After Taxation
- Deferred Tax
1,267.69
1,381.55
Balance Brought Forward From Last Year
4,624.10
3,561.69
Amount available for appropriation
5,891.79
4,943.24
Appropriations
General Reserve
108.00
140.00
Proposed Dividend
153.11
153.11
Tax on Dividend
26.03
Balance carried to Balance Sheet
26.03
287.14
319.14
5,604.65
4,624.10
14.90
20.48
12.91
16.27
Basic Earnings Per Share of Rs 10 Each
Diluted Earnings Per Share of Rs 10 Each
Significant Accounting Policies and Notes To Accounts
17
Schedules 1 To 17 annexed hereto form part of the
Balance Sheet and Profit & Loss Account
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
41
42
Gitanjali Gems Limited
Cash Flow Statement
for the year ended 31st March,
(Rupees in Millions)
2009
CASHFLOW FROM OPERATING ACTIVITIES
Net profit before Tax
Adjustment for
Depreciation
Interest (net)
Exchange (Gain)/Loss
Dividend Received
2008
1,307.20
1,486.75
43.36
453.39
(321.83)
(0.33)
174.59
34.25
177.92
3.69
(2.20)
213.66
Income Tax Paid
(2,475.18)
(2,087.36)
(998.41)
334.40
1.37
(5,225.18)
(97.43)
(5,148.02)
(1,362.82)
(2,405.32)
109.65
4,046.38
0.73
388.62
(133.48)
468.80
CASHFLOW FROM INVESTING ACTIVITIES
Purchase of Investments (Net)
Advance for Capital Account
Dividend Received
Purchase of Fixed Assets
(2,428.06)
–
0.33
(77.86)
(2,505.59)
(4,483.52)
(7.53)
2.20
(196.57)
(4,685.42)
(629.94)
186.14
312.00
6,777.56
(62.96)
(106.27)
(359.42)
6,747.05
Changes in Working Capital
(Increase)/Decrease in Inventories
(Increase)/Decrease in Sundry Debtors
(Increase)/Decrease in Loans & Advances
Increase/(Decrease) in Current Liabilities
Increase/(Decrease) in Provisions
CASHFLOW FROM FINANCING ACTIVITIES
Issue of Share Capital
Issue of Share Warrants
Increase in Share Premium
Changes in Unsecured Loans
Dividend and Dividend Tax Paid
Interest paid (net)
Effect of exchange difference on translation of
foreign currency cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
–
–
–
(0.82)
(179.13)
(449.99)
267.49
(6,708.86)
65.51
4,082.69
Cash and cash equivalents at the beginning of
the year
9,095.14
5,012.45
Cash and cash equivalents at the end of the year
2,386.28
9,095.14
2,383.04
3.24
2,386.28
478.83
8,615.51
0.21
9,094.55
0.59
9,095.14
Components of Cash and Cash equivalents at the
year end
Balance with Banks
In Currents Account
In Fixed Deposit Accounts
In EEFC Account
348.32
2,034.56
0.16
Cash on Hand
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
Annual Report 2008-09
Schedules
forming part of the Balance Sheet as at 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 1 - SHARE CAPITAL
Authorised
12,00,00,000 Equity Shares of Rs. 10/- each
1,200.00
1,200.00
1,200.00
1,200.00
850.63
850.63
850.63
850.63
(Previous year 12,00,00,000 Equity shares of Rs 10/-each )
Issued, Subscribed & Paid up
8,50,62,883 (Previous year : 8,50,62,883)Equity Shares
of Rs.10/- each fully paid up
Total
SCHEDULE 2 - RESERVES & SURPLUS
(A)Share Premium Account
Opening Balance
Add : During the year
12,110.91
3,335.75
–
8,775.16
12,110.91
12,110.91
(B)General Reserve
Opening Balance
242.00
Add: Transferred from Profit & Loss Account during the year
108.00
102.00
140.00
350.00
242.00
5,604.65
4,624.10
18,065.56
16,977.01
9,001.10
7,459.11
9,001.10
7,459.11
From a Director
7.85
1.54
From a Shareholder
2.23
9.35
3,746.92
2,963.26
3,757.00
2,974.15
(C)Profit & Loss Account
Total
SCHEDULE 3 - SECURED LOANS
Working Capital Loans From Banks / Financial Institutions
(Refer Note 2.7 - Schedule 17)
Total
SCHEDULE 4 - UNSECURED LOANS
Foreign Currency Convertible Bonds
Total
43
76.00
15.44
30.96
23.91
17.05
Office Equipments
Computers
Vehicles
Moulds & Dies
219.04
121.72
–
87.49
34.23
1.10
1.32
6.80
1.61
3.06
14.94
49.11
–
–
49.11
–
–
2.48
1.22
1.89
5.93
–
–
37.59
637.32
709.93
7.53
87.82
614.58
18.15
25.23
35.28
15.83
77.17
135.22
62.76
97.34
147.60
Deductions/
As at
Transfer
31st March
2009
–
138.53
172.78
–
–
172.78
10.13
6.08
14.78
7.64
27.43
62.88
1.85
41.99
As at
1st April
2008
34.25
43.36
–
–
43.36
2.33
4.78
7.88
1.20
9.01
9.83
3.04
5.29
–
Provided
for the year
–
5.24
–
–
5.24
–
–
1.62
0.75
0.79
2.08
–
–
–
Deductions
Transfer
Depreciation
172.78
210.90
** Represents advances given for office premises at Bharat Diamond Bourse where possession is pending
–
–
210.90
12.46
10.86
21.04
8.09
35.65
70.63
4.89
47.28
–
As at
31st March
2009
* Includes cost of land pending registration in the name of the company Rs. 64.16 millions and advance given for purchase of land - Rs. 3.34 millions
433.22
Previous Year Figures
7.53
637.32
Advances on Capital Account **
Total
0.33
Capital Work-in-Progress
629.46
17.45
123.70
Plant & Machinery
Furniture & Fixture
Sub total
–
62.76
Office Premises
–
97.34
Factory Building
2.89
Additions
182.30
As at
1st April
2008
GROSS BLOCK (AT COST)
Freehold land *
DESCRIPTION OF ASSETS
SCHEDULE 5 - Fixed Assets
464.54
499.03
7.53
87.82
403.68
5.69
14.37
14.24
7.74
41.52
64.59
57.87
50.06
147.60
As at
31st March
2009
464.54
7.53
0.33
456.68
6.92
17.83
16.18
7.80
48.57
60.82
60.91
55.35
182.30
As at
31st March
2008
NET BLOCK
(Rupees in Millions)
44
Gitanjali Gems Limited
Schedules
forming part of the Balance Sheet as at 31st March,
Annual Report 2008-09
Schedules
forming part of the Balance Sheet as at 31st March,
(Rupees in Millions)
2009
SCHEDULE 6 - INVESTMENTS
Long Term Unquoted (at cost)
1)Indian Subsidiaries
99,000 Equity Shares of Rs.100/- each fully paid up of Mehul
Impex Limited (Previous Year : 99,000 Equity Shares)
50,000 Equity Shares of Rs.10/- each fully paid up of CRIA
Jewellery Private Limited. (Previous Year : 9,980 Equity Shares)
1,28,00,000 Equity Shares of Rs. 10/- each fully paid up of
Gitanjali Exports Corporation Limited (Previous Year 51,00,000
Equity Shares)
Add : Advance towards Share Capital
83,50,000 Equity Shares of Rs. 10/- each of Fantasy Diamond
Cuts Private Limited. (Previous Year 49,90,000 Equity Shares)
Add : Advance towards Share Capital
50,000 Equity Shares of Rs. 10/- Each of Hyderabad Gems SEZ
Limited (Previous Year : 50,000 Equity Shares)
4,50,000 Equity Shares of Rs. 10/- Each of Asmi Jewellery India
Private Limited (Formerly Known as Desire Lifestyle Private
Limited) (Previous Year : 10,000 Shares)
Add : Advance towards Share Capital
66,00,000 Equity Shares of Rs.10/- each of GILI India Limited (Formerly Known as Gitanjali Jewels Limited)
(Previous Year : 50,00,000 Equity Shares)
Add : Advance towards Share Capital
2,550 Equity Shares of Rs. 100/- Each of Shubalavanya Jewel
Crafts Private Limited. (Previous Year : 2,550 Equity Shares)
5,00,00,000 Equity Shares of Rs. 10/- Each of Gitanjali Infratech
Limited (Previous Year : 5,00,00,000,Equity Shares)
20,50,000 Equity Shares of Rs. 10/- Each of Gitanjali Lifestyle
Limited (Previous Year : 50,000 Equity Shares)
Add : Advance towards Share Capital
50,000 Equity Shares of Rs. 10/- Each of Ivida Technologies
Private Limited (Previous Year : 10,000 Equity Shares)
26,02,050 Equity Shares of Rs. 10/- each fully paid up of
D'Damas Jewellery (India) Private Limited (Previous Year
26,02,050 Equity Shares)
Add : Advance towards Share Capital
10,18,795 - 4% Non - Cumulative Reedeemable Preference
Shares of Rs. 100/- each of D'damas Jewellery (India) Private
Limited
(Previous Year : 10,18,795 Preference Shares)
27,50,000 Equity Shares of Rs.10/- each of Brightest Circle
Jewellery Private Limited ( Previous Year : 5,00,000 Equity Shares)
Add : Advance towards Share Capital
1,66,666 - 4% Non - Cumulative Reedeemable Preference
Shares of Rs. 10/- each of Brightest Circle Jewellery Private
Limited
(Previous Year : 1,66,666 Preference Shares)
50,000 Equity Shares of Rs. 10/- Each of Raigad Gems SEZ
Limited (Previous Year : 50,000 Equity Shares)
2008
9.90
9.90
0.50
0.10
1,698.15
66.45
350.00
49.90
416.45
301.25
150.00
199.90
0.50
0.50
154.50
0.10
150.00
480.00
150.10
880.00
400.00
0.27
880.00
0.27
500.00
500.00
100.50
0.50
100.00
0.50
26.02
180.00
100.50
0.10
26.02
206.02
101.88
180.00
523.48
73.48
450.00
206.02
101.88
16.67
523.48
16.67
0.50
0.50
50,000 Equity Shares of Rs. 10/- Each of Aurangabad SEZ
Limited (Formerly known as Aurangabad Gems SEZ Limited)
(Previous Year : 50,000 Equity Shares)
50,000 Equity Shares of Rs. 10/- Each of Nanded SEZ Limited
(Formerly known as Nanded Gems SEZ Limited)
(Previous Year : 50,000 Equity Shares)
50,000 Equity Shares of Rs. 10/- Each of Nashik Multi Services
SEZ Limited (Previous Year : 50,000 Equity Shares)
0.50
0.50
0.50
0.50
0.50
0.50
50,000 Equity Shares of Rs. 10/- Each of Nagpur Multi Product
SEZ Limited (Previous Year : 50,000 Equity Shares)
0.50
0.50
45
46
Gitanjali Gems Limited
Schedules
forming part of the Balance Sheet as at 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 6 - INVESTMENTS (Contd.)
Long Term Unquoted (at cost)
1)Indian Subsidiaries
50,000 Equity Shares of Rs. 10/- Each of West Bengal SEZ
Limited (Previous Year : NIL)
0.50
–
50,000 Equity Shares of Rs. 10/- Each of Mohar Jewels Limited
(Previous Year : NIL)
0.50
–
50,000 Equity Shares of Rs. 10/- Each of Eureka Finstock Private
Limited (Previous Year : NIL)
0.50
–
50,000 Equity Shares of Rs. 10/- Each of Decent Securities &
Finance Private Limited (Previous Year : NIL)
0.50
–
6,50,000 Equity Shares of Rs. 10/- Each of Modali Jewels Private
Limited (Previous Year : 6,50,000 Equity Shares)
4.50
4.50
* 28,33,000 Equity Shares of Rs. 10/- Each of Modali Gems Private
Limited (Previous Year : 4,25,000 Equity Shares) Previously
known as Modali Distributors Private Limited
50,000 Equity Shares of Rs. 10/- Each of MMTC Gitanjali Private
Limited (Previous Year : NIL)
14.18
4.25
0.50
–
0.50
–
2,010.56
1,260.75
50,000 Equity Shares of Rs. 10/- Each of Gitanjali Retail Ventures
Limited (Previous Year : NIL)
2) Overseas Subsidiaries
1772.68 Common Stock of USD 0.01 each of Samuels Jewelers
Inc.USA (Previous Year : 1772.68 Common Stock)
200 Shares of AED 1000 each of Gitanjali Venture DMCC
(Previous Year : 200 Shares)
383.97
145.29
8336.10 shares of Rogers Limited Inc USA
(Previous Year : 8336.10 Shares)
780.41
780.41
100 Common Shares of Gitanjali USA Inc.
(Previous Year : 100 Common Shares)
638.94
620.69
22.90
–
0.10
0.10
30.00
30.00
8,385.18
5,954.36
3)Joint Ventures
10,00,000 Equity Shares of Rs. 10/- Each of Morellato India
Private Limited (Previous Year : NIL)
10,000 Equity Shares of Rs. 10/- Each of Spectrum Jewellery
Private Limited. (Previous Year : 10,000 Shares)
4) Others
10,00,000 Equity Shares of Diamond India Limited
Year : 10,00,000 Shares)
Total
* Previous year classified under Joint Venture
(Previous
Annual Report 2008-09
Schedules
forming part of the Balance Sheet as at 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 7 - Inventories
(As Certified by the Management)
a. Raw Materials
b. Work In Process
c. Manufactured Goods
d. Trading Goods
e. Consumables, Stores & Tools
4,890.90
143.63
108.83
2,432.47
5.30
2,641.30
212.96
399.44
1,846.45
5.80
Total
7,581.13
5,105.95
4,630.71
7.69
4,638.40
3,086.25
7.69
3,093.94
Others
9,988.65
9,988.65
9,418.47
9,418.47
Exports Receivables Translation Control Account
1,280.30
1,280.30
19.71
19.71
7.69
7.69
7.69
7.69
15,899.66
12,524.43
SCHEDULE 8 - SUNDRY DEBTORS
(Unsecured, Considered Good unless and otherwise stated)
Outstanding for more than six months
Outstanding for more than six months considered doubtful
Less: Provision for doubtful debts
Total
SCHEDULE 9 - CASH AND BANK BALANCES
Cash on Hand
Balance with Scheduled Banks :
in Current Accounts
in Fixed Deposits
in EEFC Account
3.24
0.59
348.32
2,034.56
0.16
478.83
8,615.51
0.21
Total
2,386.28
9,095.14
SCHEDULE 10 - LOANS & ADVANCES
(Unsecured, Considered Good)
Advances recoverable in cash or in kind or for
value to be received
Advances to Subsidiary Companies
Deposits
Service Tax Receivable
Sales Tax Refund Receivable
Income Tax
Staff Advances
Prepaid Expenses
Advances to Suppliers / Labourer
Share Application Money
939.16
3,437.45
223.60
3.39
12.35
498.86
7.43
72.12
360.56
4.75
1,166.46
2,402.85
219.14
3.18
17.80
401.43
7.59
65.71
164.74
9.20
Total
5,559.67
4,458.10
47
48
Gitanjali Gems Limited
Schedules
forming part of the Balance Sheet as at 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 11 - CURRENT LIABILITIES
Sundry Creditors
For Goods / Labour
For Others / Expenses
For Other liabilities
Advance received from customers
Interest accrued but not due on bank loans
Statutory Liabilities
(There is no amount due and outstanding to Investor Education and Protection
Fund and Small Scale Industrial Undertakings)
7,030.79
372.81
22.91
249.91
35.29
8.26
7,759.81
632.92
22.74
11.86
22.46
16.01
Total
7,719.97
8,465.80
SCHEDULE 12 - PROVISIONS
Provision for Taxation
Fringe Benefit Tax
Proposed Dividend
Dividend Tax
Gratuity
405.45
3.99
153.11
26.03
7.85
370.45
2.16
153.11
26.03
6.30
Total
596.43
558.05
Annual Report 2008-09
Schedules
forming part of the Profit & Loss Account for the year ended 31st March,
(Rupees in Millions)
2009
2008
10,478.30
3,710.99
12,008.55
2,497.44
14,189.29
14,505.99
5,786.43
6,962.75
12,749.18
5,120.65
6,916.65
12,037.30
26,938.47
26,543.29
SCHEDULE 14 - OTHER INCOME
Commission Received
Dividend Received
Job Work
Discount Received
Miscellaneous Receipts
1.11
0.32
0.66
0.07
0.01
–
2.20
1.29
0.84
1.46
Total
2.17
5.79
3,382.60
1,717.55
5,100.15
2,971.49
765.58
3,737.07
19,383.09
6,859.58
26,242.67
533.06
26,775.73
16,721.25
8,095.13
24,816.38
809.27
25,625.65
6,619.80
956.03
7,575.83
3,382.60
1,717.55
5,100.15
24,300.05
24,262.57
SCHEDULE 13 - SALES
Exports (Including Deemed Exports)
Diamonds
Jewellery
Local
Diamonds
Bullion and Jewellery
Total
SCHEDULE 15 - COST OF TRADING GOODS/ MATERIAL CONSUMED
Opening Stock
Diamonds
Bullion/Jewellery
Add: Purchases
Diamonds
Bullion/Jewellery
Add: Labour Charges / Mfg. Expenses
Less : Closing Stock
Diamonds
Bullion/Jewellery
Total
49
50
Gitanjali Gems Limited
Schedules
forming part of the Profit & Loss Account for the year ended 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 16 - OPERATING EXPENSES
Employee Cost
Salary, Bonus & Allowances
Contribution To P.F.& Other Funds
Staff Welfare
Staff Recruitment expenses
Gratuity
142.78
6.02
6.16
0.46
3.04
102.87
5.28
6.26
1.33
1.93
Sub Total
158.46
117.67
0.12
0.74
28.62
14.90
12.08
1.74
6.33
126.83
20.49
3.94
5.37
2.41
74.90
5.84
4.76
2.04
23.52
106.45
2.18
3.30
8.51
5.07
9.86
2.14
2.49
–
0.57
2.70
0.69
0.49
1.40
3.03
165.53
27.62
0.02
1.50
0.88
0.03
32.15
6.97
11.74
1.24
3.62
159.57
10.84
6.98
4.10
2.37
42.92
7.75
3.13
1.69
–
89.15
1.36
2.40
60.29
4.64
9.61
1.87
2.07
0.28
–
–
0.01
0.52
0.47
4.17
(28.15)
25.00
0.25
–
Sub Total
678.18
469.92
Grand Total
836.64
587.59
Stores Consumed
Packing Materials Consumed
Rent, Rates & Taxes
Commission & Assortment Charges
Foreign Travelling Expenses
Computer Expenses
Electricity Charges
Advertisement / Selling & Distribution Expenses
Travelling & Conveyance
Membership/Subscription
Telephone Expenses
Postage & Courier Expenses
Legal, Professional and Service Charges
Printing & Stationery
Export Sales Expenses
Auditors' Remuneration
Event Expenses
Bank Commission
Consumables
Insurance
Donation
Import Expenses
E.C.G.C. Premium
Freight & Forwarding (Export)
Security Service Charges
Brokerage
Sales Tax Asst. Dues
Bad Debts W/off
Service Tax
Repairs & Maintenance - Building
Repairs & Maintenance - Plant & Machinery
Repairs & Maintenance - Others
EEFC/Cont/Cryt/Bank Facility Exchange Difference
Miscellaneous Expenses
Entertainment Expenses
Loss on sale of assets
Annual Report 2008-09
Schedules
forming part of the accounts for the year ended 31st March, 2009
SCHEDULE 17 - Significant Accounting Policies & Notes To Accounts
1.Significant Accounting Policies
1.1Accounting Concepts
The accounts have been prepared on accrual basis, in accordance with the Accounting Standards referred to
in Section 211 (3C) of the Companies Act, 1956, which have been prescribed by the Companies (Accounting
Standards) Rules, 2006 and the provisions of the Companies Act 1956, to the extent applicable. Accounting
policies have been consistently applied except where a newly issued accounting standard is initially adopted
or a revision to the existing accounting standard or a more appropriate presentation of the financial statements
requires a change in the accounting policy hitherto in use.
1.2 Use of estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and
expenses during the reporting periods. Difference between the actual results and estimates are recognized in
the period in which the results are known / materialized.
1.3 Revenue Recognition
a)
Revenue on sale of products is recognized as and when the products are dispatched to customers &
acknowledged by the customers. Sales are stated net of returns and excluding sales tax.
b) Revenue is recognized only when it is reasonably certain that the ultimate collection will be made
1.4 Fixed Assets
a)
Fixed assets are recorded at cost of acquisition inclusive of freight, duties, taxes and incidental expenses
related to acquisition. Expenditure incurred during construction period has been added to the cost of
assets.
1.5Leased Assets
a)
Assets taken on finance lease, including taken on hire purchase arrangements, wherein the Company has an
option to acquire the asset, are accounted for as fixed assets in accordance with the Accounting Standard
19 on “Leases”, (AS 19) issued by the Institute of Chartered Accountants of India.
b) Assets taken on lease under which the lessor effectively retains all the risk and rewards of ownership
are classified as operating lease. Lease payments under operating leases are recognized as expenses on
accrual basis in accordance with the respective lease agreement.
c)
The cost of improvements to lease properties are capitalized and disclosed appropriately.
1.6Impairment of Fixed Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment
loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The
impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of
recoverable amount
1.7Depreciation
Depreciation is charged on the fixed assets under the written down value method in accordance with the
provisions of Schedule XIV to the Companies Act, 1956. The expenditure incurred on improvement of assets
acquired on lease is written off evenly over the balance period of the lease.
1.8Investment
Long – term investments are stated at cost. Provision for diminution in the value of long-term investments is
made only if such a decline is other than temporary in the opinion of the management.
51
52
Gitanjali Gems Limited
Schedules
forming part of the accounts for the year ended 31st March, 2009
1.9 Borrowing Costs
Borrowing costs attributable to the acquisition or construction of qualifying asset are capitalized as part of the
cost of asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.
1.10Foreign Currency Transactions
Transactions in foreign currency are recorded at the rate in force on the date of transactions.
Foreign currency assets, except investments and liabilities other than for financing fixed assets are stated at the
rate of exchange prevailing at the date of balance sheet and resultant gains/losses are charged to the profit and
loss account.
Premium or discount arising at the inception of forward foreign exchange contracts is amortized as expense
or income over the life of the contracts. Any profit or loss arising on cancellation or renewal of such forward
contract is recognized as income or expense for the period.
Exchange differences arising on settlement or restatement of foreign currency denominated liabilities relating to
the acquisition of fixed asset are recognized in the Profit and Loss account.
1.11Inventories
Inventories of raw materials, finished goods, rejections, trading goods and stores are valued as under:
Raw Material
Rough Diamond Rejections
Trading Goods
Finished Goods – Polished Diamonds
Lower of cost and net realisable value
At net realisable value
Lower of cost and net realisable value
Lower of cost and net realisable value
Work in progress – Jewellery
Lower of market value and material cost plus
proportionate labour and overheads.
Finished Goods – Jewellery
Lower of market value and material cost plus labour
and overheads.
Finished Goods – Gold
Consumable Stores & Tools
Lower of cost and market value
At cost
1.12Taxation
Provision for current tax is made on the basis of estimated taxable income for the current accounting year in
accordance with the Income Tax Act, 1961.
Deferred tax is recognized, subject to prudence, on timing differences, being the difference between the taxable
income and the accounting income that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax assets are recognized for unabsorbed depreciation and carry forward losses to
the extent there is virtual certainty that sufficient future taxable income will be available against which deferred
tax assets can be realized.
Fringe Benefit Tax is provided in accordance with the provision of Income Tax Act, 1961.
1.13Employee Benefits
i)
Leave Salary is paid to all employees as per the policy of Company every year.
ii)
Defined Contribution Plans :
Contributions payable by the Company to the concerned Government authorities in respect of Provident
Fund, Family Pension Fund and Employees State Insurance are charged to Profit & Loss A/c.
iii) Defined Benefit Plan :
The Company’s liability towards gratuity is determined on the basis of year End actuarial valuations applying
the Projected Unit Credit Method done by an independent actuary. The actuarial gains or losses determined
by the actuary are recognized in the Profit and Loss Account as income or expense.
Annual Report 2008-09
Schedules
forming part of the accounts for the year ended 31st March, 2009
1.14Earning Per Share
Earning per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders,
by the weighted average number of equity shares outstanding during the period.
Dilutive EPS is calculated by dividing the net profit or loss for the period attributable to equity shareholders, by
the weighted average number of equity shares considered for deriving the basic EPS and also the weighted
average number of equity shares that could have been issued upon conversion of all dilutive potential equity
shares. Dilutive potential equity shares are deemed converted at the beginning of the year and not issued at a
later date.
1.15Provisions for Contingent Liabilities and Contingent Assets
Contingent liabilities are not provided for and are disclosed by way of notes after careful evaluation by the
management of the facts and legal aspects of the matters involved. Contingent assets are neither recognized
nor disclosed in the financial statements.
2.Notes to Accounts
2.1 Contingent Liabilities not provided in respect of:
a)
Corporate Guarantees given by the Company to the extent of Rs. 2,828.70 millions (Previous year Rs.1,295.10
millions) for Working capital facilities availed by its wholly owned subsidiaries.
b) Outstanding Letter of Credit : Rs.125.14 millions (Previous year Rs.320.15 millions)
2.2Share Warrants
As per the provisions of the Companies Act 1956, the Company had issued 10 millions warrants convertible into
equal number of equity shares on preferential basis at a price of Rs.312 per warrant to promoter and promoter
group on February 21, 2008. These warrants will be convertible into equity shares of the Company at the option
of the warrant holders within a period of 18 months from the date of allotment in one or more tranches. During
the year the company has not received any further subscription and no shares have been issued against the
outstanding share warrants.
2.3 The Company had received net proceeds of Rs. 3,114.70 millions through an initial public offerings (IPO) during
March, 2006 which have been fully utilized as under:
(Rupees in Millions)
2009
Investment in Subsidiaries, Joint Ventures & Associates
Working Capital requirements & General corporate purpose
Investment in setting up a Diamond manufacturing facility in SEZ at
Hyderabad
Unutilized money invested in Bank Fixed Deposits
Total
2008
1,395.40
1,629.30
90.00
1,095.40
959.30
10.00
NIL
1,050.00
3,114.70
3,114.70
2.4 Out of the balance Foreign Currency Convertible Bonds (FCCBs) proceeds of USD 5.75 millions as on March
31, 2008, the Company further utilized towards its objects - overseas acquisitions and infrastructure activities
including development of Special Economic Zones and as on March 31, 2009, the Company had a balance of
USD 2.00 millions lying in banks pending utilization.
Upto 31st March,2008, the company had converted USD 36.14 millions of FCCBs into 5,896,067 equity shares of
Rs. 10 each at an initial conversion price of Rs. 275/- per equity share. During the year, the conversion price was
adjusted and reset to Rs. 220/- per equity share as per terms and condition of Offering Circular dated November
21, 2006 and any equity shares upon conversion would rank pari passu with existing share holders. The company
has not converted any FCCBs from 1st April, 2008 to 31st March, 2009 and the outstanding FCCBs as on 31st
March, 2009 was USD 73.86 millions.
53
54
Gitanjali Gems Limited
Schedules
forming part of the accounts for the year ended 31st March, 2009
2.5 Out of the balance Global Depository Receipts (GDRs) proceeds of USD 94.30 millions as on March 31, 2008,
the company utilized USD 72.965 millions towards investment in overseas and Indian subsidiaries and towards
general corporate purposes including working capital requirements as per the objects of the issue. Pending
utilization, the balance proceeds of USD 21.335 millions have been kept in deposit accounts with overseas banks
as on March 31, 2009.
2.6Investments
In Subsidiaries
With a view to strengthening the integrated business model and continuing to expand the existing range of
product offerings, the company has during the year additionally invested to the extent of Rs. 343.25 millions
(previous year : Rs. 1,780 millions) in some of its Subsidiary Companies.
As the Subsidiary Companies have preferred the infusion of funds through equity capital route, during the year
following subsidiaries have issued equity shares to the company as under :
(Rupees in Millions)
Name of the Subsidiary
Gitanjali Exports Corporation Ltd
Fantasy Diamond Cuts Pvt Ltd
Asmi Jewellery India Pvt Ltd
GILI India Ltd
Gitanjali Lifestyle Ltd
Brightest Circle Jewellery Pvt Ltd
No. of
Shares
Issued
Face
Value
(Rs.)
Share
Premium
(Rs.)
Amount
(Rs. in
Millions)
2,800,000
3,350,000
400,000
1,600,000
2,000,000
2,250,000
10
10
10
10
10
10
200
65
375
240
40
190
588.00
251.25
154.00
400.00
100.00
450.00
Total
1,943.25
As one of the subsidiaries is in the process of complying with various formalities, an amount of Rs. 180 millions
continues to be classified under the “Investment Schedule”.
2.7Secured Loans
Working capital borrowings from Banks/ Financial Institution are secured against hypothecation by way of a first
charge on all the present and future goods, movable assets, vehicles, furniture, stock-in–trade, fixed deposits,
book debts, mortgage by way of deposit of title deeds of land and building of the Company’s factory premises,
office premises of group companies alongwith personal guarantee of the Managing Director.
2.8 Following payments have been made to Directors during the year
(Rupees in Millions)
2009
Salary & Other Payments
10.24
2008
9.34
In view of the sufficient profits during the year and as no commission is paid/payable to any director, separate
computation of profit in respect of managerial remuneration as required under Section 198 / 349 of the Companies
Act, 1956 is not given.
2.9 Interest received during the year was Rs. 813.27 Millions (Previous Year Rs. 516.46 Millions) and Tax Deducted
at Source from interest income was Rs 66.17 Millions (Previous Year Rs. 91.75 Millions)
Annual Report 2008-09
Schedules
forming part of the accounts for the year ended 31st March, 2009
2.10Sundry Debtors:
Sundry debtors includes Rs. 1,186.06 millions. (Previous year Rs 985.16 millions) due from concerns in which
Directors are interested as Directors/Partners.
2.11Loans and Advances:
Advances to suppliers includes Rs 206.95 millions (Previous year Rs 106.96 millions) given to concerns in which
Directors are interested as Directors/Members/Partners.
2.12 Remuneration to Auditors
(Rupees in Millions)
2009
2008
a) Audit Fees
b) Tax Audit Fees
c) Service Tax
1.66
0.15
0.19
1.35
0.15
0.19
Total
2.00
1.69
2.13Information required pursuant to Paras 3 & 4 of part II of Schedule VI to the Companies Act, 1956
(As per Annexure - I)
2.14Earning per share (after Tax provision) for the year ended 31st March,
2009
Net profit for the period attributable to equity shareholders (Rs. In Millions)
No. of Equity shares as at 31st March
Basic earnings per share (Face value of Rs.10 each) (Rs)
Weighted average number of equity Shares outstanding (Nos.)
Diluted earnings per share (Face value of Rs.10 each) (Rs)
2008
1,267.69
85,062,883
14.90
98,169,248
12.91
1,381.54
67,455,958
20.48
84,888,765
16.27
2.15Deferred Tax Assets & Liabilities as on 31st March, are as under:
(Rupees in Millions)
2009
Deferred Tax (Liability)
Differences in depreciation and other differences in block of fixed assets as
per tax books and financial books
Gross Deferred Tax (Liability)
Deferred Tax Asset
Provision for Retirement Benefits
Gross Deferred Tax Asset
Net Deferred Tax Asset/(Liability)
2008
(9.97)
(6.61)
(9.97)
(6.61)
1.70
1.70
(8.27)
0.84
0.84
(5.77)
55
56
Gitanjali Gems Limited
Schedules
forming part of the accounts for the year ended 31st March, 2009
2.16Defined Benefit Plan
The Company has applied the revised Accounting Standard AS-15 Employee Benefits notified under the
Companies (Accounting Standard) Rules, 2006. Consequent to the application of the revised AS-15 the following
disclosures have been made as required by the said standard:
(%)
I)Assumptions
2009
Discount Rate Previous Year
Salary Escalation Previous Year
Attretion Rate Previous Year
Discount Rate Current Year
Salary Escalation Current Year
Attretion Rate Current Year
2008
8.00
6.00
2.00
7.75
6.00
2.00
8.00
6.00
–
8.00
6.00
–
(Rupees in Millions)
II)Table Showing Change in Benefit Obligation
Liability at the beginning of the year
Interest Cost
Current Service Cost
Past Service Cost (Non Vested Benefit)
Past Service Cost (Vested Benefit)
Liability Transfer in
Liability transfer out
Benefit Paid
Actuarial (gain)/loss on obligations
Liability at the end of the year
2009
2008
6.30
0.64
2.71
–
–
–
–
(1.27)
(1.03)
7.35
5.06
.53
1.74
–
–
–
–
(0.69)
(0.34)
6.30
(Rupees in Millions)
III)Tables of Fair Value Plan of Assets
Fair Value of Plan Assets at the beginning of year
Expected Return of Plan Assets
Contributions
Transfer from Other Company
Transfer to Other Company
Benefit Paid
Acturial gain / (Loss) on Plan Assets
Fair Value of Plan Assets at the end of the year
Total Acturial Gain/(loss) to be recognized
2009
2008
–
–
1.27
–
–
(1.27)
–
–
1.03
–
–
–
–
–
–
–
–
–
(Rupees in Millions)
IV)Recognition of Transitional Liability
Transition Liability at start
Transition Liability Recognised during Year
Transition Liability at end
2009
2008
–
–
–
–
–
–
Annual Report 2008-09
Schedules
forming part of the accounts for the year ended 31st March, 2009
(Rupees in Millions)
V)Acturial Return on Plan Assets
2009
Expected Return on Plan Assets
Acturial Gain / (Loss) on Plan Assets
Acturial Return on Plan Assets
2008
–
–
–
–
–
–
(Rupees in Millions)
VI)Amount Recognised in the Balance Sheet
Liability at the end of the year
Fair Value of Plan Assets at the end of the year
Difference
Unrecognised Past Service Cost
Unrecognised Transition Liability
Amount Recognised in the Balance Sheet
2009
2008
7.35
–
(7.35)
–
–
(7.35)
6.30
–
(6.30)
–
–
(6.30)
(Rupees in Millions)
VII)Expenses Recognised in the Income Statement
Current Service Cost
Interest Cost
Expected Return on Plan Assets
Past Service Cost (Non Vested Benefit) Recognised
Past Service Cost (Vested Benefit) Recognised
Recognition of Transition Liability
Actuarial (Gain) or Loss
Expense Recognised in Profit & Loss Account
2009
2008
2.71
0.64
–
–
–
–
(1.03)
2.32
1.74
0.53
–
–
–
–
(0.34)
1.93
(Rupees in Millions)
VIII)Balance Sheet Reconciliation
Opening Net Liability
Expense as above
Employers Contribution
Amount Recognised in Balance Sheet
2009
2008
6.30
2.32
(1.27)
7.35
5.06
1.93
(0.69)
6.30
(Rupees in Millions)
IX) Other Details
2009
2008
Gratuity is payable at the rate of 15 days
Salary for each year of service subject to maximum of Rs.3,50,000/-.
Salary escalation is considered as advised by the Company which is in
line with the industry practice Considering promotion and demand and
supply of the Employees
Number of Members
Salary Per Month
Contribution for next year
383
6.19
–
352
5.51
–
57
58
Gitanjali Gems Limited
Schedules
forming part of the accounts for the year ended 31st March, 2009
(Rupees in Millions)
X)Experience Adjustment
On Plan Liability Gain / (Loss)
2009
2008
(1.40)
–
Provision for gratuity as per actuarial valuation works out to Rs.7,354,195, against which the company has
gratuity provision of Rs. 7,848,023/- as at 31st March, 2009.
2.17Segment Reporting (Accounting Standard –17)
The Management of the company identifies two major reportable segments as Diamond business & Jewellery
Business.
(Refer to Annexure II)
2.18 Related Party Transaction (Accounting Standard -18)
(Refer to Annexure – III)
2.19Impairment of Assets
There has been no case of impairment of assets reported during the year.
2.20Disclosure as per Accounting Standard (AS – 19) on “Leases”, issued by the ICAI, are given below:
i)
The Company has taken various office premises under operating lease or leave and license agreements.
These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or
longer for other leases and are renewable by mutual consent on mutually agreeable terms. The Company
has given refundable interest free security deposits under certain agreements.
ii)
Lease payments are recognised in the Profit and Loss Account under ‘Rent’ in schedule 16.
iii) The future minimum lease payments under non-cancelable operating lease
a)
not later than one year Rs.28.91 Millions (Previous year 28.29 Millions)
b) later than one year and not later than five years Rs.79.48 Millions(Previous year 93.99 Millions)
c)
More than five years Rs. NIL (Previous year : Rs. NIL)
2.21Disclosure of Foreign Currency Exposures
The details of outstanding foreign currency exposure of the company as at March 31, 2009 are as under
(In Millions)
Particulars
Debtors - covered by Forward Contract
Debtors - uncovered
Creditors - covered by Forward Contract
Creditors - uncovered
Bank Balance - Uncovered
FCCBs - Uncovered
Bank Facility - Uncovered
USD
69.52
178.36
60.38
57.17
25.21
73.86
5.14
Forward contracts for debtors and creditors are not intended for trading and Speculations
Euro
–
0.50
–
–
–
–
–
Annual Report 2008-09
Schedules
forming part of the accounts for the year ended 31st March, 2009
2.22Disclosure of Loans and Advances to Subsidiaries, Associates & Others (Pursuant to Clause 32 of Listing
Agreement)
(Rupees in Millions)
Name of the Companies
Amount
Outstanding
as at
31st March,
2009
Maximum
amount
Outstanding
during the
year
717.98
75.00
92.89
103.11
477.00
119.59
824.01
1.34
80.73
0.15
417.81
58.75
245.26
5.94
0.06
0.50
1,049.86
75.00
92.89
103.11
477.00
413.94
829.97
1.34
80.73
0.15
608.91
91.81
245.26
5.94
0.06
0.50
Wholly Owned Subsidiaries
Gitanjali Exports Corporation Ltd.
Brightest Circle Jewellery Pvt. Ltd.
Decent Securities & Finance Pvt. Ltd.
Eureka Finstock Pvt. Ltd.
Fantasy Diamond Cuts Pvt. Ltd.
Gitanjali Infratech Ltd.
Hyderabad Gems SEZ Ltd.
Mohar Jewels Ltd.
Nashik Multi Services SEZ Ltd.
West Bengal SEZ Ltd.
Mehul Impex Ltd.
Asmi Jewellery India Pvt. Ltd.
Gitanjali Lifestyle Ltd.
Ivida Technologies Ltd.
MMTC Gitanjali Pvt. Ltd.
CRIA Jewellery Pvt. Ltd.
At the year end, the company has no loans and advances in the nature of loans, where in repayment is beyond
seven years.
The above statement excludes:
a)
Rs. 212.05 millions invested in a subsidiary Company as long term debt and is presently included under
loans and advances pending clarification/approval and compliance, would be converted into share capital
accordingly.
b) Rs. 5.29 Millions advanced to the subsidiary Companies by way of trade advance.
2.23 The Company is in the process of identifying enterprises covered under the Micro, Small and Medium Enterprises
Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent
obtained, no supplier is covered under the Act.
2.24 Previous year’s figures have been regrouped/rearranged/reworked wherever necessary and possible so as to
confirm to current year’s classification
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
59
60
Gitanjali Gems Limited
Annexure - I
2.13Information required pursuant to Paras 3 & 4 of Part II of Schedule VI to the Companies Act, 1956.
a)Diamonds
2009
Qty.
2008
Rupees in
Millions
Qty.
Rupees in
Millions
1.
Opening Stock
Cts.
923,280.000
3,382.47
Cts. 1,313,886.370
2,971.49
2.
Closing Stock
Cts. 1,151,445.080
6,619.79
Cts.
3,382.47
3.
Sales
Cts. 2,513,061.480 15,289.35
Cts. 3,367,700.110 16,858.41
4.
Purchases
Cts. 3,377,159.860 17,966.56
Cts. 4,163,283.780 16,434.33
5.
Inter Unit Diamond Received
Inter Division Diamond Transferred
Inter Division Diamond Received
Repairing Loss
Cts.
Cts.
Cts.
Cts.
–
68,608.290
11,050.670
124.710
–
970.29
173.96
–
Cts.
Cts.
Cts.
Cts.
103.510
39,878.900
1,415.480
224.830
0.01
572.54
21.88
–
6.
Manufactured
Polished Diamonds
Rough Rejection Diamonds
Cts.
Cts.
264,662.220
69,320.930
3,807.76
3.63
Cts.
Cts.
496,982.340
–
4,989.55
–
14%
86%
100%
223,015.890
689,218.230
912,234.120
29.01%
469.37 19%
270,443.940
2,910.95 81% 1,374,143.700
3,380.32 100% 1,644,587.640
30.22%
816.13
3,496.01
4,312.14
7.
Consumption-Rough Diamonds /
Jewellery
Imported
Indigenous
Yield %
8.
9.
923,280.000
Value of Import on CIF Basis
Diamonds
Expenditure in Foreign Exchange
Foreign Travelling
Others
10. Earnings in Foreign Exchange
FOB Value of Exports
11,156.88
11,156.88
12,400.20
12,400.20
7.42
11.30
18.72
3.00
5.13
8.13
14,170.31
14,170.31
14,104.96
14,104.96
47,919.04 46,146.52
63.59
56.98
f) Closing Stock
Raw Form
Total Quantity
Total Amount
49,008.43 101,347.62
65.53
119.71
–
–
– 559,963.23
–
627.66
e)Adjustments
Total Quantity
Total Amount
W.I.P.
Total Quantity
Total Amount
–
–
d) Sales during the year
Total Quantity 837,265.64 723,064.02
Total Amount
1,081.93
461.70
–
–
c)Consumed in
Production
Total Quantity 1,003,096.05 725,599.27
Total Amount
1,453.65 1,456.64
–
–
1,366.55
1.43
71.95
0.00
2009
b)Purchases
Total Quantity 1,789,795.02 939,599.27
Total Amount
2,488.01
996.98
2008
1,294.60
1.43
2009
2009
ALLOYS
Gms.
2008
–
–
8,554.78
0.05
–
–
–
–
–
–
1,105.52 22,972.31
0.01
0.16
1,294.60 212,252.89 176,079.30
1.43
1.79
1.56
–
–
–
–
15.91 588,622.29 396,149.50
0.02
3.25
2.63
222.70 611,483.87 477,250.00
0.34
3.39
3.62
1,087.81 199,051.61 117,951.11
1.12
1.72
0.73
2008
GOLD
(MOUNTINGS)
10 KT
.995 Gold - Gms.
147,494.14 96,594.93
176.69
96.40
a)Opening Stock
Total Quantity
Total Amount
GOLD 24KT
Stated in the form of
.995 Gold - Gms.
Raw Material Consumed/Trading goods
2008
2008
14,749.45 12,649.13
6.34
5.29
2009
PRE. & SEMI
STONES & PEARLS
Cts.
1,542.05
23.47
5,843.27
66.95
4,703.73
72.17
14,748.51 17,156.85
170.47
176.87
1,248.95 40,001.17
38.97
574.06
6,010.34
98.59
103.51
0.01
–
–
7,094.70
2.82
3,668.61
1.59
58,348.56 11,080.84
9.22
4.75
–
–
50,640.64
10.38
28,468.01 77,470.67 231,550.42 229,215.05
572.06 1,168.46
255.96
300.44
31,960.60 33,769.31 332,884.87 231,211.86
620.05
542.28
272.04
301.47
21,860.58 27,102.82
249.04
301.16
2009
DIAMONDS
Cts.
b) Quantitative information in respect of stocks, consumption, purchases and sales by class of goods.
2008
–
–
–
–
7,332.51
10.11
9,881.79
10.70
29.63
0.00
563.07
0.07
40,617.18 20,146.56
4.27
2.41
–
–
–
–
30,391.39
2.28
50,328.57
4.09
20,709.63 18,160.35
2.47
1.88
2009
SYNTHETIC STONES
Cts.
4,088.04
5.36
592.08
0.85
2,026.06
2.65
–
–
–
–
-
2,654.06
3.55
2009
2008
1,752.28
2.26
901.78
1.29
–
–
–
–
–
–
195.87
0.33
2,458.19
3.22
PLATINUM
Gms.
(Rupees in Millions)
Annual Report 2008-09
Annexure - I
61
32.12
48.99
Total Amount
37.31
Total Amount
16.67
Total Amount
Total Amount
W.I.P.
9,183.06
1.70
Total Amount
25.43
Total Amount
Total Quantity
32,026.21
Total Quantity
Raw Form
f) Closing Stock
–
–
Total Quantity
e)Adjustments
41,010.56
Total Quantity
d)Sales during the year
14,873.68
Total Quantity
c) Consumed in Production
65,375.75
Total Quantity
b)Purchases
31,717.76
Total Amount
2009
Total Quantity
a)Opening Stock
16.57
17,178.82
15.55
14,538.94
–
–
298.77
223,683.54
262.72
8,549.64
287.96
250,711.43
6.88
13,239.51
2008
COLOUR STONE/C.Z./
PEARL.
Cts.
Raw Material Consumed/Trading goods
1.42
40,584.49
2.11
65,624.18
–
–
–
–
8.86
192,992.67
11.24
278,080.96
1.15
21,120.38
2009
2008
0.45
8,789.17
0.70
12,331.21
–
–
1.41
55,019.07
2.90
26,365.03
3.05
87,993.36
1.00
14,511.12
Silver
Gms.
–
–
5.88
8,824.00
–
–
–
–
2.24
1,319.00
6.03
3,266.00
2.09
6,877.00
2009
STEEL
Gms.
–
–
2.09
6,877.00
–
–
–
–
0.50
1,075.00
0.15
116.00
2.45
7,836.00
2008
b) Quantitative information in respect of stocks, consumption, purchases and sales by class of goods.
–
–
–
–
–
–
–
–
0.50
–
0.50
–
–
–
2009
CONSUMABLES
Gms.
–
–
–
–
–
–
–
–
7.10
–
7.10
–
–
–
2008
–
–
0.04
82.25
–
–
–
–
–
–
–
–
0.04
82.25
2009
476.64
467,611.46
2009
2008
420.16
311,673.22
TOTAL
(Rupees
in Millions)
3,454.34
2,153.98
–
–
0.04
82.25
–
–
–
–
–
3,211.53
143.79
116,937.14
285.08
482,401.45
41.62
3,275.01
1,207.62
212.97
160,975.61
263.68
306,635.85
1,201.73
600,067.91
785.35
943,481.96 1,003,308.68
2,336.11
– 2,091,313.51 1,471,772.58
–
– 3,163,247.59 2,030,951.59
0.04
82.25
2008
PLATINUM MOUNTING
Gms.
(Rupees in Millions)
62
Gitanjali Gems Limited
Annexure - I
Annual Report 2008-09
Annexure - I
c)
Finished Goods
i)
Studded Jewellery Comprising of
(Rupees in Millions)
Jewellery/Diamond
(Quantity-Grams)
2009
a)
b)
c)
d)
e)
f)
2008
Opening Stock
Total Quantity
Total Amount
565,905.25
1,241.04
163,053.23
345.43
Total Quantity
Total Amount
1,914,513.54
2,313.85
1,226,548.89
3,210.62
Total Quantity
Total Amount
1,325,248.86
4,132.61
4,271,038.75
6,278.31
Total Quantity
Total Amount
3,582,827.63
9,591.61
4,960,153.80
8,683.18
Total Quantity
Total Amount
47,359.55
87.27
134,581.82
448.73
Total Quantity
Total Amount
175,480.47
527.16
565,905.25
1,241.04
91.55%
83.34%
Mfg Jewellery
Finished Jewellery Purchased
Jewellery sold
Jewellery - Division Transfer
Closing Stock
Yield %
63
64
Gitanjali Gems Limited
Annexure - II
Segmentwise Reporting Revenue, Results and Capital Employed
(Rupees in Millions)
For the year ended 31st March,
2009
2008
A) Primary Segment (By Business Segment)
1.
2.
3.
Segment Revenue
a. Segment - Diamond
b. Segment - Jewellery
Total
Less: Inter Segment sales
Net Sales
Segment Results
Profit/(Loss) before Tax and interest fromeach segment
a. Segment - Diamond
b. Segment - Jewellery
Total
Less :
i) Interest
ii) Other un-allocable expenses
Total Profit Before Tax
Capital Employed
a. Segment - Diamond
b. Segment - Jewellery
b. Unallocated net assets
Total
17,196.06
10,797.43
27,993.49
1,055.02
26,938.47
17,708.41
9,429.29
27,137.70
594.41
26,543.29
415.03
1,580.99
1,996.02
660.69
1,100.50
1,761.19
453.39
235.43
1,307.20
177.92
96.52
1,486.75
6,868.98
2,961.44
9,397.77
19,228.19
5,407.57
1,925.89
10,806.18
18,139.64
12,749.18
14,189.29
26,938.47
12,037.30
14,505.99
26,543.29
B) Secondary Segment (By Geographical Segment)
Segment Revenue
Geographical Location
India
Rest of the world
Total Revenue
Annual Report 2008-09
Annexure - III
Related Party Disclosures as per AS 18.
For the year ended 31st March, 2009
A)
B)
Particulars of Enterprises Controlled By The Company
Name of Related Party
Relationship
Mehul Impex Limited
Gitanjali Exports Corporation Limited
CRIA Jewellery Private Limited
Fantasy Diamond Cuts Pvt Ltd
Hyderabad Gems SEZ Limited
Shubalavanya Jewel crafts PrivateLimited
Asmi Jewellery India P.Limited (Formerly known as Desire Lifestyle PrivateLimited)
Gili India Limited (Formerly known as Gitanjali Jewels Limited)
Gitanjali Infratech Limited
Gitanjali Lifestyle Limited
D'Damas Jewellery (India) PrivateLimited
Ivida Technologies PrivateLimited
Brightest Circle Jewellery PrivateLimited
Raigad SEZ Limited
Aurangabad SEZ Limited (Formerly known as Aurangabad Gems SEZ Limited)
Nanded SEZ Limited (Formerly known as Nanded Gems SEZ Limited)
Nashik Multi Services SEZ Limited
Mohar Jewels Limited
Modali Jewels PrivateLimited
West Bengal SEZ Limited
Gitanjali Ventures DMCC - Dubai
Samuels Jewelers Inc. USA
Gitanjali USA Inc.
Rogers Limited Inc
Gitanjali Retail Ventures Limited
Gitanjali Holdings Limited
MMTC Gitanjali Private Limited
Decent Securities & Finance Private Limited
Eureka Finstock PrivateLimited
Nagpur Multiproduct SEZ Limited
Modali Gems Private Limited (Formerly known as Modali Distributors Private Limited)
Tri-Star Worldwide LLC
Trinity Watch Co. Private Limited
Lucera Retail Venture Private Limited
Kolkatta Axis Malls Limited
Hoop Retail Ventures Private Limited
Morellato India Private Limited
Spectrum Jewellery Private Limited
Mannat Jewellery Manufacturing Private Limited
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Step Down Subsidiary
Step Down Subsidiary
Step Down Subsidiary
Step Down Subsidiary
Step Down Subsidiary
Joint Venture
Joint Venture
Step Down Joint
Venture
Particulars of Key Management Personnel
Name of Related Party
Relationship
Mehul C. Choksi
G.K.Nair
Adrianus Voorn
Managing Director
Director
Director
65
66
Gitanjali Gems Limited
Annexure - III
For the year ended 31st March, 2009
C)
Particulars of Enterprises Under Common Control of The Key
Management Personnel
Name of Related Party
Audarya Investments Private Limited
Naviraj Estates Private Limited
Priyanka Gems PrivateLimited
Partha Gems PrivateLimited
Lustre Manufacturers PrivateLimited
Gitanjali Reality PrivateLimited
Rohan Mercantile Private Limited
Trans Expo Trade Private Limited
Mozart Investment Private Limited
Gitanjali Gold & Precious Limited
Touchstone
Diamond Creations
Prism Bullion Private Limited
Sneaking Mercantile PrivateLimited
N & J Finstock PrivateLimited
D)
Particulars Of Enterprises Controlled By Relatives Of KeyManagement
Personnel where There Are Transactions
Diminco N.V.
E)
Particulars Of Relatives Of Key Management Personnel where
there are Transactions
Guniyal C. Choksi
Priti M.Choksi
F)
Particulars of Transactions with Parties Referred To in (A) Above
Purchases
Amount outstanding shown under Sundry Creditors
Labour Charges Paid
Sales
Sales of Assets
Interest Received
Amount outstanding shown under Sundry Debtors
Amount outstanding shown under Advance to Subsidiary Co.
Amount outstanding shown under Advance from Customer
Amount outstanding shown under Advances
Amount outstanding shown under Advances to suppliers
Investment
Amount outstanding shown under Share Application Money
Reimbursement of Expenses
Expenses Recovered
Guarantees given to the bankers for Letter of Credit facility
Rupees in Millions
1,222.61
42.90
49.74
8,400.60
1.90
10.05
2,214.68
3,437.48
213.15
50.72
0.02
2,430.81
4.75
8.77
244.94
2,828.70
Annual Report 2008-09
Annexure - III
For the year ended 31st March, 2009
G)
Particulars of Transactions with Parties Referred To in (B) Above
Salary and other payments
Loan taken
Loan returned
Amount outstanding shown under Unsecured Loans
Guarantees obtained for working capital borrowings from bankers
H)
128.48
27.23
206.95
6.65
3.66
2.23
6.91
Particulars of Transactions with Parties Referred To in (D) Above
Sales
Purchases
Amount Outstanding Shown Under Sundry Debtors
Amount Outstanding Shown Under Sundry Creditors
J)
10.24
448.67
438.93
7.85
To the extent of
working capital
borrowings
Particulars of Transactions with Parties Referred To in (C) Above
Sales
Amount Outstanding Shown Under Sundry Debtors
Amount outstanding shown under Advances to Suppliers
Amount outstanding shown under Advances from Customer
Assortment charges
Expenses Reimbursement
Rent Paid
I)
Rupees in Millions
558.44
883.14
407.28
971.06
Particulars of Transactions with Parties Referred To in (E) Above
Sales
Amount Outstanding Shown Under Sundry Debtors
Amount outstanding shown under Unsecured Loans
0.14
0.14
2.23
67
68
Gitanjali Gems Limited
Balance Sheet Abstract
and Company’s General Business Profile
1 Registration Details
Registration No.
Balance Sheet Date
4 0 6 8 9
3 1
Date
0 3
Month
State Code
1 1
0 9
Year
2 Capital raised during the year (Amount in Rs. 000)
Public Issue
N
I
L
Private Placement
N
I
L
Bonus Issue
N
I
L
Right Issue
N
I
L
3 Position of Mobilisation and Deployment of Funds (Amount in Rs. 000)
Total Liabilities
3 1 9 9 4 5 5 2
Total Assets
3 1 9 9 4 5 5 2
1 8 0 6 5 5 6 3
Sources of Funds
Paid - up Capital
8 5 0 6 2 9
Reserves & Surplus
Share Warrants
3 1 2 0 0 0
Deferred Tax Liability
Secured Loans
9 0 0 1 1 0 2
8 2 6 6
Unsecured loans
3 7 5 6 9 9 2
Investments
8 3 8 5 1 8 1
Application of Funds
Net Fixed Assets
Net current assets
4 9 9 0 3 3
2 3 1 1 0 3 3 8
Deferred Tax Assets
N
I
L
4 Performance of Company (Amount in Rs. 000)
Turnover Incl. other income 2 6 9 4 0 6 4 5
Total Expenditure
Net Profit Before Tax
Net Profit after Tax
1 3 0 7 2 0 0
Earning per Share in (Rs)
1 4
.
9 0
2 5 6 3 3 4 4 5
1 2 6 7 6 8 8
Dividend Rate (%)
1 8
.
0 0
5 Generic names of five principal products of Company
Item Code No.
Product Description
7 1 0 2 3 1
0 0
R O U G H
7 1 0 2 3 9
1 0
P O L
7 1 0 8 1 2
0 0
G O L D
7 1 0 6 9 1
0 0
S
7 1 1 3 1 9
1 0
G O L D
I
I
D
I
S H E D
A M O N D S
D
I
A M O N D S
L V E R
J E W E L L E R Y
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
–
–
248.38
13.93
234.45
–
Provision for Taxation
Profit after Taxation
Proposed Dividend
–
0.04
0.11
0.15
–
14.49
12.16
26.65
10,898.24 308.74 2,157.35
Profit before Taxation
Turnover
–
0.50
INR
849.69
66.00
INR
0.04
–
(1.96)
0.06
(1.90)
–
158.96
32.38
191.34
26.97 3,280.38
–
53.08 2,653.92
53.08 2,653.92
173.28 (11.47)
4.50
INR
10,080.06 546.99 1,387.78
26.78
9.90
INR
Total Liabilities
Details of
Investments (Except
investment in
Subsidiaries)
(Rupees in Millions)
–
26.20
14.55
40.75
6,152.57
0.25
2,074.45
2,074.45
274.80
83.50
INR
–
24.93
2.43
27.36
891.29
62.73
1,274.45
1,274.45
50.725
USD
USD
433.93
50.725
USD
6.50
INR
–
(402.79)
–
(402.79)
4,156.28
–
–
–
–
–
–
(13.06) (433.07) (32.69)
– (118.11)
–
–
–
–
–
–
778.24 (0.12)
–
778.24 (0.12)
79.53 4,443.52
–
(13.06) (551.18) (32.69)
– 2,867.53
–
5,181.27 2,604.30 2,659.69 307.47 3,162.47 11.92
5,181.27 2,604.30 2,659.69 307.47 3,162.47 11.92
(18.58) (458.01) (33.47) 1,230.92 (5.93)
80.89
50.725 50.725
USD
1,975.54 2,042.70 1,238.09
50.725
USD
(30.51) (1,024.03)
250.78
INR
0.50
INR
–
–
0.01
–
–
511.82
–
690.66
690.66
(79.77)
20.50
INR
(3.77)
–
–
0.37 (120.35)
0.20
0.57 (124.12)
–
–
2.44 22.62
(3.63) (1.12)
0.04
1.36
0.50
INR
2.44 22.62
(3.59) (1.11)
14.72
–
32.24
32.24
(28.53) (1.12)
28.33
INR
Mehul
Asmi
Cria Gili India Fantasy D’Damas Samuels Gitanjali Rogers Tristar Gitanjali MoModali Mohar Shu- Gitanjali
Jew- baLaLifeImpex Jewel- JewelLtd.
Diamond Jewellery Jewelers
USA,
Ltd. Inc, World- Ventures dali
Gems
els
vanstyle
Ltd. lery India lery
(ForCuts Pvt.
(India)
Inc.
Inc.
wide
DMCC Jew- Pvt. Ltd.
Ltd.
yaa
Ltd.
Pvt Ltd.
Pvt.
merly
Ltd
Pvt. Ltd.
LLC
els
(For(formerly Ltd.
known
Pvt.
merly
Jewel
known
as
Ltd.
known
Crafts
as Desire
Gitanjali
as
Pvt.
Lifestyle
Jewels
Modali
Ltd.
Pvt. Ltd.)
Ltd.
Distributors
Private
Ltd)
10,080.06 546.99 1,387.78
2,385.85
128.00
INR
Gitanjali
Exports
Corporation Ltd.
Total Assets
Reserves
Capital
Exchange Rate
Reporting Currency
Particulars
Name of Subsidiaries
Details of Subsidiary Companies
Annual Report 2008-09
Statement
pursuant to Section 212(8) of the Companies Act, 1956 Relating to Subsidiary
Companies for the year ended March 31, 2009
69
INR
–
–
Place :Mumbai
Dated :29th June, 2009
Proposed Dividend
53.81 (20.57)
Profit after Taxation
0.56
26.47
Provision for Taxation
–
80.28 (20.01)
2,378.67
0.50
INR
West
Bengal
SEZ
Ltd.
–
–
0.67
0.67
–
–
–
(2.27) (0.17)
0.04
(2.23) (0.17)
–
–
8.60
8.60
(2.32) (0.17)
0.50
INR
Ivida
Technologies
Pvt.
Ltd.
MEHUL C. CHOKSI
Managing Director
–
0.62
0.18
0.80
–
– 100.00
Profit before Taxation
Turnover
0.01
1,494.13 870.15 665.11
Total Liabilities
Details of
Investments (Except
investment in
Subsidiaries)
1,494.13 870.15 665.11
42.40
0.50 500.00
INR
HyGitanderajali
bad InfrateGems ch Ltd.
SEZ
Ltd.
528.87 (20.57)
29.17
INR
Brightest
Circle
Jewellery Pvt.
Ltd.
Total Assets
Reserves
Capital
Exchange Rate
Reporting Currency
Particulars
Name of Subsidiaries
Details of Subsidiary Companies
–
(37.64)
0.24
(37.40)
147.96
–
300.11
300.11
(53.39)
10.00
INR
Lucera
Retail
Venture
Pvt. Ltd.
(Formerly
known as
Renaissance
Retail
Venture
Pvt. Ltd.)
0.80
0.50
INR
–
0.43
0.13
0.56
–
94.27
95.01
95.01
G. K. NAIR
Director
–
(0.88)
(0.01)
(0.89)
2.49
–
30.61
30.61
(13.22)
0.50
INR
–
(1.31)
–
(1.31)
–
106.65
109.64
109.64
(2.26)
0.50
INR
Trinity Decent Eureka
Watch SecuriFinCompany ties & stocks
Pvt. Ltd.
FiPvt. Ltd.
nance
Pvt.
Ltd.
–
(3.87)
(0.37)
(4.24)
9.69
–
99.12
99.12
(47.50)
10.10
INR
0.50
INR
0.50
INR
–
–
–
0.55
0.55
–
–
–
–
–
(0.02)
–
(0.02)
–
–
0.51
0.51
(0.18)
0.50
INR
PANKHURI WARANGE
Company Secretary
For and on behalf of the Board
–
(0.22) (0.23) (0.07)
–
(0.22) (0.23) (0.07)
–
–
0.74
0.51
–
0.74
0.51
(0.22) (0.23) (0.07)
0.50
INR
–
(0.04)
–
(0.04)
–
–
0.51
0.51
(0.20)
0.50
INR
Hoop
Gitanjali MMTC Kolka- Raigad AurangaRetail
Retail
Gitan- ta Axis Gems bad SEZ
Ventures Ventures jali Pvt. Mall
SEZ
Ltd.
Pvt. Ltd. Pvt. Ltd. Ltd.
Ltd.
Ltd.
(For(Formerly
merly
known as
known
B Vijay
as
Retail
AurangaVentures
bad
Pvt. Ltd.)
Gems
SEZ Ltd.)
0.50
INR
–
–
0.51
0.51
–
–
–
(0.04) (0.03)
–
(0.04) (0.03)
–
–
0.51
0.51
(0.20) (0.20)
0.50
INR
–
(0.04)
–
(0.04)
–
–
81.25
81.25
(0.36)
0.50
INR
Nanded- Nag- Nashik
SEZ Ltd. pur
Multi
(ForMulti- Servmerly
Prodices
known
uct
SEZ
as
SEZ
Ltd.
Nanded Ltd.
Gems
SEZ Ltd.)
(Rupees in Millions)
70
Gitanjali Gems Limited
Statement
pursuant to Section 212(8) of the Companies Act, 1956 Relating to Subsidiary
Companies for the year ended March 31, 2009
Annual Report 2008-09
Auditors’ Report
on Consolidated Financial Statements
The Board of Directors
Gitanjali Gems Limited
Mumbai.
1.
We have audited the attached Consolidated Balance Sheet of GITANJALI GEMS LIMITED (the Company) and its
subsidiaries & joint ventures (entities together termed as the Gitanjali Group) as at March 31, 2009, the related
Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date
annexed thereto. These Consolidated Financial Statements are the responsibility of the Company’s management
and have been prepared on the basis of separate financial statements and other financial information regarding
components. Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with generally accepted auditing standards in India. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared,
in all material respects, in accordance with an identified financial reporting framework and are free from material
misstatements. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by the management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
3.
We did not audit the financial statements of certain subsidiaries and joint venture companies whose financial
statements reflect total assets of Rs. 7,493.24 millions as at March 31, 2009 (Previous Year Rs. 11,262.26 millions),
and total revenues Rs. 7,351.00 millions (Previous Year Rs. 11,217.42 millions) for the year ended on that date.
These financial statements and other financial information have been subjected to audit by other auditors whose
reports have been furnished to us. We have placed reliance on the said reports for the purpose of our opinion on the
consolidated financial statements.
4.
We have relied on the unaudited financial statements (Refer Schedule 18, Note-2.1(b)) of entities whose financial
statements reflect total assets of Rs. 11,030.18 millions as at March 31, 2009 (Previous Year Rs. 5,356.98 millions),
total revenue of Rs 6,884.66 millions (Previous Year Rs. 5,024.76 millions) for the year then ended. These unaudited
financial statements of the entities, as approved by the Board of Directors, have been furnished to us by the
Management and our report in so far as it relates to the amounts included therein, is based solely on such approved
unaudited financial statements.
5.
We report that the consolidated financial statements have been prepared by the management of the Company in
accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements and Accounting
Standard (AS) 27 – Financial Reporting of Interest in Joint Ventures, notified by Companies (Accounting Standards)
Rules, 2006.
6.
Based on our audit and on consideration of the reports of other auditors on separate financial statements and also
other financial informations of the components, and to the best of our information and according to the explanations
given to us, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in
conformity with the accounting principles generally accepted in India:
a)
in the case of the Consolidated Balance Sheet, of the state of affairs of the Gitanjali Group as at March 31,
2009,
b) in the case of the Consolidated Profit and Loss Account, of the profit of the Gitanjali Group for the year ended on
that date, and
c)
in the case of Consolidated Cash Flow Statement, of the Consolidated cash flows of the Gitanjali Group for the
year ended on that date.
For Ford , Rhodes , Parks & Co.
Chartered Accountants
A.D.SHENOY
Partner
Membership No. 11549
Place :Mumbai
Dated :29th June, 2009
71
72
Gitanjali Gems Limited
Consolidated Balance Sheet
as at 31st March,
(Rupees in Millions)
Schedules
SOURCES OF FUNDS
Shareholders' Funds
Share Capital
Share Warrants
Reserves and Surplus
2008
20,774.88
98.48
850.63
312.00
17,683.38
18,846.01
936.12
Deferred Tax Liability (Net)
20,466.32
48.22
13,292.68
3,045.43
16,338.11
(2.77)
Total
41,387.90
36,117.47
2,826.41
–
773.30
331.33
2,395.47
431.65
1,963.82
543.35
2,507.17
53.91
704.68
141.77
Minority Interest
Loan Funds
Secured Loans
Unsecured Loans
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
1
2009
850.63
312.00
19,612.25
2
3
4
16,592.65
3,873.67
5
3,108.86
815.74
2,293.12
533.29
Expenditure During Construction period, Pending Allocation
Goodwill on consolidation
Investments
Current Assets, Loans & Advances
Inventories
Sundry debtors
Cash and bank balances
Loans and advances
7
8
9
10
19,758.17
27,596.29
2,972.00
4,675.62
55,002.08
12,365.53
22,825.20
11,229.55
3,771.66
50,191.94
Less : Current Liabilities and Provisions
Current liabilities
Provisions
11
12
16,718.96
826.28
17,545.24
37,456.84
41,387.88
16,724.53
757.71
17,482.24
32,709.70
36,117.23
0.02
0.24
41,387.90
36,117.47
6
Net Current Assets
Miscellaneous Expenditure
(to the extent not written off or adjusted)
Total
Significant Accounting Policies and Notes To Accounts
13
18
Schedules 1 To 18 annexed hereto form part of the
Balance Sheet and Profit & Loss Account
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
Annual Report 2008-09
Consolidated Profit & Loss Account
for the year ended 31st March,
(Rupees in Millions)
Schedules
2009
2008
INCOME
Sales (Net)
14
50,888.76
Other Income
15
22.36
48,317.36
44.96
50,911.12
48,362.32
EXPENDITURE
Cost of Trading Goods/Materials Consumed
16
42,382.69
41,669.01
Operating Expenses
17
5,629.50
4,093.94
Interest
978.40
448.42
Depreciation & Amortization
335.96
Profit Before Tax
Provision for Current Tax
200.97
49,326.55
46,412.34
1,584.57
1,949.98
129.61
Provision for Fringe Benefit Tax
Provision for Deferred Tax
9.60
(108.77)
(1.42)
Profit after Tax (before adjustment for Consolidation)
Less: Minority Interest
204.42
10.94
31.78
212.60
1,552.79
1,737.38
46.96
Add: Share of profit from Associate Companies
143.09
–
Profit after Tax (after adjustment for consolidation)
12.64
(46.96)
(130.45)
1,505.83
1,606.93
Add: Balance brought forward from previous year
Gitanjali Gems Ltd.
4,970.46
3,649.24
(0.82)
–
Subsidiary Companies as at 31-3-08
8.88
25.75
Joint Venture as at 31-3-08
0.16
Adjustment on account of consolidation
Amount available for appropriation
7.67
4,978.68
3,682.66
6,484.51
5,289.59
Appropriations
General Reserve
108.00
140.00
Proposed Dividend on Equity Shares
153.11
153.11
Tax on Dividend
26.02
Balance Carried to Balance Sheet
26.02
287.13
319.13
6,197.38
4,970.46
Basic Earnings per Share of face value of Rs. 10 each (Rs.)
17.70
23.82
Diluted Earnings per Share of face value of Rs. 10 each (Rs.)
15.34
18.93
(Refer Schedule 18, Note - 2.8)
Schedules 1 To 18 annexed hereto form part of the
Balance Sheet and Profit & Loss Account
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
73
74
Gitanjali Gems Limited
Consolidated Cash Flow Statement
for the year ended 31st March,
(Rupees in Millions)
2009
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax as per Profit & Loss Account
Adjustment for
Depreciation, Amortisation & preliminary
expenses written off
Effect of Exchange Rate Change
Loss on sale of Fixed Asset
Dividend Received
Expenditure Pending Allocation written off
Provision for Gratuity & Leave Encashment
Interest and Finance Charges - net
Operating Profit before Working Capital Changes
Adjustment for
Trade and Other Receivables
Inventories
Trade Payables & Other Liabilities
Cash Generated from Operations
1,584.57
335.96
(635.56)
0.06
(0.33)
9.82
5.08
978.40
(2,530.77)
(6,277.61)
(1.73)
Taxes Paid
Net Cash generated from Operations
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets - net
Capital work-in-progress (incl. advance)
Investment in Subsidiaries / Joint Venture
Miscellaneous Expenditure incurred
Receipt of Dividend
Interest Income
Net Cash Used in Investing Activities
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Issue of Share Capital
Proceeds from Share Warrants
Increase in Share Premium
Proceeds of Unsecured Loans
Dividend Paid including tax
Interest Paid
Net Cash from Financing Activites
Net Increase / (Decrease) in Cash & Cash
Equivalents
Opening Balance of Cash & Cash Equivalents
Adjustment on account of exchange rate
Upon addition / exclusion of Subsidiaries / J.V.
2008
(365.05)
91.68
(1,054.11)
(0.10)
0.33
1.00
–
–
–
538.70
(179.13)
(929.00)
1,949.98
200.97
(90.73)
4.31
(2.20)
4.47
448.42
693.43
2,278.00
(8,810.11)
(6,532.11)
(103.57)
(6,635.68)
(1,326.25)
(7,801.40)
(2,474.68)
8,936.06
(518.13)
(145.41)
(1,440.55)
(0.24)
2.20
46.88
(569.43)
186.14
312.00
6,777.56
(428.33)
(111.97)
(647.52)
(8,531.36)
11,229.55
267.47
6.34
Closing Balance of Cash & Cash Equivalents
11,503.36
2,972.00
565.24
2,515.22
(1,340.02)
1,175.20
(244.85)
930.35
(2,055.25)
6,087.88
4,962.98
6,174.54
67.21
24.82
6,266.57
11,229.55
Certified that the above statement is in accordance with the requirements prescribed by SEBI.
Note:1) Cash flow statement has been prepared under the Indirect Method as set out in the Accounting Standard - 3 of
The Companies (Accounting Standards) Rules, 2006
2) Previous year’s figures have been restated and regrouped whereever necessary.
3) Foreign Current exchange rate fluctation includes exchange difference on account of translation of Foreign
Subsidiary companies financial Statement.
4) Figures in bracket indicates outflows.
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
Annual Report 2008-09
Schedules
forming part of the Consolidated Balance Sheet as at 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 1 - SHARE CAPITAL
Authorised
120,000,000 Equity shares of Rs. 10/- Each
1,200.00
1,200.00
1,200.00
1,200.00
850.63
850.63
850.63
850.63
12,110.91
12,110.91
(Previous year 120,000,000 Equity Shares of Rs. 10/- each)
Issued, Subscribed & Paid up
85,062,883 ( Previous Year 85,062,883) Equity Shares of
Rs. 10 each fully paid up
Total
SCHEDULE 2 - RESERVES & SURPLUS
Share Premium Account
General Reserve
Profit & Loss Account Balance
350.00
242.00
6,197.38
4,970.46
Capital Reserve on Consolidation
387.23
554.84
Exchange Fluctuation Reserve Account
566.73
(194.83)
19,612.25
17,683.38
16,591.87
13,019.49
Total
SCHEDULE 3 - SECURED LOANS
Working Capital Loans From Banks/Financial Institution
(Refer Schedule 18, Note 2.5)
Vehicle Loan
Term Loan
Total
0.78
1.27
–
271.92
16,592.65
13,292.68
27.67
21.85
SCHEDULE 4 - UNSECURED LOANS
From Directors
From Shareholders
2.23
4.30
From Ex-partner of the erstwhile firm
8.28
20.28
88.57
35.74
3,746.92
2,963.26
3,873.67
3,045.43
From a Company
From Foreign Currency Convertible Bonds (Refer Schedule 18, Note-2.4 (b))
Total
75
325.76
33.09
Furniture & Fixture
Office Equipments
Vehicles
567.78
2,938.82
1,584.64
Previous Year Figures
543.35
Total
Capital Work-in-Progress
2,395.47
Leasehold Improvements
–
14.72
385.42
447.10
79.88
367.22
148.50
116.68
–
423.81
Sub total
6.34
2.04
Intangible Assets
Motor Boat
Electrical Fittings
0.84
73.93
1.81
202.76
Plant & Machinery
–
1.74
39.38
62.93
Office Premises
17.38
169.95
Factory Building
–
106.04
447.21
Computers
GROSS BLOCK (AT COST)
1,018.93
446.03
17.83
428.20
16.60
29.18
–
0.30
3.48
30.40
10.23
36.86
148.83
–
68.88
83.44
50.17
189.80
107.77
82.03
–
–
–
0.30
1.03
2.69
2.30
32.17
5.95
–
–
37.59
2,938.82
3,642.15
533.29
3,108.86
732.88
569.67
14.72
2.04
43.64
151.13
47.36
404.38
346.48
62.93
240.57
493.06
As at 31st Additions on Additions Deductions/
As at
March,
account of
Transfer
31st March
2008
Acquisition
2009
Freehold land
DESCRIPTION OF ASSETS
SCHEDULE 5 - Fixed Assets
231.76
431.65
–
431.65
136.37
4.44
1.02
0.65
13.53
41.17
14.71
64.77
91.97
1.90
59.84
1.28
20.10
53.52
–
53.52
34.35
3.06
–
–
0.71
4.98
1.25
7.61
1.54
–
0.02
–
187.60
337.02
–
337.02
149.49
48.04
2.74
0.20
7.34
30.50
4.11
58.93
21.15
3.05
11.22
0.25
7.81
6.45
–
6.45
–
–
–
0.05
0.51
1.71
1.29
0.80
2.09
–
–
–
As at 31st Additions on For the year Deductions/
March,
account of
Transfer
2008
Acquisition
Depreciation
431.65
815.74
–
815.74
320.21
55.54
3.76
0.80
21.07
74.94
18.78
130.51
112.57
4.95
71.08
1.53
As at 31st
March,
2009
2,507.17
2,826.41
533.29
2,293.12
412.67
514.13
10.96
1.24
22.57
76.19
28.58
273.87
233.91
57.98
169.49
491.53
2,507.17
543.35
1,963.82
431.41
419.37
13.70
1.39
25.85
64.87
18.38
260.99
110.79
61.03
110.11
445.93
As at 31st As at 31st
March,
March,
2009
2008
NET BLOCK
(Rupees in Millions)
76
Gitanjali Gems Limited
Schedules
forming part of the Consolidated Balance Sheet as at 31st March,
Annual Report 2008-09
Schedules
forming part of the Consolidated Balance Sheet as at 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 6 - INVESTMENTS
Long Term Investment (Unquoted at cost)
(i)In Affiliates
650,000 Equity Shares of Rs. 10/- each of Modali Jewels Pvt. Ltd. (Previous Year
650,000 Equity Shares)
–
1.25
1,416,500 Equity Shares of Rs. 10/- each of Modali Gems Pvt. Ltd. (Formerly
known as Modali Distributors Pvt. Ltd.) (Previous Year 425,000) (Refer Schedule
18, Note - 2.2)
0.01
–
10,000 Equity Shares of Rs. 10/- each of Spectrum Jewellery Pvt. Ltd. (Previous
Year 10,000 Equity Shares)
0.10
0.10
25,000 Equity Shares of Rs. 10/- each of Diadem Ranka Desire Lifestyle Pvt Ltd
(Previous Year -25,000 Equity Shares)
0.25
0.25
1,000,000 Equity Shares of Rs. 10/- each of Lucera Retail Venture Pvt. Ltd.
(Formerly known as Renaissance Retail Venture Pvt. Ltd.) (Previous Year 1,000,000
Equity Shares)
–
10.00
10,000 Equity Shares of Rs. 10/- each of Trinity Watch Company Pvt. Ltd.
(Previous Year 10,000 Equity Shares)
–
0.10
0.00
0.00
30.00
30.00
0.03
0.03
0.02
0.04
(iv) Other Investments
Redeemable Non-Convertible Bond with Indusind Bank
Shares of Laxmi Finance Leasing
Premises at 3, Laxmi Tower, B-wing, Mumbai
Premises at 6, Laxmi Tower, B-wing, Mumbai
100.00
0.01
106.64
94.27
100.00
–
–
–
Total
331.33
141.77
SCHEDULE 7 - INVENTORIES
Raw Materials
Work In Process
Manufactured Goods/Trading Goods
Consumables, Stores & Tools
Props, Display Material and Boxes
Others
7,700.02
212.39
11,814.54
27.27
1.82
2.13
3,698.02
297.44
8,348.67
5.80
4.00
11.60
Total
19,758.17
12,365.53
In Others
51 Equity share of Citizen Co-op Bank of face value of Rs. 10/- each, fully paid up
(Previous Year 51 Equity Shares)
1,000,000 Equity Shares of Diamond India Ltd. (Previous Year 1,000,000 Equity
Shares)
(ii) In Equity Shares (Non - Traded)
125 Equity share of Shoppers' Stop Ltd. of Rs. 10/- each, fully paid up (Previous
Year 125 Equity shares)
(iii) In Government Securities
National saving certificates (pledge with sales tax department)
77
78
Gitanjali Gems Limited
Schedules
forming part of the Consolidated Balance Sheet as at 31st March,
(Rupees in Millions)
2009
SCHEDULE 8 - SUNDRY DEBTORS
Unsecured, Considered Good unless and otherwise stated
Outstanding for more than six months
Outstanding for more than six months considered doubtful
Others
Add : Exports Receivables Translation Control A/C
Less: Provision for doubtful debts
Total
2008
10,414.76
16.03
10,430.79
5,398.95
16.56
5,415.51
15,427.51
15,427.51
17,439.10
17,439.10
1,844.79
1,844.79
27.14
27.14
106.80
106.80
56.55
56.55
27,596.29
22,825.20
SCHEDULE 9 - CASH AND BANK BALANCES
Cash in hand
Balance with Scheduled Banks :
in Current Accounts
in Fixed Deposits
in EEFC Account
10.92
6.54
503.71
2,457.02
0.35
549.65
10,673.15
0.21
Total
2,972.00
11,229.55
SCHEDULE 10 - LOANS & ADVANCES
(Unsecured, Considered Good)
Advances recoverable in cash or in kind or for value to be received
Deposits
Income Tax - (Including FBT)
Service Tax Receivable
Staff Advances
Sales Tax / VAT / Excise Duty Receivable
Advance Payment - Statutory Dues
Prepaid Expenses
Other Receivables
Advances to Suppliers / Labourer
Share Application Money
2,720.16
413.72
717.55
3.46
13.89
24.92
6.34
111.90
123.25
511.57
28.86
2,288.73
308.36
585.58
3.23
18.13
29.10
0.80
198.99
53.63
131.70
153.41
Total
4,675.62
3,771.66
Annual Report 2008-09
Schedules
forming part of the Consolidated Balance Sheet as at 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 11 - CURRENT LIABILITIES
Sundry Creditors*
For Goods / Labour
For Accrued Wages & Salaries
For Other Expenses
Other liabilities
Statutory Liabilities
Advance received from customers
Directors' current account
Share Application Money
Preference Share Capital
Franchisee Deposits
Interest accrued but not due on bank loans
Less: Import Payable Translation Control Account
13,514.08
166.40
879.76
197.06
101.05
463.95
0.87
–
1,164.72
7.45
56.86
(166.76)
15,215.54
115.31
983.30
299.67
98.43
60.12
0.26
1.38
–
–
33.79
83.27
Total
16,718.96
16,724.53
* Note: There is no amonut due and outstanding to Investor Education and Protection Fund and Small Scale Industrial
Undertakings
SCHEDULE 12 - PROVISIONS
Provision for Taxation
Provision for Fringe Benefit Tax
Provision for Gratuity / Leave Encashment
Proposed Dividend
Provision for Dividend Tax
Other Provisions
610.95
12.95
23.25
153.11
26.02
–
554.61
7.74
15.41
153.11
26.02
0.82
Total
826.28
757.71
SCHEDULE 13 - MISC. EXPENDITURE
(to the extent not written off or adjusted)
Preliminary Expenses
0.02
0.24
Total
0.02
0.24
79
80
Gitanjali Gems Limited
Schedules
forming part of the Consolidated Profit & Loss Account for the year ended 31st March,
(Rupees in Millions)
2009
2008
16,679.11
15,376.91
2.49
18,839.45
10,550.36
–
32,058.51
29,389.81
7,270.68
11,550.73
8.84
18,830.25
7,841.49
11,086.06
–
18,927.55
50,888.76
48,317.36
SCHEDULE 15 - OTHER INCOME
Commission Received
Sponsorship Charges
Dividend Received
Labour & Job work charges
Rent Received
Interest on Income Tax Refund
Insurance Claim
Discount Received
Sales Tax Refund
Sundry Balance written back (Net)
Profit / (Loss) on Sale of Fixed Assets
Provision no longer required, written back
EEFC/Cont/Cryt/Bank Facility Exchange Difference
Miscellaneous Income
2.19
–
0.33
1.04
0.72
0.24
0.17
0.08
0.15
0.30
–
–
0.04
17.10
0.00
7.31
2.20
13.38
0.12
0.96
–
–
–
1.50
(4.31)
4.30
0.01
19.49
Total
22.36
44.96
4,719.73
8,336.10
47.05
13,102.88
5,117.73
4,599.61
0.23
9,717.57
28,609.29
18,659.14
150.01
47,418.44
19.62
1,058.97
48,497.03
25,135.32
17,250.12
–
42,385.44
(8.11)
1,449.91
43,827.24
9,481.17
9,647.52
88.53
19,217.22
4,730.85
7,144.94
0.01
11,875.80
42,382.69
41,669.01
SCHEDULE 14 - SALES
Exports (Including Deemed Exports)
Diamonds
Jewellery
Others
Local
Diamonds
Bullion and Jewellery
Others
Total
SCHEDULE 16 - COST OF TRADING GOODS/ MATERIAL CONSUMED
Opening Stock
Diamonds
Bullion/Jewellery
Others
Add: Purchases
Diamonds
Bullion/Jewellery/Stones and Gold
Others
Foreign Exchange Rate Difference - Imports
Add: Labour Charges
Less : Closing Stock
Diamonds
Bullion/Jewellery
Others
Total
Annual Report 2008-09
Schedules
forming part of the Consolidated Profit & Loss Account for the year ended 31st March,
(Rupees in Millions)
2009
2008
SCHEDULE 17 - OPERATING EXPENSES
Payment to and Provision for Employees
Salary, Bonus & Allowances
Contribution to P.F. & Other Funds
Staff Welfare
Staff Recruitment expenses
Leave Encashment
Gratuity
1,756.39
135.98
196.84
6.79
61.06
8.73
1,403.44
94.90
14.87
1.42
–
5.33
Sub Total (A)
2,165.79
1,519.96
2.86
857.57
124.55
396.51
15.14
8.93
22.71
114.15
17.58
10.35
16.76
2.21
45.75
3.31
838.37
0.94
357.57
0.29
9.08
11.98
5.68
6.06
(1.21)
50.25
0.58
0.67
0.04
0.51
171.54
27.26
1.64
6.71
103.66
189.86
5.71
0.07
0.00
(1.61)
27.85
0.79
9.59
1.45
24.44
745.17
82.49
172.49
14.47
45.85
18.38
85.59
11.82
61.69
6.60
0.90
17.54
0.64
787.34
7.73
166.86
0.43
7.03
30.60
8.43
4.42
9.42
6.96
–
0.10
0.06
–
(17.75)
23.29
1.41
2.64
–
221.73
0.52
0.01
0.08
(0.74)
17.63
0.30
3.56
3.85
Sub Total (B)
3,463.71
2,573.98
Grand Total (A+B)
5,629.50
4,093.94
Other Operating Expenses
Stores Consumed
Rent, Rates & Taxes
Postage, Telephones & Communication charges
Bank Charges
E.C.G.C. Premium
Insurance
Printing & Stationery
Travelling & Conveyance
Packing Materials Consumed
Donation
Directors' Remuneration
Repairs & Maintenance - Building
Repairs & Maintenance - Others
Repairs & Maintenance - Plant & Machinery
Advertisement & Selling expenses
Octroi Charges
Legal, Professional & Service Charges
License Fees
Export Sales Expenses
Freight & Forwarding (Export)
Import Expenses
Auditor's Remuneration
Bad Debts / Advance written off / Sundry balances W/off
Provision for Doubtful Debts
Deffered & Preliminary Expenses written off
Block Policy Premium
Books & Periodicals
Construction Expenses
EEFC/Cont/Cryt/Bank Facility Exchange Difference
Electricity
Motor Car Expenses
Membership & Subscription
Loss from discontinued operation
Miscellaneous Expenses
Brokerage
Internet Charges
Interest on Statutory Liabilities
Sales Tax Asst. Dues
Security Service Charges
Service Tax
Computer and Related Expenses
Prior period Expenses (net)
81
82
Gitanjali Gems Limited
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
SCHEDULE 18 - SIGNIFICANT ACCOUNTING POLICIES & NOTES TO CONSOLIDATED ACCOUNTS
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of preparation of financial statements
The Consolidated Financial Statements relate to Gitanjali Gems Limited and its subsidiaries and joint ventures
(together referred to as the “Gitanjali Group”). The Consolidated Financial Statements are prepared under the
historical cost convention on accrual basis of accounting to comply in all material respects with the mandatory
accounting standards as notified by the Companies (Accounting Standards) Rules, 2006 as amended (‘the
Rules’), the relevant provisions of the Companies Act, 1956(‘the Act’) and guidelines issued by Securities and
Exchange Board of India (SEBI). The accounting policies have been consistently applied by the Group and the
accounting policies not referred to otherwise, are in conformity with Indian Generally Accepted Accounting
Principles (‘Indian GAAP’).
1.2 Principles of consolidation
a)
The Consolidated Financial Statements include the financial statements of Gitanjali Gems Ltd. (the Company)
and all of its subsidiaries, which are more than 50% owned and controlled and as regards joint ventures its
share of interest in joint venture which is accounted on the basis of proportionate line-by-line consolidation.
All material inter-company accounts and transactions are eliminated on consolidation.
b) The management has classified its foreign operations as non – integral. In translating financial statements of
non-integral foreign operation for incorporation in financial statements, components of financial statements
of foreign subsidiaries are translated into Indian Rupees in accordance with the Accounting Standards AS
21 / AS 11 as notified by the Companies (Accounting Standards) Rules, 2006. Briefly stated
i)
ii)
All income and expenses are translated at the average rate of exchange prevailing during the year.
Assets and Liabilities are translated at the rate prevailing at the end of the year. Depreciation is
accounted at the same rate at which assets are converted.
iii) The resulting exchange differences are accumulated in Exchange Fluctuation Reserve Account.
c)
The difference between the cost of investment and net worth at the time of acquisition of shares in the
subsidiaries is recognized in the financial statements as Goodwill or Capital Reserve, as the case may be. In
case of Goodwill, it is tested for impairment annually. In case where loss is in excess of the minority interest
in the equity of the subsidiary, it is adjusted against the majority interest.
d) Share of minority interest in the net profit is adjusted against the income to arrive at the net income
attributable to shareholders. Minority interest’s share of net assets is presented separately in the balance
sheet.
As far as possible, the Consolidated Financial Statements are prepared using uniform accounting policies for like
transactions and other events in similar circumstances and are presented in the same manner as the company’s
separate financial statements.
1.3 Use of Estimates
The preparation of Consolidated Financial Statements, in conformity with the Generally Accepted Accounting
Principles, requires estimates and assumptions to be made that affects the reported amounts of assets and
liabilities on the date of financial statements and the reported amounts of revenues and expenses during the
reporting period. Differences between the actual results and estimates are recognized in the period in which the
results are known / materialized.
1.4 Revenue Recognition
a)
Revenue on sale of products are recognised when the risk and rewards of ownership are passed onto the
customers, which is generally on dispatch of goods. Sales are stated net of returns and net of sales tax and
other taxes as applicable.
Annual Report 2008-09
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
b) Revenue is recognised only when it is reasonably certain that the ultimate collection will be made.
c)
Interest income is recognized when it is rationally certain of recovery and on time basis taking into account
the amount outstanding and rate applicable. Interest is shown as net of interest expense.
1.5 Fixed Assets and Intangibles
Fixed assets are recorded at cost of acquisition inclusive of freight, duties and taxes and incidental expenses
related to acquisition. Expenditure incurred during construction period has been added to the cost of assets.
Capital work–in-progress includes capital advances. In case of intangibles viz, trade names and customer
relationships, the same has been amortized by the foreign subsidiaries as per its accounting policy.
1.6Leases
Assets taken on lease on or after April 1, 2001 are accounted for as Fixed Assets in accordance with Accounting
Standard (AS) 19 on “Leases”.
a)
Finance lease
Assets taken on finance lease, including taken on hire purchase arrangements, wherein the company has
an option to acquire the asset, are accounted as fixed assets in accordance with the AS 19 on “ Leases”.
b) Operating lease
Assets taken on lease under which all risks and rewards of ownership are effectively retained by the lessor
are classified as operating lease. Lease payments under operating leases are recognized as expenses on
accrual basis in accordance with the respective lease agreements.
c)
The costs of improvements to leased properties are capitalized and disclosed appropriately.
1.7Impairment of Fixed Assets
The management periodically assesses, using external and internal sources, whether there is an indication that
an asset may be impaired. An asset is treated as impaired when the carrying amount of assets exceeds its
recoverable value in accordance with AS 28. An impairment loss is determined by each company and charged
to the respective Profit and Loss Account in the year in which an asset is identified as impaired. The impairment
loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable
amount.
1.8Depreciation and Amortization of Fixed Assets
Depreciation is charged on the fixed assets under the written down value method in accordance with the
provisions of Schedule XIV to the Companies Act, 1956. The expenditure incurred on improvement of assets
acquired on lease is written off evenly over the balance period of the lease. In respect of Fixed Assets of few
Subsidiaries, the depreciation method and rates followed by the subsidiaries are different from those followed
by the parent company.
Leasehold Land is amortised over the period of the lease.
1.9Investments
Long – term investments are stated at cost. Provision for diminution in the value of long-term investments is
made only if such a decline is other than temporary in the opinion of the management.
Current investments, if any, are valued at lower of cost and market value.
1.10 Borrowing Costs
Borrowing costs attributable to the acquisition or construction of qualifying asset are capitalized as part of the
cost of asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.
1.11 Foreign Currency Transactions
Transactions in foreign currency are recorded at the rate prevailing on the date of transactions. Foreign currency
assets except investments and liabilities other than for financing fixed assets are stated at the rate of exchange
prevailing at the date of balance sheet and resultant gains/losses are charged to the Profit and Loss account.
83
84
Gitanjali Gems Limited
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
Premium or discount in respect of forward foreign exchange contracts is amortised as expense or income
over the life of the contracts. Any profit or loss arising on cancellation or renewal of such forward contract is
recognized as income or expense for the period. Exchange differences arising on settlement or restatement of
foreign currency denominated liabilities relating to the acquisition of fixed asset are recognized in the Profit and
Loss account.
1.12Inventories
Inventories of raw materials, finished goods, rejections, trading goods and stores are valued as under:
Raw Material
Rough Diamond Rejections
Trading Goods
Finished Goods – Polished Diamonds
Work in progress – Jewellery
Finished Goods – Jewellery
Finished Goods – Gold
Consumable Stores & Tools
Lower of cost and net realisable value
At net realisable value
Lower of cost and net realisable value
Lower of cost and net realisable value
Lower of market value and material cost plus
proportionate labour and overheads.
Lower of market value and material cost/estimated
cost plus labour and overheads.
Lower of cost and market value
At cost
1.13Taxation
Tax expense for the year comprises of current income tax, deferred tax and Fringe-benefit tax.
a)
Indian Companies
Provision for income tax is made on the basis of estimated taxable income for the current accounting year
in accordance with the Income Tax Act, 1961.
Deferred tax is recognized, subject to prudence, on timing differences, being the difference between the
taxable income and the accounting income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets are recognized for unabsorbed depreciation and carry
forward losses to the extent there is virtual certainty that sufficient future taxable income will be available
against which deferred tax assets can be realized.
Fringe-benefit tax is provided as per the Income Tax Act, 1961.
b) Foreign Companies
Foreign companies recognize tax liabilities and assets in accordance with the applicable local laws.
1.14Employee Benefits
The Company and its subsidiaries account for the gratuity benefits payable in future based on independent
actuarial valuation. The liability is not funded except in the case of one subsidiary, where the liability is funded.
The company & its subsidiary follow different assumptions as such the compilation would become unwieldy &
for the sake of brevity details are not included in this schedule.
1.15Earnings Per Share
Earning per share (EPS) is calculated by dividing the net profit or loss for the period attributable to equity
shareholders, by the weighted average number of equity shares outstanding during the period.
Dilutive EPS is calculated by dividing the net profit or loss for the period attributable to equity shareholders, by
the weighted average number of equity shares considered for deriving the basic EPS and also the weighted
average number of equity shares that could have been issued upon conversion of all dilutive potential equity
shares. Dilutive potential shares are deemed converted at the beginning of the year unless issued at later date.
1.16 Provisions and Contingent Liabilities and Contingent Assets
Contingent liabilities are not provided for and are disclosed by way of notes after careful evaluation by the
management of the facts and legal aspects of the matters involved. Contingent assets are neither recognised
nor disclosed in the financial statement.
Annual Report 2008-09
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
2.NOTES TO CONSOLIDATED FINANCIAL STATEMENT
Notes to these Consolidated Financial Statements are intended to serve as a means of informative disclosure and a
guide to better understanding of the consolidated position of the Company. Recognizing this purpose, the Company
has disclosed only such notes from the individual financial statements which:
a)
are necessary for representing a true and fair view of the Consolidated Financial Statement
b) involve items considered to be material and which cannot be viewed in the independent financial statement of
Gitanjali Gems Limited.
2.1 a)
Companies considered in the Consolidated Financial Statement are as follows:
Name of the Subsidiary Companies
1.
2.
3.
4.
5.
Country Percentage of Percentage of
Ownership
Ownership
of
Incorpo- Interest as at Interest as at
ration
31–03-2009
31–03-2008
25.
26.
27.
28.
29.
30.
31.
32.
Gitanjali Exports Corporation Limited
Mehul Impex Limited
Fantasy Diamond Cuts Private Limited
CRIA Jewellery Private Limited
Gili India Limited (Formerly known as Gitanjali
Jewels Limited)
Brightest Circle Jewellery Private Limited
D’Damas Jewellery (India) Private Limited
Hyderabad Gems SEZ Limited
Gitanjali Lifestyle Limited
Gitanjali Infratech Limited
Gitanjali Ventures DMCC
Samuels Jewelers Inc.
Gitanjali USA, Inc.
Rogers Ltd., Inc.
Asmi Jewellery India Private Limited (Formerly
known as Desire Lifestyle Private Limited)
ShubaLavanyaa Jewel Crafts Private Limited
Modali Jewels Private Limited
Modali Gems Private Limited (Formerly known
as Modali Distributors Private Limited)
(Refer to Schedule 18, Note 2.2)
Decent Securities & Finance Private Limited
Eureka Finstock Private Limited
Ivida Technologies Private Limited
Raigad Gems SEZ Limited
Aurangabad SEZ Limited (Formerly known as
Aurangabad Gems SEZ Limited)
Nanded SEZ Limited (Formerly known as
Nanded Gems SEZ Limited)
Nagpur Multi Products SEZ Limited
Nashik Multi Services SEZ Limited
West Bengal SEZ Limited
MMTC Gitanjali Private Limited
Gitanjali Retail Ventures Limited
Mohar Jewels Limited
Morellato India Private Limited
Tristar Worldwide LLC
33.
Trinity Watch Company Private Limited
India
100%
34.
Lucera Retail Venture Private Limited
(Formerly known as Renaissance Retail
Venture Private Limited)
Hoop Retail Ventures Private Limited (Formerly
known as B. Vijay Retail Venture Private Limited)
Kolkata Axis Malls Limited
India
100%
India
100%
India
100%
India
50%
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
35.
36.
37.
Mannat Jewellery Manufacturing Private
Limited
Relationship
India
India
India
India
India
100%
100%
100%
100%
100%
51%
100%
99.80%
99.80%
100%
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
India
India
India
India
India
UAE
USA
USA
USA
India
100%
51%
100%
100%
100%
100%
97%
100%
100%
100%
100%
51%
100%
100%
100%
100%
97%
100%
100%
100%
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
India
India
India
51%
100%
100%
51%
100%
50%
Subsidiary
Subsidiary
Subsidiary
India
India
India
India
India
100%
100%
100%
100%
100%
–
–
100%
100%
100%
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
India
100%
100%
Subsidiary
India
India
India
India
India
India
India
USA
100%
100%
100%
100%
100%
100%
50 %
100%
100%
Subsidiary
100%
Subsidiary
–
Subsidiary
–
Subsidiary
–
Subsidiary
–
Subsidiary
– Joint Venture
70% Step Down
Subsidiary
100% Step Down
Subsidiary
100% Step Down
Subsidiary
–
Step Down
Subsidiary
– Step Down
Subsidiary
50% Step Down
Joint Venture
85
86
Gitanjali Gems Limited
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
b) List of companies considered in Consolidated Financial statements based on unaudited financial statement
as approved by the Board of Directors of respective companies
Name of the Company
Country
of
Incorporation
Relationship
Subsidiary
Subsidiary
Subsidiary
Step Down
Subsidiary
Subsidiary
Step Down
Joint Venture
1.
2.
3.
4.
Samuels Jewelers Inc.
Rogers Ltd., Inc.
Gitanjali USA, Inc.
Tristar Worldwide LLC
USA
USA
USA
USA
5.
6.
ShubaLavanyaa Jewel Crafts Private Limited
Mannat Jewellery Manufacturing Private
Limited
India
India
c)
Percentage of Percentage of
Ownership
Ownership
Interest as at Interest as at
31–03-2009
31–03-2008
97%
100%
100%
100%
97%
100%
100%
70%
51%
50%
51%
–
Following are the companies which are not included in the consolidation as the management is of the
opinion that on comparison of the assets and revenues of the Joint Venture Companies as a percentage to
the total consolidated assets and revenue of the Group is not material.
Name of the Company
1.
2.
*
Country
of
Incorporation
Relationship
India
India
Joint Venture
Step Down
Joint Venture
Spectrum Jewellery Private Limited*
Diadem Ranka Desire Lifestyles Private Limited
Percentage of Percentage of
Ownership
Ownership
Interest as at Interest as at
31–03-2009
31–03-2008
50%
50%
50%
50%
The total assets and revenues included in the Consolidated Financial Statement for the year ended March 31, 2007
were Rs 84.04 millions and Rs. 48.32 millions respectively.
d) In respect of ten subsidiaries and a joint venture considered in the aforesaid Consolidated Financial
Statements the companies have negative networth as on 31st March, 2009 and it is reported that the
accounts of the said companies have been prepared on going concern basis.
2.2 Investments:
a)
During the year the company has directly or through its subsidiaries acquired balance additional shares in
the following subsidiaries so as to make wholly owned subsidiaries of the company
i)
Gitanjali Exports Corporation Limited (GECL)
During the year, the Company purchased additional 4,900,000 equity shares of Rs.10/- each. Thus,
GECL became a wholly owned subsidiary of the Company, which was earlier 51% subsidiary of the
company.
ii)
Fantasy Diamond Cuts Private Limited (FDCPL)
During the year, the Company purchased additional 10,000 equity shares of Rs.10/- each. Thus, FDCPL
became a wholly owned subsidiary of the Company, which was earlier 99.80% subsidiary of the
company.
iii) Cria Jewellery Private Limited (CJPL)
During the year, the Company purchased additional 20 equity shares of Rs.10/- each. Thus, CJPL became
a wholly owned subsidiary of the Company, which was earlier 99.98% subsidiary of the company.
iv) Modali Gems Private Limited (MGPL)
During the year, the Company purchased additional 1,416,500 equity shares of Rs. 10/- each. Thus,
MGPL became a wholly owned subsidiary of the company, which was earlier a Joint Venture Company.
The said additional shares were acquired on 31st March, 2009 and hence, financials of MGPL is
consolidated on the basis of Joint Venture accounting and not on the basis of subsidiary accounting.
Annual Report 2008-09
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
v)
Tristar Worldwide LLC (TWL)
During the year, the Company has acquired aditional 30% in TWL through its own subsidiary. Thus,
TWL became a wholly owned step down subsidiary of the Company.
vi) Hoop Retail Venture Private Limited (HRVPL) (Formerly known as B. Vijay Retail Venture Private
Limited)
During the year, the Company purchased 1,010,000 equity shares of Rs. 10/- each of HRVPL through
one of its subsidiaries. Thus, HRVPL became wholly owned step down subsidiary of the company.
b) During the year the company has formed following wholly owned subsidiaries and Joint venture company
i)
West Bengal SEZ Limited (WBSL)
During the year, the Company formed a wholly owned subsidiary in India as WBSL. The Company as on
31st March, 2009 holds 50,000 equity shares (entire issued and paid up share capital) of Rs.10/- each.
ii)
MMTC Gitanjali Private Limited (MGPL)
During the year, the Company formed a wholly owned subsidiary in India as MGPL. The Company as on
31st March, 2009 holds 50,000 equity shares (entire issued and paid up share capital) of Rs.10/- each.
iii) Gitanjali Retail Ventures Limited (GRVL)
During the year, the Company formed a wholly owned subsidiary in India as GRVL. The Company as on
31st March, 2009 holds 50,000 equity shares (entire issued and paid up share capital) of Rs.10/- each.
iv) Mohar Jewels Private Limited (MJPL)
During the year, the Company formed a wholly owned subsidiary in India as MJPL. The Company as on
31st March, 2009 holds 50,000 equity shares (entire issued and paid up share capital) of Rs.10/- each.
v)
Kolkatta Axis Mall Limited (KAML)
During the year, the Company formed a wholly owned subsidiary in India as KAML through one of its
subsidiary. The Company through its subsidiaries as on 31st March, 2009 holds 50,000 equity shares
(entire issued and paid up share capital) of Rs.10/- each.
vi) Gitanjali Holdings Limited (GHL)
During the year, the Company formed a wholly owned foreign subsidiary in UAE as GHL. The subsidiary
has not started its operations and as such the same is not considered in Consolidated Financial
Statement.
vii) Morellato India Private Limited (MIPL)
During the year, the Company formed a Joint Venture company in India as MIPL. The Company as
on 31st March, 2009 holds 1,000,000 equity shares (50% of the issued and paid up share capital) of
Rs.10/- each. Thus, it becomes 50% joint venture company.
c)
During the year the company has invested in following companies
i)
Decent Securities Private Limited (DSPL)
During the year, the Company acquired 10,000 equity shares of Rs. 10/- each of DSPL. Thus, DSPL
became a wholly owned subsidiary of the company. The Company as on 31st March, 2009 holds
50,000 equity shares of Rs.10/- each.
ii)
Eureka Finstocks Private Limited (EFPL)
During the year, the Company purchased 10,000 equity shares of Rs. 10/- each of EFPL and thus, EFPL
became a wholly owned subsidiary of the company.
d) Quoted
125 equity shares of Shoppers Stop Limited of Rs.10/-each at a total cost of Rs. 29,750/-. (Market value Rs.
12,562.50)
87
88
Gitanjali Gems Limited
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
e)
Unquoted
51 equity shares of Citizen Co-operative Bank of Rs.10/-each at a total cost of Rs.510/-.
i)
In Government securities such as National Savings Certificate etc amounting to 35,000/- (pledged with
sales tax department).
ii)
Redeemable Non-Convertible Bond of a bank amounting to Rs. 100,000,000/-.
2.3 Share Capital
Share Warrants
As per the provisions of the Companies Act 1956, the Company had issued 10,000,000 warrants convertible into
equal number of Equity Shares on preferential basis at a price of Rs. 312/- per warrant to promoter and promoter
group on February 21, 2008. These warrants will be converted into equity shares of the Company at the option of
the warrant holders with in a period of 18 months from the date of allotment i.e. on 20th August, 2009 in one or
more tranches. During the year the company has not received any further subscription and no shares have been
issued against outstanding warrants.
2.4 Statement of utilization of Issue proceeds as on 31st March,
a)
Issue of Equity Shares In India
The Company had received net proceeds of Rs. 3,114.70 millions through a public issue of equity shares
which has been utilized as follows:
(Rupees in Millions)
Particulars
2009
2008
Investment in Subsidiaries & Joint Ventures
General corporate purpose (Including working Capital)
Investment in setting up a diamond manufacturing facility in SEZ at
Hyderabad.
1,395.40
1,629.30
90.00
1,095.40
959.30
10.00
Unutilized money temporarily invested in Bank Fixed Deposits
NIL
1,050.00
3,114.70
3,114.70
Total
b) Issue of Foreign Currency Convertible Bonds (FCCBs)
Out of the balance FCCB proceeds of USD 5.75 millions as on March 31st, 2008, the Company further
utilized towards overseas acquisitions and infrastructure projects including development of Special
Economic Zones as per the objects for which it was raised. The balance issue proceeds as of 31st March,
2009 amounting to USD 2.00 millions is temporarily lying in fixed deposits with Indian banks.
Up to March 31, 2008, the company had converted USD 36.14 millions of FCCBs in to 5,896,067 equity
shares of Rs. 10/-each at an initial conversion price of Rs 275/- per equity share. During the year, the
conversion price was adjusted and reset to Rs. 220/- per equity share as per terms and condition of the
Offering Circular dated November 21, 2006. The company has not converted any FCCBs from April 1, 2008
to March 31, 2009 and the outstanding FCCBs as on March 31, 2009 were USD 73.86 millions. Any equity
shares up on conversion would rank pari passu with existing share holders.
c)
Issue of Global Depository Receipts (GDRs)
Out the balance GDR proceeds of USD 94.30 millions as on 31st March, 2008, the company utilized USD
72.965 millions towards investment in Overseas and Indian subsidiaries and towards general corporate
purposes including working capital requirements as per the objects of the issue. Pending utilization, the
balance proceeds of USD 21.335 millions, have been kept in deposit accounts with overseas banks as on
31st March, 2009.
Annual Report 2008-09
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
2.5 Secured Loans:
Working capital borrowings from Banks/ financial institution of the Company and some of the subsidiaries are
secured against hypothecation by way of a first/pari passu charge on all the present and future goods, movable
assets, vehicles, furniture, stock-in–trade, fixed deposits, book debts, mortgages by way of deposit of title deeds
on certain immovable properties along with personal guarantee of the Director/Corporate guarantees of the
Company.
2.6 Sundry Debtors:
The Sundry debtors of subsidiary companies include dues of Rs. 68.60 millions outstanding since 2001, where
one of the subsidiaries has filed suit for recovery in the Honorable City Civil Court at Ahmedabad against M/S
K.L.Chokshi. It has obtained a legal opinion confirming that it has a reasonably good chance to succeed at the
hearing of the above suit and to get decree against the defendant. The Management, based on the aforesaid
view, is of the opinion that the debts are good and recoverable and no provision is considered necessary at this
stage.
2.7 Contingent Liabilities not provided in respect of:
a)
Corporate Guarantees given by the Company for Working capital facilities availed by Subsidiary Companies
to the extent of Rs. 2,828.70 millions (Previous Year Rs. 1,295.10 millions)
b) Outstanding Letters of Credit: Rs. 800.60 millions (Previous Year Rs. 1,050.04 millions).
c)
Bank Guarantee given by Subsidiary companies: Rs. 451.50 millions (Previous Year Rs. 58.52 millions)
d) Duty on Imports against Export Obligations: Rs. 2.58 millions (Previous Year Nil)
e)
Disputed Income Tax: Rs. 1.8 millions (Previous Year Rs. 1.25 millions)
f)
Estimated Amount of Contracts remaining to be executed on Capital Account and not provided for (Net of
Advances given): Rs. 10.43 millions (Previous Year Rs. Nil).
g) Forward contract for sale of gold Rs. 14.26 millions (Previous Year Rs. 46.10 millions)
h)
Forward contract for purchase of gold Rs. 14.29 millions (Previous Year Rs. 3.58 millions)
i)
Disputed SBLC charges Rs 0.50 millions ( Previous Year Rs. Nil)
j)
Pending F and C forms (Under Sales Tax regulation) Rs. 133.04 millions ( Previous Year Rs. 63.81 millions)
k)
Guarantees given to Sales Tax authority Rs 3.99 millions (previous year Rs. 0.20 millions)
l)
Guarantees given to Customs authority Rs 0.42 millions (previous year Rs. 0.42 millions)
m) Two of the subsidiaries have provided corporate guarantees to the extent of realizable value of the properties
situated at B-6 and B-3, Laxmi Towers, Bandra Kurla Complex. Bandra East, Mumbai – 400 051 favouring
Allahabad Bank consortium to secure the credit facilities of the Company.
n) One of the subsidiaries has received order u/s 115WE for AY 2007-08 by which demand has been raised for
Rs. 206,079/- out of which is Rs.110,000/- has been paid. The subsidiaries propose to contest this
demand.
2.8 Earning Per Share for the year ended 31st March,
Basic Earning Per Share (after Tax Provision)
(Rupees in Millions)
Particulars
Net profit for the period attributable to Equity shareholders
Weighted average number of Equity Shares outstanding as at 31st March
(Nos.)
Basic earnings per share (Face value of Rs. 10 each) (Rs)
2009
2008
1,505.83
85,062,883
1,606.93
67,455,958
17.70
23.82
89
90
Gitanjali Gems Limited
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
Diluted Earning Per Share (after Tax Provision)
Particulars
Net profit for the period attributable to Equity shareholders
Weighted average number of Equity Shares outstanding (Nos.)
Diluted earnings per share (Face value of Rs.10 each) (Rs)
2009
2008
1,505.83
98,169,248
1,606.93
84,888,765
15.34
18.93
2.9 Deferred Tax Assets and Liabilities as on 31st March,
(Rupees in Millions)
Particulars
Deferred Tax (Liability)
Differences in depreciation and other differences in block of fixed assets as
per tax books and financial books
2009
2008
(12.35)
(5.91)
(101.56)
(113.91)
–
(5.91)
7.85
3.88
–
5.34
1.85
0.26
Differences in depreciation and other differences in block of fixed assets as
per tax books and financial books
7.10
–
On preliminary expenses not written off till the commencement of business
as per Income Tax Act, 1961
1.24
1.23
114.77
(69.15)
65.69
(48.22)
–
–
8.68
2.77
Others
Gross Deferred Tax (Liability)
Deferred Tax Asset
Provision for Retirement Benefits / Doubtful Debts
Disallowance under Section 43B of I.T.Act
Disallowances under section 40(a)
Others
As per Note below *
Gross Deferred Tax Asset
Net Deferred Tax Asset/(Liability)
* Note 1) In case of nine subsidiaries where due to losses incurred and where in the absence of virtual
certainty backed by convincing evidence, no deferred tax assets have been recognised by the
company on the timing difference arising on account of unabsorbed depreciation and carried
forward business losses.
2)
The gross deferred liabilities and deferred tax is shown above. However the same is reported on
net basis in the Consolidated Financial Statements.
2.10 Segment Reporting (Accounting Standard 17)
The management of the Company identifies two major reportable segments viz. Diamond Business and Jewellery
Business. Activity in diamond business includes manufacturing and export of cut & polished diamonds and sales
in local market. Activity in jewellery business includes manufacturing and export of plain gold and diamond
studded jewellery and manufacturing and sales in local market of branded and unbranded jewellery.
Refer to Annexure I
2.11 Related Party Transactions (Accounting Standard 18)
Refer to Annexure II
2.12 Impairment of Assets
As required by Accounting Standard – 28, the Company has carried out the assessment of impairment of
assets.
There has been no impairment of assets reported during the year.
Annual Report 2008-09
Schedules
forming part of the Consolidated accounts for the year ended 31st March, 2009
2.13 Employee Benefits
The company has followed Accounting Standard-15 Employee Benefits, notified under the Companies
(Accounting Standard) Rules, 2006. The company and its subsidiaries accounted for the liability for gratuity
benefits payable in future based on independent acturial valuation. The liability is not funded except in the case
of a subsidiary where it is funded. For detail disclosure refer respective balance sheets.
2.14 Disclosure of Foreign Currency Exposures
The details of outstanding foreign currency exposure of the Group as at 31st March,
(In Millions)
USD
Particulars
Debtors – covered by Forward Contract
Debtors – uncovered
Creditors – covered by Forward Contract
Creditors – uncovered
Bank Balance - uncovered
FCCBs – uncovered
Advance to supplier - uncovered
Bank Facility - uncovered
88.05
285.48
70.88
107.48
25.84
73.86
0.01
5.14
Euro
–
0.50
–
0.00
–
–
–
–
Forward contracts for debtors and creditors are not intended for trading and speculation.
2.15 Disclosure as per Accounting Standard 19 on “Leases”, issued by the ICAI, are given below:
a)
The Company has taken various office premises under operating lease or leave and license agreements.
These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or
longer for other leases and are renewable by mutual consent on mutually agreeable terms. The company
has given refundable interest free security deposits under certain agreements.
b) Lease payments are recognized in the profit & Loss account under the head ³Rent².
c)
The future minimum lease payments are as follows;
i)
ii)
Not later than one year Rs. 720.06 millions (Previous year Rs. 633.06 millions)
Later than one year and not later than five years Rs. 1,519.43 millions (Previous year Rs. 1,395.08
millions)
iii) More than five years Rs. 453.47 millions (Previous year Rs 356.18 millions)
2.16Amounts due to Investor Education Fund
-Nil
2.17Amounts due to Small Scale Industries
-Nil
2.18 The Company is in process of identifying enterprises covered under the Micro, Small and Medium Enterprises
Development Act, 2006 (the Act). Based on the details regarding the status of the suppliers, to the extent
obtained, no supplier is covered under the Act.
2.19 Previous year’s figures have been regrouped/rearranged/reworked wherever necessary and possible so as to
confirm to current year’s classification
As per our report of even date.
For FORD, RHODES, PARKS & CO.
Chartered Accountants
For and on behalf of the Board
MEHUL C. CHOKSI
Managing Director
A. D. SHENOY
Partner
M. No. 11549
Place :Mumbai
Dated :29th June, 2009
G. K. NAIR
Director
PANKHURI WARANGE
Company Secretary
91
92
Gitanjali Gems Limited
Annexure - I
Segmentwise Reporting Revenue, Results and Capital Employed
(Rupees in Millions)
For the year ended 31st March,
2009
2008
A) Primary Segment (By Business Segment)
1.
2.
3.
Segment Revenue
Segment - Diamond
Segment - Jewellery
Segment - Others
Total
Less: Inter Segment sales
Net Sales / Income from Operations
Segment Results
Profit / (Loss ) before tax and interest from each segment
Segment - Diamond
Segment - Jewellery
Segment - Others
Total
Less :
Interest
Other un-allocable expenses
Total Profit Before Tax
Capital Employed
Segment - Diamond
Segment - Jewellery
Unallocated net assets
Total
27,340.37
27,051.33
11.33
54,403.03
3,514.27
50,888.76
27,253.48
21,658.29
–
48,911.77
594.41
48,317.36
715.53
2,194.04
(158.13)
2,751.44
919.78
1,483.73
(39.04)
2,364.47
978.40
235.43
1,537.61
448.42
96.52
1,819.53
9,100.72
9,384.11
3,469.70
21,954.53
7,447.28
6,449.43
4,949.06
18,845.77
18,830.25
32,058.51
50,888.76
18,927.55
29,389.81
48,317.36
B) Secondary Segment (By Geographical Segment)
Segment Revenue
India
Rest of the world
Total Revenue
Annual Report 2008-09
Annexure - II
Related Party Statement for the year ended 31st March, 2009
Related Party & Their Relationship
1
Subsidiary Companies
Asmi Jewellery India Private Limited (Formerly known as Desire Lifestyle
Private Limited)
Aurangabad SEZ Limited (Formerly known as Aurangabad Gems SEZ Limited)
Brightest Circle Jewellery Private Limited
CRIA Jewellery Private Limited
D’Damas Jewellery (India) Private Limited
Decent Securities & Finance Private Limited
Eureka Finstock Private Limited
Fantasy Diamond Cuts Private Limited
Gili India Limited (Formerly known as Gitanjali Jewels Limited)
Gitanjali Exports Corporation Limited
Gitanjali Infratech Limited
Gitanjali Lifestyle Limited
Gitanjali USA, Inc.
Gitanjali Ventures DMCC
Gitanjali Holdings Limited
Gitanjali Retail Ventures Limited
Hyderabad Gems SEZ Limited
Ivida Technologies Private Limited
Mehul Impex Limited
Modali Jewels Private Limited
Modali Gems Private Limited (Formerly known as Modali Distributors Private
Limited)
MMTC Gitanjali Private Limited
Mohar Jewels Limited
Nagpur Multi Product SEZ Limited
Nanded SEZ Limited (Formerly known as Nanded Gems SEZ Limited)
Nashik Multi Services SEZ Limited
Raigad Gems SEZ Limited
Rogers Limited, Inc
Samuels Jewelers Inc.
ShubaLavanyaa Jewel Crafts Private Limited
West Bengal SEZ Limited
2
Joint Venture Company
Spectrum Jewellery Private Limited
3
Key Management Personnel
Mr. Adrianus Voorn
Mr. G.K.Nair
Mr. Mehul C. Choksi
93
94
Gitanjali Gems Limited
Annexure - II
Related Party Statement for the year ended 31st March, 2009 (Contd.)
Related Party & Their Relationship
4
Enterprises under Common
Control of Key Management
Personnel
Alliance Jewellery Private Limited
Audarya Investments Private Limited
Diamond Creations
Damsy Retail Jewellery Private Limited
Gitanjali Gold & Precious Limited
Gitanjali Reality Private Limited
Legacy Gold Private Limited
Lustre Manufacturers Private Limited
Maitreyi Impex Private Limited
Mast Jewellery Distribution Private Limited
Mozart Investment Private Limited
Naviraj Estates Private Limited
N & J Finstock Private Limited
Partha Gems Private Limited
Pink Jewellery Private Limited
Prism Bullion Private Limited
Priyanka Gems Private Limited
Rohan Diamonds Private Limited
Rohan Mercantile Private Limited
The Next Diamond Company
Touchstone
Trans-Expo Trade Private Limited
5
Relative of Key Management
Personnel
Mrs. Amita Bhansali
Mrs. Guniyal C. Choksi
Mrs. Neena Sheth
Mrs. Priti M. Choksi
6
Enterprises Controlled
by Relatives of Key
Management Personnel
Diminco N.V.
7
Enterprises Controlled by
the Investing Venturer of the
Joint Venture Company
Damas LLC
Damas Goldfield Jewellery Private Limited
Modern India Limited
Morellato SPA
8
Step Down Subsidiaries
Hoop Retail Ventures Private Limited (Formerly known as B Vijay Retail
Ventures Private Ltd)
Kolkatta Axis Malls Limited
Lucera Retail Venture Private Limited (Formerly known as Renaissance Retail
Venture Private Limited)
Tri-Star Worldwide LLC
Trinity Watch Company Private Limited
9
Step Down Joint Ventures
Diadem Ranka Desire Lifestyle Private Limited
Mannat Jewellers Manufacturing Private Limited
Annual Report 2008-09
Annexure - II
Related Party Statement for the year ended 31st March, 2009 (Contd.)
Relationship with the Transaction with the Company
Company
Enterprise Controlled by the Investing Venturer of a Joint Venture Company
Amount Outstanding shown under Sundry Debtors
Amount Outstanding shown under Sundry Creditors
Purchases
Share Capital Issued
Enterprises Controlled by relatives of Key Management Personnel
Amount Outstanding shown under Sundry Creditors
Amount Outstanding shown under Sundry Debtors
Purchases
Sales
Enterprises Under Common Control of Key Management Personnel
Advance Given
Advances Received Given Back
Amount Outstanding shown under Advances to Labour
Amount Outstanding shown under Advances from Customer
Amount Outstanding shown under Advances to Suppliers
Amount Outstanding shown under Loans & Advances
Amount Outstanding shown under Sundry Creditors
Amount Outstanding shown under Sundry Debtors
Amount Outstanding shown under Unsecured Loan
Expenses incurred
Other Income Received
Purchases
Reimbursement of Expenses
Sales
Key Management Personnel
Advances Received
Advances Received Given Back
Amount Outstanding shown under Unsecured Loan
Salary & Other Payments
Guarantee given for Working Capital borrowings to the banks / financial
institution
Amount
(Rs. in Millions)
4.93
2.42
0.02
32.82
1,151.65
963.53
1,070.08
1,281.78
101.81
0.06
3.61
6.65
278.22
1.34
11.30
137.03
3.68
90.00
0.23
53.02
2.23
352.86
480.33
590.55
10.14
10.24
To The extent
of Borrowings
Relative of Key Management Personnel
Amount Outstanding shown under Sundry Creditors
Amount Outstanding shown under Unsecured Loan
Amount Outstanding shown under Sundry Debtors
Sales
Advances Received Given Back
8.90
12.30
0.14
0.15
0.27
Joint Venture Companies
Amount Outstanding shown under Advances to Suppliers
Amount Outstanding shown under Loans & Advances
Amount Outstanding shown under Sundry Creditors
Amount Outstanding shown under Sundry Debtors
Expenses recovered
Purchases
Sales
0.02
50.67
3.28
33.46
0.54
0.33
18.15
95
96
Gitanjali Gems Limited
Annexure - II
Related Party Statement for the year ended 31st March, 2009 (Contd.)
Relationship with the Transaction with the Company
Company
Step Down Joint Venture Company
Amount Outstanding shown under Loans & Advances
Amount Outstanding shown under Sundry Creditors
Purchases
Sales
Amount
(Rs. in Millions)
1.82
1.28
0.05
1.23
Subsidiary Companies
Guarantees given to bankers for working capital credit facilities
2,828.70
Holding Company
Equitable Mortgage created by subsidiary company in favour of Holding
Company
To The extent
of value of
property
Annual Report 2008-09
97
Corporate Information
Board of Directors
Mr. Mehul C. Choksi
Mr. G. K. Nair
Mr. Dhanesh V. Sheth
Mr. Prakash D. Shah
Mr. Sujal A. Shah
Mr. S. Krishnan
Mr. Suresh Chukkapalli
Chairman & Managing Director
Executive Director
Non -Executive Director
Independent Director
Independent Director
Independent Director
Independent Director
Company Secretary &
Compliance Officer
Ms. Pankhuri Warange
Audit Committee
Mr. Sujal A. Shah (Chairman)
Mr. G. K. Nair
Mr. Prakash D. Shah
Mr. S. Krishnan
Shareholders / Investors
Grievance Committee
Mr. Prakash D. Shah (Chairman)
Mr. G .K. Nair
Mr. Dhanesh V. Sheth
Remuneration Committee
Mr. Sujal A. Shah (Chairman)
Mr. Prakash D. Shah
Allotment Committee
Mr. Mehul C. Choksi (Chairman)
Mr. G. K. Nair
Mr. Dhanesh Sheth
Mr. Suresh Chukkapalli
Borrowing Committee
Investment Committee
Mr. G. K. Nair (Chairman)
Mr. Mehul C. Choksi
Mr. Dhanesh Sheth
Buyback Committee
Mr. Mehul C. Choksi (Chairman)
Mr. G. K. Nair
Mr. Dhanesh Sheth
Auditors
M/s Ford, Rhodes, Parks & Co.
Sai Commercial Building,
312/313, 3rd Floor,
BKS Devshi Marg,
Govandi (East),
Mumbai – 400088.
Bankers
Allahabad Bank
Andhra Bank
Bank of Baroda
Canara Bank
Corporation Bank
Dena Bank
Development Credit Bank Ltd.
Export Import Bank of India
ICICI Bank Limited
Indian Overseas Bank
IndusInd Bank Limited
Karnataka Bank Limited
Punjab National Bank
Punjab & Sind Bank
State Bank of Bikaner & Jaipur
State Bank of India
State Bank of Indore
State Bank of Hyderabad
Syndicate Bank
United Bank of India
Yes Bank Ltd.
Mr. Mehul C. Choksi (Chairman)
Mr. G. K. Nair
Mr. Dhanesh Sheth
Registered Office
Corporate Office
Registrar & Transfer Agent
801/802, Prasad Chambers, Opera
House, Mumbai – 400004
Tel: +91-022-40362222
Fax:+91-022-23630363
e-mail: investors@gitanjaligroup.com
B- 10, 2nd Floor, Plot No. C/ 25, ‘G’
Block, Laxmi Towers, Bandra Kurla
Complex, Bandra (E),
Mumbai- 400 051.
Tel: +91-022-40102000 / 01
Fax:+91-022-40102003
e-mail : investors@gitanjaligroup.com
Karvy Computershare Private Limited
Gitanjali Gems Limited Unit,
Plot No. 17 to 24, Vittal Rao Nagar,
Madhapur, Hyderabad - 500081
Tel: +91-040-23420815/ 16/ 17
Fax:+91-040-23420814
e-mail: einward.ris@karvy.com
Website: www.karisma.karvy.com
98
Gitanjali Gems Limited
Notes
Annual Report 2008-09
99
Gitanjali Gems Limited
Registered Office: 801/802, Prasad Chambers, Opera House Mumbai - 400 004.
PROXY FORM
DP ID No.*
Folio No.
Client ID No.*
No. of Shares
I/We
of
in the district of
being a Member / Members of the above named Company, hereby appoint
of
or
failing
in the district of
him/her
of
in
the
district
of
as my/our proxy to attend and vote for me/us on my/our behalf at the Annual General
Meeting of the Company to be held on Saturday, 19th day of September, 2009 at 3.00 p.m. and at any adjournment (s)
thereof.
Signed this
day of
2009.
Affix a
15 paise
revenue
Stamp
* Applicable for investors holding shares in electronic form.
Signature
Note: The Proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of
the Company not less than 48 hours before the time for holding the aforesaid meeting. The Proxy need not be a member of the Company.
Gitanjali Gems Limited
Registered Office: 801/802, Prasad Chambers, Opera House Mumbai - 400 004.
ATTENDANCE SLIP
DP ID No.*
Folio No.
Client ID No.*
No. of Shares
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING VENUE
Joint Shareholders may obtain additional Attendance Slip at the venue of the meeting.
Name
Address
I hereby record my presence at the 23rd Annual General Meeting of the Company at M.C. Ghia Hall, 2nd Floor, Bhogilal
Hargovindas Building, 18/20, K. Dubhash Marg, Kala Ghoda, Mumbai-400001 at 3.00 P.M. on Saturday, September 19,
2009.
Signature of Member/Proxy
*Applicable for investors holding shares in electronic form.
BOOK-POST
Under Certificate of Posting
if undelivered please return to:
Gitanjali Gems Limited
B-6, 1st Floor, Laxmi Towers, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.
www.gitanjaligroup.com