TARA JEWELS LIMITED

ANNUAL REPORT 2017-18

FACING Challenges.CONSOLIDATING Capabilities.GROWING Possibilities.

CONTENTS

Facing Challenges. Consolidating Capabilities. Growing Possibilities ......................................................01

At a Glance .....................................................................02

Our Mission and Vision ...................................................03

Our Values ......................................................................03

Our Revered Clientele ....................................................04

Our Captivating Brands ..................................................05

Our World Presence ........................................................06

Presence Across the Chain ..............................................07

Awards and Accolades ...................................................08

Letter to Shareholders ...................................................10

Corporate Information ...................................................12

Our Board of Directors ....................................................13

Our Leadership ...............................................................14

Our Financial Scorecard ..................................................16

Tapping the Lab-Grown Diamond Markets ..........................................................18

Leveraging Our Competencies in Manufacturing ...........................................................22

Traversing the Hi-Tech Realm of Machine Manufacturing ................................................24

Management Discussion and Analysis ...........................26

Board’s Report ...............................................................40

Corporate Governance Report ........................................71

Independent Auditors’ Report ........................................90

Balance Sheet ................................................................98

Statement of Profit and Loss ..........................................99

Statement of Cash Flow ...............................................100

Statement of Changes in Equity ...................................102

Notes ...........................................................................103

Independent Auditor’s Report .....................................144

Consolidated Balance Sheet .........................................150

Consolidated Statement of Profit and Loss ..................151

Statement of Cash Flow ...............................................152

Statement of Changes in Equity. ..................................154

Notes ...........................................................................155

Notice ..........................................................................192

FY2018 was a year when India’s Gems & Jewellery industry faced tough times. Banks curtailed finance to traders and demanded more collateral security, which led to a cascading impact on the industry. In short, we couldn’t have faced a more challenging year as an Indian jewellery player. However, we stood firm and tall and adopted a cautious approach to navigate through these tough times.

We optimally stretched the available resources, improved our operational efficiencies, and aimed at stable cash flows and assured sources of revenue. We sharpened our basics – strengthened our manufacturing capabilities, lowered operating costs, improved our operational margins and efficiently executed value-accretive businesses. We abstained from unfeasible businesses, which was no longer delivering sufficient value to our shareholders. With this, we aimed at stable cash flows and assured sources of revenue.

Our strong pedigree of brands, vast library of exclusive IP designs, our advanced and hi-tech manufacturing capabilities aided us in recalibrating our business strategies and identifying newer opportunities. To optimise growth, we added new geographies in the international markets, strengthened our relationships with retailers, and forayed into the growing “lab grown diamonds” market in the international arena. Our CAD software, 3-D laser printing and patented technologies provide us with the requisite capabilities to produce and supply exquisite jewellery made from “lab grown diamonds” to international jewellery retailers.

Today, as an integrated jewellery company and specialty retailer of studded gold, platinum and silver jewellery, we remain poised to face the future. Our pragmatic approach gives us the confidence that when market conditions rebound, our solid foundation will see us advantageously into the future.

FACING Challenges.CONSOLIDATING Capabilities.GROWING Possibilities.

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AT A GLANCE

TARA JEWELS LIMITED

AT A GLANCE

55,000 Total Number of Designs

03Manufacturing Units

20 COUNTRIES

5 CONTINENTS

Our Global Presence

20 YEARSTotal Experience in

Jewellery Manufacturing

39Designers

1,000Craftsmen

07International

Brands

Our jewellery line embeds a mixture of classic styling and elegance. We source our precious and semi-precious stones from all over the world. Every piece of jewellery is handcrafted by our in-house karigars. We have maintained long-standing relationships with leading global retailers and cater to a diverse audience across 20 countries in 5 continents.

We are an integrated player in the jewellery industry with experience in Designing, Manufacturing and Retailing of jewellery. We are one of the world’s few manufacturers

with an indigenously developed manufacturing capability. We are one of the leading jewellery manufacturers

supplying to our retailers in UK and US.

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ABOUT US

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OUR MISSION

OUR VALUES

To delight our customers, stakeholders and employees through excellence in service and design, transparent and clear communication, accountable

commitments and assured rewards.

OUR VISION

To be the

preferred jeweller to the world.

EXCEED EXPECTATIONS

Always over deliver.

SERVICE BEFORE SELF

Remain customer centric. Educate &

Respect the customer.

CLEAR AND EFFECTIVE COMMUNICATION

Minimise the gap between reality and

perception, through transparency

and clarity.

RELIABLE AND SUSTAINABLE Through responsible sourcing, consistent

delivery, product quality and service.

DELIGHT

Customer delight, employee delight and

stakeholder delight.

HONOURHonour and pride in everything we do.

TARA JEWELS LIMITED

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OUR REVERED CLIENTELE

Largest SpecialtyJewellery Retailer in the

US, UK and Canada

OUR REVERED CLIENTELE

Our prestigious clientele includes some of the leading global retailers in the UK, US and South Africa. We

provide our clientele with bespoke jewellery across 20 countries in 5 continents.

Leading Chain Store Group in South Africa

A Warren Buffett company

Largest SpecialtyJewellery Retailer in the

US, UK and Canada

The largest Global Retailer

No. 1 Off-mall Destination Jeweller

in the US

Largest Online Retailer of Diamonds

Specialty Retail Jewellery chain

in US

No. 1 Specialty Jeweller

in UK

Leading Regional Departmental Store

in South Africa

No.1 Specialty Jeweller in the US

A Wholly Irish ownedcompany and a market leader

since 1979

CHRYST Switzerland

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ABOUT US

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OUR CAPTIVATING BRANDS

TARA JEWELS LIMITED

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OUR WORLD PRESENCE

India

Australia

Canada U. K.Europe

China

South Africa

U. S. A.

OUR WORLD PRESENCE

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ABOUT US

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PRESENCE ACROSS THE CHAIN

RETAILING

DESIGNING

HI-END LUXURY JEWELLERY

BRANDED JEWELLERY

MANUFACTURING

TARA JEWELS LIMITED

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AWARDS & ACCOLADES

AWARDS & ACCOLADES

We always endeavour to deliver the best results to our customers. Our achievements have been encouraged and recognised through various awards and accolades we

have received in several categories over the years.

Highest Export Performance Award for 2009 - 2010

Highest Export Performance Award for 2008 - 2009

Highest Export Performance Award for 2007- 2008

Highest Net Foreign Exchange Earner” Award for 2009 - 2010

Second Highest Net Foreign Exchange Earner” Award for 2008 - 2009

Second Highest Net Foreign Exchange Earner” Award for 2007 - 2008

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ABOUT US

STATUTORY REPORTS

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ANNUAL REPORT 2018

The second highest exporter of studded jewellery for the year 2008 - 2009

The second highest exporter of studded jewellery for the year 2007 - 2008

The “Global Supplier of the Year” Award for 2007 from Walmart

Awarded “LUXURY RETAILER OF THE YEAR” at the Star Retailer Awards 2013

Nominated for the Best 360 Marketing of the Year 2012

The Best Store Design of the Year - Single Brand category at the ET Retail Awards 2013

Awarded “Print Campaign of the Year 2012”

INTERNATIONAL BUSINESS

Global Supplier of the Year Twice Awarded by Walmart

Overall Excellence Award Second highest exporter in the category of studded precious metal jewellery exports in EPZ, by GJEPC (The Gem and Jewellery Export

Promotion Council) in year 2007, 2008 and 2009

Conferred with “Star Trading House” status - By the Ministry of Commerce & Industry and have been the highest

exporter in gems and jewellery sector for the years FY2009 and FY2010

TARA JEWELS LIMITED

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LETTER TO SHAREHOLDERS

LETTER TO SHAREHOLDERS

We have established a leading edge in design and creativity, presence across the jewellery value chain and an established global clientele. Our domain expertise and the experience of our promoters in the Gems & Jewellery

industry has provided us with a competitive edge in the marketplace.

RAJEEV SHETHChairman & Managing Director

Dear Shareholders,

I begin this letter with a sense of pride on how our Company has grown stronger over the years. With goals that are built for a longer time horizon, we view periodic short-term challenges as speed bumps along the way. We remain unfazed towards our objectives, and are determined to keep taking concrete steps towards enhancing our presence and serving the customers, producing sustainable performance and focusing on long-term shareholder value creation.

We are proud to have pioneered jewellery manufacturing in India through our cutting-edge manufacturing facilities and patented technologies, and to have revolutionised low-cost jewellery manufacturing in India. Today, we are an integrated player in the jewellery industry in India, with a portfolio of studded gold, platinum and silver jewellery, catering to a diverse audience across 20 countries in 5 continents.

Facing ChallengesWith the Gems & Jewellery industry facing tough times which impacted the industry players, we remain unfazed. We stood firm and tall and took

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ABOUT US

STATUTORY REPORTS

FINANCIALS

ANNUAL REPORT 2018

certain tough choices to ensure business continuity. We adopted a pragmatic and cautious approach, optimally stretched the available resources and improved operational efficiencies. For delivering sufficient value to our shareholders, we abstained from unfeasible businesses, which was no longer viable. This was aimed at attaining stable cash flows, improving operational margins and leading to assured sources of revenue. We also utilised the opportunity to sharpen our basics – strengthened our manufacturing capabilities, lowered operating costs and efficiently executed “value accretive” businesses.

Capitalising on our ProficienciesWe continued to serve diverse markets and continents through our vast library of exclusive 50,000 IP designs, our state-of-the-art design and manufacturing capabilities. However, our performance has been reinforced by our asset light business model and our strong pedigree of brands. We capitalised on having established a leading edge in design and creativity, presence across the jewellery value chain and an established global clientele. Our domain expertise and the experience of our promoters in the gems & jewellery industry has provided us with a competitive edge in the marketplace.

It is the very adeptness of our manufacturing skills that we are now leveraging to foray into the slowly-expanding segment of “lab-grown diamonds” in the international market. With this, we are leveraging our world-class manufacturing skills to create new designs by using these diamonds and supplying fashion jewellery to our international retailers. We hope to gain a decent market share in this segment.

Towards Scalable and Sustainable GrowthDuring the year, we identified newer opportunities, added new geographies in the international markets, built our brands, and continued our focus on Internet-based and made-to-order jewellery. We were able to do this by leveraging our CAD software, 3-D later printing and patented technologies in producing and supply exquisite jewellery to large jewellery retailers. Today, as an integrated jewellery company and specialty retailer of studded gold, platinum and silver jewellery, we remain poised to face the future.

I urge all our stakeholders to stay focused on the facts, the fulfilment of our strategic plans and the proven performance record of the Company. We remain solidly determined to deliver long-term and sustained value to our stakeholders. Our pragmatic approach gives us the confidence that when market conditions rebound, our solid foundation will see us advantageously into the future.

On behalf of the Management and Board of Directors, I would like to take this opportunityto thank our shareholders and our employees for their contribution and support.

We also thank our retailers and business partners for their continuous trust and confidence in the Company.

Warm Regards,

Rajeev Sheth

Chairman & Managing Director

TARA JEWELS LIMITED

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CORPORATE INFORMATION

COMPANY SECRETARY & COMPLIANCE OFFICERMS. NIVEDITA NAYAK

STATUTORY AUDITORSM/S GMJ & Co,

Chartered Accountants,

3rd and 4th Floor, Vastu Darshan,

B Wing, Azad Road, Andheri (East),

Mumbai - 400069

INTERNAL AUDITORSS Y LODHA & ASSOCIATES,

Chartered Accountants,

Room No. 3, 1st Floor, Clark House,

Plot 8, Nathalal Parikh Marg, Colaba,

Mumbai - 400001

REGISTRAR AND SHARE TRANSFER AGENTSLINK INTIME INDIA PVT. LIMITED,

C 101, 247 PARK,L B S MARG, VIKHROLI WEST,

MUMBAI - 400083

BANKERS• STATE BANK OF INDIA

• PUNJAB NATIONAL BANK

• UNION BANK OF INDIA

• STATE BANK OF PATIALA

• CENTRAL BANK OF INDIA

• BANK OF INDIA

• AXIS BANK

• IDBI BANK

• EXIM BANK

• CORPORATION BANK

• CANARA BANK

• VIJAYA BANK

REGISTERED OFFICEPLOT NO. 122, 15TH ROAD, NEAR IDBI BANK,

M.I.D.C, ANDHERI (EAST), MUMBAI - 400093

CORPORATE OFFICEPLOT NO. 29 (P), & 30 (P), SUB PLOT A,

SEEPZ SEZ, ANDHERI (EAST),

MUMBAI - 400096

CIN NO: L52393MH2001PLC 131252

OUR MANUFACTURING PLANTSa. Plot No. 122, 15th Road,

Near IDBI Bank, M.I.D.C, Andheri (East),

Mumbai - 400093

b. Plot No. 29(P), & 30(P), Sub Plot A,

SEEPZ SEZ, Andheri (East),

Mumbai - 400096

c. Unit No. GJ-7, SDF VII, SEEPZ SEZ,

Andheri (East), Mumbai - 400096

CORPORATE INFORMATION

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ABOUT US

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Mr. Rajeev Sheth is the Chairman and Managing Director of our Company. He holds a graduate degree in Commerce from Mumbai University. He also holds a Diploma in Gemology from Gemological Institute of America. He has approximately 35 years of experience in the jewellery business. He started his career by promoting Rose International and thereafter became the Promoter and Managing Director of Intergold India Limited from 1989 to 1999.

Ms. Fern Mallis is a Non-Executive Independent Director. She holds a Bachelors Degree of Fine Arts from the University of Buffalo. Ms. Mallis has more than four decades of experience in architecture, design and fashion industries. She has worked with Conde Nast Publications (Mademoiselle Magazine), Fashion Director Gimbel´s East Department Store and Pres Fern Mallis Public Relations. She was the Senior Vice President of International Design Center, New York, the Executive Director of Council of Fashion Designers of America from 1991 to 2001 and the Senior Vice President of IMG Fashion from 2001 to 2010.

Ms. Disha Tulsiani is Chief Financial Officer and Executive Director. She holds a Graduate Degree in Banking & Finance from Mumbai University and a Master’s Degree in Finance from University of Wales, Cardiff, UK. She is responsible for the overall financial controlling, planning and budget analysis at Tara. She has an experience of over 10 years in the field of Business Finance with organizations based out of India, Dubai and UK. She started her career in 2008 in London with Pennington’s, UK, LLC, Prior to joining Tara Jewels in 2013, she acted in the capacity of a Business Head at Capital Marketing FZ, LLC, a Dubai based company into outdoor media, sports and Fashion.

OUR BOARD OF DIRECTORS

TARA JEWELS LIMITED

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OUR LEADERSHIP

Mr. Ravindran M.P is Chief Operating Officer of

our Company. He holds a Post Graduate Degree

in Computer Science and Masters in Business

Administration in Systems Management from Mumbai

University. He is in charge of customer service,

trading and outsourcing operations in our Company.

He has approximately 27 years of experience in the

areas of jewellery and engineering.

Mr. Sajid Salim Sakarwalla is Vice President

– Diamond Procurement. A Graduate Diamond

from Gemological Institute of America, he is also

certified as an Accredited Jewellery Professional from

GIA. He holds a Graduation Degree in Commerce

from Mumbai University and a Masters Degree

in Management Studies (MMS-Finance) from

NarseeMonjee Institute of Management Studies,

Mumbai University. He joined the Company on

October 11, 2002 and is in charge of the overall

diamond division.

Ms. Aarti Sheth Cooper is Vice President- Business

Development (exports division) of our Company. She

holds a Bachelor of Science degree in International

Business and Marketing from Drexel University;

Master’s of Science degree in international

employment relations; and Human Resource

Management from London School of Economics.

She is responsible for overall sales review, business

development and strategic alliances management of

the institutional retail clients in U.S. She also plays an

active role in managing product development for all

the US markets.

Ms. Divya Sheth Mathur is Vice President- Product

Development. She holds a BA & Associate in Arts

Degree from New York University, New York and an

MSc from Leeds University Business School. She has

10 years of jewelry design and retailing experience.

She is responsible for global business development

and product development at Tara.

Mr. Rajesh Kumar Gupta is General Manager

Accounts and Costing. He is a qualified Chartered

Accountant and ICWA. He has approximately 24 years

of experience in the field of accounts and costing.

OUR LEADERSHIP

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ABOUT US

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Mr. Chander Gurnani is General Manager-

Finance. He is a qualified Chartered Accountant,

responsible for managing finance and tax matters

of the Company. He has approximately 18 years of

experience in the field of accounts and finance.

Mr. Pravin Patil is General Manager-Human

Resources and Administration. He holds a Master’s

Degree in Labour Studies and Graduation in Law

from Mumbai University. He is responsible for human

resources and administrative division of the Company.

Mr. Patil has approximately 26 years of experience

in the area of human resource and administration in

hospitality and jewellery industry.

Mr. Vishal Adhyapak is General Manager-

Information Technology of the Company. He holds

a Diploma in Mechanical Engineering from Mumbai

University. He is in charge of information technology

division of the Company. He has approximately 17

years of experience in the field.

Mrs. Nivedita Nayak is the Company Secretary

and Compliance Officer. She is Associate member of

the Institute of Company Secretaries of India. She

also holds degree in Bachelor of Law and Bachelor

of Commerce from Mumbai University. She is

responsible for handling all the Company Secretarial

and Legal matters. She has experience of around 8

years in the field of Secretarial and Legal.

INTERNATIONAL BUSINESS Mr. Stuart Marcus is Vice President-Sales of our

Subsidiary Fabrikant-Tara International LLC. He holds

a Bachelor of Arts degree in Marketing from the

Northeastern University, Boston. He is responsible

for diamond fashion and bridal sales to many of

our accounts. He has approximately 33 years of

experience in jewellery and four years in table top

merchandise.

SUBSIDIARY COMPANY Mr. Nilesh J. Agashiwala (USA) joined Fabrikant-

Tara International LLC, Tara’s USA division, as their

Chief Financial Officer in 2015. Mr. Agashiwala has

over 28 years of experience working with variety

of companies, including jewelry wholesaler, private

equity, public accounting firms. Mr. Agashiwala holds

a Bachelor’s degree in Finance and Economics from

the University of Mumbai, India, and is currently

pursuing his CPA designation.

Mr. Prakash Parmar (HK) is the General Manager

(Finance & Accounts). He is in charge of accounts and

finance function of Tara (Hong Kong) Ltd, a 100%

subsidiary of Tara Jewels Ltd. Mr. Prakash Parmar

is a chartered accountant with graduation in B.Sc.

from Mumbai University. He has experience in the

field of accounts and finance for over 30 years. He is

associated with the company for 11 years.

TARA JEWELS LIMITED

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OUR FINANCIAL SCORECARD

OUR FINANCIAL SCORECARD

REVENUE (` Crores)

Net Sales

FY2014 1,695.40

FY2015 1,735.28

FY2016 1,801.31

FY2017 1,552.76

FY2018 839.89

EARNINGS PER SHARE (`)

FY2014 20.48

FY2015 17.73

FY2016 10.33

FY2017 -1.88

FY2018 -292.78

PROFIT AFTER TAX (` Crores)

FY2014 50.38

FY2015 43.66

FY2016 25.44

FY2017 -4.62

FY2018 -720.90

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EBITDA (` Crores)

FY2014 162.95

FY2015 163.90

FY2016 136.31

FY2017 102.30

FY2018 -608.47

BOOK VALUE (`)

FY2014 219

FY2015 237

FY2016 248

FY2017 242

FY2018 -52

ROCE (%)

FY2014 13

FY2015 11

FY2016 8

FY2017 6

FY2018 -

TARA JEWELS LIMITED

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KEY FEATURES OF LAB-GROWN DIAMONDS:

• Manufactured in a factory

• Approx. 40% cheaper than mined diamonds

• Environment friendly

• Similar carbon composition

• Same look, feel and lustre

TAPPING THE LAB-GROWN DIAMOND MARKETS

We have made a foray into the jewellery end of lab-grown diamond industry by supplying fashion jewellery with

diamonds grown in laboratories. With this, we aim to fill what we perceive as a void in the market for well-priced

lab-grown diamond fashion jewellery.

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Lab-grown diamonds are gaining popularity. Lab-grown diamonds, which are sold in the form of jewellery pieces and are certified as synthetic, are a product of technology. They create the allure of something rare and eternal – similar to natural gems. Rather than waiting for millions of years for the earth’s

pressure to crystalise carbon into a diamond, these are grown in laboratories and are of equivalent quality to mined diamonds.

At Tara Jewels, we are leveraging the growing opportunity by tapping the early adopters of technology and those appreciating

sustainability. Besides mined diamonds, we now procure lab-grown diamonds from manufacturers to supply jewellery created from these diamonds to jewellery retailers in US and Europe.

India’s export of lab-grown diamonds increased from US$ 25 million (` 119.8 crore) in

TARA JEWELS LIMITED

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FY2011-12 to US$ 79 million (` 484 crore) in FY2014-15. Likewise, import of rough lab-grown diamonds (for polishing) shot up from US$ 12 million (` 57.5 crore) to US$ 63 million (` 385.24 crore) in FY2014-15. CVD/HTHP diamonds account for almost 95% of the export-import data of lab-grown diamonds.

Characteristics of Lab-grown Diamonds‘High pressure, high temperature’ (HTHP) and chemical vapour deposition (CVD) are two methods of culturing diamonds in a laboratory. Both mined and lab-grown diamonds are made of pure carbon and have identical physical, chemical and optical attributes. Lab-grown diamonds are conflict free, eco-friendly and less expensive. The price differential between natural and lab-grown diamonds is approximately 40%. Thus, if the price of 1 carat natural diamond is US$ 1,000, a lab-grown diamond is available at US$ 600. And, in times to come, it is expected to fall further to US$ 25.

Creating Lab-grown DiamondsLab-grown diamonds are produced from the seed of a flawless natural diamond. The technology to produce diamonds in a laboratory is almost 50 years old. A flawless diamond produced in a laboratory can also be used as a seed. Lab-grown diamonds are ‘grown’ in controlled laboratory environment using technological processes that

duplicate the conditions under the earth’s crust. Once grown, cut and polished, these stones are identical to natural diamonds and bear the same molecular properties.

PROCESS BEHIND MANUFACTURING OF LAB-GROWN DIAMONDS:

High pressure high temperature (HPHT) and chemical vapour deposition (CVD) are two methods of culturing diamonds in laboratories.

Lab-grown diamonds are grown from the seed of a natural flawless mined diamond. Flawless lab grown diamonds (bred previously from a natural diamond) can also be used as the seed.

STEP 2

STEP 1

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Key Points of Differentiation:

NATURAL DIAMONDS LAB-GROWN DIAMONDS

They are created millioned of years ago out of carbon deposits, at a depth of over 150 kms in the earth’s mantle

They are lab grown mostly inside a reactor, treated to extreme heat, pressure and gases

Formation time is more than a million years Production time 5-15 days

Mineral composed of carbon, hard and adamantine Chemical and physical properties same as natural diamonds

1 carat solitaire priced upwards of ` 3 lakh Price 30-35% cheaper than mined diamonds

Flawless diamonds are rare and expensive, high level of inclusion in lower grade diamonds

Flawless diamonds can be made in large numbers under lab conditions. Less inclusions

Diamonds are still smuggled out of conflict zones in Africa. These are popularly known as blood diamonds.

Lab grown diamonds are conflict free diamonds

4A. A plasma cover or a hot filament of gases is created inside the reactor

4B. The above process starts deposition of carbon atoms inside the reactor

4C. With technology, growth of diamond crystals can be enhanced and formation of unimportant carbons suppressed

4D. It takes 4,000 microns (4 days) to grow a 1 carat diamond

4E. A CVD reactor produces about 20 diamonds at once

HPHT method involves heating and applying pressure on a seed diamond with a carbon element (mostly graphite) on top. The compound is exposed to various gases, mainly nitrogen, which gives colour to the grown stone. It takes 5-15 days for the stone to mature through this process. HPHT process is apt to make smaller diamonds used in jewellery sets.

CVD is a more advanced method and requires labs to be absolutely dust free and power enabled at all times. In CVD, the seed diamond is placed inside a reactor, but without the carbon element.

STEP 4

STEP 3

TARA JEWELS LIMITED

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LEVERAGING OUR COMPETENCIES IN MANUFACTURING

We are one of the world’s few manufacturers with indigenously developed manufacturing capability. With 20 years of experience in the jewellery industry, we have created a strong hold in jewellery manufacturing. Our vast library of designs includes a core line of jewellery which is timeless across generations

and created with unequalled expertise and attention to detail.

03Manufacturing Units

80,000 Sq. Ft.

Total Area UnderManufacturing

120,000Units

Manufactured Per Month

39Designers

1,000Skilled Craftsmen

80%Current Installed

Capacity Utilisation

600-700New Designs

Introduced PerMonth

50,000+Designs

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ABOUT US

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We operate more than 80,000 sq. ft. of manufacturing space through 3 manufacturingunits. Of these, one is outside SEEPZ at Andheri, Mumbai; and the other two within the SEEPZ premises. We have a team of 39 designers and 1,000 experienced gold and diamond jewellery craftsmen (Karigars), which gives us a competitive industry position.

We produce 600-700 different jewellery models every month in gold and studded diamond jewellery. We have implemented SAP across all the manufacturing units. Our facility has the capacity to transform over gold into unique pieces of jewellery on a monthly basis.

Our facility supports our efforts to respond to market demands and introduce new products within record time. We enable this by harnessing the latest technologies in production processes, without compromising on the human element involved.

OUR MANUFACTURING TOOLS:

• Laser lithography

• Microscopic precision setting

• Machine made bands

• Invisible settings

• Machined graving

• CAD/CAM

TARA JEWELS LIMITED

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TRAVERSING THE HI-TECH REALM OF MACHINE MANUFACTURING

We employee advanced and high-tech equipment for jewellery manufacturing. This includes computer-aided design (CAD) software and computer-aided manufacturing

(CAM) hardware, such as 3-D laser printing and patented technologies. These technologies help us move towards Made-to-Order bespoke jewellery through low-

cost format and produce the most intricate jewellery designs.

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Our modern, well-organised manufacturing units, a higher focus on design, quality, standardisation, highly skilled labour with unique skill sets gives us a competitive market edge. Our CAD designers and qualified engineers, some of whom are 10-year old in the organisation, possess the capability to produce 500-600 new designs every year.

Our design team uses the latest technology to produce distinctive, exceptional, elegant and intricate jewellery pieces. We constantly aim towards implementing new product initiatives, new collection and innovative technologies to continue winning more consumers.

Patented TechnologyTo maximise productivity, we manufacture our jewellery using patented technologies, revolutionising jewellery manufacturing across the world. This helps us in maintaining long-standing relationships with leading global retailers and cater to a diverse audience across 20 countries in 5 continents. Digitisation in design manufacturing through CAD/CAM and 3-D printing machines enables us produce customised jewellery at competitive rates.

Explaining CADDue to the benefits of CAD, there has been an increasing trend to embrace 3-D printing technology. CAM is a software that connects CAD in such a way that the output from CAD is carried out directly by machines that are connected to the system in a production line. The CAM system is classified into two types Additive Prototyping and Subtractive Prototyping. In Additive Prototyping, the jewellery design part is built up by attaching layers of material on each other directly connected with a 3-D model (CAD). The process is called Growing or 3-D Printing.

FROM START TO FINISH:

• R&D Manufacturing has an extensive staff capable of taking your project from concept, to mass produced product, or custom one off piece.

• A team of on-site designers working with the latest CAD and design software can develop and engineer a concept to its fullest potential.

• A prototype can be produced quickly and accurately for testing and then mass produced under one roof.

• R&D can design and produce tooling, or create 3-D printed wax models that can be directly cast.

• R&D simplifies the production process by engineering and manufacturing your ideas under one roof.

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MANAGEMENT DISCUSSION AND ANALYSIS

TARA JEWELS LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

The global market for jewellery is expectedto have surpassed US$ 257 billion revenues by 2017. The value of world’s jewellery market is projected to grow by a CAGR of over 5% over the next five years. The market is predominantly driven by the Asia Pacific and the Middle Eastern markets, but

US continues to remain the dominant player in this industry.

ANNUAL REPORT 2018

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ECONOMIC OVERVIEWIndia With strong growth potential projected for the coming

years, the Indian economy continues to be the flagbearer for

economic expansion in the global landscape. The government

has made significant progress on important economic

reforms, which will support strong and sustainable growth

going forward. The implementation of the goods and services

tax, which has been in the making for over a decade, will

help raise India’s medium-term growth by enhancing the

efficiency of production and the movement of goods and

services across Indian states.

India’s economy temporarily decelerated, nevertheless, it

remained the second-best performer amongst major countries,

with strong macroeconomic fundamentals. This interim

deceleration was primarily caused by the demonetisation

measures and the introduction of the Goods & Services Tax (GST).

In the second half, the scenario improved significantly and India

jumped 30 spots on the World Bank’s Ease of Doing Business

rankings, while similar actions to liberalise the foreign direct

investment (FDI) regime helped increase flows by 20%.

(Source: Economic Survey, 2017-18)

India’s Gross Domestic Product (GDP) grew by 6.7% in

FY2018, driven by strong performance in construction,

manufacturing and public services, showing a persistent

revival trend. With this performance, India retained its

ranking as the world’s fastest-growing major economy,

outpacing China by nearly a percentage point. Looking

ahead, India’s economic growth is expected to gather

momentum in FY2019, aided by a conducive domestic and

global environment. The factors that are expected to help

the economy in achieving stronger growth are effective

implementation of GST; an improved credit off-take; a large

resource mobilisation from the primary market, strengthening

investment activity; and acceleration of global trade growth.

In addition, the thrust on rural and infrastructure sectors

in the Union Budget FY2019 are expected to rejuvenate

rural demand. In line with a positive economic development

outlook, the International Monetary Fund (IMF) has projected

India’s economy to grow by 7.4% in FY2019.

INDUSTRY OVERVIEWGems & Jewellery - WorldThe United States currently accounts for the largest jewellery

market in the world with more than half the market being

dominated by diamond jewellery segment. Regionally, Asia

Pacific holds the world’s largest jewellery market and is driven

largely by China and India, two of the largest consumers of

gold in the world and also hold majority of the processing

and manufacturing industry for jewellery. The global market

is witnessing an improvement in the jewellery sales overall

and with rising disposable incomes and changing lifestyles. It

is set to experience strong growth over the coming years.

According to ‘Global Gems and Jewellery Market Forecast

& Opportunities, 2018’ the jewellery market worldwide

has grown steadily over the last few years. While it slowed

down during the global economic recession, it is likely to

grow at a faster rate compared to the growth rate of the

past three years. The global market for jewellery is expected

to have surpassed US$ 257 billion revenues by 2017. The

value of world’s jewellery market is expected to grow at a

CAGR of over 5% over the next five years. The market is

predominantly driven by the Asia Pacific and the Middle

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MANAGEMENT DISCUSSION AND ANALYSIS

TARA JEWELS LIMITED

Eastern markets, but US continues to remain the dominant

player in the industry.

(Source: TechsciResearch)

The global Gems & Jewellery industry is seen becoming a

US$ 443 billion industry by 2022. This is on account of the

booming tourism industry, establishment of a large number

of exclusive showrooms by leading players, and rising

online availability of gems & jewellery. Demand for gems &

jewellery across the globe is dominated by Asia-Pacific and

North America. Expanding urbanisation, changing lifestyles,

growing E-Commerce sales, rising presence of organised retail

channels, growing number of premium product launches and

synchronised distribution networks is projected to drive the

global jewellery market during the forecast period.

Demand for diamond in gold, platinum, gemstones and

pearl jewellery has always been high, regardless of prices,

globally. Further, major players operating in global gems &

jewellery market are changing their product portfolios and

increasing their focus on making customised jewellery, as

per consumer demands. Advancements in jewellery making

process, along with availability of a range of certification

bodies such as Kimberly Process Certification Scheme and

Bureau of Indian Standards (BIS) hallmarking are anticipated

to pump growth in the global market in the coming years.

Asia-Pacific is also emerging as the fastest growing market

across the globe, on account of high demand from India,

China, Vietnam, Thailand, Japan and Indonesia. High demand

for Gems & Jewellery in the region can also be attributed

to rising disposable incomes, and aggressive marketing and

promotional strategies by leading players.

Global Market - Trends & Developments:

• Growing Use of 3-D Jewellery Printing

• Increasing Demand for Smart Wearable Jewellery

• Changing Preferences of Youth Population

• Rising Demand for Branded Jewellery

• Technological Advancements in Jewellery Manufacturing

• Growth in Organised Retail Formats and E-Commerce

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• Emergence of New Product Categories

• Aggressive Marketing and Promotional Strategies

Gems & Jewellery - IndiaIndia’s gems and jewellery sector is one of the largest

in the world, contributing 29% to global jewellery

consumption. The market size, which is currently at US$

75 billion, is estimated to reach US$ 100 billion by 2025.

The sector is home to more than 300,000 gems and

jewellery players, contributes about 7% to India’s GDP

and 14% to Merchandise Exports, and employs over 4.64

million employees. It contributes about 15% to India’s

total merchandise exports. The overall net exports of gems

and jewellery stood at US$ 32.71 billion during FY2018,

registering a CAGR of 5.83% over FY2005, whereas imports

increased at a CAGR of 7.97% from US$ 11.63 billion in

FY2005 to US$ 31.52 billion in FY2018.

Hub of JewelleryBased on its potential for growth and value addition, the

Government of India has declared the sector as a focus area

for export promotion. It has undertaken various measures to

promote investments and to upgrade technology and skills

to promote ‘Brand India’ in the international market. India is

deemed to be the hub of the global jewellery market because

of its low costs and availability of high-skilled labour. India is

the world’s largest cutting and polishing centre for diamonds,

with the cutting and polishing industry being well supported

by Government policies.

Moreover, India exports 75% of the world’s polished

diamonds, as per statistics from the Gems and Jewellery

Export Promotion Council (GJEPC). India’s Gems and Jewellery

sector has been contributing in a big way to the country’s

foreign exchange earnings (FEEs). The Government views

the sector as a thrust area for export promotion. The Indian

government presently allows 100% Foreign Direct Investment

(FDI) in the sector through the automatic route. The

cumulative Foreign Direct Investment (FDI) inflows in diamond

and gold ornaments in the period April 2000 – December

2017 were US$ 1,111.52 million, according to Department of

Industrial Policy and Promotion (DIPP).

(Source: IBEF Report)

India is the world’s largest centre for cut and polished

diamonds in the world and exports 75% of the world’s

polished diamonds. India has become world leader in cut

and polished diamond exports, polishing nearly one billion

stones each year. Today, 14 out of 15 diamonds sold in the

world are either polished or cut in India. India exported US$

6.29 billion worth of cut and polished diamonds during April

to June, 2018. With improvement in living standards, the

sector is likely to grow at a rapid pace. The Gems & Jewellery

Export Promotion Council intends to add 3 million more work

force by 2022. Being one of the largest exporters of gems

and jewellery, the industry is contributing a major chunk to

the total foreign reserves of the country. UAE, US, Russia,

Singapore, Hong Kong, Latin America and China are the

biggest importers of Indian jewellery.

The Gold MarketIndia is the world’s largest consumer of gold. Rising middle

class population and increasing income levels are the key

drivers for gold demand and other jewellery in India. Gold

demand in India rose 11% year-on-year to 737.5 tonnes

in 2017. Also, the Government of India has permitted

100% Foreign Direct Investment (FDI) in the sector under

the automatic route. The Bureau of Indian Standards (BIS)

has revised the standard on gold hallmarking in India from

January 2018, to include a BIS mark, purity in carat and

fitness as well as the unit’s identification and the jeweller’s

identification mark on gold jewellery. The move is aimed at

India is deemed to be the hub of the global jewellery market because of its

low costs and availability of high-skilled labour. It is the world’s largest cutting and

polishing centre for diamonds, with the cutting and polishing industry being well

supported by government policies.

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MANAGEMENT DISCUSSION AND ANALYSIS

TARA JEWELS LIMITED

ensuring a quality check on gold jewellery. The Government

launched the Gold Monetisation Scheme to reduce the

country’s reliance on gold imports to meet domestic demand.

Jewellery ExportsThe country’s gems and jewellery exports contracted by 8%

to US$ 32.72 billion in FY2018 owing to demand slowdown

in major markets, including the US. Exports declined by

8.67% to ` 2,64,130.64 crore in FY2018, mainly due to drop

in demand from the UAE, according to data from GJEPC.

Major export destinations were Hong Kong with 33%,

followed by UAE with 25% and US at 23%. The exports

were primarily driven by cut and polished diamonds (CPD)

segment, which witnessed an increase of 0.18% to

` 1,52,961.38 crore in FY2018, compared with ` 1,52,682.59

crore in FY2017. Meanwhile, gold jewellery exports registered

a growth of 6.71% to ` 62,387.48 crore in FY2018, against

` 58,464.92 crore in FY2017, while export of silver jewellery

decreased 18.91% to ` 21,830.76 crore, compared with

` 26,923.25 crore previously.

Gross Exports of Gems & Jewellery (In ` Million)

Year

FY2018 43,199

FY2017 39,287

FY2016 40,008

FY2015 40,237

FY2014 43,630

Source: GJEPC Website

Gross Exports of Gold Jewellery (In ` Billion)

Year

FY2017 8,722

FY2016 8,557

FY2015 9,904

FY2014 8,367

Source: GJEPC Website

US – Key Growth Driver for ExportsUS is the largest consumer of diamonds and jewellery globally

and the region is showing an upward trend. The country

imports 16% of its jewellery from India. India is making

efforts to grow the demand for ‘India Made’ jewellery

products in the established markets like US, Hong Kong and

China. It is exploring and penetrating new markets including

Iran, Jordan, Turkey, Latin America, Russia and the South-East

Asia. The US economy is on a revival path after witnessing a

slowdown in the past few years. The consumer sentiment has

turned positive and buyers have started coming to the market

for the purchase of new jewellery.

Organised Jewellery - GlobalWhile the overall retail Gems & Jewellery sector is growing,

the organised retail segment has also been expanding in the

recent years. Currently, the organised segment accounts for

a significant portion of the world market. . With changing

lifestyles and growing disposable incomes, the outlook

and buying patterns of consumers in the recent years have

changed rapidly. The world over, consumers now demand

greater transparency, better service and a more compelling

value proposition, driven by brand and fashion.

US is the largest consumer of diamonds and jewellery globally, as it imports 16%

of its jewellery from India. Meanwhile, India is making efforts to grow the demand for ‘India Made’ jewellery

products in the established markets like US, Hong Kong and China.

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Changing Consumer DynamicsThe retail sector is growing rapidly, driven by large retailers

and brands. The leading brands are pulling the organised

market and are opening opportunities to grow. The large

brands are also increasing their reach at a faster pace by

setting up showrooms, on-line sales portals and franchise

routes. These players are also offering a variety of discount

schemes including financing schemes to consumers to

further boost sales. Future growth outlook of the Gems &

Jewellery sector looks healthy on a global scale. Consumers

are demanding new designs and varieties in jewellery, and

branded jewellers are able to fulfil their changing demands

better than local unorganised players. Moreover, increase

in per capita income is leading to an increase in sales of

jewellery.

Branded JewelleryConsumers are beginning to move towards branded jewellery

and are willing to pay a justified premium for high quality

and inventive designs. As a consequence, the share of

the organised segment has grown substantially the world

over. The share of branded jewellery is expected to grow

strongly, aided by the emergence of large organised jewellery

manufacturers serving the rapidly growing retail industry.

Introduction of CVD/Lab-grown DiamondsLab-grown diamonds, which are sold in the form of jewellery

pieces and are certified as synthetic, are a product of

technology. Lab-grown diamonds are ‘grown’ in controlled

laboratory environment using technological processes that

duplicate the conditions under the earth’s crust. Once

grown, cut and polished, these stones are identical to natural

diamonds and bear the same molecular properties. Both

mined and grown diamonds are made of pure carbon and

have identical physical, chemical and optical attributes.

Lab-grown diamonds create the allure of something rare and

eternal – similar to natural gems. These are conflict free, eco-

friendly and less expensive. ‘High pressure, high temperature’

(HPHT) and chemical vapour deposition (CVD) are two

methods of culturing diamonds in a laboratory. Lab-grown

diamonds are produced from the seed of a flawless natural

diamond. A flawless diamond produced in a lab can also be

used as a seed.

India’s export of lab-grown diamonds increased from US$ 25

million (` 119.8 crore) in FY2011-12 to US$ 79 million

(` 484 crore) in FY2014-15. Likewise, import of rough lab-

grown diamonds (for polishing) had shot up from US$ 12

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MANAGEMENT DISCUSSION AND ANALYSIS

TARA JEWELS LIMITED

million (` 57.5 crore) to US$ 63 million (` 385.24 crore) in

FY2014-15. CVD/HTHP diamonds account for almost 95% of

the export-import data of lab-grown diamonds.

E-Commerce in JewelleryThe overall online retail market in India is estimated to have

risen to US$ 6 billion in 2015, compared with US$ 3.5 billion

in 2014, according to Gartner Inc. CLSA Asia Pacific Markets

forecasts this to grow to US$ 22 billion by 2018. The online

jewellery market is expected to be worth US$ 2.5 billion over

the next 5-10 years. Currently, it accounts for less than

0.1% of the US$ 55 billion jewellery market. The online

retail jewellery market is growing steadily due to changing

consumer behaviour, especially of the young Indian women

exposed to global trends. Online retailing offers convenience

of purchasing from the comforts of the home. Moreover,

it allows other incentives such as giving customers time to

decide and not making it obligatory for them to purchase at

their very first visit.

Government InitiativesThe Government of India would notify a new limit for

reporting about transactions in gold and other precious

metals and stones to authorities, to avoid the parking of

black money in bullion. The Bureau of Indian Standards (BIS)

has revised the standard on gold hallmarking in India from

January 2018. The gold jewellery hallmark will now carry

a BIS mark, purity in carat and fitness as well as the unit’s

identification and the jeweller’s identification mark. The move

is aimed at ensuring a quality check on gold jewellery.

The Government of India has planned to set up a Common

Facility Center (CFC) at Thrissur, Kerala. The Gems and

Jewellery Export Promotion Council (GJEPC) signed a

Memorandum of Understanding (MoU) with Maharashtra

Industrial Development Corporation (MIDC) to build India’s

largest jewellery park in at Ghansoli in Navi-Mumbai on a

25-acres land with about more than 5,000 jewellery units

of various sizes ranging from 500-10,000 square feet. The

overall investment of ` 13,500 crore (US$ 2.09 billion).

(Source: IBEF Report on Gems & Jewellery Industry)

Industry OutlookGrowth in Gems and Jewellery sector would be largely

contributed by the development of large retailers and brands.

Established brands are guiding the organised market and

opening opportunities to grow. Increasing penetration of

organised players provides variety in terms of products and

designs. Online sales are expected to account for 1-2% of

the fine jewellery segment by 2021-22. Also, the relaxation

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ABOUT US

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of restrictions of gold imports is likely to provide a fillip to

the industry. The improvement in availability along with

reintroduction of low-cost gold metal loans and likely

stabilisation of gold prices at lower levels is expected to

drive volume growth for jewellers over short to medium-

term. Demand for jewellery is expected to be significantly

supported by the recent positive developments in the

industry.

(Source: IBEF Report on Gems & Jewellery Industry)

In the coming years, growth in Gems & Jewellery sector

would be largely contributed by the development of large

retailers/brands. Established brands are guiding the organised

market and are opening opportunities to grow. Increasing

penetration of organised players provides variety in terms

of products and designs. Also, the relaxation of restrictions

of gold import is likely to provide a fillip to the industry. The

improvement in availability along with the reintroduction

of low cost gold metal loans and likely stabilisation of gold

prices at lower levels is expected to drive volume growth

for jewellers over short to medium term. The demand for

jewellery is expected to be significantly supported by the

recent positive developments in the industry.

The Gems & Jewellery industry is launching several initiatives

to further its share of global trade in the sector. With a

share of over 60%, India is already a major player in the

manufacturing of diamonds across the world. Besides

furthering its current impact on worlds diamond trade,

the industry is now aiming to have the same influence

in the trade of precious gems, including precious and

semiprecious stones. The industry, which already employs 4.6

million people, has a huge potential of skilling labour and

contributing to the decline in India’s unemployment rates.

Another key focus is the export potential of the industry.

With India being a cutting and polishing hub for diamonds,

the Government aims to make India a preferred destination

for jewellery manufacturing and an international diamond

trading hub.

COMPANY OVERVIEWWe, at Tara Jewels Limited, are an integrated player in the

global jewellery industry catering to a diverse audience across

20 countries in five continents. We have close to two decades

of experience in the international market with leading

retailers across the globe. We have a strong background in

retailing of jewellery to large global retailers.

Our presence spans across the value chain – from designing

to manufacturing and retailing of jewellery. We are

predominantly an exporter and retailer of studded diamond

jewellery and over 55,000 designs in over 20 countries and

five continents, including US, UK and Europe.

We are operating in the Branded Jewellery segment of the

jewellery value chain through our diversified product mix

of studded jewellery and diamond studded jewellery. Our

basket includes products of Gold, Platinum and Silver. Our

portfolio of products includes studded gold, platinum and

silver jewellery. Our channel of sale includes the Retail Partner

Model where we supply jewellery to international brands and

jewellery retailers.

Increasing penetration of organised players provides variety in terms of

products and designs. Online sales are expected to account for 1-2% of the

fine jewellery segment by 2021-22. The improvement in availability along withreintroduction of low-cost gold metal loans and likely stabilisation of gold

prices at lower levels is expected to drive volume growth for jewellers over short to

medium term.

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MANAGEMENT DISCUSSION AND ANALYSIS

TARA JEWELS LIMITED

Our Manufacturing CapabilityWe have three manufacturing facilities spread across

approximately 80,000 sq. ft. – one outside SEEPZ, Andheri;

and the other two within the SEEPZ premises. We have a

team of 39 designers and 1,000 craftsmen (Karigars) and

have implemented SAP across all the manufacturing units.

Our Competencies:• State-of-the-art equipment and advanced technologies

• High precision jewellery manufacturing technology

• Fully automated jewellery casting plant

• Patented turntable technology

• Multi-skilled workforce

• Robotics technology for stone setting

Foray into Lab-grown DiamondsWe made a foray into the jewellery end of lab-grown

diamond industry by supplying fashion jewellery with

diamonds grown in laboratories. Besides mined diamonds,

we also procure lab-grown diamonds from manufacturers

to supply jewellery created from them to the retailers in US

and Europe. Our objective behind this is to fill the void in the

market for well-priced lab-grown diamond fashion jewellery.

Our Esteemed Clientele

WALMART

ZALES

KAY JEWELLERS

FOSCHINI

JARED

H. SAMUEL

SIGNETJEWELLERS

CHRYST SWITZERLAND

HELZBERG DIAMONDS

STERNS

FIELDS THE JEWELLER

BLUE NILE

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International RetailWe understand the demands of global consumers and serve

distinct markets across various continents. Our jewellery

is mainly exported to Australia, Canada, European Union,

South Africa, United Kingdom and United States of America.

About 90% of our revenues are contributed by the export of

diamond and diamond studded jewellery to global retailers

with an extensive distribution network. We have a global

product development team, led by the sales team in US.

Our Strategic Tie-upsWe have strategic tie-ups with reputed global branded

jewellery retailers and international chains in the global

market. We co-brand our merchandise with reputed jewellery

retailers to enhance brand recognition and repeat orders.

We export diamond and coloured stone studded jewellery

and branded jewellery to international jewellery retailers. We

export studded jewellery to global retailers and leading chain

stores across 12,000 points of sale globally.

Our Operational Highlights:• Our Top Brands Zac Posen, Monique Lhullier and Trio’s

performed well across all outlets.

• Brands grew higher at the outlets of Helzberg, Blue Nile

and Walmart.

Awards & AccoladesInternational

• Awarded as “Global Supplier of the Year” second time

by Walmart

• Bagged Overall Excellence Award (Second-highest

exporter in the category of studded precious metal

jewellery exports in EPZ) by The Gem & Jewellery Export

Promotion Council in year 2007, 2008, 2009

• Conferred with the status of a “Star Trading House” by

the Ministry of Commerce & Industry; Been the highest

exporter in gems and jewellery for FY2009 and FY2010

• Won the “Luxury Retailer of the Year” award at the Star

Retailer Awards 2013

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MANAGEMENT DISCUSSION AND ANALYSIS

TARA JEWELS LIMITED

• Bagged “Best Store Design of the year - Single Brand

category” at the Economic Times Retail Awards, 2013

• Won “Print campaign of the Year 2012” at the Retail

Jeweller India Awards, 2012

• Received the Responsible Jewellery Council (RJC)

Certification, 2014 by meeting the highest ethical, social

and environmental standards Retail

• Luxury Retailer of the Year” at the Star Retailer

Awards 2013

• Best Store Design of the year – Single Brand category”

at the Economic Times Retail Awards 2013

• Print Campaign of the Year 2012” at the Retail Jeweller

India Awards 2012

Management OutlookWe are capitalising on our asset light model to cater to rising

demand for branded jewellery. This is aiding us in optimising

margins and enhancing profitability. Over the years, we have

leveraged our domain expertise, industry know-how, skilled

labour and our manufacturing capabilities to drive innovation,

enhance our footprint and delight our customers. We are

working towards being the preferred destination for diamond

manufacturing and an international diamond trading hub.

Moving ahead, we are aiming to capture demand in the

international branded retail segment to increase brand

recognition and build new brands. We are gradually

expanding our presence in the global market, introducing

region specific collection, focussing on new strategies to

enhance market share, and gaining repeat orders from the

existing clients.

Financial OverviewStandalone:During the year under review, the Company earned a total

revenue of ` 442.35 crore, against ` 1,197 crore in the

previous year. The Net Loss after Tax suffered by the Company

for the year under review was ` 722.76 crore, against a Net

Loss after Tax of ` 11.82 crore achieved by the Company in

the previous Financial Year.

Consolidated:During the year under review, the Company earned a total

revenue of ` 845.17 crore, against ` 1,557.85 crore in the

previous year. The Net Loss after Tax suffered by the Company

for the year under review was ` 720.90 crore, against the

Net Loss After Tax of ` 4.62 crore achieved in the previous

financial year.

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ABOUT US

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Human CapitalAt Tara, we have laid a foundation that emphasises on

people, helping us create an environment where employees

thrive to deliver an exceptional customer experience. We have

extended our work culture from beyond what we offer to

our customers to a larger audience, including our employees.

Our employees include sales, IT, administrative, finance,

marketing, procurement, logistics, design, merchandise

and factory personnel. We believe in developing a strong

relationship with our employees. Our Company makes

investments in training and learning & development of

employees on a regular basis. We emphasise on providing

our employees with effective training programs, resulting

in the improvement of operations and efficiency, as well as

customer service standards.

Risk Management Your Company has put into place a detailed Risk

Management Policy. It has tried to identify the various types

of risks and integrate risk management activities at all levels

in the Company. The details about the risk management

policy are given in the Boards’ Report.

• Business Threats The gems and jewellery sector in India is unorganised and

fragmented. Around 90% of the players operate in the

unorganised sector mostly in family-run operations. The

nature of the sector prevents it from achieving economies

of scale.

Mitigation: The Company is engaged in the export of

Gems & Jewellery. Overseas importers place the orders

based on credentials and the Company’s promoters being

associated in this business for three decades are not

affected by such competition.

• Predominance of the US market The Indian gems and jewellery sector is pre-dominantly

dependent on the US markets, which is its top export

destination. The growth of gems and jewellery sector is

heavily dependent on the growth of demand in the US

market.

• Exchange Rate/Currency Risk The Gems and Jewellery sector is affected by the rupee/

dollar exchange rate because it is export oriented. Any

volatility in the exchange rates affects the margins of the

players.

Mitigation: The Company would do forward cover for

imports and exports and insulates itself from fluctuation

in exchange rate.

• High Level of Inventories As the Gems and Jewellery sector is highly dependent

on imports for its raw materials, the players have to

maintain a high level of inventory. However, maintaining

this inventory becomes difficult for the players during the

slack season, as it carries inventory price risk.

Mitigation: The Company does not envisage holding

large inventory, and as it is a jewellery exporter, the

purchases would be made based on orders only. For

sales, it expects to have an inventory turnover of 3 to 5

times and thereby reduce the risk of inventory holding

substantially.

• Competition from Other Luxury Goods With the increase in disposable income and the change

in standard of living, the demand for luxury goods such

as perfumes, consumer electronics, leather, automobile

and gadgets are also increasing. The Gems and Jewellery

sector is experiencing competition from these luxury

goods, which is eating into the market share of the sector.

Mitigation: The market potential is huge and the

competition from other consumer goods would not

dent company’s turnover. The estimated turnover of the

company is very small when compare to total export

turnover of the country. Therefore, the risk is negligible.

• Artificial Jewellery The sector also faces a challenge in the form of

integration of synthetic or man-made diamonds. With

the advent of technology, it is difficult to differentiate

between natural and artificial jewellery. This may hit the

sale of low-cost jewellery in the long run.

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MANAGEMENT DISCUSSION AND ANALYSIS

TARA JEWELS LIMITED

Mitigation: There are different classes of people who

buy real gold jewellery and artificial jewellery. Artificial

items are more use by youngsters and office goers for

day-to-day use, whereas the real gold jewellery is used for

occasions and as a tool for savings of earnings. Therefore,

this competition is also small and negligible.

Internal Controls The Company has an adequate internal control system,

commensurate with the size of its operations. The Company’s

Audit Committee reviews the internal control systems and

internal auditors’ recommendations from time to time. All

efforts are being made to make the internal control systems

more effective. We identify new risks and re-evaluate old

risks during the year, in the process of considering risk

mitigating strategies. Some of the risks that our Company’s

core businesses are exposed to include credit risk, market risk,

operational risk and legal risk. It is also exposed to specific

risks in connection with the management of investments

and the environment within which it operates. The Company

manages cost escalation risk through processes aimed at

optimising costs through suppliers and through rigorous

contracts and procurement.

We seek to understand, limit and manage the adverse

impacts arising from external and internal events. Our risk

management team safeguards and protects the Company’s

assets against unauthorised use or disposition, maintenance

of proper accounting records and verification of authenticity

of all transactions. Within the Company, the directors are

responsible for maintenance of a sound system of internal

controls. This is done through a continuous process of

identifying, evaluating and managing the risks faced by

the company. The Company’s effectiveness on internal

control is also checked by external agencies. This results in

an unbiased and independent examination of the adequacy

and effectiveness of the internal control system and aims to

achieve the objective of optimal functioning of the Company.

Cautionary StatementThis document contains statements about expected future

events, financial and operating results of Tara Jewels Limited,

which are forward-looking. By their nature, forward-looking

statements require the Company to make assumptions

and are subject to inherent risks and uncertainties. There is

significant risk that the assumptions, predictions and other

forward-looking statements will not prove to be accurate.

Readers are cautioned not to place undue reliance on

forward-looking statements as a number of factors could

cause assumptions, actual future results and events to differ

materially from those expressed in the forward-looking

statements. Accordingly, this document is subject to the

disclaimer and qualified in its entirely by the assumptions,

qualifications and risk factors referred to in the management’s

discussion and analysis of Tara Jewels Limited’s Annual

Report, 2017-18.

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

We are working towards becoming the preferred destination for jewellery

manufacturing and an international diamond trading hub. We are gradually expanding our presence in the global market, introducing region specific

collection, focussing on new strategies to enhance market share, and gaining repeat

orders from existing clients.

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BOARD’S REPORT

TARA JEWELS LIMITED

ToThe Members,Tara Jewels Limited

Your Directors take pleasure in presenting their 17th Annual Report on the business and operations of the Company together with audited financial statements for the year ended March 31, 2018.

FINANCIAL RESULTS

` in Crores

Particulars Standalone Consolidated

FY 2017-18 FY 2016-17 FY 2017-18 FY 2016-17

Total Income 442.35 1197.00 845.17 1557.85

Total Expenditure 557.93 1210.96 957.79 1562.33

Profit/(Loss) Before Tax (713.68) (13.96) (710.72) (4.48)

Less: Tax 9.10 (2.14) 10.18 0.14

Net Profit /(Loss) For Year (722.76) (11.82) (720.90) (4.62)

Earnings Per Share (EPS) (293.54) (4.80) (292.78) (1.88)

PERFORMANCE REVIEWStandalone:During the year under review, the Company earned a total revenue of Rs.442.35 crores against Rs.1197 crores in the Previous Year. The net loss after Tax suffered by the Company for the year under review was Rs.722.76 crores against the –Net Loss after Tax of Rs.11.82 crores achieved by the Company in the previous Financial Year.

Consolidated:During the year under review, the Company earned a total revenue of Rs.845.17 crores against Rs.1557.85 crores in the Previous Year. The net loss after Tax suffered by the Company for the year under review was Rs.720.90 crores against the Net Loss After Tax of Rs.4.62 crores achieved by the Company in the previous Financial Year.

MANAGEMENT DISCUSSION AND ANALYSISAs per SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, a detailed Management Discussion and Analysis Report is presented in a separate section as part of this annual report.

DIVIDEND & RESERVESIn view of the loss incurred by the Company, the Directors do not recommend dividend on the Equity Share Capital of the Company for the Financial Year ended March 31, 2018. No amount has been transferred to reserve during the financial year under review.

SHARE CAPITALThe paid up share capital of the Company as on March 31, 2018 stood at Rs.246,228,500/-. During the year under review the Company has not issued any shares nor has granted any stock option or sweat equity. None of the directors of the company hold instruments convertible into equity shares of the company.

BOARD’S REPORT

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

EMPLOYEES STOCK OPTION SCHEMEParticulars of Employee Stock Options are given in “Annexure A” to this report.

SUBSIDIARY COMPANIES AND THEIR PERFORMANCE / FINANCIAL POSITIONThe Subsidiaries and Step down Subsidiaries of the Company as on March 31, 2018 are as follows:

Subsidiary Companies:Tara (Hong Kong) LimitedTara Jewels Holdings Inc

Step Down Subsidiaries:Tara China Jewelry Limited- Subsidiary of Tara (Hong Kong) LimitedFabrikant Tara International, LLC- Subsidiary of Tara Jewels Holdings Inc

In accordance with Section 129 (3) of the Companies Act, 2013 and Indian Accounting Standards, the Company has prepared the Consolidated Financial Statements of the Company and all its subsidiaries, which forms part of this Annual Report. The Statement in form AOC-1(Annexure B) containing salient features of the financial statements of Company’s Subsidiaries is attached to this report.

DIRECTORSa. The current policy is to have an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board, and separate its functions of governance and management. The Board consists of 5 members, 2 of whom are Executive or Whole-time Directors, and 2 are Independent Directors and 1 is a Nominee Director as on 31st March, 2018. The Board periodically evaluates the need for change in its composition and size.

Changes in the Constitution of the Board taken place during the year 2017-18 and upto the date of this Report are mentioned hereunder.

CHANGES IN CONSTITUTION OF BOARDThe following changes have taken place in the Board of Directors/Key Managerial Personnel of the Company during the year 2017-18 and upto the date of this Report:

SrNo

Name Designation Appointment Resignation Date Of Appointment/Resignation

1 Mr. Rakesh Kalra Director - YES May 29, 20172 Mr. Stuart Marcus Director - YES May 29, 20173 Mr. Jeffrey Shlakman Director - YES May 29, 20174 Mr. Vishnu Prakash Garg Chief Financial Officer - YES May 29, 20175 Mr. Sanjay Sethi Chief Financial Officer YES - June 20, 20176 Mr. Nikkhil Vaidya Director - YES August 4, 20177. Mr. Shanti Saroop Khindra Director - YES August 10, 20178 Mr. Vishnu Prakash Garg Executive Director - YES August 10, 20179 Mr. Ravindran M.P Executive Director - YES August 10, 201710 Mr. Sanjay Sethi Executive Director YES - August 10. 201711 Ms. Priyanka Agarwal Independent Director YES - November 29, 201712 Mr. Rajiv Jain Director - YES February 23, 201813 Mr. Sanjay Sethi Executive Director - YES May 1, 201814 Mr. Sanjay Sethi Chief Financial Officer - YES May 1, 201815 Ms. Priyanka Agarwal Independent Director - YES May 30, 201816 Ms. Disha Tulsiani Chief Financial Officer YES - May 29, 201817 Ms. Disha Tulsiani Executive Director YES - May 29, 2018

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BOARD’S REPORT

TARA JEWELS LIMITED

Declaration by Independent DirectorsThe Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of Independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

b. Board/ Committee Meetings:During the year under review, four meetings of the Board took place. Details of Board Meetings and Committee Meetings have been provided in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two Board Meetings was within the period prescribed by the Companies Act, 2013.

Board Meeting dates are finalized in consultation with all directors and agenda papers backed up by comprehensive notes and detailed background information are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decisions. A detailed presentation is also made to apprise the Board of important developments in industry, segments, business operations, marketing, products etc.

c. Familiarization Programme with Independent Directors:Pursuant to provisions of SEBI (Listing and Disclosures Requirements) Regulations, 2015, during the year under review the Company prepared and pursued the Familiarization Programme for Independent Directors as hosted on Company’s website at www.tarajewels.in (Weblink: www.tarajewels.in/investorrelations/corporategovernance/policies)

d. Performance Evaluation:The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Act and the Corporate Governance requirements as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).The performance of the Board was evaluated by the Board after seeking inputs from all the Directors and Senior Managerial Personnel. The performance of the Committees and effectiveness of Committee Meetings was evaluated by the Board after taking into consideration the inputs provided by the Committee Members.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of Nomination and Remuneration Policy laid down by the said committee and approved by the Board.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated taking into account the views of Executive Directors and Non-Executive Directors. The same was considered by the Board of Directors at its meeting.

e. Policy for Selection, Appointment and Remuneration of Directors/Key Managerial Personnel/Senior Management Personnel including Criteria for their performance evaluation:The Company has adopted a policy titled as “Nomination & Remuneration Policy” which interalia includes Company’s policy on Board Diversity, selection, appointment and remuneration of directors/Key Managerial Personnel/Senior Management Personnel, criteria for determining qualifications, positive attributes, independence of a director and criteria for performance evaluation of the Directors.

The Nomination & Remuneration Policy as approved by the Board is attached as Annexure “C” to the Board’s Report and also uploaded on the Company’s website www.tarajewels.in and details of criteria laid down and the Remuneration Policy are given in the Corporate Governance Report.

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

AUDIT COMMITTEEThe Details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, forming a part of this report.

During the year 2017-18, there were no instances, where the Board of Directors did not accept the recommendations of the Audit Committee.

VIGIL MECHANISMThe Company has established a vigil mechanism/Whistle Blower Policy and oversees through the Audit Committee for expressing genuine concerns by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided to any complainant to have direct access to the Chairman of the Audit Committee. The Vigil Mechanism Policy of the Company is placed on Company’s website i.e.www.tarajewels.in.(Weblink: www.tarajewels.in/investorrelations/corporategovernance/policies)

AUDITORS

a. Statutory Auditors

M/s GMJ & Co (Firm Registration No. 103429W) as the Statutory Auditors of the Company for a period of 5 years, to hold office from the conclusion of AGM held on September 28, 2017 till the conclusion of the twenty-first AGM to be held in the year 2022.

Board’s Explanation to the remarks of Auditors:

1. As regards Statutory Auditor’s remark for not depositing undisputed statutory dues with prescribed authorities within prescribed time, the Board is making its best efforts to be regular in depositing undisputed statutory dues.

2. As regards deficit of 1 Independent Director on the Board, best efforts are being made to identify a suitable candidate for appointing Independent Director.

3. The notes to the accounts and other observations referred to by the auditors in their report are self explanatory and do not call for any further explanation/clarification by the Board.

b. Secretarial Auditor

M/s K.C Nevatia, Practicing Company Secretaries, was appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18, as required under Section 204 of the Companies Act, 2013 and rules made thereunder.

The Secretarial Audit report for Financial year 2017-18 forms part of Annual Report as Annexure D to the Board’s Report.

Qualification in Secretarial Audit Report:

1. The Company is not regular in depositing statutory dues i.e. Provident funds, ESI, Profession Tax with concerned authority.

2. There is a shortfall of One Independent Director in the composition of Board and consequently the composition of the Audit Committee, Stake holders Relationship Committee and Nomination and Remuneration Committee have not been constituted in accordance with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

Board’s Explanation:

1. The Board is making efforts to be regular in depositing the statutory dues.

2. The Board is making its best effort to identify a suitable candidate for appointing Independent Director.

c. Cost Auditor

Cost Auditor is not required to be appointed by the Company since it is located in a SEZ Zone, as per the circular issued by the Ministry in this regard.

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BOARD’S REPORT

TARA JEWELS LIMITED

INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORKThe Company has strong internal control framework which includes level controls, whistle blower policy, rigorous management reviews and MIS and strong internal audit mechanism. There are robust financial control processes with appropriate checks and balances, defined policies and procedures to ensure reasonable assurance with regard to financial information. Process controls deployed ensure adherence to policies and procedures, efficiency in operations and reduce risk of frauds.The rigorous internal controls, management oversees results, thorough review of internal audit reports by the Audit Committee and implementation of action plans makes the internal financial controls strong in the Company.

RISK MANAGEMENTThe Board of Directors has constituted Risk Management Committee constituting directors and non-director members. The Board based on the recommendations of the Risk Management Committee has also adopted “Risk Management Policy” of the Company which is hosted on Company’s website at www.tarajewels.in.

The Committee through its Risk Council shall assess critical and non-critical risks, viz., Strategic, Operational, Financial, Regulatory compliance and risk management plan would be prepared for identifying and mitigating risks in each identified area. Your Company continues to attach a high degree of importance to this area and shall ensure that necessary Risk Mitigation Process is in place for each identified risk area at all times.

RELATED PARTY TRANSACTIONSAll the transactions with related parties are in the ordinary course of business and on arm’s length basis; and the details of material related party transactions or arrangements have been furnished in Form AOC-2(Annexure E) is attached to this report.

All the Related Party Transactions entered during the year under review are set out under notes to accounts to the Financial Statements.The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at Weblink: www.tarajewels.in/investorrelations/corporategovernance/policies

None of the Directors has any pecuniary relationships or transactions vis-à-vis the Company except by way of remuneration paid to the Whole - time Director and sitting fees paid to other Non-Executive Directors. The Managing Director has not drawn any remuneration from the Company during the financial year under review.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEESThe information required under section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not being sent along with this Report to the Members of the Company as per the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before the 17th Annual General Meeting during the business hours on working days.

LOANS, GUARANTEES OR INVESTMENTSDetails of Loans, Guarantees and Investments, if any covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements

CORPORATE SOCIAL RESPONSIBILITYPursuant to the provisions of Section 135 of the Act, read with CSR Rules, the Company has constituted CSR Committee and formulated CSR Policy.A Board level committee has been constituted consisting of the following members as on date of this report:

Name Designation

Mr. Rajeev Sheth Chairman and Member

Ms. Fern Mallis Member

Ms. Disha Tulsiani * Member

* Ms. Disha Tulsiani was appointed as an Executive Director and as a Member of Committee w.e.f May 29, 2018.

Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently

as a member of Committee w.e.f May 1, 2018,

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

Initiative Taken:The Company has not made any expenditure on CSR activities during the financial year under review as the Company is still exploring the appropriate project in which the CSR expenses can be made so as to provide the maximum benefit to the society at large.The Company intends to contribute the money for CSR activities as soon as the appropriate area is identified.

DEPOSITSDuring the year 2017-18, the Company did not accept any deposit from public.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSThere are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

EXTRACT OF ANNUAL RETURNThe extract of the Annual Return pursuant to the sub-section (3) of Section 92 of the Companies Act, 2013 prepared in form MGT 9 is annexed herewith as “Annexure F”.

DIRECTORS’ RESPONSIBILITY STATEMENTThe financial statements are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘the Act’), read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisionsof the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). There are no material departures from prescribed accounting standards in the adoption of these standards.

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) and 134 (5) of the Companies Act, 2013:

a) in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for that period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance

with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors have laid down internal financial controls, to be followed by the company and that such internal financial

controls are adequate and were operating effectively; and

f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

CORPORATE GOVERNANCEAs per SEBI (Listing and Disclosures Requirements) Regulations, 2015 a separate section on Corporate Governance practices followed by the Company is provided in the Corporate Governance section of the Annual Report. The certificate from practising Company Secretary on compliance with the condition of corporate governance of Listing Regulation is given in Annexure G of this Report.

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BOARD’S REPORT

TARA JEWELS LIMITED

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO(a) CONSERVATION OF ENERGY:-

The Company is very much conscious of conservation of energy and all measures are being taken to minimize the consumption of energy wherever possible.

(b) TECHNOLOGY ABSORPOTION:-

The Company has not acquired any technology during the Financial Year under review. The efforts for research and development is an ongoing process throughout the year.

(c) FOREIGN EXCHANGE EARNING & OUTGO:-

Forms part of Notes to Accounts of Financial Statement.

MATERIAL CHANGES AND COMMITMENT IF ANY EFFECTING THE FINANCIAL POSITION OF COMPANY WHICH HAVE OCCURRED BETWEEN THE FINANCIAL YEAR END OF THE COMPANY TO WHICH FINANCIAL RESULTS RELATEExcept as disclosed elsewhere in this report, there have been no material changes and commitments which can affect the financial position of the Company occurred between the end of the financial year of the Company and date of this report.

CHANGES IN NATURE OF BUSINESS AND REVISION IN THE BOARD’S REPORTThere are no changes in nature of business and also revision in the Board’s Report during the year.

HUMAN RESOURCEYour Company firmly believes that employees are the most valuable assets and key players of business success and sustained growth. Various employee benefits, recreational and team building programmes are conducted to enhance employee skills, motivation as also to foster team spirit. Company also conducts in house training programmes to develop leadership as well as technical/functional capabilities in order to meet future talent requirements. Industrial relations were cordial throughout the year.

POLICY ON PREVENTION OF SEXUAL HARASSMENTThe Company has a policy on prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Harassment, Redressal) Act, 2013. The Committee has been set up to redress complaints received regarding Sexual Harassment. All Employees (permanent, contractual, temporary, trainees) are covered under this policy.During the year 2017-2018 no complaints were received regarding sexual harassment

APPRECIATIONYour Directors place on record their sincere thanks and appreciation for the confidence reposed and continued support extended by Central and State Governments, Bankers, Customers, Suppliers and Shareholders. Your Board would like to place on record its sincere appreciation to the employees at all levels for the dedicated efforts and contribution in playing a very significant part in the Company’s operations.

For and on behalf of the Board of Directors

Sd/- RAJEEV SHETHPlace : Mumbai Chairman and Managing DirectorDate : May 29, 2018 (DIN: 00266460)

ANNUAL REPORT 2018

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FINANCIALS

ANNEXTURE - A

(a) Employee Stock Option PlanThe Employee Stock Option Plan (ESOP) is designed to provide incentives to employees above the designation of managers to deliver long term returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Once vested, the options remain exercisable for a period of 4 years. When exercisable, each option is convertible into one equity share of Rs. 10 each. The exercise price of the share options is Rs. 230.

Movement during the periodThe number and weighted average exercise prices (WAEP) of the options and movement during the period is as follows:

Year ended March 31, 2018 Year ended March 31, 2017

Numer of options

WAEP Numer of options

WAEP

Opening balance 1,06,283 230 1,11,678 230

Granted duing the period - - - -

Exercised during the period - - - -

Forfeited /lapsed during the period (1,06,283) - (5,395.00) -

Expired during the period - - - -

Closing balance - 230 1,06,283 230

Vested and exercisable - 63,770

Share options outstanding at the end of the period have the following expiry date and exercise prices

Particluars Grant date Expiry date Exercise price (`)

Share options as at March 31,

2018

Share options as at March 31,

2017

ESOP 2013 - Grant C 25-Jul-13 25-Jul-17 230 - 1,06,283

Total 1,06,283

Weighted average remaining contractual life of options outstanding at the end of period

- 0.32 Years

(b) Expense arising from share based payment transactionsTotal expenses arising from share based payment transactions recognised in profit or loss as part of employee benefit expense were as follows:

` in Lakhs

Year ended March 31, 2018

Year ended March 31, 2017

Employee stock option 0.30 4.47

Total employee share-based payment expense 0.30 4.47

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BOARD’S REPORT

TARA JEWELS LIMITED

ANNEXTURE - B AOC 1

Salient Features of Financial Statements of Subsidiary / Associates / Joint Ventures as per Companies Act , 2013Part “A”: Subsidiaries

` in Lakhs

1. Sl. No. I II III

2. Name of the subsidiary Tara Jewels Holdings, Inc. *

Tara (Hong Kong) Limited

Tara China Jewelry Limited **

3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

N.A. N.A. N.A.

4. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

USD*** USD*** USD***

5. Share capital 1,133.00 4.64 41.34

6. Reserves & surplus (including foreign currency translation reserve)

1,687.36 4,206.17 (3.22)

7. Total assets 21,345.14 21,780.17 53.62

8. Total Liabilities 18,524.79 17,569.35 15.50

9. Investments - 41.35 -

10. Turnover 41,675.62 34,627.24 88.96

11. Profit before taxation 69.21 122.65 (8.95)

12. Provision for taxation - 18.73 -

13. Profit after taxation 69.21 103.93 (8.95)

14. Other Comprehensive Income (263.48) 13.45 6.34

15. Total Comprehensive Income (194.27) 117.38 (2.61)

16. Proposed Dividend - - -

17. % of shareholding 100 100 100

* Based on Consolidated figures with Fabricant-Tara International LLC

** Wholly owned subsidiary of Tara (Hong Kong) Limited.

*** Exchange rate as at end of the year USD 1 = `64.84

Part “B”: Associates and Joint VenturesStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures is not applicable to the company since, there are no associates or joint ventures of the Company.

As Per Our Attached Report of Even DateFor G M J & Co. For and on Behalf of Board of Directors Chartered Accountants Firm Registration No. 103429W

Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani. Nivedita NayakPartner Managing Director Executive Director Company SecretaryMembership No. 38755 (DIN NO:00266460) (DIN : 08153901) [FCS:8479]

Place : Mumbai Dated : May 29, 2018

ANNUAL REPORT 2018

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FINANCIALS

ANNEXTURE - CNOMINATION AND REMUNERATION POLICY

Introduction:In pursuance of the Company’s policy to consider human resources as its invaluable assets, to pay equitable remuneration to all Directors, Key Managerial Personnel (KMP) and employees of the Company, to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 and the listing agreement as amended from time to time this policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Committee and approved by the Board of Directors.

Objective and purpose of the Policy:

The objective and purpose of this policy are:

• To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

• To determine remuneration based on the Company’s size and financial position and trends and practices on remuneration prevailing in peer companies, in the media industry.

• To carry out evaluation of the performance of Directors, as well as Key Managerial and Senior Management Personnel.

• To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Company’s operations.

• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage. In the context of the aforesaid criteria the following policy has been formulated by the Nomination and Remuneration Committee and adopted by the Board of Directors at its meeting held on February 10, 2015.

Effective Date:

This policy shall be effective from 1st April, 2014.

Constitution of the Nomination and Remuneration Committee:The Board has changed the nomenclature of Remuneration Committee by renaming it as Nomination and Remuneration Committee on Board Meeting held on May 28, 2014.

The Board has the power to reconstitute the Committee consistent with the Company’s policy and applicable statutory requirement from time to time.

Definitions:• Board means Board of Directors of the Company.

• Directors means Directors of the Company.

• Committee means Nomination and Remuneration Committee of the Company as constituted or reconstituted by the Board.

• Company means Tara Jewels Limited.

• Independent Director means a director referred to in Section 149 (6) of the Companies Act, 2013.

• Key Managerial Personnel (KMP) means-

(i)Executive Chairman and/or Managing\Director;

(ii)Whole-time Director;

(iii)Chief Financial Officer;

(iv)Company Secretary;

(v)Such other officer as may be prescribed under the applicable statutory provisions / regulations.

• Senior Management means personnel of the Company occupying the position of Chief Executive Officer (CEO) of any unit / division or Vice President including Vice President of any unit / division of the Company. Unless the context otherwise

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BOARD’S REPORT

TARA JEWELS LIMITED

requires, words and expressions used in this policy and not defined herein but defined in the Companies Act, 2013 as may be amended from time to time shall have them earning respectively assigned to them therein.

Applicability:

The Policy is applicable to

• Directors (Executive and Non-Executive)

• Key Managerial Personnel

• Senior Management Personnel

General:

• This Policy is divided in three parts: Part – A covers the matters to be dealt with and recommended by the Committee to the Board, Part – B covers the appointment and nomination and Part–C covers remuneration and perquisites etc.

• The key features of this Company’s policy shall be included in the Board’s Report.

PART – AMATTERS TO BE DEALT WITH, PERUSED AND RECOMMENDED TO THE BOARD BY THE NOMINATION AND REMUNERATION COMMITTEE:

The Committee shall:

• Formulate the criteria for determining qualifications, positive attributes and independence of a director.

• Identify persons who are qualified to become Director and persons who may be appointed in Key Managerial and Senior Management positions in accordance with the criteria laid down in this policy.

• Recommend to the Board, appointment and removal of Director, KMP and Senior Management Personnel.

PART–BPOLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR MANAGEMENT

• Appointment criteria and qualifications:

1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend to the Board his/ her appointment.

2. A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient/satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as Whole time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.

• Term/Tenure:

1. Managing Director/Whole-time Director:- The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive Director

for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.

2 Independent Director:- An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will

be eligible for re-appointment on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

- No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly. However, if a person who has already served as an Independent Director for 5 years or more in the Company as on 1st October, 2014 or such other date as may be determined by the Committee as per regulatory requirement, he / she shall be eligible for appointment for one more term of 5 years only.

- At the time of appointment of Independent Director it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company.

• Evaluation:

The Committee shall carry out evaluation of performance of every Director, KMP and Senior Management Personnel at regular interval (yearly).Criteria for evaluation of Board and Committee as a whole is attached on last page of policy. Performance evaluation will be done by grading the performance as Poor, Good, Excellent or NA (No Opportunity to Observe).

• Removal:

Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable Act, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management Personnel subject to the provisions and compliance of the said Act, rules and regulations.

• Retirement:

The Director, KMP and Senior Management Personnel shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management Personnel in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

Board Diversity:The Board of the Company may consciously be drawn in a manner that at least one director from each of the following field is on the Board of the Company.Human Resource, Banking and finance,Legal and general administration,Any other field as may be decided by the Nomination and Remuneration Committee of the Company.

PART–CPOLICY RELATING TO THE REMUNERATION FOR THE WHOLE-TIME DIRECTOR, KMP AND SENIOR MANAGEMENT PERSONNEL

• •General:

1. The remuneration / compensation / commission etc. to the Whole-time Director, KMP and Senior Management Personnel will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.

2. The remuneration and commission to be paid to the Whole-time Director shall be in accordance with the percentage / slabs / conditions laid down in the Articles of Association of the Company and as per the provisions of the Companies Act, 2013, and the rules made thereunder.

3. Increments to the existing remuneration / compensation structure may be recommended by the Committee to the Board which should be within the slabs approved by the Shareholders in the case of Whole-time Director.

4. Where any insurance is taken by the Company on behalf of its Whole-time Director, Chief Executive Officer, Chief Financial Officer, the Company Secretary and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. Provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.

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BOARD’S REPORT

TARA JEWELS LIMITED

• Remuneration to Whole-time / Executive / Managing Director, KMP and Senior Management Personnel:

1. Fixed pay:

The Whole-time Director / KMP and Senior Management Personnel shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee. The breakup of the pay scale and quantum of perquisites including, employer’s contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required.

2. Minimum Remuneration:

If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Whole-time Director/Managing Director in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions, with the previous approval of the Central Government.

3. Provisions for excess remuneration:

If any Whole-time Director/Managing Director draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction of the Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable to it unless permitted by the Central Government.

• Remuneration to Non-Executive/Independent Director:

1. Remuneration/Commission:

The remuneration / commission shall be fixed as per the slabs and conditions mentioned in the Articles of Association of the Company and the Companies Act, 2013 and the rules made thereunder.

2. Sitting Fees:

The Non- Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed Rs. One lakh per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time.

3. Commission:

Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1% of the profits of the Company computed as per the applicable provisions of the Companies Act,2013.

4. Stock Options:

An Independent Director shall not be entitled to any stock option of the Company.

AMENDMENT The Company reserves its right to amend or modify this Policy in whole or in part, at any time without assigning any reason whatsoever. However, no such amendment or modification will be binding unless the same is dully approved and notified by the Committee and Board of Directors of the Company.

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

ANNEXTURE - DForm No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE COMPANY’S FINANCIAL YEAR FROM 1ST APRIL, 2017 TO 31ST MARCH, 2018[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014]

To,The Members,Tara Jewels LimitedAndheri (East), Mumbai (Maharashtra)

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by TARA JEWELS LIMITED (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conduct / statutory compliances and expressing our opinion thereon.

Based on our verification of Tara Jewels Limited’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended March 31, 2018, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2018 according to the provisions of:

1. The Companies Act, 2013 (the Act) and the rules made thereunder;

2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;

3. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings, were not applicable to the Company during the financial year under report.

4. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;b. Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;c. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

as amended from time to time.

6. Labour Lawsa. Factories Act, 1948;b. Payment of Gratuity Act, 1972;c. Payment of Wages Act, 1936;d. Minimum Wages Act, 1948;e. Employees Provident Fund and Miscellaneous Provisions Act, 1952;f. Payment of Bonus Act, 1965;g. Employees State Insurance Act, 1948;h. Employers Liability Act, 1938;i. Equal Remuneration Act, 1976j. Industrial Dispute Act, 1947k. Maternity Benefits Act, 1961l. Contract Labour (Regulations & Abolition) Act, 1970m. The Sexual Harassment of Women at Workplace (Prevention and Redressal) Act, 2013

7. Environmental Lawsa. Environment Protection Act, 1986 and other environmental laws;b. Hazardous Wastes (Management and Handling) Rules, 1989;c. Air (Prevention & Control of Pollution) Act, 1981d. Water (Prevention & Control of Pollution) Act, 1974

8. Indian Contract Act, 1872;

9. Income Tax Act, 1961 to the extent of Tax Deducted at Source under various Section and T.D.S. Returns filed;

10. Indirect Tax Laws relating to collections, deductions, wherever applicable, payments made and returns filed;

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BOARD’S REPORT

TARA JEWELS LIMITED

11. Indian Stamp Act, 1899;

12. The Maharashtra Stamp Act, 1958;

13. Negotiable Instruments Act, 1881;

14. Indian Electricity Act, 2003.

15. The Companies (Indian Accounting Standard) Rules, 2015

16. The Bombay Shops & Establishment Act, 1948

17. Customs Act, 1952

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(iii) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

(iv) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015

SEEPZ (SEZ) Related Complainces

The Company has complied with the requirements of the applicable Laws and Rules and Guidelines as required for establishment of the manufacturing units in SEZ.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above to the extent applicable except our comments and observations as stated in Annexure to this report and forms part of this report.

We further report that the Board of Directors of the Company is duly constituted with Executive Directors and Independent Directors, with a shortfall of One Independent Director and there were no Non-Executive Directors on the Board of the Company as on 31st March, 2018. The appointment and resignation of Directors during the Financial Year under review were in compliance with the applicable provisions of the Companies Act, 2013.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the Board/Committee decisions are taken unanimously.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines

We further report that during the audit period, there were no instances of: (i) Public / Rights / Preferential issue of shares / debentures / sweat equity. (ii) Redemption / buy-back of securities. (iii) Major decisions taken by the Members in pursuance to Section 180 of the Companies Act, 2013. (iv) Merger / amalgamation / reconstruction etc. (v) Foreign technical collaborations.

We further report that during the audit period the Company has been listed with BSE Limited and National Stock Exchange.

For K. C. Nevatia & Associates Company Secretaries

Sd/-

K. C. Nevatia ProprietorPlace: MUMBAI FCS No. 3963Date: 29th May, 2018 C.P. No. 2348

This Report is to be read with our letter of even date which is annexed and forms an integral part of this report.

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

Annexure

Annexure to our Secretarial Audit Report dated 29th May, 2018

1. There were total five (5) Directors on the Board as on 31st March, 2018 comprising of two (2) Executive Directors, one (1) Nominee Director and two (2) Independent Directors. As per the Provisions of Sec 149 of the Companies Act, 2013 and as per Regulation 17 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, one half of the Board should comprise of Independent Directors. Thus, the Company needed three (3) Independent Directors against which there were only two (2) Independent Directors.

2. Due to the shortfall of one(1) Independent Director on the Board, the constitution of Audit Committee and Nomination & Remuneration Committee have not been constituted in accordance with the provisions of Sec 177 and Sec 178 respectively of Companies Act, 2013 and relevant provisions of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

3. Statutory dues such as Provident Fund, ESI, Profession Tax and Income Tax deducted at source under various provisons of the Income Tax Act, 1961, have not been deposited by the Company with the concerned authorities for several months, the amount of which could not be ascertained by us. As a result of which relevant returns under applicable laws were also not filed.

4. The Chairman Cum Managing Director of the Company has not drawn any remuneration for the financial year 2017-18.

For K. C. Nevatia & AssociatesCompany Secretaries

Place: MUMBAIDate: 29th May, 2018

Sd/- K. C. Nevatia

(Proprietor) FCS No. 3963 C.P. No. 2348

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BOARD’S REPORT

TARA JEWELS LIMITED

To,The MembersTara Jewels LimitedAndheri (East), Mumbai (Maharashtra)

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express as opinion on these secretarial records based on our audit.

2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, Rules, Regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For K. C. Nevatia & AssociatesCompany Secretaries

Place: MUMBAIDate: 29th May, 2018

Sd/- K. C. Nevatia

(Proprietor) FCS No. 3963 C.P. No. 2348

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

ANNEXTURE - E

FORM NO. AOC - 2

Disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto. [Pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014].

1 No contracts or arrangements or transactions were entered into by the Company with related parties during the year ended March 31, 2018, which were not at arm’s length basis.

2 Details of material contracts or arrangement or transactions at arm’s length basis

` in Lakhs

SR. No.

Name of the releated Party and nature of relationship

Nature of contracts/arrangements/transactions

Duration of the contracts/arrangements/transactions

Salient terms of the contracts or the arrangements or transactions including the value

Date of approval by the Audit Committee/Board

Amount paid as advances

1 Fabrikant Tara International LLC.U.S.A (Wholly owned subsidiary of Tara Jewels Holding Inc., a wholly owned subsidiary)

Sale of Goods Ongoing transactional net margin method ` 5630.73/-

approval obtained on quarterly basis

Nil

2 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)

Sale of Goods Ongoing transactional net margin method ` 11804.09/-

approval obtained on quarterly basis

Nil

3 Fabrikant Tara International LLC.U.S.A (Wholly owned subsidiary of Tara Jewels Holding Inc., a wholly owned subsidiary)

Purchase of Goods

Ongoing transactional net margin method ` 2236.92/-

approval obtained on quarterly basis

Nil

4 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)

Purchase of Goods

Ongoing transactional net margin method ` 13715.40/-

approval obtained on quarterly basis

Nil

5 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)

Labour Charges Paid

Ongoing transactional net margin method ` 0.28/-

approval obtained on quarterly basis

Nil

6 Tara (Hong Kong) Ltd. Hong Kong (Wholly owned subsidiary)

Purchase of Fixed Assets

Ongoing transactional net margin method ` 6.40/-

approval obtained on quarterly basis

Nil

7 Fabrikant Tara International LLC.U.S.A (Wholly owned subsidiary of Tara Jewels Holding Inc., a wholly owned subsidiary)

Labour Charges Received

Ongoing transactional net margin method ` 26.19/-

approval obtained on quarterly basis

Nil

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BOARD’S REPORT

TARA JEWELS LIMITED

ANNEXTURE - F

FORM NO. MGT 9

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration ) Rules, 2014.

EXTRACT OF ANNUAL RETURN AS ON FINANCIAL YEAR ENDED ON MARCH 31, 2018 I REGISTRATION & OTHER DETAILS:

i CIN L52393MH2001PLC131252

ii Registration Date March 16, 2001

iii Name of the Company Tara Jewels Limited

iv Category of the Company Company Limited by shares/Indian Non-Government Company

v Address of the Registered office & contact details

Address : Plot No.122, 15th Road, Near IDBI Bank, MIDC

Town / City : Andheri (East), Mumbai- 400093

State : Maharashtra

Country Name : India

Telephone (with STD Code) : 022-66774444

Fax Number : 022-66774464

Email Address : investor.care@tarajewels.co.in

Website, if any: www.tarajewels.in

vi Whether listed company YES

vii Name and Address of Registrar & Transfer Agents (RTA ):-

Name of RTA: LINK INTIME INDIA PVT LIMITED

Address : C 101, 247 Park, L.B.S Marg

Town / City : Vikroli (East), Mumbai- 400083

State : Maharashtra

Pin Code: 400078

Telephone : 022-49286000

Fax Number : 022-49186060

Email Address : rnt.helpdesk@linkintime.co.in

II. PRINCIPAL BUSINESS ACTIVITY OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

Sl. No.

Name and Description of main products / services

NIC Code of the Product / service % to total turnover of the company

1 Jewellary 321 100%

ANNUAL REPORT 2018

- 59 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

S. No.

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY /ASSOCIATE

% of shares held Applicable Section

1 Tara Jewels Holdings Inc N.A Subsidiary 100% 2(87)

2 Fabrikant Tara International LLC *

N.A Subsidiary 2(87)

3 Tara Hong Kong Limited N.A Subsidiary 100% 2(87)

4 Tara China Jewelry Limited* N.A Subsidiary 2(87)

* Both the Companies are Step Down Subsidiaries of our Wholly Owned Subsidiary

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Sr No

Category ofShareholders

Shareholding at the beginning of the year - 2017

Shareholding at the end of the year - 2018

% Changeduring

the yearDemat Physical Total % of Total

Shares

Demat Physical Total % of Total

Shares

(A) Shareholding of Promoter and Promoter Group

[1] Indian

(a) Individuals / Hindu Undivided Family

14746398 0 14746398 '59.8891 9622518 0 9622518 '39.0796 '-20.8095

(b) Central Government / State Government(s)

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(c) Financial Institutions / Banks

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(d) Any Other (Specify)

Bodies Corporate 33600 0 33600 '0.1365 33600 0 33600 '0.1365 '0.0000

Sub Total (A)(1) 14779998 0 14779998 '60.0255 9656118 0 9656118 ‘39.2161 '-20.8094

[2] Foreign

(a) Individuals (Non-Resident Individuals / Foreign Individuals)

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(b) Government 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(c) Institutions 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(d) Foreign Portfolio Investor 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(e) Any Other (Specify)

Sub Total (A)(2) 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

Total Shareholding of Promoter and Promoter Group(A)=(A)(1)+(A)(2)

14779998 0 14779998 '60.0255 9656118 0 9656118 '39.2161 '-20.8094

(B) Public Shareholding

[1] Institutions

(a) Mutual Funds / UTI 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(b) Venture Capital Funds 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(c) Alternate Investment Funds

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(d) Foreign Venture Capital Investors

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(e) Foreign Portfolio Investor 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

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BOARD’S REPORT

TARA JEWELS LIMITED

Sr No

Category ofShareholders

Shareholding at the beginning of the year - 2017

Shareholding at the end of the year - 2018

% Changeduring

the yearDemat Physical Total % of Total

Shares

Demat Physical Total % of Total

Shares

(f) Financial Institutions / Banks

31979 0 31979 '0.1299 38067 0 38067 '0.1546 '0.0247

(g) Insurance Companies 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(h) Provident Funds/ Pension Funds

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(i) Any Other (Specify)

Sub Total (B)(1) 31979 0 31979 ‘0.1299 38067 0 38067 ‘0.1546 ‘0.0247

[2] Central Government/ State Government(s)/ President of India

Sub Total (B)(2) 0 0 0 ‘0.0000 0 0 0 ‘0.0000 ‘0.0000

[3] Non-Institutions

(a) Individuals

(i) Individual shareholders holding nominal share capital upto ` 1 lakh.

4466235 253 4466488 '18.1396 4280001 253 4280254 '17.3833 '-0.7563

(ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh

1731296 196521 1927817 '7.8294 1918251 5351977 7270228 '29.5263 '21.6969

(b) NBFCs registered with RBI 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(c) Employee Trusts 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(d) Overseas Depositories(holding DRs) (balancing figure)

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

(e) Any Other (Specify)

Hindu Undivided Family 250180 0 250180 '1.0160 234191 0 234191 '0.9511 '-0.0649

Foreign Companies 1800000 0 1800000 '7.3103 1800000 0 1800000 '7.3103 '0.0000

Non Resident Indians (Non Repat)

54219 0 54219 '0.2202 87687 0 87687 '0.3561 '0.1359

Other Directors 3300 0 3300 '0.0134 3300 0 3300 '0.0134 '0.0000

Non Resident Indians (Repat)

359685 0 359685 '1.4608 304558 0 304558 '1.2369 '-0.2239

Clearing Member 206317 0 206317 '0.8379 92306 0 92306 '0.3749 '-0.4630

Bodies Corporate 742867 0 742867 '3.0170 856141 0 856141 '3.4770 '0.4600

Sub Total (B)(3) 9614099 196774 9810873 '39.8446 9576435 5352230 14928665 '60.6293 '20.7847

Total Public Shareholding(B)=(B)(1)+(B)(2)+(B)(3)

9646078 196774 9842852 '39.9745 9614502 5352230 14966732 '60.7839 '20.8094

Total (A)+(B) 24426076 196774 24622850 '100.0000 19270620 5352230 24622850 '100.0000 '0.0000

(C) Non Promoter - Non Public

[1] Custodian/DR Holder 0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

[2] Employee Benefit Trust (under SEBI (Share based Employee Benefit) Regulations, 2014)

0 0 0 '0.0000 0 0 0 '0.0000 '0.0000

Total (A)+(B)+(C) 24426076 196774 24622850 '100.0000 19270620 5352230 24622850 '100.0000

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

ii) Shareholding of Promoters

Sr No

Shareholder's Name Shareholding at thebeginning of the year - 2017

Shareholding at theend of the year - 2018

% change inshareholding

during the yearNo. of

SharesHeld

% of total

Shares of the

company

%of SharesPledged

/encumbered to

total shares

No. ofShares

Held

% of total

Shares of the

company

%of SharesPledged/

encumbered to

total shares

1 RAJEEV SHETH 14502893 '58.9001 '48.5577 9607893 '39.0202 '39.0138 '-19.8799

2 AARTI SHETH 114440 '0.4648 '0.0000 0 '0.0000 '0.0000 '-0.4648

3 DIVYA SHETH 114440 '0.4648 '0.0000 0 '0.0000 '0.0000 '-0.4648

4 DIVYA JEWELS INTERNATIONAL PVT LTD

33600 '0.1365 '0.0000 33600 '0.1365 '0.0000 '0.0000

5 PURNIMA RAJEEV SHETH 14625 '0.0594 '0.0000 14625 '0.0594 '0.0000 '0.0000

Total 14779998 '60.0255 '39.0138 9656118 '39.2161 '39.0138 '-20.8094

iii) Change in Promoters’ Shareholding (please specify , if there is no change)

Sr No.

Name & Type of Transaction

Shareholding at the beginning of

the year - 2017

Transactions during the year

Cumulative Shareholding at the end of

the year - 2018

No. of Shares

Held

% of Total Shares of The

Company

Date of Transaction

No. of Shares

No of Shares

Held

% of Total Shares of The

Company

1 RAJEEV SHETH 14502893 58.9001 14502893 58.9001

Transfer 13 Oct 2017 (354720) 14148173 57.4595

Transfer 20 Oct 2017 (469342) 13678831 55.5534

Transfer 27 Oct 2017 (590625) 13088206 53.1547

Transfer 03 Nov 2017 (7989) 13080217 53.1223

Transfer 10 Nov 2017 (111679) 12968538 52.6687

Transfer 17 Nov 2017 (319371) 12649167 51.3717

Transfer 24 Nov 2017 (1239772) 11409395 46.3366

Transfer 22 Dec 2017 (1581502) 9827893 39.9137

Transfer 29 Dec 2017 (220000) 9607893 39.0202

AT THE END OF THE YEAR 9607893 39.0202

2 DIVYA JEWELS INTERNATIONAL PVT LTD

33600 0.1365 33600 0.1365

AT THE END OF THE YEAR 33600 0.1365

3 PURNIMA RAJEEV SHETH 14625 0.0594 14625 0.0594

AT THE END OF THE YEAR 14625 0.0594

4 AARTI SHETH 114440 0.4648 114440 0.4648

Transfer 17 Nov 2017 (35000) 79440 0.3226

Transfer 24 Nov 2017 (79440) 0 0.0000

AT THE END OF THE YEAR 114440 0.4648 0 0.0000

5 DIVYA SHETH 13 Oct 2017 (114440) 114440 0.4648

Transfer 0 0.0000

AT THE END OF THE YEAR 0 0.0000

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BOARD’S REPORT

TARA JEWELS LIMITED

iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

Sr No.

Name & Type of Transaction

Shareholding at the beginning of

the year - 2017

Transactions during the year

Cumulative Shareholding at the end of

the year - 2018No. of Shares

Held

% of Total Shares of The

Company

Date of Transaction

No. of Shares

No of Shares

Held

% of Total Shares of The

Company1 CRYSTALON FINANZ AG 1800000 7.3103 1800000 7.3103

AT THE END OF THE YEAR 1800000 7.3103

2 SUBRAMANIAN P 386853 1.5711 386853 1.5711

AT THE END OF THE YEAR 386853 1.57113 M R RAJARAM 218402 0.8870 218402 0.8870

Transfer 28 Apr 2017 (12700) 205702 0.8354AT THE END OF THE YEAR 205702 0.8354

4 FABRIKANT H K TRADING LIMITED

196521 0.7981 196521 0.7981

AT THE END OF THE YEAR 196521 0.7981

5KARVY STOCK BROKING LIMITED-CLIENT ACCOUNT-NSE CM

27293 0.1108 27293 0.1108

Transfer 07 Apr 2017 (418) 26875 0.1091Transfer 14 Apr 2017 (216) 26659 0.1083Transfer 21 Apr 2017 5004 31663 0.1286Transfer 28 Apr 2017 (1200) 30463 0.1237Transfer 05 May 2017 (80) 30383 0.1234Transfer 12 May 2017 1725 32108 0.1304Transfer 19 May 2017 (505) 31603 0.1283Transfer 26 May 2017 10670 42273 0.1717Transfer 02 Jun 2017 131 42404 0.1722Transfer 09 Jun 2017 1024 43428 0.1764Transfer 16 Jun 2017 3138 46566 0.1891Transfer 23 Jun 2017 (3251) 43315 0.1759Transfer 30 Jun 2017 1208 44523 0.1808Transfer 07 Jul 2017 (3015) 41508 0.1686Transfer 14 Jul 2017 (400) 41108 0.1670Transfer 21 Jul 2017 455 41563 0.1688Transfer 28 Jul 2017 517 42080 0.1709Transfer 04 Aug 2017 (856) 41224 0.1674Transfer 11 Aug 2017 150 41374 0.1680Transfer 18 Aug 2017 (1146) 40228 0.1634Transfer 25 Aug 2017 245 40473 0.1644Transfer 01 Sep 2017 1715 42188 0.1713Transfer 08 Sep 2017 1035 43223 0.1755Transfer 15 Sep 2017 400 43623 0.1772Transfer 22 Sep 2017 (1470) 42153 0.1712Transfer 29 Sep 2017 3002 45155 0.1834Transfer 06 Oct 2017 (594) 44561 0.1810Transfer 13 Oct 2017 3310 47871 0.1944Transfer 20 Oct 2017 25989 73860 0.3000Transfer 27 Oct 2017 (3793) 70067 0.2846Transfer 03 Nov 2017 12123 82190 0.3338

ANNUAL REPORT 2018

- 63 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

Sr No.

Name & Type of Transaction

Shareholding at the beginning of

the year - 2017

Transactions during the year

Cumulative Shareholding at the end of

the year - 2018No. of Shares

Held

% of Total Shares of The

Company

Date of Transaction

No. of Shares

No of Shares

Held

% of Total Shares of The

CompanyTransfer 10 Nov 2017 (4525) 77665 0.3154Transfer 17 Nov 2017 1439 79104 0.3213Transfer 24 Nov 2017 52423 131527 0.5342Transfer 01 Dec 2017 34979 166506 0.6762Transfer 08 Dec 2017 (3452) 163054 0.6622Transfer 15 Dec 2017 (11883) 151171 0.6139Transfer 22 Dec 2017 7966 159137 0.6463Transfer 29 Dec 2017 48108 207245 0.8417Transfer 05 Jan 2018 (18019) 189226 0.7685Transfer 12 Jan 2018 23328 212554 0.8632Transfer 19 Jan 2018 (485) 212069 0.8613Transfer 26 Jan 2018 (849) 211220 0.8578Transfer 02 Feb 2018 (55132) 156088 0.6339Transfer 09 Feb 2018 2031 158119 0.6422Transfer 16 Feb 2018 (6025) 152094 0.6177Transfer 23 Feb 2018 672 152766 0.6204Transfer 02 Mar 2018 (10328) 142438 0.5785Transfer 09 Mar 2018 (8569) 133869 0.5437Transfer 16 Mar 2018 3334 137203 0.5572Transfer 23 Mar 2018 5052 142255 0.5777Transfer 31 Mar 2018 15921 158176 0.6424AT THE END OF THE YEAR 158176 0.6424

6 GLOBE CAPITAL MARKET LTD

13337 0.0542 13337 0.0542

Transfer 14 Apr 2017 (1611) 11726 0.0476Transfer 21 Apr 2017 (143) 11583 0.0470Transfer 28 Apr 2017 (100) 11483 0.0466Transfer 05 May 2017 700 12183 0.0495Transfer 12 May 2017 500 12683 0.0515Transfer 19 May 2017 300 12983 0.0527Transfer 26 May 2017 3399 16382 0.0665Transfer 02 Jun 2017 1200 17582 0.0714Transfer 09 Jun 2017 (250) 17332 0.0704Transfer 16 Jun 2017 543 17875 0.0726Transfer 23 Jun 2017 (3919) 13956 0.0567Transfer 30 Jun 2017 (856) 13100 0.0532Transfer 07 Jul 2017 (244) 12856 0.0522Transfer 14 Jul 2017 200 13056 0.0530Transfer 21 Jul 2017 99 13155 0.0534Transfer 28 Jul 2017 (599) 12556 0.0510Transfer 04 Aug 2017 200 12756 0.0518Transfer 11 Aug 2017 304 13060 0.0530Transfer 18 Aug 2017 400 13460 0.0547Transfer 25 Aug 2017 (50) 13410 0.0545Transfer 01 Sep 2017 1600 15010 0.0610Transfer 08 Sep 2017 (1200) 13810 0.0561

- 64 -

BOARD’S REPORT

TARA JEWELS LIMITED

Sr No.

Name & Type of Transaction

Shareholding at the beginning of

the year - 2017

Transactions during the year

Cumulative Shareholding at the end of

the year - 2018No. of Shares

Held

% of Total Shares of The

Company

Date of Transaction

No. of Shares

No of Shares

Held

% of Total Shares of The

CompanyTransfer 15 Sep 2017 (801) 13009 0.0528Transfer 22 Sep 2017 200 13209 0.0536Transfer 29 Sep 2017 47 13256 0.0538Transfer 06 Oct 2017 (47) 13209 0.0536Transfer 13 Oct 2017 (4200) 9009 0.0366Transfer 20 Oct 2017 (503) 8506 0.0345Transfer 27 Oct 2017 3770 12276 0.0499Transfer 03 Nov 2017 6290 18566 0.0754Transfer 10 Nov 2017 (300) 18266 0.0742Transfer 17 Nov 2017 (4250) 14016 0.0569Transfer 24 Nov 2017 1783 15799 0.0642Transfer 01 Dec 2017 (100) 15699 0.0638Transfer 08 Dec 2017 1067 16766 0.0681Transfer 15 Dec 2017 (200) 16566 0.0673Transfer 22 Dec 2017 35245 51811 0.2104Transfer 29 Dec 2017 (32400) 19411 0.0788Transfer 05 Jan 2018 (1154) 18257 0.0741Transfer 12 Jan 2018 1390 19647 0.0798Transfer 19 Jan 2018 (2900) 16747 0.0680Transfer 26 Jan 2018 98004 114751 0.4660Transfer 02 Feb 2018 196 114947 0.4668Transfer 09 Feb 2018 429 115376 0.4686Transfer 16 Feb 2018 (1499) 113877 0.4625Transfer 23 Feb 2018 (5000) 108877 0.4422Transfer 02 Mar 2018 500 109377 0.4442Transfer 09 Mar 2018 11320 120697 0.4902Transfer 16 Mar 2018 118 120815 0.4907Transfer 23 Mar 2018 (33) 120782 0.4905Transfer 31 Mar 2018 (4967) 115815 0.4704AT THE END OF THE YEAR 115815 0.4704

7 EXPAANZA ACCESS LIMITED

0 0.0000 0 0.0000

Transfer 24 Nov 2017 100000 100000 0.4061AT THE END OF THE YEAR 100000 0.4061

8 SHABNAM MOTIHAR 1500 0.0061 1500 0.0061Transfer 02 Jun 2017 (1500) 0 0.0000Transfer 08 Dec 2017 6000 6000 0.0244Transfer 22 Dec 2017 105 6105 0.0248Transfer 29 Dec 2017 93215 99320 0.4034Transfer 05 Jan 2018 600 99920 0.4058Transfer 19 Jan 2018 (15400) 84520 0.3433AT THE END OF THE YEAR 84520 0.3433

9 ANGEL BROKING PRIVATE LIMITED

33291 0.1352 33291 0.1352

Transfer 07 Apr 2017 (6119) 27172 0.1104Transfer 14 Apr 2017 (4669) 22503 0.0914

ANNUAL REPORT 2018

- 65 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

Sr No.

Name & Type of Transaction

Shareholding at the beginning of

the year - 2017

Transactions during the year

Cumulative Shareholding at the end of

the year - 2018No. of Shares

Held

% of Total Shares of The

Company

Date of Transaction

No. of Shares

No of Shares

Held

% of Total Shares of The

CompanyTransfer 21 Apr 2017 3541 26044 0.1058Transfer 28 Apr 2017 1415 27459 0.1115Transfer 05 May 2017 (2664) 24795 0.1007Transfer 12 May 2017 2908 27703 0.1125Transfer 19 May 2017 4275 31978 0.1299Transfer 26 May 2017 14335 46313 0.1881Transfer 02 Jun 2017 2945 49258 0.2000Transfer 09 Jun 2017 10793 60051 0.2439Transfer 16 Jun 2017 17180 77231 0.3137Transfer 23 Jun 2017 (4059) 73172 0.2972Transfer 30 Jun 2017 (4393) 68779 0.2793Transfer 07 Jul 2017 (13345) 55434 0.2251Transfer 14 Jul 2017 (2975) 52459 0.2131Transfer 21 Jul 2017 1433 53892 0.2189Transfer 28 Jul 2017 (28280) 25612 0.1040Transfer 04 Aug 2017 9176 34788 0.1413Transfer 11 Aug 2017 8223 43011 0.1747Transfer 18 Aug 2017 (9428) 33583 0.1364Transfer 25 Aug 2017 (986) 32597 0.1324Transfer 01 Sep 2017 2072 34669 0.1408Transfer 08 Sep 2017 3170 37839 0.1537Transfer 15 Sep 2017 12571 50410 0.2047Transfer 22 Sep 2017 4973 55383 0.2249Transfer 29 Sep 2017 3949 59332 0.2410Transfer 06 Oct 2017 5518 64850 0.2634Transfer 13 Oct 2017 24599 89449 0.3633Transfer 20 Oct 2017 5032 94481 0.3837Transfer 27 Oct 2017 70791 165272 0.6712Transfer 03 Nov 2017 2721 167993 0.6823Transfer 10 Nov 2017 3141 171134 0.6950Transfer 17 Nov 2017 91064 262198 1.0649Transfer 24 Nov 2017 (104514) 157684 0.6404Transfer 01 Dec 2017 7945 165629 0.6727Transfer 08 Dec 2017 (19648) 145981 0.5929Transfer 15 Dec 2017 5769 151750 0.6163Transfer 22 Dec 2017 60931 212681 0.8638Transfer 29 Dec 2017 (150049) 62632 0.2544Transfer 05 Jan 2018 26261 88893 0.3610Transfer 12 Jan 2018 25095 113988 0.4629Transfer 19 Jan 2018 1408 115396 0.4687Transfer 26 Jan 2018 19458 134854 0.5477Transfer 02 Feb 2018 14708 149562 0.6074Transfer 09 Feb 2018 3347 152909 0.6210Transfer 16 Feb 2018 (5205) 147704 0.5999Transfer 23 Feb 2018 (28421) 119283 0.4844Transfer 02 Mar 2018 3821 123104 0.5000

- 66 -

BOARD’S REPORT

TARA JEWELS LIMITED

Sr No.

Name & Type of Transaction

Shareholding at the beginning of

the year - 2017

Transactions during the year

Cumulative Shareholding at the end of

the year - 2018No. of Shares

Held

% of Total Shares of The

Company

Date of Transaction

No. of Shares

No of Shares

Held

% of Total Shares of The

CompanyTransfer 09 Mar 2018 (23171) 99933 0.4059Transfer 16 Mar 2018 10950 110883 0.4503Transfer 23 Mar 2018 (28660) 82223 0.3339Transfer 31 Mar 2018 (82) 82141 0.3336AT THE END OF THE YEAR 82141 0.3336

10 JAGDISH AMRITLAL SHAH 68706 0.2790 68706 0.2790AT THE END OF THE YEAR 68706 0.2790

v Shareholding of Directors and Key Managerial Personnel

Shareholding of each Directors and each Key Managerial

Shareholding at the

beginning of the year

Transactions During the

year

Cumulative Shareholding during the year

No. of shares % of total shares of the

company

Date of Transaction

No. of Shares

No. of shares

% of total shares of the

company

1. Mr. Rajeev Sheth, Chairman and Managing Director *

14502893 58.9001 14502893 58.9001

13-Oct-17 -354720 14148173 57.4595

20-Oct-17 -469342 13678831 55.5534

27-Oct-17 -5690625 13088206 53%

03-Nov-17 -7989 13080217 53%

10-Nov-17 -111679 12968538 53%

17-Nov-17 -319371 12649167 51%

24-Nov-17 -1239772 11409395 46%

22-Dec-17 -1581502 9827893 40%

29-Dec-17 -220000 9607893 39%

2. Mr. Vishnu Prakash Garg, Executive Director & CFO # NIL NIL

3. Mr. Ravindran M.P, Executive Director # NIL NIL

4. Mr. Nikkhil Vaidya, Independent Director # NIL NIL

5. Mr. Rajiv Jain, Independent Director # 300 300 #0.001%

6. Mr. Rakesh Kalra, Independent Director # NIL NIL

7. Mr. Shanti Saroop Khindria, Independent Director #

NIL NIL

8. Ms. Fern Mallis, Independent Director NIL NIL

9. Mr. Mariano De La Torrre, Nominee Director # NIL NIL

10. Ms. Alison Lazerwitz, Nominee Director # NIL NIL

11. Mr. Stuart Marcus, Director# NIL NIL

12. Mr. Jeffrey Shlakman, Director # NIL NIL

13. Ms. Nivedita Nayak, Company Secretary NIL NIL

14. Mr. Sanjay Sethi, Executive Director & CFO # NIL NIL

15. Ms. Disha Tulsiani, Executive Director & CFO % NIL NIL

*The above changes in Mr. Rajeev Sheth Shares are on account of Sale of Shares

ANNUAL REPORT 2018

- 67 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

# Mr. Rakesh Kalra, Mr. Stuart Marcus, Mr. Jeffrey Shalkman Resigned w.e.f May 29, 2017, Mr. Mariano de la torree resigned w.e.f December 9, 2016, Mr. Ravindran M.P, Mr. Vishnu Prakash Garg, Mr. Shanti Saroop Khindria resigned w.e.f August 10, 2017, Mr. Nikkhil Vaidya resigned w.e.f August 4, 2017, Ms. Alison Lazerwitz was appointed as Nominee Director. w.e.f February 10, 2017 and resigned w.e.f August 13, 2018, Mr. Vishnu Prakash Garg resigned as CFO w.e.f May 29, 2017, Mr. Sanjay Sethi was appointed as CFO w.e.f June 20, 2017 and as an Executive Director w.e.f August 10, 2017 and resigned w.e.f May 1, 2018 & Mr.Rajiv Jain resigned w.e.f February 23, 2018.

% Ms. Disha Tulsiani appointed as Executive Director & CFO w.e.f May 29, 2018.

V INDEBTEDNESSIndebtedness of the Company including interest outstanding/accrued but not due for payment

Amounts in `

Secured Loans including Deposits

Unsecured Loans Deposits Total Indebtness

Indebtedness at the beginning of the financial year i) Principal Amount 5,56,14,01,873 80,64,008 5,56,94,65,881 ii) Interest due but not

paid 69,60,484 69,60,484

iii) Interest accrued but not due

22,49,480 22,49,480

Total (i+ii+iii) 5,57,06,11,837 80,64,008 - 5,57,86,75,845 Change in Indebtedness during the financial year · Addition 1,49,55,51,427 11,21,26,364 1,60,76,77,791 · ReductionNet Change 1,49,55,51,427 11,21,26,364 - 1,60,76,77,791 Indebtedness at the end of the financial year i) Principal Amount 6,89,55,23,708 12,01,90,372 7,01,57,14,080 ii) Interest due but

not paid 16,47,88,027 16,47,88,027

iii) Interest accrued but not due

58,51,529 58,51,529

Total (i+ii+iii) 7,06,61,63,264 12,01,90,372 - 7,18,63,53,636

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sr. No.

Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

in `

Mr Rajeev V. Sheth

Mr. Vishnu Prakash Garg

Mr Ravindran M. P.

Mr. Sanjay Sethi

1 Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

- 5,21,749 10,95,536 54,86,559 71,03,844

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

- - - -

- 68 -

BOARD’S REPORT

TARA JEWELS LIMITED

Sr. No.

Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

in `

Mr Rajeev V. Sheth

Mr. Vishnu Prakash Garg

Mr Ravindran M. P.

Mr. Sanjay Sethi

(c) Profits in lieu of salary under section 17(3) Income tax Act, 1961

- - - -

2 Stock Option - - - -

3 Sweat Equity - - - -

4 Commission - - - -

- as % of profit - - - -

- others, specify… - - - -

5 Others, please specify - - - -

Total (A) - 5,21,749 10,95,536 54,86,559 71,03,844

Ceiling as per the Act (Within limits specified under

schedule V to the Companies

Act, 2013)

B. Remuneration to other directors:

Sr. No.

Particulars of Remuneration

Name of Directors Total Amount in `

Ms. Fern Mallis

Mr. Nikhil Vaidya

Mr. Rajiv Jain Ms. Priyanka Agarwal

3 Independent Directors

• Fee for attending board / committee meetings

80,000 40,000 1,20,000 40,000 2,80,000

• Commission - - - - -

• Others, please specify - - - - -

Total (1) 80,000 40,000 1,20,000 40,000 2,80,000

4 Other Non-Executive Directors

• Fee for attending board / committee meetings

- - - - -

• Commission - - - - -

• Others, please specify - - - - -

Total (2) - - - - -

Total (B)=(1+2) - - -

ANNUAL REPORT 2018

- 69 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

Sr. No.

Particulars of Remuneration

Name of Directors Total Amount in `

Ms. Fern Mallis

Mr. Nikhil Vaidya

Mr. Rajiv Jain Ms. Priyanka Agarwal

Total Managerial Remuneration

80,000 40,000 1,20,000 40,000 2,80,000

Overall Ceiling as per the Act

(Overall ceiling as per the

Companies Act, 2013 for sitting fees is Rs. One

Lakhs per Board Meeting or a Connittee

Meeting there of.)

C. Remuneration To Key Managerial Personnel Other Than Md/Manager/Wtd

Sr. No.

Particulars of Remuneration CFO Company Secretary

Total Amount

in `

Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

60,08,308 6,38,664 66,46,972

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 - - -

(c) Profits in lieu of salary under section 17(3) Incometax Act, 1961 - - -

Commission

- as % of profit - - -

- others, specify… - - -

Others, please specify - - -

Total 60,08,308 6,38,664 66,46,972

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

TYPE Section of the Companies Act

Brief Description Details of Penalty/Punishment/Compoundingfees imposed

Authority (RD/NCLT/COURT)

A. COMPANY

Penalty

Punishment NONE

Compounding

B. DIRECTORS

Penalty

Punishment NONE

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment NONE

Compounding

- 70 -

BOARD’S REPORT

TARA JEWELS LIMITED

ANNEXTURE G

PRACTICING COMPANY SECRETARY’S CERTIFICATE ON CORPORATE GOVERNANCE

ToThe Members of TARA JEWELS LIMITEDMumbai

We have examined the compliance of the conditions of Corporate Governance by Tara Jewels Limited for the year ended on March 31, 2018, as stipulated inRegulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 (“Listing Regulations”)

The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Regulations.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For K. C. NEVATIA & ASSOCIATES Company Secretaries

Sd/-Place: Mumbai K. C. NEVATIA Date: 29th May, 2018 Proprietor FCS 3963 C.P: 2348

ANNUAL REPORT 2018

- 71 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

The Report on Corporate Governance as prescribed by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”) is given below:

A. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE Your Company adheres to best practices in Corporate Governance based on certain key principles, including fairness and

integrity, transparency and disclosure, accountability, equal treatment to all the shareholders and social responsibility. Corporate Governance extends beyond corporate laws. Its fundamental objective is not merely to fulfil legal requirements, but also the institution of and adherence to systems and procedures, ensuring the commitment of the Board of Directors in managing the Company’s affairs in a transparent manner to maximise the long-term value of the shareholders at large.

Your Company has adopted an appropriate Corporate Governance framework to ensure timely and accurate disclosure of all material matters, including financial position, performance, ownership and governance.

Your Company’s policies and practices relating to the Corporate Governance are discussed in the following sections:

B. BOARD OF DIRECTORS (i) Board Membership Criteria The members of the Board of Directors of your Company are expected to possess the required expertise, skill and

experience to effectively manage and direct your Company to attain its organisational goals. They are expected to be persons with vision, leadership qualities, proven competence and integrity, and with a strategic bent of mind.

Each member of the Board of Directors of your Company is expected to ensure that his/her personal interest does not run in conflict with your Company’s interests. Moreover, each member is expected to use his/her professional judgement to maintain both the substance and appearance of independence and objectivity.

(ii) Composition of the Board The Board of Directors of your Company has an optimum combination of Executive and Non-executive Directors

to have a balanced Board Structure. However there is a shortfall of one Independent Director on account of his resignation on 23rd February, 2018. The Board has Five Directors as on 31st March, 2018 and except the Chairman & Managing Director and One Whole-Time Director, all other Three Directors are Non-executive. Out of the Three Non-executive Directors, Two are Independent Directors and one is a Non-Independent Director i.e. Nominee Director. The Chairman of the Board of Directors of your Company is a Non-Independent Director.

The composition of the Board of Directors of your Company as on the date of this Report, along with the other Directorships held by each of the Directors is brought out in the following tables:

Name of Director Position Relationship with other Directors

No. of otherDirectorships#

No. of other Board Committee(s) of whichhe / she is aMember*

No. of other Board Committee(s) of whichhe / she is aChairman*

Mr. Rajeev Sheth(DIN: 00266460)

Chairman & Managing Director

None 3 NIL NIL

Ms. Fern Mallis(DIN: 03270532)

Non-executive & Independent Director

None NIL NIL NIL

Ms. Alison Lazerwitz (DIN: 07706809)

Nominee Director None NIL NIL NIL

Ms. Priyanka Aggarwal(DIN: 07977932)

Non-executive & Independent Director

None NIL NIL NIL

Ms. Disha Tulsiani(DIN: 08153901)##

Executive Director None NIL NIL NIL

CORPORATE GOVERNANCE REPORT

- 72 -

CORPORATE GOVERNANCE REPORT

TARA JEWELS LIMITED

# Excludes Directorships in Foreign Companies and Section 8 Companies.* Includes only Audit Committee and Stakeholders’ Relationship Committee.## Ms. Disha Tulsiani appointed as Executive Director w.e.f May 29, 2018

iii) Board Meetings / Annual General Meeting During the year financial year 2017-18, the Board of Directors of your Company met 4 times on May 29, 2017,

August 10, 2017, November 29, 2017 and January 25, 2018.

The previous Annual General Meeting was held on September 28, 2017.

The details regarding the attendance of Directors at the Board Meetings and the Annual General Meeting held during financial year 2017-18 are provided in the following table:

Director No. of Board Meetings Whether Last AGM Attended (Yes/No)Held Attended

Mr. Rajeev Sheth 4 4 YESMr. Ravindran M.P## 4 1 NOMr. Vishnu Prakash Garg## 4 0 NOMs. Fern Mallis 4 4 NOMr. Nikkhil Vaidya# 4 1 NOMr. Rajiv Lochan Jain% 4 3 NOMr. Rakesh Kalra@ 4 0 NOMr. Shanti Saroop Khindria## 4 0 NOMr. Stuart Marcus@ 4 0 NOMr. Jeffrey Shlakman@ 4 0 NOMs. Alison Lazerwitz 4 4 NOMr. Sanjay Sethi* 4 3 YESMs. Priyanka Agarwal** 4 2 NO

@ Mr. Rakesh Kalra, Mr. Jeffrey Shlakman and Mr. Stuart Marcus resigned from the Board w.e.f May 29, 2017

# Mr. Nikkhil Vaidya resigned from the Board w.e.f August 4, 2017

## Mr. Vishnu Prakash Garg, Mr. Shanti Saroop Khindria and Mr. Ravindran M.P resigned from the Board w.e.f August 10, 2017

% Mr. Rajiv Jain resigned from the Board w.e.f February 23, 2018

* Mr. Sanjay Sethi was appointed as an Executive Director w.e.f August 10, 2017 and resigned from the Board on May 1, 2018.

** Ms. Priyanka Agarwal was appointed as an Independent Director w.e.f November 29, 2017 and resigned as Independent Director w.e.f May 30, 2018

(iv) Retirement Policy According to your Company’s Articles of Association, at every Annual General Meeting, one-third of the Directors

for the time being are liable to retire by rotation or, if their number is not three or a multiple of three, then the number nearest to one-third, shall retire from office.

The Directors to retire by rotation at every Annual General Meeting shall be those who have been longest in office since their last appointment. However, as between persons who became Director on the same day and those who are to retire shall (unless they otherwise agree among themselves) be determined by lot. A retiring Director shall be eligible for re-appointment.

. (v) Code of Conduct Your Company’s Board of Directors has prescribed a Code of Conduct for all Board Members and the Company’s

Senior Management. The Code of Conduct is available on your Company’s website, www.tarajewels.in.

All the Board Members and the Senior Management personnel of your Company have affirmed their compliance with the Code of Conduct for the year ended March 31, 2018. A declaration to this effect signed by the Managing Director is given at the end of this report.

(vi) Code of Conduct for Prohibition of Insider Trading In accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board has approved and adopted

a code of conduct governing all the directors, senior management and other employees of the Company. The Company Secretary of the Company is the Compliance Officer in respect of compliance of the code.

ANNUAL REPORT 2018

- 73 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

(vii) Profile of Directors under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, brief resume, expertise

and details of other directorship, membership in committees of Directors of other Companies and shareholding in the Company of the Directors proposed to be re-appointed / appointed are attached along with Notice of annual general meeting.

C. BOARD COMMITTEES In compliance with both the mandatory and non-mandatory requirements under SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 and the applicable laws, your Company’s Board of Directors constituted the following Committees:

(i) Audit Committee

(ii) Nomination and Remuneration Committee

(iii) Stakeholders’ Relationship Committee

(iv) Finance Committee

(v) Allotment Committee

(vi) Compensation Committee

(vii) Management & Administration Committee

(viii) Corporate Social Responsibility Committee

(ix) Risk Management Committee

The Chairman of the Board, in consultation with the Company Secretary and the respective Chairman of these Committees, determines the frequency of the meetings of these Committees. The Board of Directors has also adopted the following policies in line with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the effective and defined functioning of the respective Committees of the Board:

a) Whistle Blower Policy (Vigil mechanism)

b) Internal Financial Control Policy;

c) Related Party transaction Policy;

d) Risk Management Policy;

e) Corporate Social Responsibility Policy

f) Nomination and Remuneration Policy

g) Disclosure Policy

h) Audit Committee Mechanism

i) Familiarization Programme for Independent Directors

j) Insider Trading Code, 2015

k) Code of Conduct for the Members of Board & Senior Management Personnel

l) Documents Retention Policy

m) Policy on Material Related Party Transaction

n) Policy on disclosure of material events and information.

(i) Audit Committee The Audit Committee of the Board of Directors of your Company consists of the following Members as on the date

of this report:

Name of Committee Member DesignationMs. Priyanka Agarwal Chairman (Non-Executive - Independent Director)Ms. Disha Tulsiani* Member (Executive Director)

* Ms. Disha Tulsiani was appointed as a Executive Director and as a Member of the Committee w.e.f May 29, 2018

- 74 -

CORPORATE GOVERNANCE REPORT

TARA JEWELS LIMITED

The composition of Audit Committee was not in compliance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of SEBI (LODR) Regulations, 2015 as on date of this Report due to the resignation of Mr. Rajiv Jain, Independent Director on February 23, 2018. Efforts are being made to appoint an Independent Director at the earliest.

The Company Secretary of the Company acts as the Secretary of the Committee.

The Company’s Audit Committee met four times during the financial year 2017-18 on May 29, 2017, August 10, 2017, November 29, 2017 and January 25, 2018.

The following table provides the details of attendance at the Audit Committee meetings held during the financial year 2017-18:

Members No. of Meetings Held No. of Meetings Attended Category

Mr. Nikkhil Vaidya* 4 1 Independent Director

Mr. Rakesh Kalra** 4 0 Independent Director

Mr. Ravindran M.P@ 4 1 Executive Director

Mr. Rajiv Jain# 4 3 Independent Director

Ms. Priyanka Agarwal## 4 2 Independent Director

Mr. Sanjay Sethi% 4 3 Executive Director

** Mr. Rakesh Kalra resigned from the Board and consequently as Member of Committee w.e.f May 29, 2017

* Mr. Nikkhil Vaidya resigned from the Board and consequently as a Chairman of Committee w.e.f August 4, 2017

@ Mr. Ravindran M.P resigned from the Board and consequently as Member of Committee w.e.f August 10, 2017

# Mr. Rajiv Jain was appointed as Member of the Committee w.e.f May 29, 2017 and resigned from the Board and consequently as Chairman of Committee w.e.f

February 23, 2018

% Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently

as Member of the Committee w.e.f May 1, 2018

## Ms. Priyanka Agarwal was appointed as an Independent Director and as a Member of the Committee w.e.f November 29, 2017 and resigned from the Board and

consequently as Chairman of Committee w.e.f May 30, 2018

Mr. Rajiv Jain, the then Chairman of the Audit Committee was not present at the Company’s Previous Annual General Meeting held on September 28, 2017.

The composition, role, terms of reference as well as powers of the Audit Committee are in accordance with the provisions of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The role of the audit committee shall include the following:

(1) oversight of the listed entity’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

(2) recommendation for appointment, remuneration and terms of appointment of auditors of the listed entity;

(3) approval of payment to statutory auditors for any other services rendered by the statutory auditors;

(4) reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the board for approval, with particular reference to:(a) matters required to be included in the director’s responsibility statement to be included in the board’s report in terms of

clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;(b) changes, if any, in accounting policies and practices and reasons for the same;(c) major accounting entries involving estimates based on the exercise of judgment by management;(d) significant adjustments made in the financial statements arising out of audit findings;(e) compliance with listing and other legal requirements relating to financial statements;(f) disclosure of any related party transactions;(g) modified opinion(s) in the draft audit report;

(5) reviewing, with the management, the quarterly financial statements before submission to the Board for approval;

(6) reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter;

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(7) reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;

(8) approval or any subsequent modification of transactions of the listed entity with related parties;

(9) scrutiny of inter-corporate loans and investments;

(10) valuation of undertakings or assets of the listed entity, wherever it is necessary;

(11) evaluation of internal financial controls and risk management systems;

(12) reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

(13) reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

(14) discussion with internal auditors of any significant findings and follow up there on;

(15) reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

(16) discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

(17) to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

(18) to review the functioning of the whistle blower mechanism;

(19) approval of appointment of chief financial officer after assessing the qualifications, experience and background, etc. of the candidate;

(20) Carrying out any other function as is mentioned in the terms of reference of the audit committee.

The audit committee shall mandatorily review the following information:

(1) management discussion and analysis of financial condition and results of operations;

(2) statement of significant related party transactions (as defined by the audit committee), submitted by management;

(3) management letters / letters of internal control weaknesses issued by the statutory auditors;

(4) internal audit reports relating to internal control weaknesses; and

(5) the appointment, removal and terms of remuneration of the internal auditor shall be subject to review by the audit committee.

(6) statement of deviations:(a) quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s)

in terms of Regulation 32(1).(b) annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice in

terms of Regulation 32(7).

The Audit Committee acts as a Link between the Management, the Statutory Auditors, Internal Auditors and the Board of Directors.

The detailed terms of reference of Audit Committee are available on your Company’s website, www.tarajewels.in.

(ii) Nomination and Remuneration Committee The Nomination and Remuneration Committee of the Board of Directors of your Company consists of the following

Members as on the date of this report:

Name of Committee Member DesignationMs. Priyanka Agarwal Chairman (Non-Executive - Independent Director)Ms. Ferns Mallis* Member (Non-Executive - Independent Director)

* Ms. Fern Mallis was appointed as Member of the Committee from May 29, 2017

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The composition of Nomination and Remuneration Committee was not in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (LODR) Regulations, 2015 as on date of this Report due to the resignation of Mr. Rajiv Jain, Independent Director on February 23, 2018. Efforts are being made to appoint an Independent Director at the earliest.

The Company Secretary of the Company acts as the Secretary of the Committee.

The Company’s Nomination and Remuneration Committee met three times during the financial year 2017-18 viz. May 29, 2017, August 10, 2017 and November 29, 2017.

The following table provides the details of attendance at the Nomination and Remuneration Committee meetings held during the financial year 2017-18 :Members

No. of Meetings Held No. of Meetings Attended Category

Mr. Rakesh Kalra* 3 0 Independent DirectorMr. Nikkhil Vaidya** 3 1 Independent DirectorMr. Rajiv Jain# 3 2 Independent DirectorMs. Fern Mallis 3 3 Independent DirectorMs. Priyanka Agarwal% 3 1 Independent Director

* Mr. Rakesh Kalra resigned from the Board and consequently as Chairman of Committee w.e.f May 29, 2017

** Mr. Nikkhil Vaidya resigned from the Board and consequently as Chairman of Committee w.e.f August 4, 2017

# Mr. Rajiv Jain resigned from the Board and consequently as Member of Committee w.e.f February 23, 2018

% Ms. Priyanka Agarwal was appointed as an Independent Director and as Chairman of the Committee w.e.f November 29, 2017 and resigned from the Board and

consequently as Chairman of the Committee w.e.f May 30, 2018

The Board of Directors has on the recommendation of the Nomination and Remuneration Committee adopted the Nomination and Remuneration Policy. A copy of the same has been attached to the Directors Report as Annexure C.

Role of committee shall, inter-alia, include the following:

(1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;

(2) formulation of criteria for evaluation of performance of independent directors and the board of directors;

(3) devising a policy on diversity of board of directors;

(4) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment and removal.

(5) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

Remuneration PolicyThe remuneration of Executive Director/s is decided by the Board of Directors on the recommendation of Nomination and Remuneration Committee and the Board of Directors as per the Company’s remuneration policy within the overall ceiling approved by shareholders.

Remuneration paid to Non-executive DirectorsThe Independent Directors of your Company are paid sitting fees. Your Company pays sitting fees of Rs. 20,000/- per meeting to the Independent Directors for attending the meetings of the Board and Audit Committee Meetings of the Board.

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Details of Remuneration for the Financial Year 2017-18Non-Executive Independent Directors Name of the Director Commission (`) Sitting Fees (`) No of Shares HeldMr. Nikkhil Vaidya NIL 40,000/- NILMr. Rakesh Kalra NIL NIL NILMr. Rajiv Jain NIL 1,20,000/- 300Mr. Shanti Saroop Khindria NIL NIL NILMs. Fern Mallis NIL 80,000/- NILMs. Priyanka Agrawal NIL 40,000/- NIL

Executive / Whole—Time DirectorName of Director Period of Appointment Remuneration

Including Commission (`)No. of Shares Held/

Stock Options *Mr. Rajeev Sheth, Chairman and Managing Director

Reappointed for 3 years w.e.f October 1, 2015

NIL 9607893 as on March 31, 2018

Mr. Vishnu Prakash Garg, Executive Director

Appointed for 3 years w.e.f May 23, 2016 and Resigned w.e.f August 10, 2017

Rs. 5,21,749/- NIL

Mr. Ravindran M.P, Executive Director

Appointed for 3 years w.e.f May 25, 2015 and Resigned w.e.f August 10, 2017

Rs. 10,95,536/- NIL

Mr. Sanjay Sethi Appointed for 3 years w.e.f August 10, 2017 and Resigned w.e.f May 1, 2018

Rs. 54,86,559/- NIL

None of the Directors are entitled to any benefit upon termination of their association with the Company.

* There were no Stock Options granted during Financial Year 2017-2018.

(iii) Stakeholders Relationship Committee The Stakeholders Relationship Committee of the Board of Directors of your Company consists of the following

Members as on the date of this report:

Name of Committee Member DesignationMs. Priyanka Agarwal Chairman (Non-Executive - Independent Director)Ms. Disha Tulsiani* Member (Executive Director)

* Ms. Disha Tulsiani appointed as an Executive Director and as Member of the Committee w.e.f May 29, 2018

The composition of Stakeholders Relationship Committee was not in compliance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 20 of SEBI (LODR) Regulations, 2015 as on date of this Report due to the resignation of Mr. Rajiv Jain, Independent Director on February 23, 2018. Efforts are being made to appoint an Independent Director at the earliest.The Company Secretary of the Company acts as the Secretary of the Committee.

The Company’s Stakeholders Committee met four times during the financial year 2017-18 on May 29, 2017, August 10, 2017, November 29, 2017 and January 25, 2018

The following table provides the details of attendance at the Stakeholders Relationship Committee meetings held during the financial year 2017-18:

Members No. of Meetings Held No. of Meetings Attended CategoryMr. Rajiv Jain* 4 3 Independent DirectorMr. Ravindran M.P** 4 1 Executive DirectorMr. Nikkhil Vaidya# 4 1 Independent DirectorMr. Sanjay Sethi## 4 3 Executive DirectorMs. Priyanka Agarwal% 4 2 Independent Director

# Mr. Nikkhil Vaidya resigned from the Board and consequently as a Member of Committee w.e.f August 4, 2017

** Mr. Ravindran M.P resigned from the Board and consequently as a Member w.e.f August 10, 2017

* Mr. Rajiv Jain resigned from the Board and consequently as Chairman of Committee w.e.f February 23, 2018

## Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently

as Member of the Committee w.e.f May 1, 2018

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% Ms. Priyanka Agarwal was appointed as an Independent Director and as a Member of the Committee w.e.f November 29, 2017 and resigned from the Board and

consequently as Chairman of the Committee w.e.f May 30, 2018

The Company has received one complaint from the investors / shareholders during the financial year ended March 31, 2018 and the same has been resolved by the Company. The terms of reference of the Stakeholders Relationship Committee is as follows:

Inter alia to look into redressal of shareholders and investor complaints, e.g. transfer of shares, non-receipt of balance sheet/ annual report, non-receipt of declared dividend, interest, notices etc.; formulation of procedures in line with the statutory guidelines to ensure speedy disposal of various requests received from shareholders from time to time;

The Securities and Exchange Board of India (SEBI) has commenced processing of investor complaints in a centralised web-based complaints redress system - ‘SCORES’. The salient features of this system are:

• Centralised database of all complaints

• Online movement of complaints to the concerned listed companies

• Online upload of Action Taken Reports (ATRs) by the concerned companies

• Online viewing by investors of actions taken on the complaint and its current status

Your Company has been registered on SCORES and makes every effort to resolve all investor complaints received through SCORES or otherwise within the statutory time limit from the receipt of the complaint.

(iv) Finance CommitteeThe Company’s Board of Directors formed a Finance Committee to look after the routine financial requirements of the Company like opening and closing of bank accounts, borrowing funds up to the limits prescribed by the Board, making investments, etc.

The Finance Committee of the Board of Directors of your Company consists of the following Members as on the date of this report:

Name of Committee Member DesignationMr. Rajeev Sheth Chairman (Managing Director)Ms. Disha Tulsiani* Member (Executive Director)

* Ms. Disha Tulsiani appointed as an Executive Director and as Member of the Committee w.e.f May 29, 2018

The Company Secretary of the Company acts as the Secretary of the Committee.

The Company’s Finance Committee met Five times during the financial year 2017-18 on May 9, 2017, August 10, 2017, October 10, 2017, February 23, 2018 and March 1, 2018

The following table provides the details of attendance at the Finance Committee meetings held during the financial year 2017-18:

Members No. of Meetings Held No. of Meetings Attended CategoryMr. Rajeev Sheth 5 5 Managing DirectorMr. Ravindran M.P* 5 1 Executive DirectorMr. Sanjay Sethi** 5 4 Executive Director

* Mr. Ravindran M.P resigned from the Board and consequently as a Member of the Committee w.e.f August 10, 2017

** Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently

as Member of the Committee w.e.f May 1, 2018.

The terms of reference of the Finance Committee are as follows:

1. Exercise all powers to borrow moneys (otherwise than on debentures) within the limits sanctioned by the Board and do all necessary acts and deeds connected therewith.

2. Borrow monies by way of loan and / or issuing and allotting Bonds / Notes denominated in one or more foreign currencies in international markets, for the purpose of refinancing the existing debt, capital expenditure, general corporate purposes including working capital requirements and possible strategic investments within the limits approved by the Board.

3. To authorize opening, operation, changing of authorized signatories of the Company with respect to all Bank Accounts maintained by the Company, authorization for e-banking banking account/transaction and closing any bank account.

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4. To open and close Demat accounts of the Company for holding securities/ investments owned by the Company. The Members of the Finance Committee will be empowered to make appropriate changes in authorized signatories of the Company for operation of demat accounts.

5. Giving of guarantees / providing corporate guarantee/ providing performance guarantee/ issuing letters of comfort / providing securities within the limits approved by the Board.

6. To authorize officers of the Company for entering into forex transactions and hedging as per approved policy of the Company;

7. Approve opening and operation of Investment Management Accounts with Foreign Banks and appoint them as Agents, establishment of representative / sales offices in or outside India etc.

8. To delegate powers, make changes, in the authorized signatories of the Company with all matters related to Central Excise Act & Rules framed there under, Customs Act & Rules framed there under, Central and State Sales Tax/Value Added Tax & Rules framed there under, Foreign Trade (Development & Regulation) Act & Rules framed there under, the Employees’ Provident Funds and Miscellaneous Provisions Act & Rules framed there under, the Payment of Gratuity Act & Rules framed there under, the Employees’ State Insurance Act & Rules framed there under, issue related to Director General Foreign Trade (DGFT), Foreign Trade Policy & Rules framed there under, Superannuation Scheme or any other authorisation of similar nature;

9. To authorize officers of the Company for entering into general contracts, agreements with relation to operations with Statutory/Regulatory Bodies viz., Electricity Boards, Ports, Railways, Pollution Control Boards, Town & Country Planning Authorities, Municipal Corporations, Panchayats, any other Local Bodies or any other similar bodies/authorities.

10. Exercise all powers to invest the funds of the Company within limits specified by the Board.

11. To delegate powers, constitute committees of authorized officials for the purposes of investing surplus funds temporarily not required for the business of the Company and any other matters incidental thereto.

12. Exercise powers to make loans on behalf on the Company within the limits sanctioned by the Board.

13. Authorize one or more employees of the Company /Group u/s 113 of the Companies Act, 2013 to attend and vote at the meetings of subsidiary, associate Company or any other Company where the Company is a shareholder/debenture-holder, meetings of creditors and meetings convened by the orders of the Court.

14. Carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification as may be applicable.

15. Other transactions or financial issues that the Board may desire to have them reviewed by the Finance Committee.

16. Delegate authorities from time to time to the Executives / Authorised persons to implement the decisions of the Committee.

17. Regularly review and make recommendations to the Board about changes to the charter of the Committee.

(v) Allotment Committee

The Company’s Board of Directors formed an Allotment Committee in February, 2013 to allot shares of the Company, especially pursuant to the ESOP Schemes of the Company.

The Allotment Committee of the Board of Directors of your Company consists of the following Members as on the date of this report:

Name of Committee Member DesignationMr. Rajeev Sheth Chairman (Managing Director)Ms. Disha Tulsiani* Member (Executive Director)

* Ms. Disha Tulsiani appointed as an Executive Director and as Member of the Committee w.e.f May 29, 2018

Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently as Member of the Committee w.e.f May 1, 2018.

The Company Secretary of the Company acts as the Secretary of the Committee.

No Allotment Committee Meeting was held during the year.

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(vi) Compensation Committee

The Company’s Board of Directors formed a Compensation Committee in May 2013 to administer ESOP Scheme 2013.

The Compensation Committee of the Board of Directors of your Company consists of the following Members as on the date of this report:

Name of Committee Member DesignationMr. Rajeev Sheth Chairman (Managing Director)Mr. Pravin Patil GM, Human Resources and AdministrationMs. Disha Tulsiani* Member (Executive Director)

* Ms. Disha Tulsiani appointed as an Executive Director and as Member of the Committee w.e.f May 29, 2018

Mr. Rajiv Jain appointed as Member of the Committee w.e.f May 29, 2017 and resigned from the Board and consequently as Chairman of Committee w.e.f February 23, 2018

Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently as Member of the Committee w.e.f May 1, 2018.

The Company Secretary of the Company acts as the Secretary of the Committee.

No Compensation Committee Meeting was held during the year.

(vii) Management and Administrative Committee

The Company’s Board of Directors formed a Management and Administrative Committee in November, 2012 to look into the day-to-day affairs and businesses of routine nature of the Company.

The Management and Administrative Committee of the Board of Directors of your Company consist of the following Members as on the date of this report:

Name of Committee Member DesignationMr. Rajeev Sheth Chairman (Managing Director)Ms. Disha Tulsiani* Member (Executive Director)

* Ms. Disha Tulsiani appointed as an Executive Director and as Member of the Committee w.e.f May 29, 2018

Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently as Member of the Committee w.e.f May 1, 2018.

No Management and Administration Committee was held during the year.

The Company Secretary of the Company acts as the Secretary of the Committee.

The terms of reference of the Management and Administrative Committee are as follows:

1. To attend to legal and such other administrative matters of the Company;

2. to incorporate subsidiary companies, enter into joint ventures Indian or Foreign, and also to execute Joint venture agreements, Shareholders Agreements, Memorandum of Understanding and such other documents as may be required to form Joint Venture; and to invest in, provide loan, and / or to provide corporate guarantee, security and also to provide financial and such other assistance to such subsidiary companies, joint ventures and other persons including but not limited to body corporate, units, mutual funds, individuals, trust, etc. as may be required from time to time, within the maximum ceiling of Rs.100 crores;

3. to take on lease Land and/ or Building in relation to and for the purpose of carrying on the business of the Company, Subsidiary Companies/Joint Ventures of the Company; to purchase/take on lease Plant and Machinery to be utilized on the Company’s Subsidiary Companies/Joint Ventures;

4. to apply for registration/ license of/for the Company with/from various authorities of any state or Centre including but not limited to Provident Fund Authorities, Pollution Control Board/Authorities, Labour Department Drug and Cosmetic Department, Sales Tax authorities, Income Tax authorities, Shops and Establishment authorities, Customs and Central Excise authorities, the Director General of Foreign Trade and any other local, private or semi-government bodies and to do or perform all acts and deeds relating to such matters;

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5. to apply, in the name of and for the Company for telephone, telex, internet, fax and other telecommunication and electrical/electronic connections and to do all matters relating to such applications;

6. to purchase motor vehicles and other machineries and capital items in the name of the Company for carrying out the business of the Company, either on self-finance or Hire purchase and to authorize officials of the Company to sign documents for registration of motor vehicles and to do all acts and things for the transfer of any such motor vehicles;

7. to authorise employee(s) or others to execute, for and on behalf of the Company, agreements, applications, deeds, documents and any other writings in connection with the business of the Company and, if required, to issue Power of Attorney in favour of such persons for this purpose;

8. to appoint / authorise employee(s), advocates, consultants or others to represent the Company before any Court, Tribunal, Consumer Redressal Forum or any Statutory or other Authority on any matter relating to the operations of the Company or with which the Company is in any way connected or concerned or to represent the Company generally or for any specific purpose or purposes and, if required, issue Power of Attorney in favour of such persons for the purpose;

9. to authorize persons to represent the Company at General Meetings of any Company or cooperative society of which the Company is a shareholder/member;

10. to fix the dates for Closure of the Company’s Register of Members and Transfer Books of Shares and/or fixing Record Dates;

11. inform the Board about the compliance to with applicable laws, adequacy of risk management and internal controls;

12. to authorize affixation of common seal on such documents as may be required.

13. to authorize the closure of non-functioning showrooms / projects of the Company situated at various cities in India.

(viii) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE: The Board has constituted a Corporate Social Responsibility (CSR) Committee consisting of the following members as on

the date of this report:

Name of Committee Member DesignationMr. Rajeev Sheth Chairman (Managing Director)Mr. Fern Mallis Member (Non- Executive Independent Director)Ms. Disha Tulsiani* Member (Executive Director)

* Ms. Disha Tulsiani appointed as an Executive Director and as Member of the Committee w.e.f May 29, 2018

Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently as Member of the Committee w.e.f May 1, 2018

The CSR Policy of the Company is prepared by Committee and approved by the Board and is also placed on the website of the company www.tarajewels.in as per Section 135 (5) of the Companies Act, 2013. Initiatives with respect to it have been described in the Board’s Report.

(ix) RISK MANAGEMENT COMMITTEE: The Board has constituted a Risk Management Committee consisting of following members as on the date of this report:

Name of Committee Member DesignationMs. Disha Tulsiani* Chairman (Executive Director)

* Ms. Disha Tulsiani appointed as an Executive Director and as Member of the Committee w.e.f May 29, 2018

Mr. Rajiv Jain appointed as Member of the Committee w.e.f May 29, 2017 and resigned from the Board and consequently as Member of Committee w.e.f February 23, 2018

Mr. Sanjay Sethi was appointed as an Executive Director and as a Member of the Committee w.e.f August 10, 2017 and resigned from the Board and consequently as Chairman of the Committee w.e.f May 1, 2018

The Committee Shall

• Ensure that all the current and future material risk exposures of the company are identified, assessed, quantified, appropriately mitigated, minimized and managed i.e. to ensure adequate systems for risk management.

• To establish a framework for the company’s risk management process and to ensure its implementation.

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• To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices.

• To assure business growth with financial stability.No Risk Management Committee Meeting was held during the year.

Meeting of Independent DirectorsThe brief meeting of Independent Directors of the Company was held on March 30, 2018. Since the meeting was Video Conference and detailed discussion was held on Meeting held on May 29, 2018 where the directors were physically present without the attendance of Non-Independent Directors and the members of the management, inter alia, to discuss the following:

1. Review the performance of Non independent Directors and the Board of Directors as a whole;

2. Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors.

3. Assess the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Performance Evaluation of DirectorsThe Nomination and Remuneration Committee lays down the criteria for performance evaluation of independent directors and other directors, Board of Directors and Committees of the Board of Directors pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc.

Familiarisation Programme for Independent DirectorThe details of familiarisation Programme conducted for Independent Director have been uploaded on website of Company which is www.tarajewels.in (weblink:www.tarajewels.in/investorrelations/corporategovernance/policies)

Interse Relationship among DirectorsThere are no Interse Relationship among Directors.

D. GENERAL BODY MEETINGS: Details of your Company’s last three Annual General Meetings are presented in the following table:

Nature of Meeting

Date Time Venue Details of Special Resolution(s) passed

16th Annual General Meeting

September 28, 2017 03.00 pm Hotel Suncity Residency, Emerald-1, Basement, 16th Road, Marol MIDC, Andheri (East), Mumbai- 400093

1.Appointment of Mr. Sanjay Sethi as Executive Director

15th Annual General Meeting

September 19, 2016 03.00 pm Hotel Suncity Premiere, Gate 3, Plot No. A-1, off JVLR Road, SEEPZ, SEZ, Andheri (East), Mumbai- 400096.

1. Ratification of reappointment of Mr. Rajeev Sheth as Chairman and Managing Director

2. Ratification of appointment of Mr. Ravindran M.P as Executive Director

3. Appointment of Mr. Vishnu Prakash Garg as Executive Director

14th Annual General Meeting

September 29, 2015 03.00 pm Tribune-I, 6th Floor, Hotel Tunga International, Central Road, M.I.D.C, Andheri (East), Mumbai- 400093

1.Commission to be paid to Independent Directors

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- There was no Extraordinary General Meeting held during the year.- Special Resolutions was passed in 2017-18 through postal ballot for issue of FCCBs and Warrants. Results were

announced on September 7, 2017. However resolutions which were passed were not executed later.

E. SUBSIDIARY COMPANY Your Company does not have any material non-listed Indian Subsidiary Company. Your Company has unlisted subsidiary

companies in USA, Hongkong.

In accordance with Section 129 (3) of the Companies Act, 2013 and Accounting Standard (AS) 21, the Company has prepared the Consolidated Financial Statements of the Company and all its subsidiaries, which forms part of this Annual Report. The Policy for determining material subsidiaries is available on your Company’s website viz. www.tarajewels.in

F. RELATED PARTY TRANSACTIONS All the transactions with related parties are in the ordinary course of business and on arm’s length basis; and there are

material related party transactions or arrangement. Statement is a Part of Board’s Report (AOC 2)

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at Weblink:www.tarajewels.in/investorrelations/corporategovernance/policies

None of the Directors has any pecuniary relationships or transactions vis-à-vis the Company except by way of remuneration paid to the Managing Director, Whole Time Director and sitting fees paid to other Non-Executive Directors. However, the Managing Director has not drawn any remuneration from the Company during the financial year under review.

G. DISCLOSURES (i) Materially Related Party Transactions There have been no materially significant related party transactions, pecuniary transactions or relationships between

your Company and the Directors, management, or their relatives. The other transactions with related parties are disclosed in notes to accounts of financial statement

(ii) Details of Non-Compliance There has been no non-compliance of any legal requirements except as specified elsewhere in this report nor have

there been any strictures imposed by any Stock Exchange or SEBI or any statutory authority on any matter related to Capital Markets during the last three years.

(iii) Corporate Governance Report Your Company has complied with all the mandatory requirements of SEBI (Listing Obligations and Disclosure

Requirements) Regulations 2015 except as specified elsewhere in this report and has also complied with the non-mandatory requirements relating to having unqualified Financial Statements.

(iv) Whistle Blower Policy The Company has adopted Whistle Blower Policy and employees are encouraged to report any contravention or

suggestion for improved working of the Company. The details of the policy is also placed on the website of the company i.e. www.tarajewels.in (weblink:www.tarajewels.in/investorsrelations/corporategovernance/policies)

(v) Management Discussion and Analysis Report The Management Discussion and Analysis Report forms a part of the Annual Report and includes various matters

specified under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

(vi) Certificate on Corporate Governance The Practicing Company Secretary’s certificate relating to Corporate Governance has been annexed to the Directors’

Report and will be sent to the Stock Exchanges at the time of filing the Company’s Annual Report.

(vii) CEO / CFO Certification A certificate from the Managing Director and the Chief Financial Officer, on the Financial Statements and other

matters of the Company for the Financial Year ended March 31, 2018, was placed before the Board. This certificate is given at the end of this report.

(viii) Risk Management The Company has laid down procedures to inform Board Members about the Risk Assessment and minimisation

procedure, which are periodically reviewed by the Board.

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(ix) Reconciliation of Share Capital Audit As stipulated by SEBI, a Reconciliation of Share Capital Audit is carried out by an independent Practicing Company

Secretary on quarterly basis to confirm reconciliation of the issued and listed capital, shares held in dematerialised and physical mode and the status of the register of members.

(x) Accounting Treatment: No treatment different from that prescribed in the Indian Accounting Standards has been followed by the Company.

(xi) Commodity Price Risk or Foreign Exchange Risk and Hedging Activities: The above details have been furnished in notes to accounts of the Financials.

(xii) Proceeds from public issues, rights issues, preferential issues During the year, Company did not raise any funds by way of public issues, rights issues, preferential issues etc.

(xiii) Compliance of Non- Mandatory Requirements1. The Company has only Chairman and Managing Director and there is no Chief Executive Officer in the

Company.2. The Internal Auditors report to the Audit Committee3. The Statutory Financial Statements of Company are qualified.

(xiv) Compliance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to Corporate Governance

The Company has complied with corporate governance requirements specified in Regulation 17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 except as specified elsewhere in this report

H. MEANS OF COMMUNICATION

1. The Company’s corporate website, www.tarajewels.in, consists of Investor Relations section, which provides comprehensive information to the Shareholders.

2. Quarterly and Annual Financial results are published in leading English and Marathi daily newspapers. The newspapers in which it is published in are:

Financial Express- All Editions

Navshakti/Mumbai Lakshwadeep- Marathi

The said results are also made available on the Company’s website, www.tarajewels.in.

3. The Company’s Annual Report is e-mailed/dispatched to all the Shareholders of the Company and also made available on the Company’s website, www.tarajewels.in.

4. The Company’s Shareholding Pattern is filed on a quarterly basis with the Stock Exchanges and also displayed on the Company’s website, www.tarajewels.in.

5. Press Releases and Corporate Presentations are also displayed on the Company’s website, www.tarajewels.in.

I. GENERAL SHAREHOLDERS’ INFORMATION1. Annual General Meeting

Date, Time and Venue September 28, 2018 at 3.00 p.m at Hotel Suncity Residency, Emerald 1, Basement, 16th Road, Marol MIDC, Andheri (East),Mumbai-400093.

ANNUAL REPORT 2018

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2. Financial YearQuarterly results will be declared as per the following tentative schedule:• Financial reporting for the quarter ending

June 30, 2018• Financial reporting for the half year ending

September 30, 2018• Financial reporting for the quarter ending

December 31, 2018• Financial reporting for the year ending

March 31, 2019

First Fortnight of August, 2018

First Fortnight of November, 2018

First Fortnight of February, 2019

Last Fortnight of May, 2019

3. Dates of Book Closure Saturday September 22, 2018 to Friday September 28, 2018 (both days inclusive)

4. Listing on Stock Exchanges Your Company’s shares are listed on:

• BSE Ltd. (BSE) Floor 27, P. J. Towers, Dalal Street, Mumbai – 400 001

• The National Stock Exchange of India Ltd. (NSE), Exchange Plaza, Bandra-Kurla Complex, Bandra (E) Mumbai – 400 051

Your Company has paid the annual listing fee for the financial year 2018-19 to both the Exchanges.

5. Stock Code BSE Ltd.: 534756; the National Stock Exchange of India Ltd.: TARAJEWELS - EQ; ISIN: INE799L01016

6. Registrars and Transfer Agents Link Intime India Pvt. Ltd.(Unit: Tara Jewels Ltd.) C 101, 247 Park, L.B.S Marg,Vikroli (East), Mumbai- 400083

Tel:+91-22-49286000Fax:+91-22-49186060E-mail: rnt.helpdesk@linkintime.co.in

7. Share Transfer System The Company has entrusted the administrative work of share transfers, transmissions, issuance of duplicate certificates, sub-division, demat and re-mat requisite etc., and all tasks related to shareholdings to Link Intime India Private Limited, the Registrars and Share Transfer Agents. If the relevant documents are complete and in order in all respects, the transfer of shares is effected within 30 days and certificates are dispatched to the transferees within 30 days from the date of receipt. The requests for dematerialization of shares are processed by the Registrar and Share Transfer Agents and if all the documents are found to be in order, the same are approved by them within a period of 15 days.

8. Address for Correspondence The Company SecretaryTARA JEWELS LIMITED Plot 29(P) & 30(P), Sub Plot ‘A’, SEEPZ, SEZ, Andheri East, Mumbai 400096 022-6677 4444 investor.care@tarajewels.co.in

9. Dematerialisation of Shares and Liquidity 99.20 % shares of your Company are held in the electronic mode as on March 31, 2018.

10. Investor Complaints to be addressed to Registrars and Transfer Agents or the Company Secretary, at the addresses mentioned earlier.

11. Outstanding GDRs/ ADRs/ Warrants or any Convertible Instruments, Conversion Date and likely impact on equity

The Company has not issued any GDRs/ADRs/Warrants. There were no outstanding convertible warrants, as on March 31, 2018.

12. Commodity Price Risk or Foreign Exchange Risk and Hedging Activities

Mentioned in Financial Statements

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13. Plant Locations Plot No. 29(P) & 30(P), Sub-Plot ‘A’, SEEPZ SEZ Andheri (E), Mumbai – 400096.

Unit No. GJ-7, SDF VII, SEEPZ SEZ Andheri (E), Mumbai – 400096.

Plot No.122, 15th Road, Near IDBI Bank, MIDC, Andheri (E), Mumbai – 400093.

J. UNCLAIMED DIVIDENDPursuant to the provisions of the Companies Act, 2013 read with Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended (the ‘Rules’), the unclaimed/unpaid dividend alongwith the shares pertaining to which dividend remains unclaimed/ unpaid for a period of seven years from the date of transfer to the unpaid dividend account is mandatorily required to be transferred to the Investor Education and Protection Fund (‘IEPF’) established by the Central Government.

Information in respect of each unclaimed dividend when due for transfer to the IEP Fund is given below:

Dividend Reference Date of Declaration Due Date for transfer to IEPF

2013-2014 (Interim Dividend) November 12, 2013 December 17, 2020

Shareholders are requested to get in touch with the Company or its Registrar and Transfer Agents, Link Intime India Private Limited for encashing the unclaimed dividend, if any, standing to the credit of their account.

Details of unclaimed dividend and shareholders whose shares are liable to be transferred to IEPF authority are uploaded on company’s website www.tarajewels.in

There was no amount of unpaid dividend and shares liable to be transferred to IEPF during financial year 2017-18

K. MARKET PRICE DATA FOR 2017-18The market price data, i.e. monthly high and low prices of the Company’s shares on BSE & NSE are given below:

Month BSE NSE

High Price (`) Low Price (`) High Price (`) Low Price (`)

April, 2017 45.90 38.50 45.90 38.15

May, 2017 46.40 28.25 42.75 28.10

June, 2017 31.40 24.35 30.45 25.00

July, 2017 34.70 25.45 34.80 25.10

August, 2017 32.50 24.05 32.35 24.00

September, 2017 31.50 25.75 30.75 26.05

October, 2017 32.00 21.50 33.00 21.50

November, 2017 24.60 17.50 24.60 17.60

December, 2017 20.70 16.25 21.50 16.10

January, 2018 22.00 16.50 21.50 16.50

February, 2018 17.80 12.00 17.35 12.10

March, 2018 15.11 11.71 15.35 11.80

ANNUAL REPORT 2018

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FINANCIALS

L. SHARE PRICE MOVEMENT OF SHARES ON BSE & NSE DURING FY 2017-2018

SHARE PRICE MOMENT OF TARA JEWELS LTD. ON BSE SENSEX 50 VS BSE SENSEX 50

140

120

100

80

60

40

20

0Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Dec-2017 Jan-2018 Feb-2018 Mar-2018

Tara Jewels Ltd. India S&P BSE SENSEX 50

SHARE PRICE MOMENT OF TARA JEWELS LTD. ON NSE VS NSE NIFTY 50

Tara Jewels Ltd. India S&P BSE SENSEX 50

140

120

100

80

60

40

20

0Apr-2017 May-2017 Jun-2017 Jul-2017 Aug-2017 Sep-2017 Oct-2017 Nov-2017 Dec-2017 Jan-2018 Feb-2018 Mar-2018

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M. GREEN INITIATIVE

Your Company is concerned about the environment and utilises natural resources in a sustainable way. The Ministry of Corporate Affairs (MCA), Government of India, through its Circular Nos. 17/2011 and 18/2011, dated April 21, 2011 and April 29, 2011, respectively, has allowed companies to send official documents to their shareholders electronically as a part of its green initiatives in corporate governance.

Recognising the spirit of the circular issued by the MCA, the company has taken an initiative of sending documents like the Notice convening the General Meetings, Audited Financial Statements, Auditor’s Report, Directors’ Report, Corporate Governance Report, etc. by email. Physical copies are sent only to those shareholders whose email addresses are not registered with the Company and for the bounced email cases. Shareholders are requested to register their email id with the Registrar and Share Transfer Agent /concerned depository to enable the company to send the documents in electronic form or inform the company in case they wish to receive the above documents in paper mode.

N. SHAREHOLDING PATTERN, AS ON MARCH 31, 2018

Sr. No.

Category of Shareholders No. ofShareholders

No. of Shares Percentage (%)

1 Promoter and Promoter Group 3 9656118 39.22

2 Individuals 11812 10543046 42.82

3 Bodies Corporate 111 1128283 4.58

4 Financial Institutions/Banks 2 38067 0.15

5 Clearing Members 99 441617 1.79

6 Non-resident Indians (Repat) 158 358550 1.46

7 Directors/Others 2 3300 0.01

8 Non-residents (Non repatriable) 50 102702 0.42

9 Foreign Companies 1 1800000 7.31

10 Hindu Undivided Family 326 551167 2.24

TOTAL 12564 24622850 100.00

O. DISTRIBUTION OF SHAREHOLDING, AS ON MARCH 31, 2018

Sr. No.

Category (Share) No. ofShareholders

TotalShareholders (%)

No. of Shares Percentage (%)

1 1 – 500 9098 70.85 1650537 6.7033

2 501 – 1000 1692 13.18 1428012 5.7995

3 1001 – 2000 1014 7.90 1590100 6.4578

4 2001 – 3000 343 2.67 898297 3.6482

5 3001 – 4000 156 1.21 566605 2.3011

6 4001 – 5000 147 1.14 696385 2.8282

7 5001 – 10000 233 1.81 1681099 6.8274

8 10001 & Above 158 1.23 16111815 65.43

Total 12564 100.00 24622850 100.00

ANNUAL REPORT 2018

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FINANCIALS

ANNEXTURE A

DECLARATION OF COMPLIANCE OF THE COMPANY’S CODE OF CONDUCT

In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges, I hereby declare that Directors and Senior Management of the Company have affirmed compliance with the Code of Conduct as applicable to them for the year ended March 31, 2018.

For and on behalf of TARA JEWELS LIMITED

Sd/- RAJEEV SHETHPlace : Mumbai CHAIRMAN AND MANAGING DIERCTOR Date : May 29, 2018 (DIN: 00266460)

ANNEXURE - BCERTIFICATION BY THE CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) ON FINANCIAL STATEMENTS OF THE COMPANY:(Pursuant to SEBI (Listing Obligations and Disclosure Requirements, 2015)

We, Rajeev Sheth, Chairman & Managing Director and Disha Tulsiani, Chief Financial Officer, of Tara Jewels Limited, certify that:

1. We have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2018 and that to the best of our knowledge and belief:a) These statements do not contain any materially untrue statement nor omit any material fact nor contain statements that

might be misleading andb) These statements together present a true and fair view of the Company’s affairs and are in compliance with the existing

accounting standards, applicable laws and regulations.

2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year, which are fraudulent, illegal or in violation of the Company’s code of conduct;

3. We accept responsibility for establishing and maintaining internal controls, we have evaluated the effectiveness of the internal control systems of the Company and we have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps that we have taken or propose to take to rectify the identified deficiencies; and

4. We have indicated to the auditors and the Audit Committee that:a) there were no significant changes in internal control over financial reporting during the year;b) there were no significant changes in the accounting policies during the year; andc) there were no instances of fraud of which we have become aware and the involvement therein, if any, of the

management or an employee having a significant role in the company’s internal control system over financial reporting.

For and on behalf of TARA JEWELS LIMITED

Place: Mumbai Rajeev Sheth Disha TulsianiDate: May 29, 2018 Chairman and Managing Director Chief Financial Officer DIN: 00266460

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INDEPENDENT AUDITOR’S REPORTTo

The Members of,

Tara Jewels Limited

REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS We have audited the accompanying Standalone Ind AS financial statements of “Tara Jewels Limited” (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (herein referred to as “the financial statements”).

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS1. The Company’s Board of Directors is responsible for the preparation of these Standalone Ind AS financial statements in

terms of the requirements of Section 134(5) of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR’S RESPONSIBILITY2. Our responsibility is to express an opinion on these financial statements based on our audit.

3. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

4. We have conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal financial control relevant to the Company’s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

ANNUAL REPORT 2018

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FINANCIALS

Basis of Qualified Opinion:a) As stated in Note 32, the Company is carrying an inventory of raw material and work in progress amounting to `34,278 lakhs as at

March 31, 2018. Due to the distinctive nature of jewellery industry and impracticability in physical identification of inventory consisting of diamonds, colour stones, etc. in various sizes, cuts, colours, carat and quality, we are unable to obtain sufficient appropriate audit evidence of the extent and condition of inventory. The Company has on the basis of an internal evaluation provided for `32,531 lakhs as write down of inventories. In view of above and in the absence of valuation report from an external valuation expert, we are unable to comment on the realisability of raw material and work in progress amounting to `34,278 lakhs carried in these financial statements.

b) As stated in Note 32, the Company has provided for loss to the extent of `27,278 lakhs in respect of trade receivables. We have sent letters seeking confirmation of balances to debtors aggregating `50,644 lakhs and have received confirmation aggregating `12,035 lakhs only. We have not received confirmation aggregating to `38,608 lakhs. In view of long overdue receivables and absence of confirmations as at year end, we are unable to comment on the recoverability of trade receivables of `29,467 lakhs (net of provisions) carried in these financial statements.

c) The Company’s Internal Controls and compliances with policies and procedures needs to be strengthened with respect to recoverability of receivables, valuation of Inventories and timely payment of statutory dues.

QUALIFIED OPINIONIn our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the ‘Basis of qualified opinion’ paragraph above, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS , of the state of affairs of the Company as at March 31, 2018, and its financial performance including other comprehensive income, the changes in equity and its cash flows for the year then ended.

Emphasis of Matter:a) We draw attention to Note 43 wherein Management has prepared Standalone Ind AS financial statements on going concern basis in

spite of :

i) The company has reported loss after tax of `72,777 lakhs during the year and net liabilities exceeds net assets by `18,180 lakhs;

ii) Lenders declared the company’s Assets as Non-Performing Assets.

The management is working towards finding a workable solution to resolve its financial challenges with the lenders and to continue its business as a going concern. Accordingly, the management considers it appropriate to prepare these financial statements on a going concern basis.

In view of above, the situation indicates the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern.

b) We draw attention to Note 44 wherein the Company is in the process of obtaining necessary approvals for netting-off of export receivables against import payments from same parties and extension of time period for export trade receivables not realised within the credit period.

c) The Company is irregular in depositing its statutory dues such as Provident Fund, ESIC, Professional Tax and Income Tax Deducted at Source on timely basis, due to which the company may be liable to penal consequences under the respective laws.

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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS7. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in

terms of sub-section (11) of Section 143 of the Act, we give in the Annexure ‘A’, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

8. As required by Section143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid Ind AS financial statements;

b) Except for the effects of the matter described in the ‘Basis of qualified opinion’ paragraph above, in our opinion, proper books of account as required by law relating to preparation of the aforesaid Ind AS financial statements have been kept so far as it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of financial statements;

d) Except for the effects of the matter described in the ‘Basis of qualified opinion’ paragraph above, in our opinion, the aforesaid Ind AS financial statements comply with the Indian accounting standards specified under Section 133 of the Act, read with relevant rules issued thereunder;

e) On the basis of written representations received from the directors as on March 31, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in ‘Annexure B’; and

g) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to Note 36 to the financial statement.

ii) The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For GMJ & CoChartered Accountants

Firm No. 103429W

(CA Sanjeev Maheshwari) M. No. 038755

Place: MumbaiDate : May 29, 2018

ANNUAL REPORT 2018

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FINANCIALS

ANNEXURE ‘A’ TO THE INDEPENDENT AUDITOR’S REPORT(Referred to in paragraph 7 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

i. (a) The company has maintained proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment.

(b) The Company has a regular programme of physical verification of its Property, Plant and Equipment by which it is verified in a phased manner over a period of three years, which in our opinion is reasonable, having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such physical verification.

(c) According to the information and explanation given to us and on the basis of our verification, title deeds of all immovable properties (Flats) are held in the name of the company.

ii. According to the information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the management and discrepancies noticed on such physical verification during the year, have been properly dealt with in the books of account.

However, due to the distinctive nature of jewellery industry and impracticability in physical identification of inventory consisting of diamonds, colour stones, etc. in various sizes, cuts, colours, carat and quality, we are unable to obtain sufficient appropriate audit evidence of the extent and condition of inventory.

iii. The Company has not granted any loan, secured or unsecured, to Companies, Firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore, the provisions of Clause (iii)(a), (iii)(b) and (iii)(c) of paragraph 3 of the Order are not applicable to the Company.

iv. In our opinion, on the basis of information and explanations given to us, during the year, the company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of Loans, Investments, Guarantees and Securities, wherever applicable.

v. In our opinion, on the basis of information and explanations given to us, the company has not accepted any deposits from public within the meaning of Section 73 to 76 of the Companies Act, 2013 and the rules framed there under.

vi. On the basis of information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 148(1) of the Companies Act, 2013 for any of the goods dealt by the Company and for any of the services rendered by the Company. Therefore, the provisions of clause (vi) of paragraph 3 of the Order are not applicable to the Company.

vii. (a) On the basis of examination of records and documents and the information and explanations given to us, in respect of undisputed statutory dues including provident fund, employees’ state insurance, income tax, wealth tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues have not been regularly deposited with the appropriate authorities and there have been delays in a large number of cases.

The undisputed amounts payable in respect of the aforesaid dues which were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable,are listed below :

Name of Statute Nature of Dues

Amount (`In Lakhs)

Period to which the amount relates

Due Date Date of Payment

Income Tax Act, 1961

Income Tax* 1,325.50 F.Y. 2014-15 15.03.2015 Paid `100 lakhs till May

10, 2018

Income Tax* 769.22 F.Y. 2015-16 15.03.2016 Not Paid

Tax Deducted at Source

1.02 September, 2017 07.10.2017 Not Paid

Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975

Professional Tax 18.83 January, 2017 to September, 2017

30.02.2017 to 30.10.2017

Not Paid

The Employees’ Provident Fund And Miscellaneous Provisions Act, 1952

Provident Fund 175.56 August, 2016 to September, 2017

15.09.2016 to 15.10.2017

Not Paid

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Name of Statute Nature of Dues

Amount (`In Lakhs)

Period to which the amount relates

Due Date Date of Payment

Central Excise Act, 1944 Excise Duty 61.79 September, 2016 to June, 2017

10.10.2016 to 10.07.2017

Not Paid

The Employees’ State Insurance Act, 1948

ESIC 7.11 August, 2017 21.09.2017 18.05.2018

6.59 September, 2017 21.10.2017 Not Paid

* Exclusive of interest

(b) On the basis of examination of records and documents and the information and explanations given to us, the following are the particulars of the dues that have not been deposited on the account of dispute.

Name of the Statute Nature of the Dues

Amount (` in Lakhs)

Forum where dispute is pending

Financial year to which the amount relates

Customs Act, 1962 Custom Duty 14.18 Commissioner of Customs (Appeals), Mumbai

1995-1996

Customs Act, 1962 Custom Duty 3.77 Assistant Commissioner of Customs, Mumbai

1996-1997

Customs Act, 1962 Custom Duty 1.05 Custom, Excise and Gold (Control) Appellate Tribunal

2004-2005

Income Tax Act, 1961 Income Tax 565.00 CIT Appeals, ITAT and High Court 2001-2014

Finance Act, 1994 Service Tax 67.23 Joint Commissioner of Service Tax 2006-2008

viii. On the basis of examination of records and documents and the information and explanations given to us, the Company has defaulted in repayment of dues to Financial Institutions and banks during the year under audit. There are no loans or borrowings from the Government or by way of debentures. The period and amount of defaults are as under:

(` In Lakhs)

Name of Lender Amount of Default Period of Default

State Bank of India 8,529.22 142 - 271 Days

Punjab National Bank 8,026.04 137 - 170 Days

Union Bank of India 5,990.42 148 - 194 Days

Bank of India 4,494.95 137 - 253 Days

State Bank of Patiala 1,221.24 22 - 337 Days

Vijaya Bank 2,038.59 342 - 393 Days

Axis Bank Ltd 2,812.90 130 - 260 Days

IDBI Bank 1,287.93 373 - 423 Days

Central bank of India 2,926.41 280 - 453 Days

Corporation Bank 2,436.00 256 - 258 Days

Canara bank 3,498.11 36 - 260 Days

Exim Bank 2,692.79 351 - 362 Days

Daimler Financial Services 6.21 30- 60 Days

*Borrowings has been categorised as NPA by Consortium of Bank as on March 31, 2018.

ix. On the basis of examination of records and documents and the information and explanations given to us during the year the company has not raised money by way of initial public offer or further public offer and the term loans have been applied for the purposes for which they were obtained.

ANNUAL REPORT 2018

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FINANCIALS

x. On the basis of the information and explanations given to us, no material fraud by the company or on the company by its officers or employees has been noticed or reported during the year.

xi. On the basis of examination of records and documents and the information and explanations given to us, managerial remuneration has been paid or provided by the company in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act , 2013.

xii. As the company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of clause (xii) of

paragraph 3 of the Order are not applicable to the Company.

xiii. On the basis of the information and explanation given to us all transactions with the related parties are in compliance with Section 188 of the Companies Act, 2013. However, as the Audit Committee was not constituted for the whole year, some of the transactions have not been approved under section 177 of Companies Act, 2013. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures.

xiv. On the basis of examination of records and documents and the information and explanations given to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Therefore, the provisions of clause (xiv) of paragraph 3 of the Order are not applicable to the Company.

xv. On the basis of examination of records and documents and the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him under the provisions of Section 192 of Companies Act, 2013.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For GMJ & CoChartered Accountants

Firm No. 103429W

(CA Sanjeev Maheshwari) M. No. 038755

Place: MumbaiDate : May 29, 2018

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ANNEXURE – ‘B’ TO THE INDEPENDENT AUDITOR’S REPORT(Report on the Internal Financial Controls under Clause (f) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”))

We have audited the internal financial controls over financial reporting of “Tara Jewels Limited” (“the Company”) as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITY Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTINGA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

QUALIFIED OPINION

According to the information and explanation given to us and based on our audit, the following material weaknesses have been identified as at 31st March, 2018.

a) The Company’s Internal Controls and compliances with policies and procedures needs to be strengthened with respect to recoverability of receivables, valuation of Inventories and timely payment of statutory dues.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the effects / possible effects of the material weakness described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting as of March 31, 2018 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weakness identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of the Financial Statements of the company as of March 31, 2018 and these material weakness do not affect our opinion on the Financial Statements of the Company.

For GMJ & CoChartered Accountants

Firm No. 103429W

(CA Sanjeev Maheshwari) M. No. 038755

Place: MumbaiDate : May 29, 2018

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TARA JEWELS LIMITED

BALANCE SHEETAS AT MARCH 31, 2018

(` in Lakhs)Particulars Notes As at

March 31, 2018As at

March 31, 2017 ASSETS Non-Current Assets Property, Plant and Equipment 4 7,972.80 10,496.09 Capital Work-in-Progress - - Intangible Assets 5 136.75 224.33 Financial Assets

Investments 6 1,720.90 1,729.48 Other Financial Assets 8 45.77 51.29

Deferred Tax Asset (Net) 14 - 909.51 Other Non-Current Assets 13 266.07 234.69

10,142.29 13,645.39 Current assets Inventories 9 34,559.71 46,630.44 Financial Assets

Trade Receivables 10 29,467.84 79,453.47 Cash and Cash Equivalents 11 132.06 69.37 Other Bank Balances 12 3,644.68 6,869.18 Loans 7 24.08 37.56 Other Financial Assets 8 50.57 96.51

Other Current Assets 13 615.38 1,439.37 68,494.32 1,34,595.90

TOTAL 78,636.61 1,48,241.29 EQUITY AND LIABILITIES Equity Equity Share capital 15 2,462.29 2,462.29 Other Equity 16 (20,642.71) 51,705.72

(18,180.42) 54,168.01 Liabilities Non Current Liabilities Financial Liabilities

Borrowings 17 48.71 79.68 Provisions 21 422.27 435.35

470.98 515.03 Current Liabilities Financial Liabilities

Borrowings 17 70,077.46 55,869.32 Trade Payables 19

Micro, Small and Medium Enterprises 0.22 - Others 13,474.18 32,071.90

Other Financial Liabilities 18 7,295.83 655.14 Other Current Liabilities 20 2,169.99 2,002.46 Provisions 21 55.81 22.29 Current Tax Liabilities (Net) 22 3,272.56 2,937.14

96,346.05 93,558.25 TOTAL 78,636.61 1,48,241.29

Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) [FCS : 8479]

Place : MumbaiDated : 29.05.2018

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STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED MARCH 31, 2018

(` in Lakhs)Particulars Notes Year ended

March 31, 2018 Year ended

March 31, 2017REVENUERevenue from operations (net) 23 43,545.17 1,19,063.61 Other income 24 689.75 636.62 Total Revenue 44,234.92 1,19,700.23 EXPENSESCost of materials consumed 25 25,292.28 96,979.97 Purchases of stock-in-trade 26 78.27 2,571.20 Changes in inventories of finished goods, work-in-process and Stock-in-Trade 27 12,082.17 4,172.17 Excise duty 3.99 115.61 Employee benefits expense 28 2,112.43 2,829.53 Finance costs 29 7,754.14 7,584.00 Depreciation and amortization expense 30 1,592.98 2,217.22 Other expenses 31 6,877.05 4,626.13 Total Expenses 55,793.31 1,21,095.83 Profit before exceptional item and tax (11,558.39) (1,395.60)Exceptional items 32 59,809.72 - Profit/(loss) before tax (71,368.11) (1,395.60)Tax expense:Current tax - -Deferred tax 909.51 (213.53)

909.51 (213.53)Profit/(loss) for the year (72,277.62) (1,182.07)OTHER COMPREHENSIVE INCOMEA. Other Comprehensive income not to be reclassified to profit and

loss in subsequent periods:Remeasurement of gains (losses) on defined benefit plans (66.79) (62.37)Income tax effect - 20.62 Equity Instruments through Other Comprehensive Income (4.32) 5.15 Income tax effect - -

Other Comprehensive income for the year, net of tax (71.11) (36.60)Total Comprehensive Income for the year, net of tax (72,348.73) (1,218.67)Earnings / (Loss) per Equity Share 33

Basic (293.54) (4.80)Dilluted (293.54) (4.80)

Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) [FCS : 8479]

Place : MumbaiDated : 29.05.2018

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STATEMENT OF CASH FLOWSFOR THE YEAR ENDED MARCH 31, 2018

(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Profit/(Loss) before income tax from: (71,368.11) (1,395.61)

Adjustments for:

Depreciation and amortisation expense 1,592.98 2,217.22

Employee share-based payment expense 0.30 4.47

Loss on disposal of property, plant and equipment (1.40) 61.76

Fixed Assets written off 1,037.37 43.48

Financial guarantees income (182.86) (178.07)

Financial guarantees expense 146.42 147.60

Gain(Loss)on sale of investments (0.25) (13.71)

Bad debts written off 525.17 981.58

Rent Income (59.35) (51.70)

Allowance for doubtful debts 27,278.04 (231.72)

Write down of Inventory to NRV 32,531.68 -

Changes in fair value of financial assets at fair value through profit or loss (194.35) 181.43

Dividend and interest income classified as investing cash flows (251.54) (392.70)

Finance costs 7,116.67 6,758.10

Operating profit before working capital adjustment (1,829.24) 8,132.13

Change in operating assets and liabilities:

(Increase)/Decrease in trade receivables 22,182.43 (8,755.22)

(Increase)/Decrease in inventories (20,460.95) 6,359.29

Increase/(Decrease) in trade payables (18,597.50) 1,924.54

(Increase)/Decrease in ST loans 13.48 (10.36)

(Increase)/Decrease in other financial assets 6.99 140.58

(Increase)/Decrease in other assets 823.13 (94.90)

(Increase)/decrease in other bank balances 3,224.50 73.42

Increase/(decrease) in other financial liabilities 5,236.29 54.71

Increase/(Decrease) in provisions and other liabilities 129.24 370.08

Cash generated from operations (9,271.63) 8,194.26

Less: Income taxes paid (31.09) (342.21)

Net cash inflow from operating activities (A) (9,302.72) 7,852.05

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for property, plant and equipment (including intangible assets) (30.44) (1,134.00)

Payments for purchase of investments (0.02) (81.50)

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(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Proceeds from sale of investments 40.10 456.21

Proceeds from sale of property, plant and equipment 4.31 27.60

Dividends received 0.02 0.08

Interest received 295.99 376.01

Rent Received 59.35 51.70

Net cash outflow from investing activities (B) 369.32 (303.90)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings 14,162.48 (1,563.59)

Interest paid (5,166.37) (6,117.95)

Net cash inflow (outflow) from financing activities (C) 8,996.11 (7,681.54)

Net increase (decrease) in cash and cash equivalents (A + B + C) 62.68 (133.38)

Cash and Cash Equivalents at the beginning of the financial year 69.37 202.76

Cash and Cash Equivalents at end of the year 132.06 69.37

Reconciliation of cash and cash equivalents as per the cash flow statement:

Cash and cash equivalents as per above comprise of the following:

Balances with banks 123.45 65.79

Cash on hand 8.60 3.58

Balances per statement of cash flows 132.06 69.37

Figures under bracket represent outflows.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) [FCS : 8479]

Place : MumbaiDated : 29.05.2018

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STATEMENT OF CHANGES IN EQUITY

AS AT MARCH 31, 2018

A Equity Share Capital(` in Lakhs)

Particulars Balance at the Beginning of

the year

Changes in Equity share capital

during the year

Balance at the end of the

yearMarch 31, 2017Numbers 2,46,22,850 - 2,46,22,850 Amount 2,462.29 - 2,462.29 March 31, 2018Numbers 2,46,22,850 - 2,46,22,850 Amount 2,462.29 - 2,462.29

B Other Equity(` in Lakhs)

Particulars

Reserves and Surplus

TotalSecurities Premium Reserve

General Reserve

Share Based Payment Reserve

Retained Earnings

Equity Instruments through OCI

As at April 1, 2016 16,790.63 1,266.00 34.73 34,822.34 6.22 52,919.92 Profit for the year (1,182.07) (1,182.07)Other comprehensive income (41.74) 5.15 (36.59)Total comprehensive income for the year

- - - (1,223.82) 5.15 (1,218.66)

Transfer to General Reserve - -Utilisation of SEZ Reinvestment allowance reserve

- -

Lapse of share options 1.89 (1.89)Share based payments 4.47 4.47 As at March 31, 2017 16,790.63 1,267.89 37.31 33,598.52 11.38 51,705.72Loss for the year (72,277.62) (72,277.62)Other comprehensive income (66.79) (4.32) (71.11)Total comprehensive income for the year

- - - (72,344.42) (4.32) (72,348.73)

Lapse of share options (37.61) 37.61 -Share based payments 0.30 0.30As at March 31, 2018 16,790.63 1,267.89 - (38,708.29) 7.06 (20,642.71)

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) [FCS : 8479]

Place : MumbaiDated : 29.05.2018

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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018

1 CORPORATE INFORMATION Tara Jewels Limited (‘the Company’) is a public Company domiciled in India and is incorporated under the provisions of the

Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Plot 122, 15th Road , Near IDBI Bank, MIDC, Andheri (E), Mumbai 400093.

The Company is in the business of exports and domestic sales of fine jewellery. The Company has been in the jewellery exports business since inception and has started the retail jewellery business in 2010. The Company is an integrated player in the jewellery industry with experience ranging from designing to retailing of jewellery. The Company’s business can be divided into three operations namely, manufacturing, exporting and retailing. The portfolio of products includes gold, platinum and silver jewellery with or without studded precious and semi-precious stones. The Company’s products have presence across different price points and cater to customers across high-end, mid-market and value market segments.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on May 29, 2018.

2 SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind

AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, under the historical cost convention on the accrual basis except for derivative financial instruments and certain financial assets and liabilities which are measured at fair value.

2.2 Summary of significant accounting policies (a) Revenue recognition

(i) Sale of goods Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the

goods have passed to the buyer. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates.

(ii) Rendering of services Service income is recognised as per terms of contract with customers when the related services are performed.

(iii) Interest income Income from Interest on fixed deposits is recognised using effective interest rate method.

(iv) Dividend income Revenue is recognised when the Company’s right to receive the payment is established, which is generally

when shareholders approve the dividend.

(v) Rental income Rental income arising from operating leases is accounted for on a straight line basis over the lease terms unless

the payments are structured to increase in line with expected general inflation to compensate for the Company’s expected inflationary cost increases and is included in other income in the statement of profit or loss.

(b) Foreign currency translation

(i) Functional and presentation currency Items included in the financial statements of the entity are measured using the currency of the primary

economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Indian rupee (`), which is entity’s functional and presentation currency.

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(ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates

of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.

Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction.

(c) Taxes

(i) Current income tax Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it

relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.

Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

(ii) Deferred tax Deferred tax assets and liabilities are recognized using the liability method for all temporary differences

arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been

enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date.

A deferred tax asset is recognized to the extent that it is probable that future taxable profit will be available

against which the deductible temporary differences and tax losses can be utilized. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to

set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

(d) Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

(i) As a lessee Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as

lessee are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.

(ii) As a lessor Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line

basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.

(e) Impairment of non financial assets

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an

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individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

(f) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

(g) Inventories

Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present

location and condition. Cost is determined on weighted average basis. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of

manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on weighted average basis.

Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present

location and condition. Cost is determined on first in, first out basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion

and the estimated costs necessary to make the sale.

(h) Financial instruments

(i) Initial recognition The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual

provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

(ii) Subsequent measurement

a. Non-derivative financial instruments (i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.

(ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.

(iii) Financial assets at fair value through profit or loss A financial asset which is not classified in any of the above categories are subsequently fair valued through

profit or loss. (iv) Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial

liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109.

Gains or losses on liabilities held for trading are recognised in the profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as

such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. Financial liabilities at amortised cost Financial liabilities are subsequently carried at amortized cost using the effective interest rate method. For

trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Financial guarantee contracts Financial guarantee contracts issued by the company are those contracts that require a payment to be made

to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

(v) Investment in subsidiaries Investment in subsidiaries is carried at cost in the financial statements.

b. Derivative financial instruments The Company uses derivative financial instruments, such as forward currency contracts to hedge its foreign

currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.

(iii) Derecognition of financial instruments

The company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

(iv) Impairment of financial assets The company assesses on a forward looking basis the expected credit losses associated with its assets carried

at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 40 details how the Company determines whether there has been a significant increase in credit risk

For trade receivables only, the company applies the simplified approach permitted by Ind AS 109 Financial

Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

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(v) Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there

is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

(i) Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation. Cost directly attributable to the acquisition are capitalised until the property, plant and equipment are ready for use, as intended by management. The Company depreciates property, plant and equipment over their estimated useful lives as specified in Schedule II of the Companies Act, 2013 using the written down value method. The estimated useful lives of assets are as follows:

Buildings 30 Years

Plant and Equipments* 8-15 Years

Furniture and Fixtures 10 Years

Vehicles 8 - 10 Years

Air- Conditioners 5 - 15 Years

Office Equipments 5 Years

Computer Hardwares 3 - 6 Years

Factory Equipments 15 Years

Flats 60 Years

Electric Installations 10 Years

Building on leasehold land and leasehold improvements are amortised on straight line basis over the primary period

of lease. *Based on technical evaluation, the management believes that the useful lives for few plant and machinery best

represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.

The residual values are not more than 5% of the original cost of the asset. The Useful lives and residual values are

reviewed periodically, including at each financial year end. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future

economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the Statement of Profit and Loss when incurred.

The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.

(j) Intangible assets

Intangible assets includes computer software, are stated at cost less accumulated amortization. Computer software are amortized over estimated useful lives of five years on a straight-line basis, from the date that they are available for use. Amortization methods and useful lives are reviewed periodically including at each financial year end.

(k) Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

(l) Provisions, Contingent Liabilities and Commitments A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation

that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

- 108 -

STANDALONE

TARA JEWELS LIMITED

Contingent liability is disclosed in the case of:

- a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

- a present obligation arising from past events, when no reliable estimate is possible;

- a present obligation arising from past events, unless the probability of outflow of resources is remote.

Commitments include the amount of purchase order(net of advances) issued to parties for completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

(m) Employee benefits (i) Short-term obligations Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly

within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

(ii) Post-employment obligations

The company operates the following post-employment schemes:

(a) defined benefit plans such as gratuity and

(b) defined contribution plans such as provident fund.

(a) Gratuity The company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan’) covering eligible

employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method. The Company has taken a Group Gratuity Policy with Life Insurance Corporation of India.

The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an liability. Gains and losses through remeasurements of the net defined benefit liability are recognized in other comprehensive income. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognized in net profit in the Statement of Profit and Loss.

(b) Provident Fund The Company pays provident fund contributions to publicly administered provident funds as per local

regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due.

(iii) Other long-term employee benefit obligations Compensated absences The expected cost of accumulating compensated absences is determined by actuarial valuation

performed by an independent actuary at each balance sheet date using projected unit credit method on the additional amount expected to be paid/availed as a result of the unused entitlement that has accumulated at the balance sheet date.

The obligations are presented as current liabilities in the balance sheet if the entity does not have an

unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

ANNUAL REPORT 2018

- 109 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

(iv) Share-based payments Share-based compensation benefits are provided to employees via the Employee Stock Option Plan.

The Company recognizes compensation expense relating to share-based payments in net profit using fair-value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of options is charged to expense on a straight-line basis over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

(v) Bonus Plans The company recognises a liability and an expense for bonuses. The company recognises a provision

where contractually obliged or where there is a past practice that has created a constructive obligation.

(n) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided the Chief

Operating Decision Maker (CODM). The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been notified as the Board of Directors that makes strategic decisions.

(o) Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the group are segregated based on available information.

(p) Current/non current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle

- Held primarily for the purpose of trading

- Expected to be realised within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current. A liability is current when:

- It is expected to be settled in normal operating cycle

- It is held primarily for the purpose of trading

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The company has identified twelve months as its operating cycle.

(q) Earnings per share Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the

company by the weighted average number of equity shares outstanding during the year.

Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders, after income tax effect of interest and other financing costs associated with dilutive potential equity, by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

- 110 -

STANDALONE

TARA JEWELS LIMITED

3 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments

and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed below. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

The areas involving critical accounting estimates or judgments are:

- Estimation of current tax expense and payable – Note 14

- Estimated fair value of unlisted securities – Note 39

- Estimated useful life of intangible asset – Note 5

- Estimated useful life of tangible asset – Note 4

- Estimation of defined benefit obligation – Note 34

- Recognition of deferred tax assets for carried forward tax losses – Note 14

- Impairment of trade receivables and other financial assets – Note 40

- Impairment of non-financial assets – Note 40

ANNUAL REPORT 2018

- 111 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

4.

PRO

PERT

Y, P

LAN

T A

ND

EQ

UIP

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T

(` in

Lak

hs)

Part

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187

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ition

s du

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-17

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- -

- -

0.2

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Add

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es:

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as

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ag

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any

Re

fer

to N

ote

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or in

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pro

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lant

and

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ent

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ged

as s

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Re

fer

to N

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or d

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con

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ents

for

the

acq

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tion

of p

rope

rty,

pla

nt a

nd e

quip

men

t.

- 112 -

STANDALONE

TARA JEWELS LIMITED

5. INTANGIBLE ASSETS (` in Lakhs)

Particulars Computer Software

Total

GROSS CARRYING VALUE

As at April 1, 2016 249.84 249.84

Additions during 2016-17 143.45 143.45

Disposals during 2016-17 1.86 1.86

As at March 31, 2017 391.42 391.42

Additions during 2017-18 - -

Disposals during 2017-18 - -

As at March 31, 2018 391.42 391.42

ACCUMULATED DEPRECIATION/IMPAIRMENT

As at April 1, 2016 84.09 84.09

Depreciation for the year 2016-17 84.87 84.87

Deductions/Adjustments during 2016-17 1.86 1.86

As at March 31, 2017 167.09 167.09

Depreciation for the year 2017-18 87.58 87.58

Deductions/Adjustments during 2017-18 - -

As at March 31, 2018 254.67 254.67

Net Carrying value as at March 31, 2018 136.75 136.75

Net Carrying value as at March 31, 2017 224.33 224.33

Net Carrying value as at April 1, 2016 165.75 165.75

6. INVESTMENTS (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Non Current Investments

Equity Instruments of Subsidiaries 1,502.92 1,466.48

Other Equity Instruments 9.87 14.19

Mutual Funds 208.11 248.81

Total 1,720.90 1,729.48

Details of Non Current Investments (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

(1) Investments carried at Cost

Investments in Equity Instruments of Subsidiaries

Unquoted

Tara (Hong Kong) Limited 655,590 Equity shares of face value HK$ 10 each

292.49 281.62

Tara Jewels Holding Inc. 2,000 Equity Shares of Face Value US$ 0.01 each

1,210.44 1,184.86

1,502.92 1,466.48

ANNUAL REPORT 2018

- 113 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

(2) Investments designated at fair value through Other Comprehensive Income

Investments in Equity Instruments

Unquoted

Divya Jewels International Pvt. Ltd. 5,000 Equity Shares of Face Value `10 each

1.75 1.75

Quoted -

Punjab National Bank 7,000 Equity Shares of Face Value `2 each

6.67 10.49

Bank of India 1,400 Equity Shares of Face Value `10 each

1.45 1.95

9.87 14.19

(3) Investments carried at fair value through Profit and Loss

Investments in Mutual Funds

Quoted

SBI MF Magnum Balanced Fund - Regular Plan Growth NIL (Previous Year: 7,367.763) Units of face value of `10 each

- 8.04

SBI Premier Liquid Fund - Regular Fund Daily Dividend NIL (Previous Year: 32.254) Units of Face Value of `10 each

- 0.32

Axis Liquid Fund - Daily Dividend NIL (Previous Year: 146.40) Units of Face Value of `1000 each

- 1.47

TF2GR-Union KBC Trigger Fund Series 2 - Regular Plan Growth NIL (Previous Year: 299,990) Units of Face Value of `10 each

- 33.78

Principal Tax Savings Fund - Regular Plan Growth 6,768.429 (Previous Year: 6,768.429) Units of face value of `10 each

13.85 11.90

CP7G-Union Capital Protection Oriented Fund - Series 7 - Regular Plan Growth 1,82,172 (Previous Year: 1,82,172) Units of face value of `10 each

19.26 18.30

Unquoted -

1,750 units of face value `10,000 each of IIMCL-Emerging India Opportunities Fund 175.00 175.00

208.11 248.81

Total 1,720.90 1,729.48

Details of Quoted and Unquoted Investments (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Aggregate amount of quoted investments (Market Value `41.23 Lakhs (Previous Year : `86.25 Lakhs))

41.23 86.25

Aggregate amount of unquoted investments 1,679.67 1,643.23

Aggregate amount of impairment in the value of investments - -

Total 1,720.90 1,729.48

- 114 -

STANDALONE

TARA JEWELS LIMITED

Carrying value of Investments (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Investments carried at fair value through other comprehensive income 9.87 14.19

Investments carried at fair value through profit and loss 208.11 248.81

Investments carried at cost 1,502.92 1,466.48

Total 1,720.90 1,729.48

7. LOANS (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current

Unsecured, considered good

Loans to Employees 24.08 37.56

Total 24.08 37.56

8. OTHER FINANCIAL ASSETS (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Non Current

Financial assets carried at amortised cost

Security Deposits 45.77 51.29

Total 45.77 51.29

Current

Financial assets carried at amortised cost

Accrued Interest on fixed deposits 31.26 75.73

Other financial assets* 19.31 20.79

Total 50.57 96.51

* Includes claims Receivable.

9. INVENTORIES (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

(Valued at lower of Cost and Net Realisable value)

Raw materials [including goods-in-transit: NIL (March 31, 2017: `27.16 Lakhs)]

6,773.15 6,734.86

Work-in-process 27,504.89 32,376.09

Finished goods [including goods-in-transit: `23.77 Lakhs (March 31, 2017: `NIL)]

197.59 7,408.31

Stock-in-trade - 0.26

Stores, consumables and packing material 84.06 110.92

Total 34,559.71 46,630.44

ANNUAL REPORT 2018

- 115 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

10. TRADE RECEIVABLES (` in Lakhs) Particulars As at

March 31, 2018As at

March 31, 2017 CurrentUnsecuredConsidered good 29,467.84 79,453.47 Considered doubtful 28,144.74 866.70

57,612.58 80,320.17 Less: Allowances for doubtful debts 28,144.74 866.70

29,467.84 79,453.47

Includes Receivables from related parties (Refer Note 37)Trade or other receivables due from Directors or other officers of the company either severally or jointly with any other person amounted to `NIl (Previous year `NIl)

Trade or other receivables due from firms or private companies respectively in which any director is a partner, director or member amounted to `Nil (Previous year `Nil)

11. CASH AND CASH EQUIVALENTS (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Balances with banks: - in current accounts 123.45 65.79 Cash on hand 8.60 3.58 Total 132.06 69.37

12. OTHER BANK BALANCES (` in Lakhs) Particulars As at

March 31, 2018As at

March 31, 2017 Deposits with banks to the extent held as margin money 666.35 3,593.32 Deposits with banks as security against borrowings 2,978.33 3,275.86 Total 3,644.68 6,869.18

13. OTHER ASSETS (` in Lakhs) Particulars As at

March 31, 2018As at

March 31, 2017 Non Current Capital Advances 234.69 234.69 Others

- Payment of Tax 31.38 - Total 266.07 234.69 Current Advances other than Capital advances - Other Advances * 128.01 244.34 Others - - Prepaid expenses 51.83 413.03 - Balances with Statutory, Government Authorities 435.48 781.74 - Other current assets 0.06 0.26 Total 615.38 1,439.37

* includes advances paid to creditors

- 116 -

STANDALONE

TARA JEWELS LIMITED

14. INCOME TAX (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Deferred tax relates to the following:

Accelerated Depreciation for tax purposes 556.29 190.17

Gratuity 109.47 105.95

Leave Encashment 39.70 45.35

Disallowance under Section 43B 60.54 -

Investment in Subsidiaries (15.44) (19.57)

Losses available for offsetting against future taxable income 151.00 236.49

Provision for doubtful debts 8,401.02 286.56

Derivative Liability - 64.54

Deferred tax assets not recognised (9,302.57)

Net Deferred Tax Assets / (Liabilities) - 909.51

Movement in deferred tax liabilities/assets (` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Opening balance as at beginning of the year 909.51 675.35

Tax income/(expense) during the period recognised in profit or loss (909.51) 213.53

Tax income/(expense) during the period recognised in OCI - 20.62

Closing balance as at end of the year - 909.51

Unrecognised deferred tax assets

(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Deductible temporary differences 9,302.57 -

Unrecognised tax losses 13,685.78 -

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liablities relate to income taxes levied by the same tax authority.

Tax losses which arose in India of `43,751.94 lakhs (previous year `715.28 lakhs) that are available for offsetting for eight years against future taxable profits of the Company.

Considering the probability of availability of future taxable profits in the period in which tax losses expire, deferred tax assets have not been recognised in respect of tax lossses carried forward by the Company

Major Components of income tax expense for the years ended March 31, 2018 and March 31, 2017 are as follows:

i. Income tax recognised in profit or loss (` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Current income tax charge - -

Adjustment in respect of current income tax of previous year - -

Deferred tax

Relating to origination and reversal of temporary differences 909.51 (213.53)

Income tax expense recognised in profit or loss 909.51 (213.53)

ANNUAL REPORT 2018

- 117 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

ii. Income tax recognised in OCI (` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Net loss/(gain) on remeasurements of defined benefit plans - 20.62

Income tax expense recognised in OCI - 20.62

Reconciliation of current tax expense and accounting profit multiplied by income tax rate for March 31, 2018 and March 31, 2017 (` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Profit / (Loss) before tax (71,368.11) (1,395.60)

Accounting profit before income tax (71,368.11) (1,395.60)

Enacted tax rate in India 31.20% 33.06%

Income tax on accounting profits (22,266.85) (461.43)

Effects of Incomes exempt from tax (0.08) (9.12)

Non-deductible expenses for tax purposes 147.96 238.88

Tax on income at different rate - 38.76

Dercognisition of deferred tax asset 909.51 -

Losses carried forward to future years and other disallowances 22,118.98 (20.62)

Tax at effective income tax rate 909.51 (213.53)

15. SHARE CAPITAL (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Authorised

30,000,000 Equity Shares of ` 10 each 3,000.00 3,000.00

Issued, subscribed and paid-up

24,622,850 Equity Shares of ` 10 each fully paid up 2,462.29 2,462.29

TOTAL 2,462.29 2,462.29

i. Terms/rights attached to equity shares The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is

entitled to one vote per share and dividend in indian `, as proposed by the Board of Directors, which is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

ii. Shares held by holding/ ultimate holding company and / or their subsidiaries / associates The company does not have holding company or ultimate holding company

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iii. Details of shareholders holding more than 5% shares in the company

Name of the shareholder As at March 31, 2018 As at March 31, 2017

Amount Period of default Amount Period of default

Equity shares of ` 10 each fully paid

Rajeev Sheth 96,07,893 39.02 1,45,02,893 58.90

Crystalon Finanz AG 18,00,000 7.31 18,00,000 7.31

iv. Shares reserved for issue under options For details of shares reserved for issue under the Share based payment plan of the company, please refer note 35

v. Shares issued for consideration other than Cash / Bonus Shares The company has not issued shares for consideration other than cash or Bonus shares during the preceding 5 financial years.

16. OTHER EQUITYi. Reserves and Surplus (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Securities Premium Reserve 16,790.63 16,790.63

General Reserve 1,267.89 1,267.89

Share Based Payment Reserve - 37.31

Retained Earnings (38,708.29) 33,598.52

(20,649.77) 51,694.34

(a) Securities Premium Reserve (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 16,790.63 16,790.63

Add/(Less):

changes during the period - -

Closing balance 16,790.63 16,790.63

The amount received in excess of face value of the equity share is recognised in Share Premium Reserve. This is not available for distribution of dividend but can be utilised for issuing bonus share.

(b) General Reserve (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 1,267.89 1,266.00

Add/(Less):

Shares warrants forfeited - -

Share based payment reserve transferred on lapse of option - 1.89

Closing balance 1,267.89 1,267.89

The Company created a General Reserve in earlier years pursuant to the provisions of the Companies Act wherein certain percentage of profits were required to be transferred to General Reserve before declaring dividends. As per Companies Act 2013, the requirement to transfer profit to General Reserve is not mandatory. General Reserve is a free reserve available to the Company.

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(c) Share Based Payment Reserve (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 37.31 34.73

Add/(Less):

Option Compensation expense charged during the period 0.30 4.47

Transfer to General Reserve on exercise/lapse of option (37.61) (1.89)

Closing balance - 37.31

The Company has employee stock option scheme under which options to subscribe for the company’s shares have been granted to certain executives and senior employees.

The Share based payment reserve is used to recognise the value of equity settled share based options provided to employees, including key management personnel, as part of their remuneration. Refer to Note 35 for further details of these plans.

d) Retained Earnings (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 33,598.52 34,822.34

Net Profit/(Loss) for the year (72,277.62) (1,182.07)

Add/(Less):

Untilisation of SEZ Reinvestment allowance reserve - -

Transfer from Shared Based Payment Reserve on exercise/lapse of option 37.61 -

Items of Other Comprehensive Income directly recognised in Retained Earnings

Remeasurement of post employment benefit obligation, net of tax (66.79) (41.74)

Closing balance (38,708.29) 33,598.52

ii. Components of Other Comprehensive Income (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Equity Instruments through OCI 7.06 11.38

7.06 11.38

Reconciliation of OCI reserve is as follows: (` in Lakhs) Particulars Equity

Instruments through OCI

Total

As at April 1, 2016 6.22 6.22 Gain/(Loss) on FVTOCI financial assets 5.15 5.15

As at March 31, 2017 11.38 11.38 Gain/(Loss) on FVTOCI financial assets (4.32) (4.32)As at March 31, 2018 7.06 7.06

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17. BORROWINGS i. Non Current Borrowings

(` in Lakhs)Particulars As at

March 31, 2018 As at

March 31, 2017 Secured Term Loans From Banks - 1.51 From Others 79.68 123.82 Long term maturity of Finance Lease Obligations - - (A) 79.68 125.33 Current Maturity of Non Current Borrowings Term Loans From Banks - 1.51 From Others 30.97 44.14 Long term maturity of Finance Lease Obligations - - (B) 30.97 45.65 Total (A)-(B) 48.71 79.68

a) Term Loan from Banks includes vehicle loan which is secured by hypothecation of vehicle and carries interest @ 10.22% is repayable in 60 monthly installments inclusive of interest from the date of loan.

b) Term Loans from others include

i) Loan secured by hypothecation of Plant and Machinery and carries interest @ 13.00% p.a. The loan is repayable in 45 monthly installments of `148,642/- each including interest starting from March 2014.

ii) Loan secured by hypothecation of vehicle and carries interest @ 10.22%. The loans is repayable in 60 monthly installments inclusive of interest from the date of loan.

ii. Current Borrowings(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Secured Loans repayable on demand From Banks 56,980.24 30,299.54 From Other Parties - 300.00 Bills Discounted 11,895.31 25,189.14

Unsecured Loan from Related Party 1,201.90 80.64 Total 70,077.46 55,869.32

(a) Working capital loans from banks are secured by hypothecation of inventories, book debts, plant and machinery, fixed deposits, other current assets and equitable mortgage of the Company’s factories at Seepz and MIDC, one office at Bandra Kurla Complex, seven flats in Mumbai, and Two Flats at Prabhadevi belonging to Divya Real Estate Pvt. Ltd.

(b) The above facilities are further secured by

(i) personal guarantee of managing director, Mr. Rajeev Sheth, (ii) corporate guarantee of Divya Real Estate Pvt. Ltd., Fabrikant Tara International LLC and Tara (Hong kong) Limited (iii) fixed deposits of `8.79 Crores of managing director, Mr. Rajeev Sheth (iv) pledge of 9,606,300 equity shares of the Company held by managing director, Mr. Rajeev Sheth

(c) Loan from related party is interest free and repayable on demand.

* Borrowings has been categorised as NPA by Consortium of Bank.

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iii. Other Disclosures(a) The carrying amounts of financial and non-financial assets pledged as security for current and non current

borrowings are disclosed in Note 42

(b) Amount and period of default in repayment of borrowings

As at March 31, 2018 As at March 31, 2017Amount Period of Default Amount Period of Default

Term Loans from Others Principal 7.36 1-60 Days 4 .45 1-60 Days Interest 2.16 1-60 Days 1.71 1-60 DaysLoans repayable on demand from Banks Principal 45,954.59 1-180 Days 4,691.76 1-90 Days Interest 1,706.40 1-180 Days 58.05 1-90 Days

Net Debt ReconciliationNon Current Borrowings

Current Borrowings

Total

Net Debt as at March 31, 2017 505.97 55,732.41 56,238.38 Cash Inflows 1,121.26 43,836.13 44,957.39 Cash Outflows 345.65 26,754.10 27,099.75 Interest Expense 44.28 6,736.39 6,780.67 Interest Paid 44.28 5,122.10 5,166.37 Net Debt as at March 31, 2018 1,281.58 74,428.73 75,710.32

18. OTHER FINANCIAL LIABILITIES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current Financial Liabilities at amortised cost Current maturities of long term debts 30.97 45.65 Current maturities of finance lease obligations - - Interest accrued and due on borrowings 1,647.88 69.60 Interest accrued but not due on borrowings 58.52 22.49 Unpaid dividends 0.05 0.05 Others - - Bank Overdraft 5,553.18 243.73 Other Payables 5.24 78.40

7,295.83 459.92(ii) Financial Liabilities carried at fair value through profit and loss Derivatives not designated as hedge - Foreign Exchange forward contracts - 195.22

- 195.22 Total 7,295.83 655.14

19. TRADE PAYABLES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

CurrentTrade Payables to Micro, Small and Medium Enterprises (Refer Note 43) 0.22 - Trade Payables to Others 13,474.18 32,071.90 Total 13,474.40 32,071.90

Includes dues to related parties (refer note 37)

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20. OTHER LIABILITIES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current Statutory Liabilities 644.15 594.63 Others* 1,525.84 1,407.84 Total 2,169.99 2,002.46

*Others includes expenses payable, advance received from customer.

21. PROVISIONS(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Non Current Provision for employee benefits (Refer Note 34) Gratuity 304.11 306.10 Leave encashment 118.16 129.25 Total 422.27 435.35 Current Provision for employee benefits (Refer Note 34) Gratuity 46.74 14.37 Leave encashment 9.07 7.92 Total 55.81 22.29

22. CURRENT TAX LIABILITY(NET)(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 2,937.14 2,729.34 Add: Current tax payable for the year - - Add: Provision for interest payable on current tax 336.00 550.00 Less: Taxes paid 0.58 342.21 Closing Balance 3,272.56 2,937.14

23 REVENUE FROM OPERATIONS(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Sale of products Gems and Jewellery 43,515.43 1,19,013.68 Sale of services Labour charges 26.38 49.92 Other Operating Revenues Sale of gold dust 3.36 - 43,545.17 1,19,063.61

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24. OTHER INCOME(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Interest income on Bank fixed deposits 251.53 392.62 Dividend income 0.02 0.08 Other Non Operating IncomeFinancial Guarantee Income 182.86 178.07 Net gain on sale of Investments 0.25 13.71 Fair value Gain on financial instrument at Fair value through profit and loss 194.35 - Net gain on disposal of property, plant and equipment 1.40 - Others Rent received 59.35 51.70 Commission received - 0.43

689.75 636.62

25. COST OF MATERIALS CONSUMED(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

As at beginning of the year 6,734.86 8,915.81 Add: Purchases 57,880.74 94,799.03 Less: Write down of Inventory to NRV 32,550.16 - Less : As at end of the year 6,773.15 6,734.86

25,292.28 96,979.97

Details of raw materials and components consumed

(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Precious metals and diamonds 25,237.98 96,241.09 Others 54.30 738.89

25,292.28 96,979.97

26. PURCHASES OF STOCK-IN-TRADE(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Gems and Jewellery 78.27 2,571.20 78.27 2,571.20

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27. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Inventories as at the beginning of the year Work - in - process 32,376.09 35,309.32 Finished goods 7,408.31 8,647.24 Stock-in-trade 0.26 0.26

39,784.66 43,956.83 Less : Inventories as at the end of the yearWork - in - process 27,504.89 32,376.09 Finished goods 197.59 7,408.31 Stock-in-trade - 0.26

27,702.49 39,784.66 Net decrease / (increase) in inventories 12,082.17 4,172.17

28. EMPLOYEE BENEFITS EXPENSE(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Salaries, wages and bonus 1,851.27 2,512.33 Contribution to provident and other funds 187.88 213.17 Share based payments to employees 0.30 4.47 Staff welfare expenses 45.90 61.20 Gratuity Expense 27.08 38.35

2,112.43 2,829.53

29. FINANCE COST(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Interest expense on debts and borrowings 6,780.67 6,208.10 Interest on Income tax 336.00 550.00 Other borrowing costs Guarantee Commission Expense 146.42 147.60 Others 491.05 678.30

7,754.14 7,584.00

30. DEPRECIATION AND AMORTISATION EXPENSE(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Depreciation on tangible assets 1,505.40 2,132.36 Amortisation on intangible assets 87.58 84.87

1,592.98 2,217.22

31. OTHER EXPENSES

ANNUAL REPORT 2018

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(` in Lakhs)Particulars Year ended

March 31, 2018 Year ended

March 31, 2017 Manufacturing Expenses Wages, allowances and bonus 799.82 986.23 Import clearing charges 58.78 84.66 Labour charges 84.20 432.40 Electric power, fuel and water 323.59 323.87 Repairs and maintenance Factory Building 8.79 10.63 Plant and Machinery 20.49 27.76 Foreign Exchange fluctuation loss 2,426.72 (477.71) Stores, consumables and packing material 329.07 381.32

4,051.46 1,769.15 Selling, Administration and Other Expenses Advertisement 0.91 3.94 Payments to auditors (Refer note below) 50.00 69.15 Bad Debts written off 525.17 981.58 Credit insurance 166.17 218.63 Electricity charges 0.83 15.00 Export clearing charges 63.88 111.43 Fixed assets written off 1,037.37 43.48 House Keeping Expenses 21.87 27.75 Insurance 24.29 49.64 Legal and professional fees 294.04 249.18 Net loss on disposal of property, plant and equipment - 61.76 Rates and taxes 53.54 47.03 Rent 37.28 143.81 Repairs & maintenance - other 31.99 84.98 Sales promotion expenses 84.54 78.91 Security charges 48.81 82.33 Telephone and internet expenses 17.43 32.21 Travelling & conveyance expenses 50.75 151.86 Allowance for doubtful debts - (231.72) Bank charges 198.20 308.22 Fair value loss on financial instrument at Fair value through profit and loss - 181.43 Miscellaneous expenses 118.52 146.39

2,825.59 2,856.97 Total 6,877.05 4,626.13

32. EXCEPTIONAL ITEMS(` in Lakhs)

Year ended March 31, 2018

Year ended March 31, 2017

Write down of Inventory to NRV 32,531.68 - Allowance for doubtful debts 27,278.04 -

59,809.72 -

* The Company is carrying an inventory of raw material, work in progress and finished goods. The company during the year ceased to continue operation in its wholesale business vertical. A significant part of the inventory of this vertical is not earmarked against orders as on date and the company is trying to utilise the same in the international Retail business. In view of above and the slowdown in jewellery market, the Company has on the basis of an internal evaluation provided for write down of inventories.

**The Company has Provided for expected credit loss on trade receivables. The Company is in the process of actively following up with customes for the recovery. It expects to either realise the balance due or recover the material supplied.

a. Details of Payments to auditors

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(` in Lakhs)Year ended

March 31, 2018 Year ended

March 31, 2017Audit Fee 20.00 15.00Tax audit fee - 15.00Limited review fee 30.00 10.00Services for tax matters - 15.00Certification and consultation - 11.00Service Tax - 3.15

50.00 69.15

33. EARNINGS PER SHARE(` in Lakhs)

Year ended March 31, 2018

Year ended March 31, 2017

Profit / (Loss) after tax (` in Lakhs) (72,277.62) (1,182.07)Weighted average number of equity shares 2,46,22,850 2,46,22,850 Nominal value per share (`) 10.00 10.00 Basic and Diluted Earning / (Loss) per Equity Share (`) (293.54) (4.80)

34. EMPLOYEE BENEFIT OBLIGATIONS(` in Lakhs)

As at March 31, 2018 As at March 31, 2017Current Non

CurrentTotal Current Non

CurrentTotal

Leave obligations 9.07 118.16 127.23 7.92 129.25 137.17 Gratuity 46.74 304.11 350.85 14.37 306.10 320.46 Total Employee Benefit Obligation

55.81 422.27 478.08 22.29 435.35 457.63

(i) Leave Obligations The leave obligations cover the company’s liability for sick and earned leave. The amount of the provision of `9.07 Lakhs (Previous Year : `7.92 Lakhs) is presented as current, since the company does

not have an unconditional right to defer settlement for any of these obligations.

(ii) Post Employment obligations Defined Benefit Plans - Gratuity The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are

in continuous service for a period of five years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied by number of years of service.

The gratuity plan is partially funded plan and the company makes contributions to recognised funds in India. The company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.

The amount recognised in the balance sheet and the movement in the net defined benefit obligation over the period are as follows

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Present value of obligation

Fair value of plan assets

Net amount

As at March 31, 2016 259.06 (1.66) 257.40

Current service cost 38.62 - 38.62

Interest expense/(income) 18.78 (0.12) 18.66

Total amount recognised in profit or loss 57.40 (0.12) 57.28

Remeasurements

Return of plan assets, excluding amount included in interest (income) - - -

(Gain)/Loss from change in demographic assumptions 1.54 - 1.54

(Gain)/Loss from change in financial assumptions 54.60 - 54.60

Experience (gains)/losses 6.25 (0.02) 6.24

Total amount recognised in other comprehensive income 62.39 (0.02) 62.38

Employer contributions -

Benefit payments (56.59) - (56.59)

As at March 31, 2017 322.26 (1.79) 320.46

Current service cost 28.28 - 28.28

Interest expense/(income) 23.35 (0.13) 23.22

Total amount recognised in profit or loss 51.62 (0.13) 51.49

Remeasurements

Return of plan assets, excluding amount included in interest (income) - -

(Gain)/Loss from change in demographic assumptions 67.45 67.45

(Gain)/Loss from change in financial assumptions (8.51) (8.51)

Experience (gains)/losses 7.84 (0.01) 7.84

Total amount recognised in other comprehensive income 66.79 (0.01) 66.78

Employer contributions -

Benefit payments (94.28) - (94.28)

Past Service Cost 6.38 6.38

As at March 31, 2018 352.78 (1.93) 350.85

The net liability disclosed above relates to funded and unfunded plans are as follows:

As at March 31, 2018

As at March 31, 2017

Present value of funded obligations 352.78 322.26 Fair value of plan assets (1.93) (1.79)Deficit of funded plan 350.85 320.46 Unfunded plans - - Deficit of gratuity plan 350.85 320.46

The major categories of plan assets of the fair value of the total plan assets are as follows:

March 31, 2018

Unquoted

March 31, 2017

UnquotedBalance with LIC 1.93 1.79

The significant actuarial assumptions were as follows:

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As at March 31, 2018

As at March 31, 2017

Discount rate 7.50% 7.25%Expected return on plan assets 7.50% 7.25%Salary growth rate 3.50% 3.50%Attrition rate 8.00% 1% to 4%Life expectation for Male 60 Years 60 Years Female 60 Years 60 Years

A quantitative sensitivity analysis for significant assumption as at March 31, 2018 is shown below:

Assumptions Discount rate Salary growth rateSensitivity Level 0.5% increase 0.5% decrease 0.5% increase 0.5% decreaseMarch 31, 2017Impact on defined benefit obligation (17.36) 18.98 19.60 (18.04)March 31, 2018Impact on defined benefit obligation (12.05) 12.84 12.92 (12.22)

Assumptions Attrition Rate Mortality RateSensitivity Level 50% increase 50% decrease 10% increase 10% decreaseMarch 31, 2017Impact on defined benefit obligation NA NA NA NA March 31, 2018Impact on defined benefit obligation 25.98 (40.43) 0.25 (0.25)

Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The following payments are expected contributions to the defined benefit plan in future years:(` in Lakhs)

As at March 31, 2018

As at March 31, 2017

Within the next 12 months 46.74 16.16 Between 2 and 5 years 161.72 92.12 Between 5 and 10 years 157.40 72.86 Beyond 10 years 321.42 - Total expected payments 687.27 181.14

The average duration of the past services at the end of the reporting period is 8.33 years (Previous Year : 7.07 years)

(iii) Defined contribution plans - Provident Fund The company also has defined contribution plans. Contributions are made to provident fund in India for employees at the

rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

During the year, the Company has recognised the following amounts in the Statement of Profit and Loss:

As at March 31, 2018

As at March 31, 2017

Employer’s contribution to provident fund 129.86 163.21 129.86 163.21

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35. SHARE BASED PAYMENTS(a) Employee stock option plan

The Employee Stock Option Plan (ESOP) is designed to provide incentives to employees above the designation of managers to deliver long term returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Once vested, the options remain exercisable for a period of 4 years. When exercisable, each option is convertible into one equity share of `10 each. The exercise price of the share options is `230.

Movement during the period

The number and weighted average exercise prices (WAEP) of the options and movement during the period is as follows

Year ended March 31, 2018 Year ended March 31, 2017No. of options WAEP No. of options WAEP

Opening balance 1,06,283 230 1,11,678 230 Granted during the period - - - - Exercised during the period - - - - Forfeited / lapsed during the period (1,06,283) - (5,395) - Expired during the period - - - - Closing balance - 230 1,06,283 230 Vested and exercisable - 63,770

Share options outstanding at the end of the period have the following expiry date and exercise prices

Particulars Grant date Expiry date Exercise price (`)

Share options Share optionsMarch 31, 2018 March 31, 2017

ESOP 2013 - Grant C 25-Jul-13 25-Jul-17 230 - 1,06,283 Total - 1,06,283

Weighted average remaining contractual life of options outstandingat the end of period

- 0.32 Years

(b) Expense arising from share based payment transactions Total expenses arising from share based payment transactions recognised in profit or loss as part of employee benefit

expense were as follows:

(` in Lakhs)Year ended

March 31, 2018Year ended

March 31, 2017Employee stock option 0.30 4.47 Total employee share-based payment expense 0.30 4.47

36. COMMITMENTS AND CONTINGENCIESA. Commitmentsi. Capital Commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

(` in Lakhs)Year ended

March 31, 2018Year ended

March 31, 2017Property, plant and equipment 104.00 104.00

ii. Leases

Operating lease commitments - Company as lessee The Company’s significant leasing arrangements are in respect of residential flats and commercial premises taken on

lease. The arrangements range between 11 months and 9 years generally and are usually renewable by mutual consent or mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. In

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respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the year and included under Rent (disclosed under Other Expenses).

As at March 31, 2018

As at March 31, 2017

Commitments for minimum lease payments in relation to non cancellable operating leases are as follows

Within one year 17.57 3.20

Later than one year but not later than five years - -

later than five years - -

17.57 3.20

Rents recognised as expense in the period 37.28 143.81

Operating lease commitments - Company as lessor The Company has entered into operating leases for its commercial property. These leases have terms of between 11 months

and 3 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total rents recognised as income during the year is `59.35 Lakhs (Previous Year : `51.70 Lakhs).

As at March 31, 2018

As at March 31, 2017

Minimum lease rentals receivables in relation to non cancellable operating leases are as follows

Within one year 32.54 48.00

Later than one year but not later than five years 76.17 78.80

later than five years - -

108.72 126.80

B. Contingent Liabilities

As at March 31, 2018

As at March 31, 2017

Claim against the company not acknowledged as debt

(a) Custom duty matters 19.01 19.01

(b) Service tax matter 67.23 67.23

(c) Other matter - 10.05

Brief description of the nature of each contingent liability

(a) Custom duty matters Two show cause notices have been issued against our Company by Assistant Commissioner of Customs, Mumbai, regarding

shortage of gold and misuse of wastage norms. Also Additional Assistant Commissioner of Customs, Mumbai has imposed fine for import without a license that could not be cleared as prototype samples. Company has filed appeals before the Commissioner of Customs / Additional Commissioner of Customs and matters are pending.

(b) Service tax matter Joint Commissioner, Service Tax- I, Mumbai has issued a show cause notice to Company for service tax demand for

the Taxation of Services (Provided from Outside India and Received in India). Company has filed an appeal before the Commissioner of Central Excise against the order and the matter is currently pending.

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C. Financial Guarantees

(` in Lakhs)Year ended

March 31, 2018 Year ended

March 31, 2017Corporate Guarantee given by the Company to the bankers of a subsidiary company

18,536.40 18,479.40

Income Tax Assessment The Income- Tax assessments of the Company have been completed up to Assessment Year 2014-15. The disputed

demand outstanding up to the said assessment year is approximately `565.00 Lakhs Based on the decisions of the appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

37. RELATED PARTY TRANSACTIONSi. List of related parties as per the requirements of Ind-AS 24 - Related Party Disclosures Subsidiary Companies

1. Fabrikant Tara International LLC.

2. Tara Jewels Holding Inc.

3. Tara (Hong Kong) Ltd.

4. Tara China Jewelery Ltd.

Key Management Personnel

1. Mr. Rajeev Sheth

2. Mr.Ravindran M. P.

3. Mr. Sanjay Sethi (From 20-06-2017)

4. Mr. Vishnu Prakash Garg (Upto 29-05-2017)

5. Ms. Nivedita Nayak

6. Ms. Fern Mallis

7. Ms. Priyanka Agarwal

8. Ms. Alison Lazerwitz

Relatives of Directors

1. Mrs. Aarti Sheth

2. Mrs. Divya Sheth

3. Mrs. Purnima Sheth

4. Mrs. Rama Ravindran Menon

Entities in which Key Managerial Personnel/ their relatives are able to exercise significant influence or control

1. F. T. Diamonds

2. Divya Jewels International Pvt. Ltd.

3. Divya Real Estate Pvt. Ltd.

4. Aarti Jewellers Pvt Ltd.

5. Karan Arjun Jewellery Pvt. Ltd.

6. Tara Duniya Corporation

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ii. Transactions during the year ended March 31, 2018 (` in Lakhs)

Particulars

Subsidiaries Companies

Key Management Personnel/ Relatives

Entities in which Key Managerial Personnel/ their

relatives have significant influence or control

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Sale of GoodsFabrikant Tara International LLC. 5,630.73 16,498.75 - - - - Tara (Hong Kong) Ltd. 11,804.09 31,453.73 - - - - F. T. Diamonds - - - - - 1,644.97 Purchase of GoodsFabrikant Tara International LLC. 2,236.92 9,565.15 - - - - Tara (Hong Kong) Ltd. 13,715.40 22,354.21 - - - - Aarti Jewellers Pvt Ltd. - - - - - 1.08 F. T. Diamonds - - - - - 1,455.52 Labour Charges PaidTara (Hong Kong) Ltd. 0.28 1.55 - - - - F. T. Diamonds - - - - - 11.59 Labour Charges ReceivedFabrikant Tara International LLC. 26.19 46.94 - - - - Tara (Hong Kong) Ltd. - 0.03 - - - - Aarti Jewellers Pvt Ltd. - - - - - - F. T. Diamonds - - - - 0.18 0.28 Purchase of Fixed AssetsTara (Hong Kong) Ltd. 6.40 5.95 - - - - Directors’ Remuneration and CommissionMr Rajeev V. Sheth - - - 90.00 - - Mr Sanjay Sethi - - 54.87 - - - Mr Vishnu Prakash Garg - - 5.22 44.31 - - Mr Ravindran M. P. - - 10.96 29.47 - - Commission and other benefits to Independent Directors

- - 2.80 5.00 - -

Salary paidMr. Bimal Desai - - - 6.53 - - Ms Aarti Sheth - - 20.40 32.46 - - Ms Divya Sheth - - 22.99 22.99 - - Other Key Managerial Personnel - - 6.39 6.29 - - Professional Fees paidMrs. Rama Ravindran Menon - - 20.91 19.02 - - Sales Promotion ExpensesAarti Jewellers Pvt Ltd. - - - - - 1.47 Unsecured Loan TakenMr. Rajeev Sheth - - 1,180.09 106.64 - - Repayment of Unsecured LoansMr. Rajeev Sheth - - 71.68 26.00 - - Divya Real Estate Pvt. Ltd. - - - - 12.85 - Commission Income on Corporate Guarantee issued*Fabrikant Tara International LLC. 25.57 23.09 - - - - Tara (Hong Kong) Ltd. 10.87 11.17 - - - - Guarantee Commission Expense on Corporate Guarantee received*Fabrikant Tara International LLC. 73.21 73.80 - - - - Tara (Hong Kong) Ltd. 73.21 73.80 - - - - Guarantee Commission Income on Corporate Guarantee received*Fabrikant Tara International LLC. 73.21 73.80 - - - - Tara (Hong Kong) Ltd. 73.21 73.80 - - - -

* Notional entries as per requirement of IND AS.

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iii. Key management personnel compensation(` in Lakhs)

Year ended March 31, 2018

Year ended March 31, 2017

Salaries and other employee benefits to whole time directors and Key Management Personnel

120.82 232.05

Provision for Post employment benefits to whole time directors and Key Management Personnel

13.46 13.50

Commission and other benefits to non-executive / independent directors 2.80 5.00 137.08 250.55

iv. Closing Balances as on March 31, 2018

(` in Lakhs)

Particulars

Subsidiaries Companies

Key Management Personnel/ Relatives

Entities in which Key Managerial Personnel/ their

relatives have significant influence or control

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Trade ReceivablesFabrikant Tara International LLC. 2,162.15 - Tara (Hong Kong) Ltd. 9,663.44 11,006.93 - - - - F. T. Diamonds - - - - - - Aarti Jewellers Pvt Ltd. - - - - - 0.53 Trade PayablesFabrikant Tara International LLC. - 678.79 - - - - F. T. Diamonds - - - - 353.77 353.96 InvestmentsTara Jewels Holding Inc. 1,210.44 1,188.50 - - - - Tara (Hong Kong) Ltd. 292.49 281.76 - - - - Divya Jewels International Pvt. Ltd. - - - - 1.75 1.75 Short-term borrowingsMr. Rajeev Sheth - - 1,189.05 80.64 - - Divya Real Estate Pvt. Ltd. 12.85 - Director Remuneration payableMr. Rajeev Sheth - - - 9.85 - - Mr Vishnu Prakash Garg - - - 5.77 - - Mr Ravindran M. P. - - - 3.52 - - Mr Sanjay Sethi 16.95 - Commission and other benefits Payable to Independent Directors

- - - 28.66 - -

Salary PayableMs Aarti Sheth - - 6.18 13.60 - - Ms Divya Sheth - - 4.16 1.18 - - Other Key Managerial Personnel - - 1.64 1.08 - - Professional Fees PayableMrs. Rama Ravindran Menon - - 6.27 4.70 - -

v. Terms and conditions of transactions with related parties The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length

transactions. Outstanding balances at the year end are unsecured and interest free. For the year ended March 31, 2018, the Company has not recorded any impairment of receivables relating to amount owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and market in which the related party operates.

The parent company has given Corporate Guarantee to the Bankers of subsidiaries Companies amounting to `18536.40 Lakhs The subsidiaries have also provided Corporate guarantee to the lenders of parent company for its borowing from the banks.

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38. SEGMENT REPORTINGA. Information about Primary Business Segment The Company is exclusively engaged in the “Diamond and Gold Jewellery” Business Segment.

B. Information about Secondary Geographical Segment.

Particulars April 1, 2017 to March 31, 2018 India Outside India* Total

External Revenue 7,651.76 35,893.40 43,545.17 (30,812.45) (88,251.16) (1,19,063.61)

As at March 31, 2018 Carrying Amount of Segment Assets 19,700.66 58,935.94 78,636.60

(68,800.24) (79,441.05) (1,48,241.29) April 1, 2016 to March 31, 2018

Capital Expenditure 22.39 - 22.39 (1,143.14) - (1,143.14)

* Includes mainly United States of America, Australia, China (including Hong kong), Europe, South- Africa, Canada, Singapore and United kingdom

Note: The figures in brackets are in respect of the previous year ended March 31, 2017

Notes:(a) Segment Revenue in the geographical segment considered for disclosure are as follows:

- Revenue within India includes sales to customers located within India and earnings in India

- Revenue outside India includes sales to customers located outside India and earnings outside India.

(b) Segment revenue, results, assets and liabilities includes the respective amounts identified to each the segment and amounts allocated on a reasonable basis.

(c) Revenue from two subsidiaries amounted to `17,461 Lakh (March 31, 2017 : `47,999 Lakh).

(d) Number of customers with revenue of more than 10% is 3 amounted to `23,491 Lakh (March 31, 2017 : `47,999 Lakh).

39. FAIR VALUE MEASUREMENTSi. Financial Instruments by Category

Particulars Carrying Amount Fair ValueAs at

March 31, 2018As at

March 31, 2017As at

March 31, 2018As at

March 31, 2017FINANCIAL ASSETSAmortised cost Trade Receivables 29,467.84 79,453.47 29,467.84 79,453.47 Loans 24.08 37.56 24.08 37.56 Cash and Cash Equivalents 132.06 69.37 132.06 69.37 Other Bank Balances 3,644.68 6,869.18 3,644.68 6,869.18 Other Financial Assets 96.34 147.80 96.34 147.80 FVTOCI Investment in Equity Instruments 9.87 14.19 9.87 14.19 FVTPL Investments in Mutual Funds 208.11 248.81 208.11 248.81 Total 33,582.97 86,840.38 33,582.97 86,840.38

FINANCIAL LIABILITIESAmortised cost Borrowings 70,126.17 55,949.00 70,126.17 55,949.00 Trade Payables 13,474.40 32,071.90 13,474.40 32,071.90 Other financial liabilities 7,295.83 459.92 7,295.83 459.92 FVTPL Derivative instruments - 195.22 - 195.22 Total 90,896.41 88,676.03 90,896.41 88,676.03

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The management assessed that the fair value of cash and cash equivalent, other bank balances, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.

The fair values for security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy and their fair values are assessed as approximate to their carrying amounts.

The fair values of non current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. The own non performance risk as at reporting date was assessed to be insignificant and therefore fair values approximate their carrying amounts.

ii. Fair Value Hierarchy This section explains the judgments and estimates made in determining the fair values of the financial instruments that are

recognised and measure at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table:

Assets and liabilities measured at fair value - recurring fair value measurement:

Particulars Fair value measurement using Total

Quoted prices in active markets

(Level 1)

Significant Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

As at March 31, 2018

Financial Assets

Financial Investments at FVTPL

Quoted Mutual Funds 33.11 33.11

Unquoted Mutual Funds 175.00 175.00

Financial Investments at FVTOCI

Quoted equity shares 8.12 8.12

Unquoted equity shares 1.75 1.75

Total Financial Assets 41.23 175.00 1.75 217.98

Financial Liabilities at FVTPL

Derivative instruments - -

Total Financial Liabilities - - - -

As at March 31, 2017

Financial Assets

Financial Investments at FVTPL

Quoted Mutual Funds 73.81 73.81

Unquoted Mutual Funds 175.00 175.00

Financial Investments at FVTOCI

Quoted equity shares 12.44 12.44

Unquoted equity shares 1.75 1.75

Total Financial Assets 86.25 175.00 1.75 263.00

Financial Liabilities at FVTPL

Derivative instruments 195.22 195.22

Total Financial Liabilities - 195.22 - 195.22

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There have been no transfers among Level 1, Level 2 and Level 3 during the period

Level 1 - Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.

Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3 - If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity shares, included in level 3.

iii. Valuation technique used to determine fair value Specific Valuation techniques used to value financial instruments include: - the use of quoted market prices or dealer quotes for similar instruments - the fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates

at the balance sheet date - the fair value of the remaining financial instruments is determined using discounted cash flow analysis

iv. Valuation inputs and relationships to fair value The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation

requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate of fair value for these unquoted equity investments.

v. Valuation processes The finance department of the Company performs the valuations of financial assets and liabilities required for financial

reporting purposes, including level 3 fair values. The department reports directly to the chief financial officer (CFO) and the audit committee. Discussions of valuation processes and results are held between the CFO, Audit Committee and the valuation team periodically.

vi. Reconciliation of fair value measurement of financial assets carried at fair value (Level 3): There is no change in fair value of unquoted equity shares.

40. FINANCIAL RISK MANAGEMENT The company’s activity expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the

financial performance of the company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit risk Credit risk is the risk that the counterparty will not meet its obligations leading to a financial loss. Credit risk arises

from cash and cash equivalents, investments carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables.

i. Credit risk management

Credit risk has always been managed by the company through credit approvals, obtaining credit reports, establishing credit limits, taking credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business.

The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

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A default on a financial asset is when the counterparty fails to make contractual payments of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

ii. Provision for expected credit losses

The company follows ‘simplified approach’ for recognition of impairment loss allowance on Trade receivables

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

iii. Reconciliation of loss allowance provision - Trade receivables

Particulars (` in Lakhs)

Loss allowance on April 1, 2016 1,098.42

Changes in loss allowance (231.72)

Loss allowance on March 31, 2017 866.70

Changes in loss allowance 27,278.04

Loss allowance on March 31, 2018 28,144.74

(B) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the

availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, company maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the company’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyse the company’s financial liabilities into relevant maturity groupings based on their contractual maturities for:

- all non-derivative financial liabilities, and

- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. In the table below, borrowings include both interest and principal cash flows. To the extent that the interest rates are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

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Contractual maturities of financial liabilities

Particulars Carrying Amount

Contractual Cash Flows

Total Less than 1 year

Between 1 and 3 years

More than 3 years

March 31, 2018

Non-derivatives

Borrowings 70,157.14 73,665.00 72,414.38 1,250.62 -

Trade payables 13,474.40 13,474.40 13,474.40 - -

Other financial liabilities 7,295.83 7,295.83 7,295.83 - -

Total non derivative liabilities 90,927.37 94,435.23 93,184.62 1,250.62 -

Derivatives (net settled)

Foreign exchange forward contracts - - - - -

Total derivative liabilities - - - - -

March 31, 2017

Non-derivatives

Borrowings 55,994.65 59,407.29 59,324.98 82.32 6.91

Trade payables 32,071.90 32,071.90 32,071.90 - -

Other financial liabilities 459.92 459.92 459.92 - -

Total non derivative liabilities 88,526.47 91,939.11 91,856.80 82.32 6.91

Derivatives (net settled)

Foreign exchange forward contracts 195.22 195.22 195.22

Total derivative liabilities 195.22 195.22 195.22 - -

(C) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of

change in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk such as equity price risk and commodity price risk.

(i) Foreign currency risk

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than functional currency of the Company.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuation in exchange rates in those countries. The risk primarily relate to fluctuations in US Dollars(USD). Other Currencies in which risk of fluctuation is not significant are Great Britain Pound(GBP) and Euro(EUR) against the functional currency of the Company.

The Company, as per its risk management policy uses derivative instruments primarily to hedge foreign exchange. Further, any movement in the foreign currencies of the various operations of the Company against the functional currency of the Company may impact the Company’s revenue from international business.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risk. It hedges a part of this risk by using derivative financial instruments in line with risk management policies.

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(a) Foreign currency risk exposure The Company’s exposure to foreign currency risk at the end of the reporting period expressed in Indian ` are as follows

(` in Lakhs)

USD Others Total

March 31, 2018

Trade Receivables 57,553.59 - 57,553.59

Bank balance in EEFC accounts 0.68 - 0.68

Other Advances 73.40 2.40 75.80

Foreign Currency loans (16,620.76) - (16,620.76)

Trade Payables (11,097.00) (814.54) (11,911.53)

Other Payables (196.20) - (196.20)

Derivative Instruments - - -

Net exposure to foreign currency risk 29,713.72 (812.14) 28,901.58

March 31, 2017

Trade Receivables 77,176.10 0.80 77,176.90

Bank balance in EEFC accounts 0.70 - 0.70

Foreign Currency loans (23,363.14) - (23,363.14)

Trade Payables (29,620.26) (140.34) (29,760.60)

Derivative Instruments (195.22) - (195.22)

Net exposure to foreign currency risk 23,998.18 (139.54) 23,858.64

(b) Foreign currency sensitivity 1% increase or decrease in foreign exchange rates will have the following impact on profit before tax:

Year ended March 31, 2018 Year ended March 31, 2017 1% Increase 1% Decrease 1% Increase 1% Decrease

USD 297.14 (297.14) 239.98 (239.98)Others (8.12) 8.12 (1.40) 1.40 Net Increase/(decrease) in profit or loss 289.02 (289.02) 238.59 (238.59)

(ii) Interest rate risk

The company’s main interest rate risk arises from borrowings with variable rates, which expose the company to cash flow interest rate risk. During March 31, 2018 and March 31, 2017 the company’s borrowings at variable rate were mainly denominated in ` and USD.

The company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market.

(a) Interest rate risk exposure The exposure of the company’s borrowing to interest rate changes at the end of the reporting period are as follows:

Particulars As at March 31, 2018

As at March 31, 2017

Variable rate borrowings 68,875.56 55,488.68

Fixed rate borrowings 79.68 425.33

Total borrowings 68,955.24 55,914.01

% of borrowings at variable rate 99.88 99.24

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(b) Sensitivity

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.

Particulars Impact on profit before tax

Year ended March 31, 2018

Year ended March 31, 2017

Interest rates - increase by 50 basis points (50 bps)* (344.38) (277.44)

Interest rates - decrease by 50 basis points (50 bps)* 344.38 277.44

* holding all other variables constant

(iii) Price risk

Commodity price risk - The company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase and manufacture of Jewellery and therefore require a continuous supply of mainly Gold and Diamond. Due to the volatility in the price of Gold and Diamond, the company is exposed to commodity price risk. Historically, the company has been able to increase prices to reflect changes in commodity cost.

Equity / Units price risk - The company’s exposure to listed and unlisted equity / debt securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities, the company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the company. Reports on the equity / debt portfolio are submitted to the company’s senior management on a regular basis. The majority of the company’s equity / debt investments are publicly traded.

Equity / debt price sensitivity

The analysis is based on the assumption that the stock market index had increased by 1% or decreased by 1% with all other variables held constant, and that all the company’s equity / debt instruments moved in line with the index.

Particulars Impact on profit before tax Impact on other component of equity

Year ended March 31, 2018

Year ended March 31, 2017

Year ended March 31, 2018

Year ended March 31, 2017

Stock Market Index - increase 1% (2016 - 1%)

0.33 0.74 0.08 0.12

Stock Market Index - decrease 1% (2016 - 1%)

(0.33) (0.74) (0.08) (0.12)

Profit for the period would increase/decrease as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value though other comprehensive income.

41. CAPITAL MANAGEMENT For the purpose of the company’s capital management, capital includes issued equity capital, share premium and all

other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.

The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is Total outside liabilities (TOL) divided by Total net worth (TNW). TOL includes interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

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As at March 31, 2018

As at March 31, 2017

Borrowings 70,126.17 55,949.00 Trade payables 13,474.40 32,071.90 Other payables 7,295.83 655.14 Less: cash and cash equivalents 132.06 69.37 Less: Other bank balances 3,644.68 6,869.18 TOL 87,119.67 81,737.49 Total Equity (18,180.42) 54,168.01 TNW (18,180.42) 54,168.01 Gearing ratio (TOL / TNW) (4.79) 1.51

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define capital structure requirements as follows:

- the ratio of total outside liabilities to adjusted Net Worth must be not more than 5 times

- the ratio of long term debt to EBITDA must not be more than 4.5 times, and

- the ratio of EBITDA to net finance cost must not be less than 1.62 times

The account has been classified as NPA by banks on 31st March, 2018.

42. ASSETS PLEDGED AS SECURITYThe carrying amount of assets pledged as security for current and non current borrowings are:

(` in Lakhs)As at

March 31, 2018As at

March 31, 2017CURRENT ASSETSi. Financial AssetsTrade Receivables 29,467.84 79,453.47 Cash and Cash Equivalents 132.06 69.37 Other Bank Balances 3,644.68 6,869.18 Loans 24.08 37.56 Other Financial Assets 50.57 96.51 ii. Non Financial AssetsInventories 34,559.71 46,630.44 Other Current Assets 563.55 1,026.35 Total current assets pledge as security 68,442.48 1,34,182.88 NON CURRENT ASSETSProperty, Plants and equipments 7,788.22 7,247.68 Total non current assets pledge as security 7,788.22 7,247.68

43. Due to challenges faced in the India retail and International wholesale business, the Company has suffered significant losses thereby affecting its net worth, however the international retail business continues to grow. The management is working towards finding a workable solution to resolve its financial challenges with the lenders and to continue its business as a going concern. We adopted a pragmatic and cautious approach, optimally stretched the available resources and improved operation efficiency. Accordingly, the management considers it appropriate to prepare these financial statements on a going concern basis.

44. The Company has received certain merchandise back from customers that are being netted off with the export receivables from same party. The necessary documents for the same are submitted to the banks for netting off the export receivables against the import payables and for extension of time for realization of trade receivables wherever necessary.

45. The Board is making its best effort to identify a suitable candidate for appointing Independent Director.

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46. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 (MSMED ACT, 2006)

Particulars As at March 31, 2018

As at March 31, 2017

a) Principal amount due and remaining unpaid 0.22 -

b) Interest due on above - -

c) Payment made beyond the appointed day during the year - 2.46

d) Interest Paid on above - -

e) Interest due and payable for the period of delay - 0.07

f) Interest accrued and remaining unpaid - 0.07

g) Amount of further interest remaining due and payable in succeeding years - 1.15

The information has been given in respect of such vendors to the extent they could be identified as “Micro and Small” enterprises on the basis of information available with the Company.

47. DISCLOSURES REQUIRED UNDER SECTION 186(4) OF THE COMPANIES ACT, 2013 Corporate guarantees given by the Company in respect of Loans as at March 31, 2018

Name of the Party As at March 31, 2018

As at March 31, 2017

Fabrikant Tara International LLC. 13,008.00 12,968.00

Tara (Hong Kong) Ltd. 5,528.40 5,511.40

All the above corporate guarantees have been given for the purpose of business.

48. CORPORATE SOCIAL RESPONSIBILITY (CSR) During the previous financial year, the company has constituted the Corporate Social Responsibility Committee in terms of

Section 135 of the Companies Act, 2013 and the board had adopted a CSR Policy as recommended by the Committee. However during the financial year under review, the Company has not made any expenditure on CSR as the Company is still in the process of identifying the eligible project, by which the public can be benefited appropriately. The Company intends to contribute to the money for CSR activities as soon as the project is identified.

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49. STANDARDS ISSUED BUT NOT YET EFFECTIVEa. ISSUE OF IND AS 115 - REVENUE FROM CONTRACTS WITH CUSTOMERS

Ind AS 115 was issued in February 2016 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This standard will come into force from accounting period commencing on or after April 1, 2018. The Company will adopt the new standard on the required effective date. The Company has evaluated the effect of this on the financial statements and the impact is not material.

b. APPENDIX B TO IND AS 21- FOREIGN CURRENCY TRANSACTIONS AND ADVANCE CONSIDERATION

On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) [FCS : 8479]

Place : MumbaiDated : 29.05.2018

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INDEPENDENT AUDITOR’S REPORTToThe Members ofTara Jewels Limited

REPORT ON CONSOLIDATED FINANCIAL STATEMENTSWe have audited the accompanying Statement of consolidated financial statements of Tara Jewels Limited (hereinafter referred to as “Holding Company”) and comprising its subsidiaries (together referred to as “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2018, the Consolidated Statement of Profit and Loss (including other comprehensive income), Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTSThe Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules 2015, as amended, and other accounting principles generally accepted in India.

The respective Board of Directors of the Companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.

AUDITOR’S RESPONSIBILITYOur responsibility is to express an opinion on these consolidated financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.

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An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.

BASIS FOR QUALIFIED OPINION a) As stated in Note 31 of Consolidated Financial Statements, the Holding Company is carrying an inventory

of raw material and work in progress amounting to INR 34,278 lakhs as at March 31, 2018. Due to the distinctive nature of jewellery industry and impracticability in physical identification of inventory consisting of diamonds, colour stones, etc. in various sizes, cuts, colours, carat and quality, we are unable to obtain sufficient appropriate audit evidence of the extent and condition of inventory. The Holding Company has on the basis of an internal evaluation provided for INR 32,531 lakhs as write down of inventories. In view of above and in the absence of valuation report from an external valuation expert, we are unable to comment on the realisability of raw material and work in progress amounting to INR 34,278 lakhs carried in these financial statements.

b) As stated in Note 31 of Consolidated Financial Statements, the Holding Company has provided for loss to the extent of INR 27,278 lakhs in respect of trade receivables. We have sent letters seeking confirmation of balances to debtors aggregating INR 38,401 lakhs and have received confirmation aggregating INR 2,368 lakhs only. We have not received confirmation aggregating to INR 36,033 lakhs. In view of long overdue receivables and absence of confirmations as at year end, we are unable to comment on the recoverability of trade receivables of INR 29,467 lakhs (net of provisions) carried in these financial statements.

c) The Holding Company’s Internal Controls and compliances with policies and procedures needs to be strengthened with respect to recoverability of receivables, valuation of Inventories and timely payment of statutory dues.

OPINIONIn our opinion and to the best of our information and according to the explanations given to us and based on the other financial information of the subsidiaries, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated financial position of the Group as at March 31, 2018, and their consolidated financial performance including other comprehensive income, their consolidated cash flows and consolidated statement of changes in equity for the year ended on that date.

EMPHASIS OF MATTERa) We draw attention to Note 42 of Consolidated Financial Statements wherein Management has prepared

Consolidated Ind AS financial statements on going concern basis in spite of :

i) The Group has reported loss after tax of INR 72,049 lakhs during the year and net liabilities exceeds net assets by INR 12,674 lakhs;

ii) Lenders declared the company’s Assets as Non-Performing Assets.

The management is working towards finding a workable solution to resolve its financial challenges with the lenders and to continue its business as a going concern. Accordingly, the management considers it appropriate to prepare these financial statements on a going concern basis.

In view of above, the situation indicates the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern.

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b) We draw attention to Note 43 of Consolidated Financial Statements wherein the Company is in the process of obtaining necessary approvals for netting-off of export receivables against import payments from same parties and extension of time period for export trade receivables not realised within the credit period.

c) The Company is irregular in depositing its statutory dues such as Provident Fund, ESIC, Profession Tax, and Income Tax Deducted at Source on timely basis, due to which the company may be liable to penal consequences under the respective laws.

Our Opinion is not qualified for above matters.

OTHER MATTERSa) We did not audit the financial statements/ consolidated financial statements of subsidiaries, whose financial

statements / consolidated financial statements reflect total assets of ` 21,835 lakhs as at March 31, 2018, total revenues of ` 34,737 lakhs and net cash flows amounting to ` 77 lakhs for the year ended on that date, as considered in the consolidated Ind AS financial statements. These financial statements/consolidated financial statements of subsidiaries have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries is based solely on the reports of the other auditors. The Holding Company’s Management has converted the financial statements of such subsidiaries incorporated outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Holding Company’s Management. Our opinion is so far as it relates to the balances and affairs of such subsidiaries located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Holding Company and audited by us.

b) We did not audit the financial statements / consolidated financial statements of subsidiaries, whose financial statements / consolidated financial statements reflect total assets of ` 21,345 lakhs as at 31st March, 2018, total revenues of ` 34,633 lakhs and net cash flows amounting to ` (86) lakhs for the year ended on that date, as considered in the consolidated Ind AS financial statements. These financial statements / consolidated financial statements of subsidiaries are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it related to the amounts and disclosures included in respect of these subsidiaries and our report in terms of sub section (3) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries is based solely on such unaudited financial statements / consolidated financial statements management’s representation.

Our opinion on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and management’s representation.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSAs required by Section 143(3) of the Act, based on our audit and the other financial information of subsidiaries, as noted in the other matter paragraph, we report, to the extent applicable, that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements;

b) In our opinion, proper books of account as required by law to preparation of the aforesaid consolidated financial statements have been kept so far as appears from our examination of those books ;

c) The Consolidated Balance Sheet, Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Statement Cash Flow and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation of the consolidated financial statements;

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d) In our opinion, the aforesaid consolidated financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act;

e) On the basis of the written representations received from the directors of the Holding Company incorporated in India as on March 31, 2018, none of the directors of the Holding company incorporated in India is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

The Subsidiary Companies are incorporated outside India; hence provision of section 164(2) of the Act is not applicable to directors of Subsidiary Companies.

f) In case of Subsidiary Companies incorporated outside India, the provisions of the Act relating to internal financial controls are not applicable. With respect to adequacy of internal financial controls over financial reporting of the Holding Company incorporated in India, for the operating effectiveness of such controls, refer to our separate report in “Annexure A”; and

g) In our opinion and to the best of our information and according to the explanations given to us and also the financial information of the subsidiaries as noted in the Other matter paragraph, we report as under with respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014:

i. The consolidated financial statements disclose the impact of pending litigations on its consolidated financial position of the Group. (Refer Note 34 to the consolidated financial statements.)

ii. The Group did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

For GMJ & CompanyChartered Accountants

FRN : 103429W

CA Sanjeev MaheshwariPlace : Mumbai PartnerDate : May 29, 2018 Membership No. 38755

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TARA JEWELS LIMITED

ANNEXURE “A”

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE ACTWe have audited the internal financial controls over financial reporting of Tara Jewels Limited (hereinafter referred to as the “Holding Company”) incorporated in India as of March 31, 2018 in conjunction with our audit of the consolidated financial statements of the Tara Jewels Limited for the year ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLSThe respective board of Directors of the Holding Company incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

AUDITORS’ RESPONSIBILITYOur responsibility is to express an opinion on the Holding Company incorporated in India, internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTINGA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTINGBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINIONIn our opinion, to the best of the information and according to the explanation given to us the Holding Company, which is incorporated in India, have, maintained in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria stated in the Guidance Note.

For GMJ & CompanyChartered Accountants

FRN : 103429W

CA Sanjeev MaheshwariPlace : Mumbai PartnerDate : May 29, 2018 Membership No. 38755

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CONSOLIDATED

TARA JEWELS LIMITED

CONSOLIDATED BALANCE SHEETAS AT MARCH 31, 2018

(` in Lakhs)Particulars Notes As at

March 31, 2018As at

March 31, 2017 ASSETS Non-Current Assets Property, Plant and Equipment 4 7,984.87 10,517.57 Capital Work-in-Progress - - Intangible Assets 5 154.34 243.17 Financial Assets

Investments 6 217.98 263.00 Other Financial Assets 8 45.77 51.29

Deferred Tax Asset (Net) 14 - 999.39 Other Non-Current Assets 13 266.07 427.43

8,669.03 12,501.84 Current assets Inventories 9 38,724.76 52,219.10 Financial Assets

Trade Receivables 10 53,776.38 1,05,252.69 Cash and Cash Equivalents 11 222.73 168.62 Other Bank Balances 12 4,172.66 7,390.42 Loans 7 24.08 37.53 Other Financial Assets 8 57.12 103.57

Other Current Assets 13 1,300.12 1,690.96 98,277.85 1,66,862.89

TOTAL 1,06,946.88 1,79,364.73 EQUITY AND LIABILITIES Equity Equity Share capital 15 2,462.29 2,462.29 Other Equity 16 (15,169.67) 57,234.55

(12,707.38) 59,696.84 Liabilities Non Current Liabilities

Financial Liabilities Borrowings 17 48.71 146.71 Provisions 21 422.27 435.35

470.98 582.06 Current Liabilities

Financial Liabilities Borrowings 17 89,372.88 74,054.26

Trade Payables 19 Micro, Small and Medium Enterprises 0.22 -

Others 16,650.95 38,799.02 Other Financial Liabilities 18 7,295.82 694.84 Other Current Liabilities 20 2,432.22 2,390.40 Provisions 21 55.81 22.29 Current Tax Liabilities (Net) 22 3,375.38 3,125.02

1,19,183.28 1,19,085.83 TOTAL - 1,06,946.88 1,79,364.73

Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) (FCS : 8479)

Place : MumbaiDated : 29.05.2018

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CONSOLIDATED STATEMENT OF PROFIT AND LOSSFOR THE YEAR ENDED MARCH 31, 2018

(` in Lakhs)Particulars Notes Year ended

March 31, 2018 Year ended

March 31, 2017REVENUE

Revenue from operations (net) 23 83,988.91 1,55,275.52 Other income 24 527.99 509.46

Total Revenue 84,516.90 1,55,784.98 EXPENSES

Cost of materials consumed 25 58,894.04 1,17,713.01 Purchases of stock-in-trade 78.27 10,844.83 Changes in inventories of finished goods, work-in-process and Stock-in-Trade

26 13,632.98 2,822.78

Excise duty 3.99 115.61 Employee benefits expense 27 2,960.66 3,882.39 Finance costs 28 8,624.52 8,445.83 Depreciation and amortization expense 29 1,600.32 2,232.00 Other expenses 30 9,984.00 10,176.71

Total Expenses 95,778.78 1,56,233.16 Profit before exceptional item and tax (11,261.88) (448.18)Exceptional items 31 59,809.72 -Profit/(loss) before tax (71,071.60) (448.18)Tax expense:

Current tax 18.73 265.88 Adjustment of tax relating to earlier periods - (24.97)Deferred tax 999.39 (226.99)

1,018.12 13.92 Profit/(loss) for the year (72,089.71) (462.10)OTHER COMPREHENSIVE INCOMEA. Other Comprehensive income not to be reclassified to profit and loss in subsequent periods:

Foreign Currency Translation Reserve (243.69) (173.35)Remeasurement of gains (losses) on defined benefit plans (66.79) (62.37)Income tax effect - 20.62 Equity Instruments through Other Comprehensive Income (4.32) 5.15 Income tax effect - -

Other Comprehensive income for the year, net of tax (314.80) (209.95)Total Comprehensive Income for the year, net of tax (72,404.52) (672.05)Earnings / (Loss) per Equity Share 37

Basic (292.78) (1.88)Dilluted (292.78) (1.88)

Significant Accounting Policies and Notes on Accounts form an integral part of the financial statements.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) (FCS : 8479)

Place : MumbaiDated : 29.05.2018

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TARA JEWELS LIMITED

STATEMENT OF CASH FLOWSFOR THE YEAR ENDED MARCH 31, 2018

(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Profit / (Loss) before income tax (71,071.60) (448.18)

Adjustments for:

Depreciation and amortisation expense 1,600.32 2,232.00

Employee share-based payment expense 0.30 4.47

Loss on disposal of property, plant and equipment 1.94 61.76

Fixed Assets written off 1,037.37 43.48

(Gain) / loss on sale of investments (0.25) (13.71)

Changes in fair value of financial assets at fair value through profit or loss (194.35) 181.43

Bad Debts written off 525.17 992.92

Rent Income (59.35) (51.70)

Loss Allowance on Doubtful Debts 27,278.04 (147.86)

Write down of Inventory to NRV 32,531.68 -

Dividend and interest income classified as investing cash flows (256.83) (397.67)

Finance costs 8,029.53 7,666.63

Sundry Balances written back (15.82) (45.94)

Foreign Currency Translation Reserve `(243.89) (179.48)

Operating profit before working capital adjustment (837.74) 9,898.16

Change in operating assets and liabilities:

(Increase)/Decrease in trade receivables 23,673.10 (519.78)

(Increase) in inventories (19,037.35) 5,883.70

Increase / (Decrease) in trade payables (22,132.04) (9,353.37)

(Increase) /Decrease in loans 13.46 (10.33)

(Increase) / Decrease in other financial assets 7.50 140.75

(Increase)/decrease in other assets 552.21 572.41

(Increase)/decrease in other bank balances 3,217.76 79.16

Increase/(decrease) in other financial liabilities 5,236.29 8.73

Increase/(decrease) in provisions and other liabilities 3.53 653.82

Cash generated from operations (9,303.29) 7,353.24

Less: Income taxes paid (104.17) (423.24)

Net cash inflow from operating activities (9,407.46) 6,930.00

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for property, plant and equipment (30.47) (1,156.16)

Payments for purchase of investments (0.02) (81.50)

Proceeds from sale of investments 40.10 456.21

Proceeds from sale of property, plant and equipment 4.31 27.60

Dividends received 0.02 0.08

Interest received 301.28 380.98

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(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Rent Received 59.35 51.70

Net cash outflow from investing activities 374.58 (321.09)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from borrowings (Net) 15,205.93 313.07

Interest paid (6,118.94) (7,099.16)

Net cash inflow (outflow) from financing activities 9,086.99 (6,786.08)

Net increase (decrease) in cash and cash equivalents 54.10 (177.17)

Cash and Cash Equivalents at the beginning of the financial year 168.62 345.79

Cash and Cash Equivalents at end of the year 222.73 168.62

Reconciliation of cash and cash equivalents as per the cash flow statement:

Cash and cash equivalents as per above comprise of the following:

Balances with banks 195.53 161.29

Cash on hand 27.19 7.33

Balances per statement of cash flows 222.73 168.62

Figures under bracket represent outflows.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) (FCS : 8479)

Place : MumbaiDated : 29.05.2018

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CONSOLIDATED

TARA JEWELS LIMITED

STATEMENT OF CHANGES IN EQUITYAS AT MARCH 31, 2018

A Equity Share Capital

(` in Lakhs)

Particulars Balance at the Beginning of

the period

Changes in Equity share capital

during the year

Balance at the end of the

periodMarch 31, 2017Numbers 2,46,22,850 - 2,46,22,850 Amount 2,462.29 - 2,462.29 March 31, 2018Numbers 2,46,22,850 - 2,46,22,850 Amount 2,462.29 - 2,462.29

B Other Equity

(` in Lakhs) Particulars Reserves and Surplus Exchange differences

on translating the financial statements

of foreign operations

Equity Instruments through OCI

Total other equity *

Capital Reserve

Securities Premium Reserve

General Reserve

Share Based Payment Reserve

Retained Earnings

As at April 1, 2016 268.49 16,790.63 1,266.00 34.73 38,596.63 939.42 6.22 57,902.12 Profit for the period (462.10) (462.10)Other comprehensive income (41.74) (173.35) 5.15 (209.94)Total comprehensive income for the year

- - - - (503.85) (173.35) 5.15 (672.04)

Transfer to General Reserve - Utilisation of SEZ Reinvestment allowance reserve

-

Lapse of share option 1.89 (1.89)Share based payments 4.47 4.47 As at March 31, 2017 268.49 16,790.63 1,267.89 37.31 38,092.78 766.06 11.38 57,234.55

Profit for the period (72,089.71) (72,089.71)Other comprehensive income (66.79) (243.69) (4.32) (314.80)Total comprehensive income for the year

- - - - (72,156.51) (243.69) (4.32) (72,404.52)

Lapse of share options (37.61) 37.61 - Share based payments 0.30 0.30 As at March 31, 2018 268.49 16,790.63 1,267.89 - (34,026.12) 522.37 7.06 (15,169.67)

* Attributable to equity holders of the Parent as there is no non-controlling interest.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) [FCS : 8479]

Place : MumbaiDated : 29.05.2018

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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018

1 CORPORATE INFORMATION The consolidated financial statements comprise financial statements of Tara Jewels limited (‘the Company’) and its

subidiaries (collectively, ‘the Group’)for the year ended March 31, 2017. The Company is a public Company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Plot 122, 15th Road , Near IDBI Bank, MIDC, Andheri (E), Mumbai 400093.

The Group is in the business of exports and domestic sales of fine jewellery. The Group has been in the jewellery exports

business since inception and has started the retail jewellery business in 2010. The Group is an integrated player in the jewellery industry with experience ranging from designing to retailing of jewellery. The portfolio of products includes gold, platinum and silver jewellery with or without studded precious and semi-precious stones. The Group’s products have presence across different price points and cater to customers across high-end, mid-market and value market segments. The consolidated financial statements for the year ended March 31, 2017 were approved by the Board of Directors and authorised for issue on May 29, 2017.

2 SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation The consolidated financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS)

notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, under the historical cost convention on the accrual basis except for derivative financial instruments and certain financial assets and liabilities which are measured at fair value.

2.2 Principles of consolidation The consolidated financial statements have been prepared on the following basis

(a) Subsidiaries

Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the group.

The group combines the financial statements of the parent and its subsidiaries line by line adding together like

items of assets, liabilities, equity, income and expenses. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

The financial statements of all entities used for the purpose of consolidation are drawn up to same reporting date as that of the parent company, i.e., year ended on March 31 2017. When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial information as of the same date as the financial statements of the parent to enable the parent to consolidate the financial information of the subsidiary.

Non-controlling interests, if any, in the results and equity of subsidiaries are shown separately in the consolidated statement of profit and loss, consolidated statement of changes in equity and balance sheet respectively.

(b) Changes in ownership interests

The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised within equity.

- 156 -

CONSOLIDATED

TARA JEWELS LIMITED

(c) Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

(d) Foreign currency translation

(i) Functional and presentation currency Items included in the financial statements of the entity are measured using the currency of the primary

economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in Indian rupee (INR), which is entity’s functional and presentation currency.

(ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at

the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss.

Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at

fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction.

(iii) Group companies The results and financial position of foreign operations that have a functional currency different from the

presentation currency are translated into the presentation currency as follows: - assets and liabilities are translated at the closing rate at the date of that balance sheet - income and expenses are translated at average exchange rates , and - All resulting exchange differences are recognised in other comprehensive income.

2.3 Other Significant Accounting Policies These are set out under “Significant Accounting Policies” as given in the Company’s standalone financial

statements.

3 SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS These are same as given in the Company’s standalone financial statements.

ANNUAL REPORT 2018

- 157 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

4.

PRO

PERT

Y, P

LAN

T A

ND

EQ

UIP

MEN

T(`

in L

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)

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ares

Fact

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2,66

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7.48

434.

4227

8.85

63.0

875

.41

51.6

318

7.02

3,16

1.71

269.

8799

.20

13,

338.

83

Add

ition

s du

ring

2016

-17

-1,

275.

410.

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100.

295.

93-

1.00

0.13

1,2

91.9

4

Dis

posa

ls d

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g 20

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18.8

811

4.42

7.90

6.66

15.7

41.

3524

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8.51

14.6

4 4

62.9

7

WD

V T

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201

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(0.1

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(0.0

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As

at M

arch

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201

7 2

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7,3

13.8

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6

8.46

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0.41

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36

84.

45

14,

166.

33

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ition

s du

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4.33

3

9.54

5

6.57

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1

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7.57

Net

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No

tes:

i. Pr

op

erty

, Pla

nt

and

Eq

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t p

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ged

as

secu

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ag

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st b

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s b

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rou

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to

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r in

form

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n p

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nt

and

eq

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t p

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ged

as

secu

rity

by

the

Gro

up

.

ii.

Co

ntr

actu

al O

blig

atio

ns

Ref

er t

o N

ote

34

for

dis

clo

sure

of

con

trac

tual

co

mm

itm

ents

fo

r th

e ac

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ion

of

pro

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ty, p

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t an

d e

qu

ipm

ent.

- 158 -

CONSOLIDATED

TARA JEWELS LIMITED

5. INTANGIBLE ASSETS (` in Lakhs)

Particulars Computer Software

Patent and Trademark

Total

GROSS CARRYING VALUE

As at April 1, 2016 249.84 16.58 266.42

Additions during 2016-17 147.48 - 147.48

Disposals during 2016-17 1.86 - 1.86

WDV Translation Difference 2016-17 (0.14) (0.37) (0.51)

As at March 31, 2017 395.32 16.21 411.53

Additions during 2017-18 - - -

Disposals during 2017-18 - - -

WDV Translation Difference 2017-18 0.01 0.05 0.06

As at March 31, 2018 395.33 16.26 411.59

ACCUMULATED DEPRECIATION / IMPAIRMENT

As at April 1, 2016. 84.09 - 84.09

Depreciation for the year 2016-17 86.18 - 86.18

Deductions/Adjustments during 2016-17 1.86 - 1.86

Accumulated Depreciation Translation Difference 2016-17 (0.04) - (0.04)

As at March 31, 2017 168.36 - 168.36

Depreciation for the year 2017-18 88.87 - 88.87

Deductions/Adjustments during 2017-18 - - -

Accumulated Depreciation Translation Difference 2017-18 0.02 - 0.02

As at March 31, 2018 257.25 - 257.25

Net Carrying value as at March 31, 2018 138.08 16.26 154.34

Net Carrying value as at March 31, 2017 226.96 16.21 243.16

Net Carrying value as at April 1, 2016 165.75 16.58 182.33

6. INVESTMENTS(` in Lakhs)

Particulars As at March 31, 2018

As at April 1, 2017

Non Current Investments

Other Equity Instruments 9.87 14.19

Mutual Funds 208.11 248.81

Total 217.98 263.00

ANNUAL REPORT 2018

- 159 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

Details of Non Current Investments (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Investments in Equity Instruments

Unquoted

Divya Jewels International Pvt. Ltd. 5,000 Equity Shares of Face Value ` 10 each

1.75 1.75

Quoted

Punjab National Bank 7,000 Equity Shares of Face Value ` 2 each

6.67 10.49

Bank of India 1,400 Equity Shares of Face Value ` 10 each

1.45 1.95

9.87 14.19

Investments carried at fair value through Profit and Loss

Investments in Mutual Funds

Quoted

SBI MF Magnum Balanced Fund - Regular Plan Growth NIL (Previous Year: 7,367.763) Units of face value of Rs. 10 each

- 8.04

SBI Premier Liquid Fund - Regular Fund Daily Dividend NIL (Previous Year: 32.254) Units of Face Value of Rs. 10 each

- 0.32

Axis Liquid Fund - Daily Dividend NIL (Previous Year: 146.40) Units of Face Value of Rs. 1000 each

- 1.47

TF2GR-Union KBC Trigger Fund Series 2 - Regular Plan Growth NIL (Previous Year: 299,990) Units of Face Value of Rs. 10 each

- 33.78

Principal Tax Savings Fund - Regular Plan Growth 6,768.429 (Previous Year: 6,768.429 ) Units of face value of Rs. 10 each

13.85 11.90

CP7G-Union Capital Protection Oriented Fund - Series 7 - Regular Plan Growth 1,82,172 (Previous Year: 1,82,172) Units of face value of Rs. 10 each

19.26 18.30

Unquoted

1,750 units of face value ` 10,000 each of IIMCL-Emerging India Opportunities Fund

175.00 175.00

208.11 248.81

Total 217.98 263.00

Details of Quoted and Unquoted Investments(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Aggregate amount of quoted investments (Market Value ` 41.23 Lakhs (Previous Year : ` 86.25 Lakhs))

41.23 86.25

Aggregate amount of unquoted investments 176.75 176.75

Aggregate amount of impairment in the value of investments - -

Total 217.98 263.00

- 160 -

CONSOLIDATED

TARA JEWELS LIMITED

Carrying value of Investments (` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Investments carried at fair value through other comprehensive income 9.87 14.19

Investments carried at fair value through profit and loss 208.11 248.81

Total 217.98 263.00

7. LOANS(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current

Unsecured, considered good

Loans to Employees 24.08 37.53

Total 24.08 37.53

8. OTHER FINANCIAL ASSETS(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Non Current

Financial assets carried at amortised cost

Security Deposits 45.77 51.29

Total 45.77 51.29

Current

Financial assets carried at amortised cost

Interest Accrued but not due 31.26 75.73

Security Deposits 6.55 7.05

Other financial assets* 19.31 20.79

Total 57.12 103.57

* Includes advances paid to creditors and claims Receivable.

9. INVENTORIES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

(Valued at lower of Cost and Net Realisable value)

Raw materials (including goods-in-transit: NIL) (March 31, 2017: ` 27.16 Lakhs)

6,984.57 6,821.09

Work-in-process 27,504.89 32,398.98

Finished goods 4,151.23 12,887.84

Stock-in-trade - 0.26

Stores, consumables and packing material 84.06 110.92

Total 38,724.76 52,219.10

ANNUAL REPORT 2018

- 161 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

10. TRADE RECEIVABLES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current

Unsecured

Considered good 53,776.38 1,05,252.69

Considered doubtful 28,242.30 963.96

82,019 1,06,217

Less: Allowances for credit losses 28,242.30 963.96

53,776.38 1,05,252.69

Includes Receivables from other related parties (Refer Note 35)

11. CASH AND CASH EQUIVALENTS(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Balances with banks:

- in current accounts 195.53 161.29

Cash on hand 27.19 7.33

Total 222.73 168.62

12. OTHER BANK BALANCES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Deposits with banks to the extent held as margin money 666.35 3,593.32

Deposits with banks as security against borrowings 3,506.31 3,797.10

Total 4,172.66 7,390.42

13. OTHER ASSETS(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Non Current Capital Advances 234.69 234.69Others - Prepaid expenses - 192.74 - Payment of Tax 31.38 -Total 266.07 427.43 Current Advances other than Capital advances - Other Advances 792.28 395.42Others - Prepaid expenses 72.30 513.54- Balances with Statutory, Government Authorities 435.48 781.74- Other current assets 0.06 0.26 Total 1,300.12 1,690.96

- 162 -

CONSOLIDATED

TARA JEWELS LIMITED

14. INCOME TAXDeferred Tax (` in Lakhs)Particulars As at

March 31, 2018As at

April 1, 2017Deferred tax relates to the following:Accelerated Depreciation for tax purposes 556.29 190.17 Gratuity 109.47 151.31 Leave Encashment 39.70 - Unamortised share issue expenses u/s 35D - - Disallowance under Section 40(a)(ia) - - Investment in Subsidiaries (15.44) - Disallowance under Section 43B 60.54 - Losses available for offsetting against future taxable income 151.00 236.49 Provision for doubtful debts 8,401.02 286.56 Derivative Liability - 64.54 Transferred to P&L (9,302.57) - OthersInventories - 70.32 Net Deferred Tax Assets / (Liabilities) - 999.39

Movement in deferred tax liabilities/assets

(` in Lakhs) Particulars Year ended

March 31, 2018 Year ended

March 31, 2017 Opening balance as of April 1 999.39 751.78 Tax income/(expense) during the period recognised in profit or loss (999.39) 226.99 Tax income/(expense) during the period recognised in OCI - 20.62 Translation difference - - Closing balance as at March 31 - 999.39

(` in Lakhs) Particulars Year ended

March 31, 2018 Year ended

March 31, 2017 Deductible temporary differences 9,302.57 -Unrecognised tax losses 13,685.78 -

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liablities relate to income taxes levied by the same tax authority. Tax losses which arose in India of ` 43751.94 Lakhs (Previous year ` 715.28 Lakhs) that are available for offsetting for eight years against future taxable profits of the Holding company.

Considering the probability of availability of future taxable profits in the period in which tax losses expire, deferred tax assets have not been recognised in respect of tax lossses carried forward by the Company. Major Components of income tax expense for the years ended March 31, 2017 and March 31, 2016 are as follows: i. Income tax recognised in profit or loss

(` in Lakhs) Particulars Year ended

March 31, 2018 Year ended

March 31, 2017 Current income tax charge 18.73 265.88 Adjustment in respect of current income tax of previous year - - Deferred taxRelating to origination and reversal of temporary differences 999.39 (226.99)Income tax expense recognised in profit or loss 1,018.12 38.89

ANNUAL REPORT 2018

- 163 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

ii. Income tax recognised in OCI(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Net loss/(gain) on remeasurements of defined benefit plans - 20.62

Income tax expense recognised in OCI - 20.62

Reconciliation of tax expense and accounting profit multiplied by income tax rate for March 31, 2017 and March 31, 2016

(` in Lakhs)

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Profit / (Loss) before tax (71,071.60) (448.18)

Accounting profit before income tax (71,071.60) (448.18)

Enacted tax rate in India 31.20% 33.06%

Income tax on accounting profits (22,174.34) (148.18)

Effects of

Incomes exempt from tax (0.08) (9.12)

Non-deductible expenses for tax purposes 147.96 238.88

Tax on income at different rate - 38.76

Differential overseas tax rates 16.10 (85.80)

Dercognisition of deferred tax asset 1,018.12 -

Losses carried forward to future years and other disallowances 22,010.37 (20.62)

Tax at effective income tax rate 1,018.12 13.92

15. SHARE CAPITAL(` in Lakhs)

Particulars As at March 31, 2018

As at April 1, 2017

Authorised

30,000,000 Equity Shares of ` 10 each 3,000.00 3,000.00

Issued, subscribed and paid-up

24,622,850 Equity Shares of ` 10 each fully paid up 2,462.29 2,462.29

Total 2,462.29 2,462.29

i. Terms/rights attached to equity shares The Holding Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares

is entitled to one vote per share and dividend in indian rupees, as proposed by the Board of Directors, which is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Holding Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

ii. Details of shareholders holding more than 5% shares in the Holding company

Name of the shareholder As at March 31, 2018 As at March 31, 2017

Number % holding Number % holding

Equity shares of ` 10 each fully paid

Rajeev Sheth 96,07,893 39.02 1,45,02,893 58.90

Crystalon Finanz AG 18,00,000 7.31 18,00,000 7.31

- 164 -

CONSOLIDATED

TARA JEWELS LIMITED

iii. Shares reserved for issue under options For details of shares reserved for issue under the Share based payment plan of the Holding company, please refer note 32

iv. Shares issued for consideration other than Cash / Bonus Shares The Holding company has not issued shares for consideration other than cash or Bonus shares during the preceding 5

financial years.

16. OTHER EQUITYi. Reserves and Surplus

(` in Lakhs)

Particulars As at March 31, 2018

As at April 1, 2017

Securities Premium Reserve 16,790.63 16,790.63

General Reserve 1,267.89 1,267.89

Share Based Payment Reserve - 37.31

Retained Earnings (34,026.12) 38,092.78

Capital Reserve 268.49 268.49

Foreign Currency Translation Reserve 522.37 766.06

Closing Balance (15,176.73) 57,223.17

(a) Securities Premium Reserve(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 16,790.63 16,790.63

Add/(Less):

changes during the period - -

Closing balance 16,790.63 16,790.63

(b) General Reserve(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 1,267.89 1,266.00

Add/(Less):

Shares warrants forfeited -

Share based payment reserve transferred on lapse of option - 1.89

Closing balance 1,267.89 1,267.89

(c) Share Based Payment Reserve(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 37.31 34.73

Add/(Less):

Option Compensation expense charged during the period 0.30 4.47

Transfer to General Reserve on exercise/lapse of option (37.61) (1.89)

Closing balance - 37.31

ANNUAL REPORT 2018

- 165 -

ABOUT US

STATUTORY REPORTS

FINANCIALS

The Holding Company has one share option scheme under which options to subscribe for the company’s shares have been granted to certain executives and senior employees. The Share based payment reserve is used to recognise the value of equity settled share based payments provided to employees, including key management personnel, as part of their remuneration. Refer to Note 32 for further details of these plans. (d) Retained Earnings

(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 38,092.78 38,596.63

Net Profit/(Loss) for the year (72,089.71) (462.10)

Add/(Less):

Transfer to Retained Earning on exercise/lapse of option 37.61 -

Items of Other Comprehensive Income directly recognised in Retained Earnings

Remeasurement of post employment benefit obligation, net of tax (66.79) (41.74)

Closing balance (34,026.12) 38,092.78

(e) Capital Reserve(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 268.49 268.49

Add/(Less):

changes during the period - -

Closing balance 268.49 268.49

(f) Foreign Currency Translation Reserve(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 766.06 939.42

Add/(Less):

changes during the period (243.69) (173.35)

Closing balance 522.37 766.06

ii. Components of Other Comprehensive Income(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Equity Instruments through OCI 7.06 11.38

7.06 11.38

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CONSOLIDATED

TARA JEWELS LIMITED

The disaggregation of changes to OCI by each type of reserve in equity is shown below:(` in Lakhs)

Particulars Equity Instruments through OCI

Total

As at April 1, 2016 6.22 6.22

Gain/(Loss) on FVTOCI financial assets 5.15 5.15

As at March 31, 2017 11.38 11.38

Gain/(Loss) on FVTOCI financial assets (4.32) (4.32)

As at March 31, 2018 7.06 7.06

17. BORROWINGSi. Non Current Borrowings

(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Secured

Term Loans

From Banks - 1.51

From Others 79.68 123.82

Long term maturity of Finance Lease Obligations - 67.03

(A) 79.68 192.36

Current Maturity of Non Current Borrowings

Term Loans

From Banks - 1.51

From Others 30.97 44.14

Long term maturity of Finance Lease Obligations - -

(B) 30.97 45.65

Total (A)-(B) 48.71 146.71

a) Term Loan from Banks includes vehicle loan which is secured by hypothecation of vehicle and carries interest @ 10.22% p.a. The loans is repayable in 60 monthly installments inclusive of interest from the date of loan.

b) Term Loans from others include i) Loan secured by hypothecation of Plant and Machinery and carries interest @ 13.00% p.a. The loan is repayable in

45 monthly installments of ` 148,642/- each including interest starting from March 2014.

ii) Loan secured by hypothecation of vehicle and carries interest @ 10.22%. The loans is repayable in 60 monthly installments inclusive of interest from the date of loan.

c) Long term maturity of Finance Lease Obligations represents fair value of Finance lease obligations amortised over the lease

term on a straight line basis in accordance with Ind AS 109.

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

ii. Current Borrowings(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Secured

Loans repayable on demand

From Banks 75,748.42 48,082.24

From Other Parties - 300.00

Bills Discounted 11,895.31 25,189.14

Unsecured

Loan from Related Party 1,729.14 482.89

Total 89,372.88 74,054.26 (a) Working capital loans from banks are secured by hypothecation of inventories, book debts, plant and machinery, fixed

deposits, other current assets and equitable mortgage of the Holding Company’s factories at Seepz and MIDC, one office at Bandra Kurla Complex, seven flats in Mumbai, and Two Flats at Prabhadevi belonging to Divya Real Estate Pvt. Ltd.

(b) The above facilities are further secured by

(i) personal guarantee of managing director, Mr. Rajeev Sheth,

(ii) corporate guarantee of Divya Real Estate Pvt. Ltd., Fabrikant Tara International LLC and Tara (Hong kong) Limited

(iii) fixed deposits of ` 8.79 Crores of managing director, Mr. Rajeev Sheth

(iv) pledge of 9,606,300 equity shares of the Holding Company held by managing director, Mr. Rajeev Sheth

(c) Working capital loans from others are secured by pledge of 23,75,000 equity shares of the Holding Company held by managing director, Mr. Rajeev Sheth and personal guarantee of managing director

(d) Working capital loans taken by USA Subsidiary Company are secured by hypothecation of substantially all assets of the subsidiary company, subordinations and corporate guarantee of Tara Jewels Limited.

(e) Working capital loans taken by Hongkong Subsidiary Company are secured by hypothecation of inventory, receivables and fixed deposits. The loans are further secured by corporate guarantee of Tara Jewels Limited and personal guarantee of Managing Director, Mr. Rajeev Sheth.

(f) Loan from related party is interest free and repayable on demand. iii. Other Disclosures (a) The carrying amounts of financial and non-financial assets pledged as security for current and non current borrowings are

disclosed in Note 41

(b) Amount and period of default in repayment of borrowings

As at March 31, 2018 As at March 31, 2017

Amount Period of Default Amount Period of Default

Term Loans from Others

Principal 7.36 1 - 60 days 4.45 1 - 60 days

Interest 2.16 1 - 60 days 1.71 1 - 60 days

Loans repayable on demand from Banks

Principal 45,954.59 1-180 Days 4,691.76 1-180 Days

Interest 1,706.40 1-180 Days 58.05 1-180 Days

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CONSOLIDATED

TARA JEWELS LIMITED

18. OTHER FINANCIAL LIABILITIES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current

Financial Liabilities at amortised cost

Current maturities of long term debts 30.97 45.65

Current maturities of finance lease obligations - -

Interest accrued and due on borrowings 1,647.88 69.60

Interest accrued but not due on borrowings 58.52 62.20

Unpaid dividends 0.05 0.05

Others

Bank Overdraft 5,553.18 243.73

Other Payables 5.23 78.40

7,295.82 499.63

(ii) Financial Liabilities carried at fair value through profit and loss

Derivatives not designated as hedge

- Foreign Exchange forward contracts - 195.22

- 195.22

Total 7,295.82 694.85

19. TRADE PAYABLES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current

Trade Payables to Micro, Small and Medium Enterprises 0.22 -

Trade Payables to Others 16,650.95 38,799.02

Total 16,651.17 38,799.02

Includes dues to related parties (refer note 35)

20. OTHER LIABILITIES(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Current

Statutory Liabilities 644.15 594.63

Others* 1,788.07 1,795.77

Total 2,432.22 2,390.40

*Others includes expenses payable, advance received from customer.

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

21. PROVISIONS(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Non Current

Provision for employee benefits

Gratuity (Refer Note 32) 304.11 306.10

Leave encashment 118.16 129.25

Total 422.27 435.35

Current

Provision for employee benefits

Gratuity (Refer Note 32) 46.74 14.37

Leave encashment 9.07 7.92

Total 55.81 22.29

22. CURRENT TAX LIABILITY(NET)(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Opening balance 3,125 .02 2,763.49

Add: Current tax and earlier tax payable 18.73 240.90

Add: Provision for interest payable on current tax 336.00 550.00

Less: Taxes paid (104.17) (423.24)

Translation Difference (0.20) (6.13)

Closing Balance 3,375.38 3,125.02

23. REVENUE FROM OPERATIONS(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Sale of products 83,985.36 1,55,272.58

Sale of services 0.19 -

Labour charges

Other Operating Revenues 3.36 2.95

83,988.91 1,55,275.52

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CONSOLIDATED

TARA JEWELS LIMITED

24. OTHER INCOME(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Interest income on

Bank fixed deposits 256.81 397.59

Loans to others - -

Dividend income 0.02 0.08

Other Non Operating Income

Financial Guarantee Income - -

Net gain on sale of Investments 0.25 13.71

Fair value Gain on financial instrument at Fair value through profit and loss 194.35 -

Net gain on disposal of property, plant and equipment 1.40 -

Others

Rent received 59.35 51.70

Commission received - 0.43

Sundry balances written back 15.82 45.94

Miscellaneous income - -

527.99 509.46

25. COST OF MATERIALS CONSUMED(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

As at beginning of the year 6,823.08 9,729.25

Add: Purchases 91,606.28 1,14,798.51

Less: Write down of Inventory to NRV 32,550.16 -

Less : As at end of the year 6,984.57 6,821.09

Translation Difference (0.58) 6.35

58,894.04 1,17,713.01

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

26. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE

(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Inventories as at the beginning of the year Work - in - process 32,398.98 35,453.56 Finished goods 12,887.84 12,802.62 Stock-in-trade 0.26 0.26

45,287.08 48,256.45 Less : Inventories as at the end of the year Work - in - process 27,504.89 32,398.98 Finished goods 4,151.23 12,887.84 Stock-in-trade - 0.26

31,656.13 45,287.08 Translation Difference 2.02 (146.59)Net decrease / (increase) in inventories 13,632.98 2,822.78

27. EMPLOYEE BENEFITS EXPENSE(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Salaries, wages and bonus 2,618.33 3,541.12 Contribution to provident and other funds 204.95 218.56 Share based payments to employees 0.30 4.47 Staff welfare expenses 109.99 79.88 Gratuity Expense 27.08 38.35

2,960.66 3,882.39

28. FINANCE COST(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Interest expense on debts and borrowings 7,693.53 7,116.63 Interest on income tax 336.00 550.00 Other borrowing costs 594.99 779.20 Guarantee Commission Expense - - Others

8,624.52 8,445.83

29. DEPRECIATION AND AMORTISATION EXPENSE(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Depreciation on tangible assets 1,512.74 2,145.83 Amortisation on intangible assets 87.58 86.18

1,600.32 2,232.00

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CONSOLIDATED

TARA JEWELS LIMITED

30. OTHER EXPENSES(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Manufacturing Expenses

Wages, allowances and bonus 799.82 986.23

Import clearing charges 169.81 335.46

Labour charges 930.11 3,125.81

Electric power, fuel and water 324.58 323.87

Repairs and maintenance

Factory Building 8.79 10.63

Plant and Machinery 20.49 27.76

Foreign Exchange fluctuation loss 2,426.61 (477.79)

Stores, consumables and packing material 345.47 394.15

5,025.67 4,726.11

Selling, Administration and Other Expenses

Advertisement 0.91 3.94

Payments to auditors (Refer note below) 83.52 69.15

Bad Debts written off 525.17 992.92

Credit insurance 166.17 218.63

Electricity charges 0.83 16.68

Export clearing charges 128.37 138.43

Fixed assets written off 1,037.37 43.48

House Keeping Expenses 37.06 46.02

Insurance 137.97 263.49

Legal and professional fees 1,231.24 1,241.53

Net loss on disposal of property, plant and equipment 3.34 61.76

Rates and taxes 53.54 47.12

Rent 290.72 410.12

Repairs & maintenance - other 83.17 121.92

Sales promotion expenses 517.27 669.89

Security charges 48.81 82.33

Telephone and internet expenses 42.13 49.46

Travelling & conveyance expenses 94.17 245.40

Allowance for doubtful debts - (147.86)

Bank charges 256.01 447.54

Fair value loss on financial instrument at Fair value through profit and loss - 181.43

Miscellaneous expenses 220.56 247.22

4,958.33 5,450.60

Total 9,984.00 10,176.71

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

31. EXCEPTIONAL ITEMS(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Write down of Inventory to NRV 32,531.68 - Allowance for doable debts 27,278.04 -

59,809.72 - * The Company is carrying an inventory of raw material, work in progress and finished goods. The company during the year ceased to continue operation in its wholesale business vertical. A significant part of the inventory of this vertical is not earmarked against orders as on date and the company is trying to utilise the same in the international Retail business. In view of above and the slowdown in jewellery market, the Company has on the basis of an internal evaluation provided for write down of inventories.

** The Company has provided for expected credit loss on trade receivables . The Company is in the process of actively following up with the customers for the recovery. It expects to either realise the balance dues or recover the material supplied.

Details of Payments to auditors

(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Audit Fee 28.52 15.00 Tax audit fee 15.00 15.00 Limited review fees 30.00 10.00 Services for tax matters 5.00 15.00 Certification and consultation 5.00 11.00 Service Tax - 3.15

83.52 69.15

32. EMPLOYEE BENEFIT OBLIGATIONS(` in Lakhs)

Particulars As at March 31, 2018 As at March 31, 2017

Current Non Current

Total Current Non Current

Total

Leave obligations 9.07 118.16 127.23 7.92 129.25 137.17 Gratuity 46.74 304.11 350.85 14.37 306.10 320.46 Total Employee Benefit Obligation 55.81 422.27 478.08 22.29 435.35 457.63

(i) Leave Obligations The leave obligations cover the Holding company’s liability for sick and earned leave.

The amount of the provision of ` 907,292(Previous Year : ` 791,838) is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations.

(ii) Post Employement obligations

a) -Gratuity The Holding company provides for gratuity for employees in india as per the Payment of Gratuity Act, 1972. Employees who

are in continuous service for a period of five years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied by number of years of service.

The gratuity plan is a funded plan and the Holding company makes contributions to recognised funds in India. The Holding company does not fully fund the liability and maintains a target level of funding to be maintained over a period of time based on estimations of expected gratuity payments.

The amount recognised in the balance sheet and the movement in the net defined benefit obligation over the period are as follows.

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CONSOLIDATED

TARA JEWELS LIMITED

(` in Lakhs)

Present value of obligation

Fair value of plan assets

Net amount

As at April 1, 2016 259.06 (1.66) 257.40

Current service cost 38.62 - 38.62

Interest expense/(income) 18.78 (0.12) 18.66

Total amount recognised in profit or loss 57.40 (0.12) 57.28

Remeasurements

Return of plan assets, excluding amount included in interest (income)

- - -

(Gain)/Loss from change in demographic assumptions 1.54 1.54

(Gain)/Loss from change in financial assumptions 54.60 54.60

Experience (gains)/losses 6.25 (0.02) 6.24

Total amount recognised in other comprehensive income 62.39 (0.02) 62.38

Employer contributions -

Benefit payments (56.59) (56.59)

As at March 31, 2017 322.26 (1.79) 320.46

Current service cost 28.28 28.28

Interest expense/(income) 23.35 (0.13) 23.22

Total amount recognised in profit or loss 51.62 (0.13) 51.49

Remeasurements

Return of plan assets, excluding amount included in interest (income)

- -

(Gain)/Loss from change in demographic assumptions 67.45 67.45

(Gain)/Loss from change in financial assumptions (8.51) (8.51)

Experience (gains)/losses 7.84 (0.01) 7.84

Total amount recognised in other comprehensive income 66.79 (0.01) 66.78

Employer contributions -

Benefit payments (94.28) (94.28)

Past Service Cost 6.38 6.38

As at March 31, 2018 352.78 (1.93) 350.85

The net liability disclosed above relates to funded and unfunded plans are as follows: (` in Lakhs)

As at March 31, 2018

As at March 31, 2017

Present value of funded obligations 352.78 322.26

Fair value of plan assets (1.93) (1.79)

Deficit of funded plan 350.85 320.46

Unfunded plans

Deficit of gratuity plan 350.85 320.46 The major categories of plan assets of the fair value of the total plan assets are as follows

March 31, 2018Unquoted

March 31, 2017Unquoted

Balance with LIC 1.93 1.79

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

The significant actuarial assumptions were as follows:

As at March 31, 2018

As at March 31, 2017

Discount rate 7.50% 7.25%

Expected return on plan assets 7.50% 7.25%

Salary growth rate 3.50% 3.50%

Attrition rate 8.00% 1% to 4%

Life expectation for

Male 60 Years 60 years

Female 60 Years 60 years

A quantitative sensitivity analysis for significant assumption as at March 31, 2018 is shown below:

Assumptions Discount rate Salary growth rate

Sensitivity Level 0.5% increase

0.5% decrease

0.5% increase

0.5% decrease

March 31, 2017

Impact on defined benefit obligation (17.36) 18.98 19.60 (18.04)

March 31, 2018

Impact on defined benefit obligation (12.05) 12.84 12.92 (12.22)

Assumptions Attrition Rate Mortality Rate

Sensitivity Level 50% increase

50% decrease

10% increase

10% decrease

March 31, 2017

Impact on defined benefit obligation NA NA NA NA

March 31, 2018

Impact on defined benefit obligation 25.98 (40.43) 0.25 (0.25)

Sensivities due to mortality, attrition and withdrawals are insignificant and therefore ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement. The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined beenfit obligation as a result of reasonable changes in key assumptions occuring at the end of the reporting period. The following payments are expected contributions to the defined benefit plan in future years:

(` in Lakhs)

As at March 31, 2018

As at March 31, 2017

Within the next 12 months 46.74 16.16

Between 2 and 5 years 161.72 92.12

Between 5 and 10 years 157.40 72.86

Beyond 10 years 321.42 -

Total expected payments 687.27 181.14

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CONSOLIDATED

TARA JEWELS LIMITED

(ii) Defined contribution plans The company also has defined contribution plans. Contributions are made to provident fund in India for employees at the

rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

During the year, the Holding Company has recognised the folllowing amounts in the Statement of Profit and Loss:

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Employer's contribution to provident fund 129.86 163.21

129.86 163.21

33. SHARE BASED PAYMENTS(a) Employee stock option plan The Employee Stock Option Plan (ESOP) is designed to provide incentives to employees above the designation of managers

to deliver long term returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

Once vested, the options remain exercisable for a period of 4 years. When exercisable, each option is convertible into one equity share of ` 10 each. The exercise price of the share options is ` 230.

Movement during the period The number and weighted average exercise prices (WAEP) of the options and movement during the period is as follows:

Year ended March 31, 2018 Year ended March 31, 2017

Numer of options

WAEP Numer of options

WAEP

Opening balance 1,06,283 230 1,11,678 230

Granted duing the period - - - -

Exercised during the period - - - -

Forfeited /lapsed during the period (1,06,283) - (5,395.00) -

Expired during the period - - - -

Closing balance - 230 1,06,283 230

Vested and exercisable 63,770

Share options outstanding at the end of the period have the following expiry date and exercise prices

Particluars Grant date Expiry date Exercise price (`)

Share optionsMarch 31, 2018

Share optionsMarch 31, 2017

ESOP 2013 - Grant C 25-Jul-13 25-Jul-17 230 - 1,06,283

Total - 1,06,283

Weighted average remaining contractual life of options outstanding at the end of period 0.32 Years (b) Expense arising from share based payment transactions Total expenses arising from share based payment transactions recognised in profit or loss as part of employee benefit

expense were as follows:

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Employee stock option 0.30 4.47

Total employee share-based payment expense 0.30 4.47

34. COMMITMENTS AND CONTINGENCIES A. Commitments i. Capital Commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:

(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Property, plant and equipment 104.00 104.00

ii. Other Commitments(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Future Minimum Royalty payable 258.94 160.48

iii. Leases Operating lease commitments - as lessee The Group’s significant leasing arrangements are in respect of residential flats and commercial premises taken on lease. The

arrangements range between 11 months and 9 years generally and are usually renewable by mutual consent or mutually agreeable terms. Under these arrangements, generally refundable interest free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Statement of Profit and Loss for the year and included under Rent (disclosed under Other Expenses).

(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Commitments for minimum lease payments in relation to non cancellable operating leases are as follows

Within one year 206.91 193.32

Later than one year but not later than five years 721.59 989.72

later than five years 95.05 -

1,023.56 1,183.04

Rents recognised as expense in the period 290.72 410.12 Operating lease commitments - as lessor The Holding Company has entered into operating leases for its commercial property. These leases have terms of between 11 months and 3 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The total rents recognised as income during the year is ` 59.35 Lakhs (Previous Year : ` 51.70).

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CONSOLIDATED

TARA JEWELS LIMITED

(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

Minimum lease rentals receivables in relation to non cancellable operating leases are as followsWithin one year 32.54 48.00

Later than one year but not later than five years 76.17 78.80

later than five years - -

108.72 126.80

B. Contingent Liabilities(` in Lakhs)

Particulars As at March 31, 2018

As at March 31, 2017

i. Claim against the Group not acknowledged as debt(a) Custom duty matter 19.01 19.01 (b) Service tax matter 67.23 67.23 (c) Other matter - 10.05

Breif description of the nature of each contingent liability (a) Custom duty matters Two show cause notices have been issued against holding Company by Assistant Commissioner of Customs, Mumbai,

regarding shortage of gold and misuse of wastage norms. Also Additional Assistant Commissioner of Customs, Mumbai has imposed fine for import without a license that could not be cleared as prototype samples. Holding Company has filed appeals before the Commissioner of Customs / Additional Commissioner of Customs and matters are pending.

(b) Service tax matter Joint Commissioner, Service Tax- I, Mumbai has issued a show cause notice to Holding Company for service tax demand for

the Taxation of Services (Provided from Outside India and Received in India). The Holding Company has filed an appeal before the Commissioner of Central Excise against the order and the matter is currently pending.

Income Tax Assessment The Income- Tax assessments of the Holding Company have been completed up to Assessment Year 2014-15. The disputed demand outstanding up to the said assessment year is approximately ` 565.00 Lakhs Based on the decisions of the appellate authorities and the interpretations of other relevant provisions, the Holding Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

35. RELATED PARTY TRANSACTIONS i. List of related parties as per the requirements of Ind-AS 24 - Related Party Disclosures

Key Management Personnel1. Mr. Rajeev Sheth2. Mr.Ravindran M. P.3. Mr. Sanjay Sethi (From 20-06-2017)4. Mr. Vishnu Prakash Garg (Upto 29-05-2017)5. Mrs. Nivedita Nayak 6. Ms. Fern Mallis7. Ms. Priyanka Agarwal8. Ms. Alison Lazerwitz

Relatives of Directors 1. Mrs. Aarti Sheth2. Mrs. Divya Sheth3. Mrs. Purnima Sheth4. Mrs. Rama Ravindran Menon

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

Entities in which Key Managerial Personnel/ their relatives are able to exercise significant influence or control 1. F. T. Diamonds2. Divya Jewels International Pvt. Ltd.3. Divya Real Estate Pvt. Ltd.4. Aarti Jewellers Pvt Ltd. 5. Karan Arjun Jewellery Pvt. Ltd.6. Tara Duniya Corporation

ii. Transactions during the year ended Mar 31, 2018

(` in Lakhs)

Particulars Key Management Personnel

Entities in which Key Managerial Personnel/ their relatives have significant influence or control

Current Year

Previous Year

Current Year

Previous Year

Sale of Goods

F. T. Diamonds - - 14,221.66 1,644.97

Purchase of Goods

Aarti Jewellers Pvt Ltd. - - - 1.08

F. T. Diamonds - - 14,593.69 1,455.52

Labour Charges Paid

F. T. Diamonds - - - 11.59

Labour Charges Received

Aarti Jewellers Pvt Ltd. - - - -

F. T. Diamonds - - 0.18 0.28

Directors’ Remuneration and Commission

Mr. Rajeev Sheth - 90.00 - -

Mr. Sanjay Sethi 54.87 - - -

Mr. Vishnu Prakash Garg 5.22 44.31 - -

Mr. Ravindran M. P. 10.96 29.47 - -

Commission and other benefits to Independent Directors

2.80 5.00 - -

Salary and Professional Fees paid

Mr. Bimal Desai - 6.53

Ms. Aarti Sheth 20.40 32.46 - -

Ms. Divya Sheth 22.99 22.99 - -

Other Key Managerial Personnel 6.39 6.29 - -

Professional Fees paid

Mrs. Rama Ravindran Menon 20.91 19.02 - -

Sales Promotion Expenses

Aarti Jewellers Pvt Ltd. - - - 1.47

Unsecured Loan Taken

Mr.Rajeev Sheth 1,180.09 106.64 - -

F.T. Diamonds - - 123.18 6.18

Divya Real Estate Pvt. Ltd. - - 12.85 -

Repayment of Unsecured Loan Taken

Mr.Rajeev Sheth 71.68 26.00 - -

Tara Duniya Corporation - - 0.58 70.44

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CONSOLIDATED

TARA JEWELS LIMITED

iii. Key management personnel compensation

(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Salaries and other employee benefits to whole time directors and Key Management Personnel

120.82 232.05

Provision for Post employment benefits to whole time directors and Key Management Personnel

13.46 13.50

Commission and other benefits to non-executive / independent directors 2.80 5.00

Share based payments

137.08 250.55

iv. Closing Balances as on March 31, 2018

(` in Lakhs)

Particulars Key Management Personnel

Entities in which Key Managerial Personnel/ their relatives have significant influence or control

Current Year

Previous Year

Current Year

Previous Year

Trade Receivables

F. T. Diamonds Inc. - - 2.75 -

Aarti Jewellers Pvt Ltd. - - - 0.53

Trade Payables

F. T. Diamonds Inc. - - 437.89 353.96

Investments

Divya Jewels International Pvt. Ltd. - - 1.75 1.75

Short Term Borrowings

Mr.Rajeev Sheth 1,189.05 80.64 - -

F.T. Diamonds - - 277.98 153.19

Tara Duniya Corporation - - 249.26 249.05

Divya Real Estate Pvt. Ltd. 12.85 -

Director Remunaration payable

Mr.Rajeev Sheth - 9.85 - -

Mr.Vishnu Prakash Garg - 5.77 - -

Mr.Ravindra P. Menon - 3.52 - -

Commission and other benefits to Independent Directors

16.95 28.66 - -

Salary and Professional Fees payable

Ms. Aarti Sheth 6.18 13.60 - -

Ms. Divya Sheth 4.16 1.18 - -

Mrs. Rama Ravindran Menon 6.27 4.70 - -

Other Key Managerial Personnel 1.64 1.08 - -

v. Terms and conditions of transactions with related parties The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length

transactions. Outstanding balances at the year end are unsecured and interest free. For the year ended March 31, 2018, the Group has not recorded any impairment of receivables relating to amount owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and market in which the related party operates.

The parent company has given Corporate Guarantee to the Bankers of subsidiaries Companies amounting to ` 18536.40 Lakhs The subsidiaries have also provided Corporate guarantee to the lenders of parent company for its borowing from the banks.

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FINANCIALS

36. SEGMENT REPORTING A. Information about Primary Business Segment

The Group is exclusively engaged in the “Diamond and Gold Jewellery” Business Segment.

B. Information about Secondary Geographical Segment.

Particulars April 1, 2017 to March 31, 2018

India Outside India* Total

External Revenue 7,651.76 76,337.14 83,988.90

(30,812.45) (1,24,463.08) (1,55,275.52)

As at March 31, 2018

Carrying Amount of Segment Assets 19,700.66 87,246.22 1,06,946.87

(68,800.24) (1,10,564.49) (1,79,364.73)

April 1, 2017 to March 31, 2018

Capital Expenditure 22.39 - 22.39

(1,143.14) (13.34) (1,156.48)

* Includes mainly United States of America, Australia, China (including Hong kong), United Arab Emirates,

Europe, South- Africa, Canada, Singapore and United kingdom Note: The figures in brackets are in respect of the previous year ended March 31, 2017 Notes: (a) Segment Revenue in the geographical segment considered for disclosure are as follows: - Revenue within India includes sales to customers located within India and earnings in India - Revenue outside India includes sales to customers located outside India and earnings outside India.

(b) Segment revenue, results, assets and liabilities includes the respective amounts identified to each of the segment and

amounts allocated on a reasonable basis.

(c) Number of customers with revenue of more than 10% is 2 amounted to ` 22,009 Lakh (March 31, 2017 : NIL).

37. EARNINGS PER SHARE(` in Lakhs)

Particulars Year Ended March 31, 2018

Year ended March 31, 2017

Profit / (Loss) after tax (` in Lakhs) (72,089.71) (462.10)

Weighted average number of equity shares 2,46,22,850 2,46,22,850

Nominal value per share (`) 10.00 10.00

Basic and Diluted Earning / (Loss) per Equity Share (`) (292.78) (1.88)

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38. FAIR VALUE MEASUREMENTSi. Financial Instruments by Category

(` in Lakhs)

Particulars Carrying Amount Fair Value

As at March 31, 2018

As at March 31, 2017

As at March 31, 2018

As at March 31, 2017

FINANCIAL ASSETS

Amortised cost

Trade Receivables 53,776.38 1,05,252.69 53,776.38 1,05,252.69

Loans 24.08 37.53 24.08 37.53

Cash and Cash Equivalents 222.73 168.62 222.73 168.62

Other Bank Balances 4,172.66 7,390.42 4,172.66 7,390.42

Other Financial Assets 102.89 154.86 102.89 154.86

FVTOCI

Investment in Equity Instruments 9.87 14.19 9.87 14.19

FVTPL

Investments in Mutual Funds 208.11 248.81 208.11 248.81

Total 58,516.71 1,13,267.11 58,516.71 1,13,267.11

FINANCIAL LIABILITIES

Amortised cost

Borrowings 89,421.59 74,200.97 89,421.59 74,200.97

Trade Payables 16,651.17 38,799.02 16,651.17 38,799.02

Other financial liabilities 7,295.82 499.62 7,295.82 499.62

FVTPL - 195.22 - 195.22

Derivative instruments

Total 1,13,368.58 1,13,694.84 1,13,368.58 1,13,694.84

The management assessed that the fair value of cash and cash equivalent, other bank balances, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments. The fair values for security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy and their fair values are assessed as approximate to their carrying amounts. The fair values of non current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk. The own non performance risk as at reporting date was assessed to be insignificant and therefore fair values approximate their carrying amounts. ii. Fair Value Hierarchy This section explains the judgments and estimates made in determining the fair values of the financial instruments that

are recognised and measure at fair value. To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table:

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FINANCIALS

Assets and liabilities measured at fair value - recurring fair value measurement:

Particulars Fair value measurement using Total

Quoted prices in active markets

(Level 1)

Significant Observable

Inputs (Level 2)

Significant Unobservable

Inputs (Level 3)

As at March 31, 2018

Financial Assets

Financial Investments at FVTPL

Quoted Mutual Funds 33.11 - - 33.11

Unquoted Mutual Funds - 175.00 - 175.00

Financial Investments at FVTOCI

Quoted equity shares 8.12 - - 8.12

Unquoted equity shares - - 1.75 1.75

Total Financial Assets 41.23 175.00 1.75 217.98

Financial Liabilities at FVTPL

Derivative instruments - - - -

Total Financial Liabilities - - - -

As at March 31, 2017

Financial Assets

Financial Investments at FVTPL

Quoted Mutual Funds 73.81 - - 73.81

Unquoted Mutual Funds - 175.00 - 175.00

Financial Investments at FVTOCI

Quoted equity shares 12.44 - - 12.44

Unquoted equity shares - - 1.75 1.75

Total Financial Assets 86.25 175.00 1.75 263.00

There have been no transfers among Level 1, Level 2 and Level 3 during the period

Level 1 - hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV. Level 2 - The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. Level 3 - If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity shares included in level 3. iii. Valuation technique used to determine fair value Specific Valuation techniques used to value financial instruments include: - the use of quoted market prices or dealer quotes for similar instruments - the fair value of forward foreign exchange contracts and principal swap is determined using forward exchange rates at the balance sheet date - the fair value of the remaining financial instruments is determined using discounted cash flow analysis

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iv. Valuation inputs and relationships to fair value The fair values of the unquoted equity shares have been estimated using a discounted cash flow model. The valuation

requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility, the probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate of fair value for these unquoted equity investments.

v. Valuation processes The finance department performs the valuations of financial assets and liabilities required for financial reporting purposes,

including level 3 fair values. The department reports directly to the chief financial officer (CFO) and the audit committee. Discussions of valuation processes and results are held between the CFO, Audit Committee and the valuation team periodically.

vi. Reconciliation of fair value measurement of financial assets carried at fair value (Level 3): There is no change in fair value of unquoted equity shares.

39. FINANCIAL RISK MANAGEMENT The group’s activity expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the

financial performance of the group, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.

(A) Credit risk Credit risk is the risk that the counterparty will not meet its obligations leading to a financial loss. Credit risk

arises from cash and cash equivalents, investments carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables.

i. Credit risk management Credit risk has always been managed by the group through credit approvals, obtaining credit reports, establishing credit

limits, taking credit limits and continuously monitoring the creditworthiness of customers to which the group grants credit terms in the normal course of business.

The group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information.

A default on a financial asset is when the counterparty fails to make contractual payments of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.

ii. Provision for expected credit losses The group follows ‘simplified approach’ for recognition of impairment loss allowance on Trade receivables

As a practical expedient, the group uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

iii. Reconciliation of loss allowance provision - Trade receivables

Particulars (` in Lakhs)Loss allowance on April 1, 2016 1,115.00 Changes in loss allowance (147.86)Translation difference (3.19)Loss allowance on March 31, 2017 963.96 Changes in loss allowance 27,278.04 Translation difference 0.30 Loss allowance on March 31, 2018 28,242.30

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STATUTORY REPORTS

FINANCIALS

(B) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability

of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, group maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecasts of the group’s liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows. In addition, the group’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual

maturities for:

- all non-derivative financial liabilities, and - net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding

of the timing of the cash flows.

The table have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. In the table below, borrowings include both interest and principal cash flows. To the extent that the interest rates are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

Contractual maturities of financial liabilities

Particulars Carrying Amount Contractual Cash Flows

Total Less than 1 year

Between 1 and 3 years

March 31, 2018

Non-derivatives

Borrowings 89,421.59 93,866.37 92,137.23 1,729.14

Trade payables 16,651.17 16,651.17 16,651.17 -

Other financial liabilities 7,295.82 7,295.82 7,295.82 -

Total non derivative liabilities 1,13,368.58 1,17,813.36 1,16,084.22 1,729.14

Derivatives (net settled)

Foreign exchange forward contracts - - - -

Total derivative liabilities - - - -

March 31, 2017

Non-derivatives

Borrowings 74,200.97 81,426.61 81,266.28 160.32

Trade payables 38,799.02 38,799.02 38,799.02 -

Other financial liabilities 499.63 499.63 499.63 -

Total non derivative liabilities 1,13,499.63 1,20,725.26 1,20,564.94 160.32

Derivatives (net settled)

Foreign exchange forward contracts 195.22 195.22 195.22 -

Total derivative liabilities 195.22 195.22 195.22 -

(C) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of

change in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and other price risk such as equity price risk and commodity price risk.

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(i) Foreign currency risk The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and

other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than functional currency of the Holding Company.

Considering the countries and economic environment in which the Holding Company operates, its operations are subject to risks arising from fluctuation in exchange rates in those countries. The risk primarily relate to fluctuations in US Dollars(USD). Other Currencies in which risk of fluctuation is not significant are Great Britain Pound(GBP) and Euro(EUR) against the functional currency of the Holding Company.

The Group, as per its risk management policy uses derivative instruments primarily to hedge foreign exchange. The Group evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risk. It hedges a part of this risk by using derivative financial instruments in line with risk management policies.

(a) Foreign currency risk exposure The Group’s exposure to foreign currency risk at the end of the reporting period expressed in Indian Rupees are as

follows

(` in Lakhs)

USD Others Total

March 31, 2018

Trade Receivables 81,862.13 - 81,862.13

Cash and Bank balances 619.34 - 619.34

Other Advances 73.40 2.40 75.80

Other Financial Assets 6.55 - 6.55

Foreign Currency loans (35,916.17) - (35,916.17)

Trade Payables (14,273.76) (814.54) (15,088.30)

Other Payables (196.20) - (196.20)

Derivative Instruments - - -

Other Financial Liabilities - - -

Net exposure to foreign currency risk 32,175.28 (812.14) 31,363.14

March 31, 2017

Trade Receivables 1,02,975.32 0.80 1,02,976.11

Cash and Bank balances 621.20 - 621.20

Other Financial Assets 7.05 - 7.05

Foreign Currency loans (41,615.11) - (41,615.11)

Trade Payables (36,347.38) (140.34) (36,487.71)

Derivative Instruments (195.22) - (195.22)

Other Financial Liabilities (39.71) - (39.71)

Net exposure to foreign currency risk 25,406.16 (139.54) 25,266.62 (b) Foreign currency sensitivity 1% increase or decrease in foreign exchange rates will have the following impact on profit before tax and OCI:

Name of the shareholder Year ended March 31, 2018 Year ended March 31, 2017

1% Increase 1% Decrease 1% Increase 1% Decrease

Impact in Profit or Loss

USD 321.75 (321.75) 254.06 (254.06)

Others (8.12) 8.12 (1.40) 1.40

Net Increase/(decrease) in profit or loss 313.63 (313.63) 252.67 (252.67)

ANNUAL REPORT 2018

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STATUTORY REPORTS

FINANCIALS

(ii) Interest rate risk The company’s main interest rate risk arises from borrowings with variable rates, which expose the company to cash

flow interest rate risk. During March 31, 2018 and March 31, 2017 the company’s borrowings at variable rate were mainly denominated in Rupees and USD.

The group’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market.

(a) Interest rate risk exposure The exposure of the group’s borrowing to interest rate changes at the end of the reporting period are as follows:

(` in Lakhs)Particulars As at

March 31, 2018 As at

March 31, 2017Variable rate borrowings 87,643.73 73,271.38 Fixed rate borrowings 1,808.82 975.25 Total borrowings 89,452.56 74,246.63 % of borrowings at variable rate 97.98 98.69

(b) Sensitivity Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.

(` in Lakhs) Impact on profit before tax

Particulars Year ended March 31, 2018

Year ended March 31, 2017

Interest rates - increase by 50 basis points (50 bps)* (438.22) (366.36)Interest rates - decrease by 50 basis points (50 bps)* 438.22 366.36

* holding all other variables constant

(iii) Price risk Commodity price risk - The group is affected by the price volatility of certain commodities. Its operating activities

require the ongoing purchase and manufacture of Jewellery and therefore require a continuous supply of mainly Gold and Diamond. Due to the volatility in the price of Gold and Diamond, the company is exposed to commodity price risk. Historically, the group has been able to increase prices to reflect changes in commodity cost.

Equity / Units price risk - The group’s exposure to listed and unlisted equity / debt securities price risk arises from

investments held by the group and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.

To manage its price risk arising from investments in equity securities, the group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the group. Reports on the equity / debt portfolio are submitted to the senior management on a regular basis. The majority of the group’s equity / debt investments are publicly traded.

Equity / debt price sensitivity The analysis is based on the assumption that the stock market index had increased by 1% or decreased by 1% with

all other variables held constant, and that all the group’s equity / debt instruments moved in line with the index.

Particulars Impact on profit before tax

Impact on other component of equity

Year ended March 31, 2018

Year ended March 31, 2017

Year ended March 31, 2018

Year ended March 31, 2017

Stock Market Index - increase 1% 0.33 0.74 0.08 0.12

Stock Market Index - decrease 1% (0.33) (0.74) (0.08) (0.12)

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Profit for the period would increase/decrease as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value though other comprehensive income.

40. CAPITAL MANAGEMENT For the purpose of the group’s capital management, capital includes issued equity capital, share premium and all other

equity reserves attributable to the equity holders of the Holding Company. The primary objective of the group’s capital management is to maximise the shareholder value.

The group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The group monitors capital using a gearing ratio, which is Total outside liabilities (TOL) divided by Total net worth (TNW). TOL includes interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

(` in Lakhs)

As at March 31, 2018

As atMarch 31, 2017

Borrowings 89,421.59 74,200.97

Trade payables 16,651.17 38,799.02

Other payables 7,295.82 694.84

Less: cash and cash equivalents 222.73 168.62

Less: Other bank balances 4,172.66 7,390.42

TOL 1,08,973.19 1,06,135.79

Total Equity (12,707.38) 59,696.84

TNW (12,707.38) 59,696.84

Gearing ratio (TOL / TNW) (8.58) 1.78

41. ASSETS PLEDGED AS SECURITY The carrying amount of assets pledged as security for current and non current borrowings are:

(` in Lakhs)

Particulars As at March 31, 2018

As atMarch 31, 2017

CURRENT ASSETS

i. Financial Assets

Trade Receivables 82,018.68 1,05,252.69

Cash and Cash Equivalents 222.73 168.62

Other Bank Balances 4,172.66 7,390.42

Loans 24.08 37.53

Other Financial Assets 57.12 103.57

ii. Non Financial Assets

Inventories 38,703.64 52,124.79

Other Current Assets 1,227.82 1,258.10

Total current assets pledge as security 1,26,426.72 1,66,335.72

NON CURRENT ASSETS

Property, Plants and equipments 7,799.30 7,278.28

Total non current assets pledge as security 7,799.30 7,278.28

ANNUAL REPORT 2018

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STATUTORY REPORTS

FINANCIALS

42. Due to challenges faced in the India retail and International wholesale business, the Company has suffered significant losses thereby affecting its net worth, however the international retail business continues to grow. The management is working towards finding a workable solution to resolve its financial challenges with the lenders and to continue its business as a going concern. We adopted a pragmatic and cautious approach, optimally stretched the available resources and improved operation efficiency. Accordingly, the management considers it appropriate to prepare these financial statements on a going concern basis.

43. The Company has received certain merchandise back from customers that are being netted off with the export receivables from same party. The necessary documents for the same are submitted to the banks for netting off the export receivables against the import payables and for extension of time for realization of trade receivables wherever necessary.

44. The Board is making its best effort to identify a suitable candidate for appointing Independent Director.

45. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 (MSMED ACT, 2006)

(` in Lakhs)

Particulars As at March 31, 2018

As atMarch 31, 2017

a) Principal amount due and remaining unpaid 0.22 -

b) Interest due on above - -

c) Payment made beyond the appointed day during the year - 2.46

d) Interest Paid on above - -

e) Interest due and payable for the period of delay - 0.07

f) Interest accrued and remaining unpaid - 0.07

g) Amount of further interest remaining due and payable in succeeding years - 1.15

The information has been given in respect of such vendors to the extent they could be identified as “Micro and Small” enterprises on the basis of information available with the Holding Company.

46. CORPORATE SOCIAL RESPONSIBILITY (CSR) During the previous financial year, the Holding company has constituted the Corporate Social Responsibility Committee

in terms of Section 135 of the Companies Act, 2013 and the board had adopted a CSR Policy as recommended by the Committee. However during the financial year under review, the Holding Company has not made any expenditure on CSR as the Holding Company is still in the process of identifying the eligible project, by which the public can be benefited appropriately. The Holding Company intends to contribute to the money for CSR activities as soon as the project is identified.

47. STANDARDS ISSUED BUT NOT YET EFFECTIVE a. ISSUE OF IND AS 115 - REVENUE FROM CONTRACTS WITH CUSTOMERS Ind AS 115 was issued in February 2016 and establishes a five-step model to account for revenue arising from

contracts with customers. Under Ind AS 115 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This standard will come into force from accounting period commencing on or after April 1, 2018. The Company will adopt the new standard on the required effective date. The Company has evaluated the effect of this on the financial statements and the impact is not material.

b. APPENDIX B TO IND AS 21- FOREIGN CURRENCY TRANSACTIONS AND ADVANCE CONSIDERATION On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting

Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

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48 ADDITIONAL INFORMATION Additional Information, as required under Schedule III to the Companies Act, 2013, of enterprises consolidated as Subsidiary

/ Associates / Joint-Ventures is as under:

(` in Lakhs)

Name of the Enterprise Net Assets i.e. total assets minus total liabilities

Share in profit or loss Share in Total Comprehensive Income

As % of consolidated

net assets

Amount As % of consolidated profit or loss

Amount As % of consolidated

Comprehensive Income

Amount

Parent

Tara Jewels Limited (163.62) (18,180.42) (100.23) (72,277.62) (99.89) (72,348.73)

Subsidiaries

Indian - - - - - -

Foreign

1. Tara Jewels Holdings, Inc. *

25.38 2,820.35 0.10 69.21 (0.27) (194.27)

2. Tara (Hong Kong) Limited 37.90 4,210.82 0.14 103.93 0.16 117.38

3. Tara China Jewelry Limited

0.34 38.12 (0.01) (8.95) - (2.61)

Minority interest in all subsidiaries

- - - - - -

Associates (Investments as per the equity method)

Indian - - - - - -

Foreign - - - - - -

Joint Ventures (as per proportionate consolidation / Investment as per the equity method)

Indian - - - - - -

Foreign - - - - - -

(100.00) (11,111.14) (100.00) (72,113.44) (100.00) (72,428.24)

Less : Adjustments arising out of consolidation

1,596.25 (23.72) (23.72)

Total (12,707.38) (72,089.71) (72,404.52)

* Based on Consolidated figures with Fabricant-Tara International LLC

ANNUAL REPORT 2018

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STATUTORY REPORTS

FINANCIALS

49. SALIENT FEATURES Salient Features of Financial Statements of Subsidiary / Associates / Joint Ventures as per Companies Act , 2013

Part “A”: Subsidiaries

(` in Lakhs)

1. Sl. No. I II III

2. Name of the subsidiary Tara Jewels Holdings, Inc. *

Tara (Hong Kong) Limited

Tara China Jewelry Limited **

3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

N.A. N.A. N.A.

4. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

USD*** USD*** USD***

5. Share capital 1,133.00 4.64 41.34

6. Reserves & surplus (including foreign currency translation reserve)

1,687.36 4,206.17 (3.22)

7. Total assets 21,345.14 21,780.17 53.62

8. Total Liabilities 18,524.79 17,569.35 15.50

9. Investments - 41.35 -

10. Turnover 41,675.62 34,627.24 88.96

11. Profit before taxation 69.21 122.65 (8.95)

12. Provision for taxation - 18.73 -

13. Profit after taxation 69.21 103.93 (8.95)

14. Other Comprehensive Income (263.48) 13.45 6.34

15. Total Comprehensive Income (194.27) 117.38 (2.61)

16. Proposed Dividend - - -

17. % of shareholding 100 100 100 * Based on Consolidated figures with Fabricant-Tara International LLC ** Wholly owned subsidiary of Tara (Hong Kong) Limited. *** Exchange rate as at end of the year USD 1 = ` 64.84 Part “B”: Associates and Joint Ventures Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures is not applicable to the company since, there are no associates or joint ventures of the Company.

As Per Our Attached Report of Even Date

For GMJ & Co. For and on Behalf of Board of Directors Chartered AccountantsFirm Registration No. 103429W

CA Sanjeev Maheshwari Rajeev Sheth Disha Tulsiani Nivedita Nayak Partner Managing Director CFO & Executive Director Company Secretary Membership No. 38755 (DIN : 00266460) (DIN : 08153901) [FCS : 8479]

Place : MumbaiDated : 29.05.2018

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TARA JEWELS LIMITED

NOTICE

Notice is hereby given that the SEVENTEENTH (17th) Annual General Meeting (AGM) of the Members of Tara Jewels Limited will be held on Friday 28th day of September, 2018 at 3.00 p.m. at Hotel Suncity Residency, Emerald 1, Basement, 16th Road, Marol MIDC, Andheri (e),Mumbai- 400093, to transact the following business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Standalone and the Consolidated Audited financial statements as at March 31, 2018 together with the Report of the Directors and the Auditors thereon.

2. To appoint a Director in place of Mr. Rajeev Sheth (DIN: 00266460 ), who retires by rotation and, being eligible, seeks re-appointment and to pass the following resolution as an Ordinary Resolution.

“RESOLVED THAT Mr. Mr. Rajeev Sheth (DIN: 00266460), who retires by rotation and being eligible and offers himself for re-appointment be and is hereby re-appointed as a Director, liable to retire by rotation

“RESOLVED FURTHER THAT the above-mentioned re-appointment of Mr. Rajeev Sheth as a Director liable to retire by rotation shall not in any way constitute a break in his existing office as a Managing Director of the Company.

3. To ratify the appointment of Statutory Auditors of the Company, and to fix their remuneration and for that purpose to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 (“Act”) and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time, and pursuant to the resolution passed by the members at the 16th Annual General Meeting of the Company held on 28th September, 2017, approving the appointment of M/s GMJ & Co, Chartered Accountants (Firm Registration No. 103429W), as the Statutory Auditors of the Company for a period of five years to hold office from the conclusion of 16th Annual General Meeting (“AGM”) till the conclusion of 21st Annual General Meeting to be held in the year 2022, the said appointment of M/s GMJ & Co, as Statutory Auditors of the Company be and is hereby ratified to hold office from the conclusion of this AGM till the conclusion of 18th AGM of the Company to be held in the year 2019 and that the Board of Directors be and is hereby authorised to fix the remuneration payable to them for the financial year ending March 31, 2019, on the recommendation of the audit committee and in consultation with the Statutory Auditors of the Company.

SPECIAL BUSINESS:

4. To consider and, if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 40 of The Companies (Amendment) Act, 2017 the ratification of the appointment of Statutory Auditors at every Annual General Meeting shall be discontinued.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to fix the remuneration for the remaining term of appointment of M/s. GMJ & Co., Chartered Accountants (Firm Registration Number:103429W) as the Statutory Auditors of the Company i.e. until the conclusion of the 21st Annual General Meeting of the Company to be held in the year 2022.

RESOLVED FURTHER THAT the Board of Directors of the Company (including its Committee), be and is hereby authorised to do all such act, deeds, matters and things as may be necessary, desirable or expedient to give effect to this resolution.”

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5. To consider and, if thought fit, to pass the following resolution as Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 196, 197, 198, 203 and other applicable provisions, if any, of the Companies Act, 2013(Act) read with Schedule V to the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), and pursuant to the recommendation of the Nomination and Remuneration Committee and the Board of Directors of the Company, the Company hereby approves re-appointment of Mr. Rajeev Sheth (DIN:00266460) as the Chairman and Managing Director (CMD) of the Company for a period of three years with effect from October 1, 2018, liable to retire by rotation, at such remuneration and on the terms and conditions as per the Explanatory Statement attached to this notice, with liberty to the Board of Directors to vary, amend or revise the remuneration within the maximum ceiling and the terms and conditions of the appointment in accordance with the provisions of the Act, and as may be agreed to between the Board of Directors and Mr. Rajeev Sheth.

RESOLVED FURTHER THAT in case of loss or inadequacy of profit during the tenure of Mr. Rajeev Sheth as Chairman and Managing Director, the remuneration including perquisites payable to him shall be in accordance with the limits specified in Section II of Part II of Schedule V to the Companies Act, 2013, or such other limits as may be prescribed by the Central Government from time to time or approved by Central Government as minimum remuneration under the Companies Act, 2013.

RESOLVED FURTHER THAT any one Director of the Company be and is hereby authorized to do all such acts, deeds, matters and things which may be necessary, usual, proper or expedient to give effect to the above resolution.

6. To consider and, if thought fit, to pass the following resolution as Ordinary Resolution:

“RESOLVED THAT Ms. Disha Tulsiani (DIN 0008153901) who was appointed by the Board of Directors as an Additional Director of the Company with effect from May 29, 2018 and who holds office up to the date of this Annual General Meeting in terms of Section 161(1) of the Companies Act, 2013 (“Act”), but who is eligible for appointment and in respect of whom the Company has received a notice in writing from a Member under Section 160(1) of the Act proposing her candidature for the office of Director of the Company, be and is hereby appointed as a Director of the Company, liable to retire by rotation.

7. To consider and, if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 196, 197,198 and other applicable provisions, if any, of the Companies Act, 2013 (Act) read with Schedule V to the Act and the applicable Rules made thereunder, the approval of the Members of the Company be and is hereby accorded for the appointment of Ms. Disha Tulsiani (DIN 0008153901) as a Whole-Time Director of the Company for a period of three years, with effect from May 29, 2018 on the following terms and conditions including remuneration:

Particulars Amount Per Month (in Rs.)

Basic Salary Rs. 1,00,000/-HRA Rs. 40,000/-Allowances Rs. 9,930/-Bonus Rs. 777.44/-Provident Fund Rs. 1,800/-Medical Reimbursement Scheme Rs. 1,250/-Other benefits Rs. 96,242.56/-Total Monthly Gross Salary Rs. 2,50,000/-Total Yearly Gross Salary Rs. 30,00,000/-

RESOLVED FURTHER THAT in pursuance of the provisions of Section 197(3) and other applicable provisions, if any, of the Companies Act, 2013, and the Rules framed thereunder, Ms. Disha Tulsiani, Whole-Time Director, shall be paid the above mentioned remuneration with authority to the Board to grant increments and vary terms of her appointment from time to time so however that the aggregate remuneration at any time will not exceed a sum of Rs. 5 lacs p.m. during her tenure. However in the event of absence or inadequacy of profits in any financial year during the term of her office as a Whole-Time Director, remuneration will not exceed the limits specified under Section II of Part II of Schedule V to the Companies Act, 2013, or such other limits as may be prescribed by the Central Government from time to time or approved by Central Government as minimum remuneration under the Companies Act, 2013.

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RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all such acts, deeds, matters and things as it may in its absolute discretion consider necessary and also to file necessary e-forms with the Ministry of Corporate Affairs to give effect to the above resolution under the Act.

8. To consider and, if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 14 and all other applicable provisions, if any, of the Companies Act 2013 read with Companies (Incorporation) Rules, 2014 as amended from time to time and in force, the existing Clause 192 of the Articles of Association be and is hereby deleted and following Clause 192 be inserted in place thereof:

192 A Managing Director or Joint Managing Director shall be liable to retire by rotation and shall be subject to the same provisions as to resignation and removal as the Directors of the Company, and if he ceases to hold the office of Director from any cause shall ipso facto and immediately cease to be Managing Director.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do all such acts, deeds, matters and things as it may in its absolute discretion consider necessary and also to file necessary e-forms with the Ministry of Corporate Affairs to give effect to the above resolution under the Act.

9. To consider and, if thought fit, to pass the following resolution as a Special Resolution:

“RESOLVED THAT in terms of the provision of Section 180(1)(a) and other applicable provisions, if any, of the Companies Act, 2013 read with the Rule thereto (including any statutory modification(s) or re-enactment thereof for the time being in force), provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and all other applicable rules, regulations, guidelines and other provisions of law, and also subject to all necessary approvals, consents, permissions and sanctions from the concerned authorities and subject to such terms and conditions as may be imposed by any of them, consent of the Members of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as the “Board” which term shall be deemed to include any Committee which the Board may have constituted or hereinafter constitute from time to time to exercise its powers including the power conferred by this resolution) to transfer, sell, assign, deliver or otherwise dispose-off, from time to time, in one or more tranches, the whole or substantially the whole of the asset(s)/ undertaking(s) of the Company and/or of its subsidiaries together with all tangible and intangible assets (including its investment in subsidiary companies) and all other rights and claims of the Company pertaining to the said asset(s)/ undertaking(s), on a slump sale basis or by any other mode as a going concern or otherwise, to any party / person(s)/ body(ies)/ entity(ies)/ company(ies) including any related party, if any, as per the provisions of Section 188 of the Companies Act, 2013 and rules made thereunder, for such consideration(s) whether in cash or otherwise and on such terms and conditions and in such manner as the Board may in its absolute discretion decide or as it may deem fit.

RESOLVED FURTHER THAT the Board be and is hereby authorized to do and perform or cause to be done all such acts, deeds, matters and things, as may be required or deemed necessary or incidental thereto, and to settle, approve, ratify and finalise all issues that may arise in this regard, without further referring to the Members of the Company, including without limitation, finalising and executing any agreements, writings, papers, memoranda, deed(s) of assignment/ conveyance, undertaking and/ or such other document(s) as may be necessary or expedient in their own discretion, and to delegate all or any of the powers or authorities herein conferred to any Director(s) or other official(s) of the Company, or to engage any advisor, consultant, agent or intermediary, as may be deemed necessary and to do all necessary and incidental acts to give effect to this resolution.

Registered Office: By Order of the Board of DirectorsPlot No. 122, 15th Road For Tara Jewels LimitedNear IDBI Bank, M.I.D.C Andheri (East)Mumbai – 400 093. Sd/-

Nivedita NayakMumbai, August 13, 2018 Company Secretary

CIN: L52393MH2001PLC131252Tel.:022 66774444Website:www.tarajewels.inE-mail:investor.care@tarajewels.co.in

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NOTES:

1. A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote, instead of himself/herself and the proxy need not be a member of the Company.

2. Proxy form duly stamped and executed in order to be effective, must reach the registered office of the company not less than 48 hours before the time of commencement of the Annual General Meeting. Proxy form for the AGM is enclosed.

3. Pursuant to Section 105(1) of the Companies Act, 2013, read with Rule 19 of the Companies (Management and Administration) Rules, 2014, a person can act as proxy on behalf of Members not exceeding 50 (fifty) in number and holding in aggregate not more than 10 (ten) per cent of the total share capital of the Company carrying voting rights. In the case of a Member holding more than 10 (ten) per cent of the total share capital of the Company carrying voting rights, such a Member may appoint a single person as proxy, who however shall not act as proxy for any other person or shareholder.

4. Corporate Members are requested to send to the Registered Office of the Company a duly certified copy of the Board Resolution, pursuant to Section 113 of the Companies Act, 2013, authorizing their representative to attend and vote at the Annual General Meeting.

5. The Explanatory Statement pursuant to Section 102 (1) of the Companies Act, 2013, with respect to Item No. 4 to 9 being Special Business as set out in the Notice is attached and forms part of this Notice.

6. Brief resume of Directors proposed to be appointed /re-appointed as required under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are provided in the Annexure “A” & “B” to the Notice.

7. The Registers required to be maintained under the Companies Act, 2013 i.e. the Register of Directors and Key Managerial Personnel and their Shareholding in the Company under Section 170 of the Companies Act, 2013 and Register of Contracts in which Directors are interested under Section 189 of the Companies Act, 2013 will be available for inspection by the Members at the AGM.

8. The Register of Members and Share Transfer Books will remain closed from September 22, 2018 to September 28, 2018 (both days inclusive).

9. Section 72 of the Companies Act, 2013 read with Rule 19(1) of the Companies (Share Capital and Debentures) Rules, 2014 made thereunder, permits Nomination by the members of the Company in the prescribed Form SH-13. Members are requested to avail this facility.

10. Members/Proxy holders are requested to bring their attendance slip duly signed and copy of the Annual Report to attend the meeting.

11. Members are requested to send to the Company their queries, if any, on accounts and operations of the Company at least 10 days before the Meeting to enable the Company to provide the required information.

12. Relevant documents referred to in the accompanying Notice are open for inspection by the members at the Registered Office of the Company on all working days, except Saturdays, between 11.00 a.m. to 1.00 p.m. up to the date of the Meeting.

13. Members are requested to notify immediately any change in their address / Bank mandate to their respective Depository Participants (DPs) in respect of their electronic share accounts and in respect of their physical shares, Folios to the Registrars

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and Share Transfer Agent of the Company, Link Intime India Private Limited,C 101, 247 Park, L.B.S Marg, Vikroli West, Mumbai- 400083.

14. Members are requested to quote their Ledger Folio Number / Client ID Number in all their future correspondence.

15. 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.

16. Electronic copy of the Notice along with the Annual Report is being sent to all the members whose email IDs are registered with the Company/Depository Participants(s) for communication purposes unless any member has requested for a hard copy of the same. For members who have not registered their email address, physical copies of the Annual Report are being sent in the permitted mode.

17. Non-Resident Indian Members are requested to inform M/s. Link Intime India Private Limited immediately of:(a) Change in their residential status on return to India for permanent settlement.(b) Particulars of their bank account maintained in India with complete name, branch, account type, account No. and

address of the Bank with PIN Code No, if not furnished earlier.

18. In compliance with the provisions of Section 108 of the Act and the Rules framed thereunder, the Members are provided with the facility to cast their vote electronically, through the e-voting services provided by Central Depository Services (India) Limited (CDSL), on all resolutions set forth in this Notice.

The facility for voting through ballot paper,will also be made available at the AGM and the members attending the AGM who have not already cast their votes by remote e-voting shall be able to exercise their voting right at the AGM, through ballot paper. Members who have cast their vote by remote e-voting prior to the AGM may attend the AGM but shall not be entitled to cast their votes again.

19. Since the securities of the Company are compulsorily tradable in electronic form, to ensure better investor service and elimination of risk of holding securities in physical form, it is requested that the members holding shares in physical form to get their shares dematerialized art the earliest.

The instructions for shareholders voting electronically are as under:

(i) The voting period begins on September 25, 2018 at 9.30 A.M and ends on September 27, 2018 at 5.00P.M. During this period shareholders of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date September 21, 2018, may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter.

(ii) Any person, who acquires shares of the Company and become member of the Company after the dispatch of the notice and holding shares as of the cut-off date i.e. September 21, 2018 may obtain login id and password by sending a request to Company Secretary.

(iii) The shareholders should log on to the e-voting website www.evotingindia.com.

(iv) Click on Shareholders.

(v) Now Enter your User ID a. For CDSL: 16 digits beneficiary ID, b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID, c. Members holding shares in Physical Form should enter Folio Number registered with the Company.

(vi) Next enter the Image Verification as displayed and Click on Login.

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(vii) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an earlier voting of any company, then your existing password is to be used.

(viii) If you are a first time user follow the steps given below:

For Members holding shares in Demat Form and Physical Form

PAN Enter your 10 digit alpha-numeric *PAN issued by Income Tax Department (Applicable for both demat• Members who have not updated their PAN with the Company/Depository Participant are requested

to use the sequence number which is printed on stiker of the annual report envelope.

DOB Enter the Date of Birth as recorded in your demat account or in the company records for the said demat account or folio in dd/mm/yyyy format.

Dividend Bank Details

Enter the Dividend Bank Details as recorded in your demat account or in the company records for the said demat account or folio.

• Please enter the DOB or Dividend Bank Details in order to login. If the details are not recorded with the depository or company please enter the member id / folio number in the Dividend Bank details field as mentioned in instruction (iv).

(ix) After entering these details appropriately, click on “SUBMIT” tab.

(x) Members holding shares in physical form will then directly reach the Company selection screen. However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(xi) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions contained in this Notice.

(xii) Click on the EVSN of Tara Jewels Ltd.

(xiii) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO” for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.

(xiv) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.

(xv) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.

(xvi) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote.

(xvii) You can also take out print of the voting done by you by clicking on “Click here to print” option on the Voting page.

(xviii) If Demat account holder has forgotten the same password then Enter the User ID and the image verification code and click on Forgot Password & enter the details as prompted by the system.

(xix) Note for Non – Individual Shareholders and Custodians

• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.

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• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to helpdesk.evoting@cdslindia.com.

• After receiving the login details a compliance user should be created using the admin login and password. The Compliance user would be able to link the account(s) for which they wish to vote on.

• The list of accounts should be mailed to helpdesk.evoting@cdslindia.com and on approval of the accounts they would be able to cast their vote.

• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.

(xx) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions (“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to helpdesk.evoting@cdslindia.com.

20.a) Mr. K.C Nevatia, FCS, Practicing Company Secretary (CP No.2348) has been appointed as Scrutinizer to scrutinize voting process in a fair and transparent manner.

b) The Scrutinizer shall after the conclusion of voting at the general meeting, will first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two (2) witnesses who are not in the employment of the Company and shall make not later than three (3) days of the conclusion of the Annual General Meeting a consolidated Scrutinizer’s Report of the votes cast in favour or against, if any, forthwith to the Chairman of the Company or in his absence any other director so authorized by the Board, who shall countersign the same and declare the result of the voting forthwith.

c) The Results declared along with the Scrutinizer’s Report shall be available for inspection and also placed on the website of the Company and on the website of CDSL immediately after the declaration. The results shall also be immediately forwarded to BSE Limited and NSE.

IMPORTANT COMMUNICATION TO MEMBERS:

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliances by the companies and has issued circulars stating that service of notice / documents including Annual Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, members who have not registered their e-mail addresses, so far, are requested to register their e-mail addresses, in respect of electronic holdings with the Depository through their concerned Depository Participants. Members who hold shares in physical form are requested to register the same with the Company’s Share Transfer Agent, M/s. Link Intime India Private Limited Email: tjl.ipo@linkintime.co.in

EXPLANATORY STATEMENT UNDER SECTION 102 (1) OF THE COMPANIES ACT, 2013Item No. 4This explanatory Statement is provided though strictly not required as per section 102 of the Act.Section 40 of the Companies (Amendment) Act, 2017 has been notified by the Central Government on 7th May, 2018 whereby the first proviso to Section 139(1) of the Companies Act, 2013 relating to ratification of appointment of the auditors by the members at every Annual General Meeting during the period of their appointment, has been omitted with effect from that date.

In view of the above mentioned ammendment, it is proposed to discontinue the ratification of Auditors at every Annual General Meeting from the subsequent Annual General Meeting during the remaining tenure of the Auditors with the consent of the members by way of an Ordinary Resolution as set out in Item No. 4 of the Notice. Board recommends the said resolution for approval of the members.

None of the Directors and/or Key Managerial Personnel of the Company and their relatives are in any way concerned or interested in this resolution.

Item No. 5:Mr. Rajeev Sheth was re-appointed as the Chairman and Managing Director of the Company for a period of three years with effect from October 1, 2015 on the terms and conditions set out in the Agreement dated October 1, 2015. He is the Promoter of the Company and has been playing an important role in the management of the Company. Considering his immense

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contributions in managing the affairs of the Company, the Board of Directors at their Meeting held on May 29, 2018, based on the recommendation of Nomination & Remuneration Committee, has proposed to re-appoint him as the Chairman and Managing Director (CMD), for a further period of three years effective October 1, 2018, on the following terms and conditions:

I. Salary: Not exceeding Rs.15,00,000/- per month as may be decided by Board of Directors.

II. Performance Linked Incentive: Mr. Rajeev Sheth shall also be entitled to performance linked incentive based on the specific goals mutually set and approved by the Board of Directors or any committee of Directors from time to time.

III. Commission: Such amount subject to the overall limits pertaining to the managerial remuneration laid down under Section 197 of the Companies Act, 2013, however such commission shall not exceed 1% of the net profit.

IV. Perquisites & Allowances: Perquisites are classified into three parts A, B and C as follows :

Part A:

i. Medical Reimbursement: Expenses incurred for self and family.

ii. Leave Travel Allowance for self and family once in a year incurred in accordance with the rules of the Company.

iii. Fees of clubs subject to a maximum of two clubs excluding admission and Life Membership Fees.

iv. Personal Accident Insurance: The amount of the annual premium at actual.

Part B:Contribution to provident fund, superannuation fund or annuity fund will not be included in computation of ceiling on perquisite to the extent these either singly or put together are not taxable under the Income Tax Act.

Gratuity: Gratuity payable shall be in accordance with the Company’s Scheme as may be applicable or amended from time to time and shall not be included in the computation of ceiling on remuneration to the extent provided in schedule V to the Companies Act, 2013.

He shall be entitled to 30 days leave with full salary for every 12 months of service or part thereof. Encashment of leave at the end of the tenure will not be included in the computation of the ceiling on remuneration.

Part C:The Company shall provide a Car with driver, and mobile, telephone, communication facilities at residence of Managing Director. Provision of Car for use of the Company’s business and telephone at residence will not be considered as perquisites. Personal Long distance call and use of car for private purpose shall be billed by Company to the Chairman and Managing Director.

OTHERSMr. Rajeev Sheth shall be entitled to reimbursement of expenses, entertainment, travelling expenses, boarding and lodging and all other incidental expenses in connection with and for the business of Company in India and abroad will be allowed and will not be deemed/treated as a perquisite. Perquisites shall be evaluated as per Income Tax Rules, wherever applicable or at actual cost.

In case of the Company having adequate profits, the managerial person will be paid such remuneration, within the limits specified from time to time under Section 197, read with Section I of Part II of Schedule V to the Act. The total managerial remuneration payable by a public company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent of the net profits of the company for that financial year computed in the manner laid down in section 198, except that the remuneration of the directors shall not be deducted from the gross profits;

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Provided further that, except with the approval of the company in general meeting and approval of the Central Government, the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five per cent of the net profits of the company and if there is more than one such director remuneration shall not exceed ten per cent of the net profits to all such directors and manager taken together.

Minimum Remuneration: In the event of loss or inadequacy of profits in any financial year remuneration will be subject to a maximum ceiling limit per month which shall not exceed the limits specified under section II of part II of Schedule V to the Companies Act, 2013, including any statutory modification(s) or re-enactment(s) thereof, for the time being in force, as per the recommendation of the Nomination and Remuneration Committee and the approval of the Board of Directors of the Company.

The scope and quantum of remuneration and perquisites specified above herein may be enhanced, enlarged, widened, altered or varied by the Board of Directors in the light of and in conformity of the Companies Act, 2013 and or/ the rules and regulations made thereunder and/or such guidelines as may be announced by Central Government from time to time.

The Board recommends the Special Resolution at Item No. 5 of the accompanying Notice for reappointment of Mr. Rajeev Sheth as Chairman and Managing Director of the Company, for approval of members.

Except Mr. Rajeev Sheth and his relatives no other Director and Key Managerial Personnel and their relatives are in any way concerned or interested in this Resolution.

The detail of Shareholding of Mr. Rajeev Sheth, his relatives and the Promoter Group Company is provided in Annexure B to this Notice.

The information of Mr. Rajeev Sheth to be provided under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in the Annexure A to this Notice.

Item No. 6 &7:The Board of Directors of the Company at their meeting held on May 29, 2018, had appointed Ms. Disha Tulsiani as an Additional Director of the Company on the recommendation of the Nomination and Remuneration Committee. As per Section 161 (1) of the Companies Act, 2013, Ms. Disha Tulsiani holds office up to the date of this Annual General Meeting. The Company has received a notice under Section 160 of the Companies Act, 2013 in writing from a member of the Company proposing the candidature of Ms. Disha Tulsiani for being elected as a Director liable to retire by rotation. She does not hold any equity shares of the Company.

Ms. Disha Tulsiani satisfies the conditions as given under Section 196 (3) and Part I of Schedule V to the Companies Act, 2013 and is not disqualified from being appointed as a Director under Section 164 of the Act.

The Board recommends her appointment as a Director and also as a Whole-Time Director of the Company for the approval of members of the Company by passing the resolutions as set out at item Nos. 6 and 7 of the notice as Ordinary and Special Resolutions respectively.

The information of Ms. Disha Tulsiani to be provided under Regulation 36(3) of SEBI (Listing Obligations and Dislcosure Requirements) Regulations, 2015 is provided in the Annexure A to this Notice.

Except Ms. Disha Tulsiani, none of the other Directors and Key Managerial Personnel of the Company and their relatives is/are in any manner, concerned or interested, financially or otherwise, in passing the resolutions set out at item Nos. 6 and 7.

INFORMATION AS REQUIRED IN SECTION II OF PART II OF SCHEDULE V:

I. General Information:(1) Nature of Industry- Manufacturing of Jewellery(2) Date or expected date of commencement of commercial production-N.A.(3) In case of new companies, expected date of commencement of activities as per project approved by financial institutions

appearing in the prospectus-N.A.(4) Financial performance based on given indicators- Given in Financial Statement(5) Foreign investments or collaborations, if any- The Company has not entered into any foreign collaboration and no

direct capital investment has been made in the Company. As regards foreign investors mainly, foreign bodies corporate and foreign nationals are investors in the Company on account of past public issue of securities and secondary market purchases.

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II. Information about the appointee:

Mr. Rajeev Sheth(1) Background details- He holds a graduate degree in commerce from Mumbai University. He also holds a diploma in

gemology from Gemological Institute of America. Mr. Sheth has approximately 35 years of experience in the jewellery business.

(2) Past remuneration- Gross Rs. 15 Lacs p.m. However he was paid NIL remuneration during 2017-18. . (3) Recognition or awards- NIL(4) Job profile and his suitability- Included in Annexure “A” to the Notice.(5) Remuneration proposed- as mentioned in resolution.(6) Comparative remuneration profile with respect to industry, size of the company, profile of the position and person (in

case of expatriates the relevant details would be with respect to the country of his origin)-Not Comparable.(7) Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any-

None

Ms. Disha Tulsiani(1) Background details- She holds a Graduate Degree in Banking & Finance from Mumbai University and a Master’s Degree

in Finance from University of Wales, Cardiff, UK.(2) Past remuneration- Rs. 10,80,929/- p.a. (3) Recognition or awards- NIL(4) Job profile and his suitability- Included in Annexure “A” to the Notice.(5) Remuneration proposed- as mentioned in resolution.(6) Comparative remuneration profile with respect to industry, size of the company, profile of the position and person (in

case of expatriates the relevant details would be with respect to the country of his origin)-Not Comparable.(7) Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any-

None

III. Other Information:(1) Reasons of loss or inadequate profits- Adverse Market Conditions and increase in cost of input.(2) Steps taken or proposed to be taken for improvement- Efforts to create new market and reduction in cost.(3) Expected increase in productivity and profits in measurable terms- Cannot be ascertained in measurable terms.

Item No. 8:Section 152(6) of the Companies Act, 2013 provides that atleast two-thirds of the total number of directors of a public company shall be persons whose period of office is liable to determination by retirement of directors by rotation and at every Annual General Meeting one-third of such directors shall retire from office by rotation. Independent Directors and Nominee Directors are not to be counted for this purpose. As per Article 192 of Articles of Association (AOA) of the Company, Managing Director and Joint Managing Director shall not be liable to retire by rotation. Since the board of directors of the Company is not broad based, it has become necessary to amend Article 192 of AOA of the Company so as to provide for retirement of Managing Director and Joint Managing Director to enable the Company to comply with the provisions of Section 152(6) of the Companies Act, 2013.

The Board, therefore, recommends the special resolution as set out in Item No. 8 of the Notice for your approval.

None of the Directors and Key Managerial Personnel of the Company and their relatives is/are in any manner, concerned or interested, financially or otherwise, in passing the resolutions set out at item No. 8 of the Notice.

Copies of AOA of the Company before and after the proposed amendment are available for inspection of members on all working days during usual business hours.

Item No. 9:The Company has been incurring huge losses since previous financial year resulting into depletion of Working Capital. In order to meet the financial requirement of the Company for Working Capital, the Company may have to transfer, sell, assign, deliver or otherwise dispose-off, from time to time, in one or more tranches, the whole or substantially the whole of the asset(s)/ undertaking(s) of the Company and/or its subsidiaries.

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NOTICE

TARA JEWELS LIMITED

As per provisions of Section 180(1)(a) of the Companies Act, 2013, the Company cannot, except with the consent of the shareholders by way of special resolution, sell, lease or otherwise dispose of the whole or substantially the whole of the undertaking of the Company or where the company owns more than one undertaking, of the whole or substantially the whole of any of such undertakings. Also, in terms of Regulation 24 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), the Company shall not dispose of shares in its material subsidiary resulting in reduction of its shareholding (either on its own or together with other subsidiaries) to less than 50% or cease the exercise of control over the subsidiary without passing a special resolution in its general meeting. Further, Regulation 24(6) of SEBI Listing Regulations, provides that no company shall sale, dispose of assets amounting to more than 20% of the assets of the material subsidiary on an aggregate basis during a financial year without passing a special resolution in its general meeting.

Moreover, Section 188(1) of the Companies Act, 2013 requires approval of shareholders for certain transactions with related parties as prescribed in Rules under the said section. The contract for sale/disposal of assets/undertaking of the Company may take place with any of the related parties.

The Board of Directors accordingly recommends the Special Resolution set out at Item No. 9 of the accompanying Notice for the approval of the Members.

None of the Directors, Key Managerial Personnel and their relatives are concerned or interested, financially or otherwise, in the resolution.

Registered Office: By Order of the Board of DirectorsPlot No. 122, 15th Road For Tara Jewels LimitedNear IDBI Bank, M.I.D.C Andheri (East)Mumbai – 400 093. Sd/-

Nivedita NayakMumbai, August 13, 2018 Company Secretary CIN: L52393MH2001PLC131252Tel.:022 66774444Website:www.tarajewels.inE-mail:investor.care@tarajewels.co.in

ANNUAL REPORT 2018

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ABOUT US

STATUTORY REPORTS

FINANCIALS

ANNEXURE ADetails of the Directors seeking re-appointment/ appointment in the Seventeenth Annual General Meeting pursuant to Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Particulars Mr. Rajeev Sheth Ms. Disha Tulsiani

Date of Birth 16/11/1958 05/10/1987

Age 60 years 31 years

DIN 00266460 08153901

Date of appointment/reappointment October 1 2018 May 29, 2018

Date of first appointment on Board March 16, 2001 May 29, 2018

Terms and Conditions of appointment As mentioned in resolution and the explanatory statement annexed to the Notice

As mentioned in resolution and the explanatory statement annexed to the Notice

Relationship with other Directors, Manager and other Key Managerial Personnel of the company

NIL NIL

Remuneration sought to be paidAs mentioned in resolution and the explanatory statement annexed to the Notice

As mentioned in resolution and the explanatory statement annexed to the Notice

Remuneration Last Drawn Gross Rs. 15,00,000/- p.m (Howeever he has not drawn any remuneration during 2017- 2018)

Gross Rs. 10,80,929/- p.a

Qualification& Experience in specific functional area

He holds a graduate degree in commerce from Mumbai University. He also holds a diploma in gemology from Gemological Institute of America. Mr. Sheth has approximately 35 years of experience in jewellery business

She holds a Graduate Degree in Banking & Finance from Mumbai University and a Master’s Degree in Finance from University of Wales, Cardiff, UK.

No. of Meetings of the Board attended during the year

4 NIL #

Directorships held in other companies* NIL NIL

Memberships/ Chairmanships of Committee in other public limited companies (includes only Audit & Shareholders’/ Investors’ Grievance Committee)

NIL NIL

No of shares held in Company 2245393 $ NIL

*excludes Directorships in Private Limited Companies, Foreign Companies, Section 8 Companies and Government bodies.

# Appointed as Additional and Executive Director w.e.f May 29, 2018.

$ Shares held as on the date of Notice i.e August 13, 2018.

ANNEXURE BThe Shareholding of Mr. Rajeev Sheth, his Relatives and the Promoter Group Company in Tara Jewels Limited is as given below:

Name Shareholding in Tara Jewels

Limited

Percentage (%)

Mr. Rajeev Sheth* 2245393 9.12

Ms. Purnima Rajeev Sheth* 14625 0.06

Divya Jewels International Private Limited* 33600 0.14

Total 2293618 9.31

*Shareholding as on the date of Notice i e August 13, 2018.

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NOTICE

TARA JEWELS LIMITED

NOTES