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CITANJALI

The Listing Department BSE Limited P.J. Towers, Dalal Street Mumbai - 400 001

October 04,2017

National Stock Exchange of lndia Limited Exchange Plaza Bandra - Kurla Complex Bandra (East) Mumbai - 400 051

Dear Sir,

Sub : Submission of 31'' Annual Report for the Financial Year 2016-17

Ref : 1. Regulation 34 of Securities and Exchange Board of lndia (Listing Obligations and Disclosure Requirements) Regulations, 2015

2. BSE Scrip Code: 532715 3. NSE Scrip Symbol: GITANJALI

Apropos the captioned subject and references quoted above, we enclose herewith soft copy of 31" Annual Report for the Financial Year 2016-17, as approved and adopted in the 31" Annual General Meeting (AGM) of the Company held on Thursday, September 28, 2017.

This is for your information and records.

Thanking You,

Yours faithfully,

For Gitanjali Gems Limited

~ o m p h y Secretary

Gitanjali Gems Limited Registered Office: A- I ,7rh Floor, Laxmi Towers, Bandra Kurla Complex, Bandra (East), Mum bai - 40005 1 , lndia

T: 022 40354600 / 0 I F: 40354602 www.gitanjaligroup.com CIN - L369 1 l MH l986PLC040689

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Page No.

The Board of Directors 2

Company Information 3

Notice to Annual General Meeting 4

Director’s Report 17

Management Discussion and Analysis 52

Report on Corporate Governance 66

Auditor’s report on Financial Statement 84

Balance sheet 91

Statement of Profit & Loss 92

Cash Flow Statement 93

Significant Accounting Policies & Notes forming part of Financial statements 96

Auditor’s report on Consolidated Financial Statements 155

Consolidated Balance sheet 160

Consolidated Statement of Profit & Loss 161

Consolidated Cash Flow Statement 162

Significant Accounting Policies & Notes forming part of Consolidated Financial statements 165

Salient features of Financial Statements of Subsidiaries/Associates/Joint Ventures 223

CONTENTS

THE JOURNEY OF A PIONEER2

A brief profile of all the Board members are as under :

Mr. MEHUL CHOKSI

He is a commerce graduate and has been associated with the gems and jewellery industry for more than three decades. He has wide experience in the diamond and jewellery industry having an exposure to the entire range of activities, from rough procurement to jewellery retail. He has been instrumental in launching and establishing various successful jewellery brands in India. He has also been a pioneer in corporatizing the un-structured diamond and jewellery industry in India. He steers the group vision and strategy with his deep knowledge and foresight.

Mr. DHANESH SHETH

He is a Commerce Graduate and has been associated with Gitanjali for over two decades. He advises the company on its diamond procurement operations, the processing, buying and selling of rough diamonds and other aspects of Business Development of Diamond Segment.

Mr. S. KRISHNAN

He is a Masters Degree holder in commerce besides being a D.M.M., M.F.M. He is a leading professional in the financial services industry and has vast experience in banking, fund management and capital market operations. He has held top management positions in TAIB Bank E.C., TAIB Securities, Everest Fund, Aldercrest Trading Limited and First Bank with Professional experience in USA, Europe, Middle East, Africa and India.

Ms. NAZURA AJANEY

She is a commerce graduate and has been involved with an NGO ‘Helix Aids Foundation’ that works in the Field of HIV/AIDS. She has wide experience in working for rehabilitation of women and children suffering from HIV/AIDS. She also has been actively working in the area of providing support, advice and creating awareness of these cases for maximum relief to the affected. She is currently CEO of ‘Childology’, an organization which is involved in CSR activities, where children from underprivileged background are offered targeted intervention to improve their academic grades and improve their chances of success in life.

Mr. ANIL HALDIPUR

He holds a bachelor’s degree in science from the University of Mumbai. He has over 40 years of rich experience in the banking and finance sector. He was responsible for the assessment of working capital requirements and assessment of term loan requirement for corporate sector in Canara Bank. He retired from Canara Bank as an Assistant General Manager.

PROFILE OF DIRECTORS

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COMPANY INFORMATION

Board of DirectorsMr. Mehul ChoksiMr. Dhanesh ShethMr. S. KrishnanMs. Nazura AjaneyMr. Anil Haldipur

Registered OfficeA-1, 7th Floor, Laxmi Tower, Bandra – Kurla Complex,Bandra (E), Mumbai – 400051Tel: +91-022-40354600Fax: +91-022-40102005

Company Secretary & Compliance OfficerMs. Pankhuri Warange

Chief Financial OfficerMr. Chandrakant Karkare

Registrar & Transfer AgentKarvy Computershare Private LimitedGitanjali Gems Limited UnitKarvy Selenium Tower B,Plot No.31-32,Gachibowli, Financial District, Hyderabad-500 032Phone: 040-67162222, Fax: 040-23001153Email: [email protected]

Sr. No. Name of Bank1 Allahabad Bank2 Andhra Bank3 Bank of Baroda4 Bank of India

Sr. No. Name of Bank5 Bank of Maharashtra6 Canara Bank7 Catholic Syrian Bank8 Central Bank of India9 Corporation Bank10 Dena Bank11 Dhanlaxmi Bank12 EXIM Bank13 ICICI Bank Ltd14 IDBI Bank15 Indian Overseas Bank16 IndusInd Bank Ltd17 Jammu and Kashmir Bank Ltd18 JSC VTB Bank19 Karnataka Bank Ltd20 Karur Vysya Bank21 Lakshmi Vilas Bank Ltd22 Oriental Bank of Commerce23 Punjab & Sind Bank24 Punjab National Bank25 Standard Chartered Bank26 State Bank of India27 State Bank of Mauritius28 Syndicate Bank29 UCO Bank30 Union Bank of India31 United Bank of India32 Vijaya BankPlant Locations:

LOCATION ADDRESSMumbai 1. Gemplus Jewellery Divsion. Unit No.1, Plot No.61, SEEPZ, Andheri (East), Mumbai-400 096.

2. Block-D, Plot No.16,17,28,&29, SEEPZ, Andheri (East), Mumbai-400 096.3. Plot no. 131/90, Plot no. 20, Marol Co-operative Industrial Estate, M.V. Road, Opp Star Audio,

Marol Bhawan, Marol, Andheri (E), Mumbai – 400 059Surat 1. Diamond Park-2, 2nd Floor, Opp. Savani Estate, Varachha Road, Surat-395 006, Gujarat.

2. Unit No. 376, 377 & 378 at Plot No.241, Surat Special Economic Zone, G.I.D.C. Road No.4, Sachin, Surat-394 230, Gujarat.

Hyderabad SDF-1, Plot No.15, Survey No.1/1, Hyderabad Gems SEZ Ltd., Raviryala Village, Maheshwaram Mandal,Ranga Reddy District, Telangana-501510. Andhra Pradesh.

Jaipur 1. Basement & Ground floor, G-185, EPIP, Sitapura Industrial Area, Jaipur-302022.2. Plot No.H-120, Phase-II, Jaipur Special Economic Zone, Sitapura, Jaipur-302022.

Thailand 99/29, Moo 5, Tambon Pasak, Amphur Muang, Lamphun 51000, Thailand


NOTICE

NOTICE is hereby given that the 31st Annual General Meeting of the Members of Gitanjali Gems Limited will be held on Thursday, September 28, 2017 at 9 a.m. at Boundary Hall, First Floor, MCA Recreation Centre, RG – 2, G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400051 to transact the following businesses:ORDINARY BUSINESS:1. To receive, consider and adopt the audited financial statements (including audited consolidated financial statements)

of the Company for the financial year ended March 31, 2017 together with the Reports of the Board of Directors and the Auditors thereon.

2. To declare dividend on equity shares for the financial year ended March 31, 2017.3. To appoint a Director in place of Mr. Dhanesh Sheth (DIN:00120257), who retires by rotation and being eligible,

offers himself for re-appointment.4. To consider and if thought fit, to pass the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any, of

the Companies Act, 2013 (“the Act”) read with the Companies (Audit and Auditors) Rules, 2014, (including any statutory modification(s) or re-enactment thereof, for the time being in force), M/s. Ambavat Jain & Associates LLP, Chartered Accountants (LLP Registration No. AAA7120, ICAI Firm Registration No. 109681W/W 100012), be and is herby appointed as statutory auditors of the Company in place of retiring auditors M/s. Ford, Rhodes, Parks & Co. LLP, Chartered Accountants (LLP Registration No. AAE 4990, ICAI Firm Registration No. 102860W/W100089), for a term of 5 (five) consecutive years from the conclusion of this Annual General Meeting (“AGM”) till the conclusion of 36th AGM to be held for Financial year 2021-22 subject to ratification of their appointment at every AGM, at such remuneration and out of pocket expenses as may be fixed by the Board of Directors of the Company.”

SPECIAL BUSINESS:5. To Consider, and if thought fit, to pass the following resolution as an Ordinary Resolution: “RESOLVED THAT Mr. Anil Haldipur (DIN:07653590) who was appointed as an Additional Director of the

Company by the Board of Directors under provisions of Section 161 of the Companies Act, 2013 (“the Act”) and Articles of Association of the Company with effect from August 11, 2017 and whose term of office expires at the forthcoming Annual General Meeting, but who is eligible for appointment and has consented to act as Director of the Company and in respect of whom the Company has received a notice in writing under Section 160 (1) of the Act from a member proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company.

RESOLVED FURTHER THAT pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Act and the Companies (Appointment and Qualification of Director) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mr. Anil Haldipur, who has submitted a declaration that he meets the criteria for independence as provided in Section 149(6) of the Act, be and is hereby appointed as an Independent Director of the Company not liable to retire by rotation for a term of five years from August 11, 2017 to August 10, 2022.”

6. To Consider, and if thought fit, to pass the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 196, 197, 198 and 203 read with Schedule V and other

applicable provisions, if any, of the Companies Act, 2013, (including any statutory modifications or re-enactment(s) thereof, for the time being in force)and Articles of Association of the Company, and such other consents and permission as may be necessary, and subject to such modifications, variations as may be approved and acceptable to the appointee, upon recommendation of Nomination and Remuneration Committee and the Board of Directors, approval of the members be and is hereby accorded to the appointment of Mr. Dhanesh Sheth (DIN : 00120257) as a Whole Time Director of the Company for a period of 5 years from August 11, 2017 as set out in the explanatory

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statement annexed to the notice convening this meeting, with liberty to the Board of Directors (hereinafter referred to as “ the Board” which term shall be deemed to be include any committee of the Board constituted to exercise its powers, including the power conferred by this resolution) to alter and vary the terms and conditions of appointment and /or remuneration as it may deem fit, subject to the same not exceeding the limits specified in Section 198 of the companies Act, 2013 or any statutory modification(s) or re-enactment thereof.

RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year(s) during the tenancy of tenure of Mr. Dhanesh Sheth as Whole Time Director the remuneration as set out in the Explanatory Statement annexed to the notice convening this meeting be paid to Mr. Dhanesh Sheth, as minimum remuneration subject to approval of Central government, if necessary.

RESOLVED FURTHER THAT the Board of Directors or a Committee thereof be and is hereby authorized to alter or vary the remuneration within the provisions of Section 198 and schedule V of the companies Act, 2013, to the extent the board of directors or committee thereof may consider appropriate, as may be permitted or authorized in accordance with any provisions under the Companies Act, 2013 or schedule(s) appended thereto, for the time being in force or any statutory modification or re-enactment thereof and /or any rules or regulations there under and to do all such acts, deeds, things in order to give effect to this resolution or as otherwise considered by the board to be in the best interest of the company, as it may deem fit.

RESOLVED FURTHER THAT any one Director or Company Secretary of the Company, be and are hereby authorized to do all such acts, deeds, matters and things as may be considered necessary and expedient for the purpose of effectuating the appointment of Mr. Dhanesh Sheth as Whole Time Director of the Company and to do all necessary filings with appropriate statutory authority and comply with any other incidental matter in relation to his appointment.”

7. To Consider, and if thought fit, to pass the following resolution as an Ordinary Resolution: “RESOLVED THAT further to resolution passed at 26th Annual General Meeting held on September 28, 2012

for remuneration payable to Mr. Mehul Choksi, Managing Director (DIN:00060099) pursuant to the provisions of Sections 178, 196, 197 and 203 and other applicable provisions, if any, of the Companies Act, 2013 (“Act”) read with Schedule V to the Act and the Rules made there under, including any statutory modification thereof, or any other law as recommended by the nomination and remuneration committee of the Company, approval of the members of the company be and is hereby accorded to ratify the increase in the remuneration payable to Mr. Mehul Choksi, Managing Director of the Company from an amount not exceeding Rs. 60,00,000/- (Rupees Sixty lakhs only) per annum to an amount not exceeding Rs. 1,10,00,000/- (Rupees One Crore Ten lakhs only) per annum with other terms and conditions of appointment remaining the same as earlier agreed to between the Board of Directors and Mr. Mehul Choksi.

RESOLVED FURTHER THAT payment of remuneration to Mr. Mehul Choksi, Managing Director amounting to Rs. 1,10,00,000/- (Rupees One Crore Ten lakhs only) per annum in aggregate, for the financial year 2016-17 and further for the financial year 2017-18, payment of proportionate remuneration out of Rs. 1,10,00,000/- (Rupees One Crore Ten lakhs only) per annum up till the continuation of tenure of employment agreement ended on July 31, 2017 be and is herby ratified.

RESOLVED FURTHER THAT any Director or Company Secretary is hereby authorized to do all such acts, deeds and things as may be necessary to give effect to the above said resolution and complete necessary filings in this regard.”

8. To Consider, and if thought fit, to pass the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 196, 197, 198 and 203 read with Schedule V and other

applicable provisions, if any, of the Companies Act, 2013, (including any statutory modifications or re-enactment(s) thereof, for the time being in force), and Articles of Association of the Company, and such other consents and permission as may be necessary, and subject to such modifications, variations as may be approved and acceptable to the appointee, upon recommendation of Nomination and Remuneration Committee and the Board of Directors,


approval of the members be and is hereby accorded for re- appointment of Mr. Mehul Choksi (DIN :00060099) as a Managing Director of the Company for a period of 5 years with effect from August 1, 2017 as set out in the explanatory statement annexed to the notice convening this meeting, with liberty to the Board of Directors (hereinafter referred to as “ the Board “ which term shall be deemed to be include any committee of the Board constituted to exercise its powers, including the power conferred by this resolution) to alter and vary the terms and conditions of appointment and /or remuneration, subject to the same not exceeding the limits specified in Section 198 of the companies Act , 2013 or any statutory modification(s) or re-enactment thereof.

RESOLVED FURTHER THAT in the event of loss or inadequacy of profits in any financial year(s) during the tenancy of tenure of Mr. Mehul Choksi, as Managing Director the remuneration as set out in the Explanatory Statement annexed to the notice convening this meeting be paid, as minimum remuneration subject to approval of Central government, if necessary.

RESOLVED FURTHER THAT the Board of Directors or a Committee thereof be and is hereby authorized to alter or vary the remuneration within the provisions of Section 198 and schedule V of the companies Act, 2013, to the extent the board of directors or committee thereof may consider appropriate, as may be permitted or authorized in accordance with any provisions under the Companies Act, 2013 or schedule(s) appended thereto, for the time being in force or any statutory modification or re-enactment thereof and /or any rules or regulations there under and to do all such acts, deeds, things in order to give effect to this resolution or as otherwise considered by the board to be in the best interest of the company , as it may deem fit.

RESOLVED FURTHER THAT any one Director or Company Secretary of the Company, be and is hereby authorized to do all such acts, deeds, matters and things as may be considered necessary and expedient for the purpose of effectuating the appointment of Mr. Mehul Choksi as Managing Director of the Company and to do all necessary filings with appropriate statutory authority and comply with any other incidental matter in relation to his appointment.”

9. To Consider, and if thought fit, to pass the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to Section 20 and other applicable provisions, if any, of the Companies Act, 2013

and relevant rules prescribed there under, consent of the members be and is hereby accorded to charge from a member the fee in advance equivalent to the estimated expenses of delivery of the documents pursuant to any request made by the shareholder for delivery of such document to him/her through a particular mode of services provided such request along with requisite fee has been received by the Company at least one week in advance of the dispatch of document by the Company and no such request shall be entertained by the Company after the dispatch of such document by the Company to the Shareholder.

RESOLVED FURTHER THAT any one Director or Company Secretary of the Company be and are hereby authorized to do all such acts, deeds, matters and things as they may in their absolute discretion deem necessary, proper, desirable or expedient and to settle any question, or doubt that may arise in respect of matter aforesaid, including determination of the estimated fees for delivery of the document to be paid in advance.”

NOTES:a) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE 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.

b) Proxies in order to be effective should be duly completed, stamped and signed and must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the Annual General Meeting.

c) A person can act as a proxy on behalf of Members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A Member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or Shareholder.

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d) Corporate Members intending to send their authorized representative(s) to attend the Meeting are requested to send a certified copy of the Board resolution authorizing their representative to attend and vote on their behalf at the Annual General Meeting.

e) Members desirous of obtaining any information as regards accounts of the Company are requested to write to the Company at least one week before the Meeting, so that the information required will be made available at the Annual General Meeting.

f) The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, September, 16, 2017 to Thursday,September 28, 2017 (both days inclusive) for the purpose of declaration of dividend.

g) The Final Dividend for the financial year ended March 31, 2017 as recommended by the board, if approved at the Annual General Meeting, will be paid within a period of thirty days from the date of declaration to those members:(i) whose names appear as Beneficial Owners as at the end of the business hours on Friday, September 15,

2017 in the list of Beneficial Owners to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited in respect of the shares held in electronic form; and

(ii) whose names appear as Members in the Register of Members of the Company after giving effect to valid share transfers in physical form lodged with the Company/its Registrar and Transfer Agents on or before Friday, September 15, 2017.

h) Members/Proxies are requested to bring the Attendance Slip(s) duly filled in.i) Electronic copy of annual report alongwith notice of the 31st Annual General Meeting of the Company interalia

indicating the process and manner of e-voting alongwith Attendance Slip and Proxy Form 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 alongwith Notice of the 31st Annual General Meeting of the Company interalia indicating the process and manner of e-voting alongwith Attendance Slip and Proxy Form is being sent in the permitted mode.

j) Members may also note that the Notice of the 31st Annual General Meeting and the Annual Report for the year ended March 31, 2017 will also be available on the Company’s website www.gitanjaligroup.com for their download. Even after registering for e-communication, members are entitled to receive such communication in physical form, upon making a request for the same, free of cost. For any communication, the shareholders may also send requests to the Company’s designated email id: [email protected].

k) Voting through electronic means In compliance with provisions of Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management

and Administration) Rules, 2014 as amended by the Companies (Management and Administration) Amendment Rules, 2015 and Regulation 44 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Company is pleased to provide members facility to exercise their right to vote on resolutions proposed to be considered at the Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM (“remote e-voting”) will be provided by Karvy Computershare Private Limited (Karvy).

The facility for voting through ballot paper shall be made available at the AGM and the members attending the meeting who have not cast their vote by remote e-voting shall be able to exercise their right at the meeting through ballot paper.

The members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM but shall not be entitled to cast their vote again.

The remote e-voting period commences on Monday, September 25, 2017 ( 9.00 a.m.) and ends on Wednesday, September 27, 2017 (5.00 p.m.). During this period members’ of the Company, holding shares either in physical


form or in dematerialized form, as on the cut-off date of Thursday, September 21, 2017 may cast their vote by remote e-voting. The remote e-voting module shall be disabled by Karvy for voting thereafter. Once the vote on a resolution is cast by the member, the member shall not be allowed to change it subsequently.

The process and manner for remote e-voting is as under:I. In case a Member receives an email from Karvy [for members whose email IDs are registered with the

Company/Depository Participants(s)]:a. Open your e-mail. The login credentials (i.e., user-id & password) will be mentioned in the mail. Please note

that the password is an initial password.b. Launch internet browser by typing the following http://evoting.karvy.comc. Put user ID and password as initial password noted in step (i) above. Click Login.d. Members holding shares in Demat/Physical form will now reach Password Change menu wherein they are

required to mandatorily change their login password in the new password field. The new password has to be minimum eight characters consisting of at least one upper case (A-Z),one lower case (a-z), one numeric value (0-9) and a special character. Kindly note that this password can be used by the Demat holders for voting for resolution of any other Company on which they are eligible to vote, provided that Company opts for e-voting through Karvy Computershare Private Limited e-Voting platform. System will prompt you to change your password and update any contact details like mobile number, email ID etc on 1st login. You may also enter the Secret Question and answer of your choice to retrieve your password in case you forget it. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

e. You need to log in again with the new credentialsf. On successful login, system will prompt to Select the e-voting event number of Gitanjali Gems Limited.g. If you are holding shares in Demat form and had logged onto https://evoting.karvy.com and casted your vote

earlier for any company, then your exiting login id and password are to be used.h. Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm”when prompted.i. Once you have voted on the resolution, you will not be allowed to modify your vote.j. Members holding multiple folios/demat accounts shall choose the voting process separately for each folio/

demat accounts.k. Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/

JPG Format) of the relevant certified copy of Board Resolution/ Authority letter etc. together with attested specimen signature of the duly authorized signatory(ies)who are authorized to vote, to the Scrutinizer through e-mail [email protected] with a copy marked to [email protected]

II. In case a Member receives physical copy of the Notice of AGM [for members whose email IDs are not registered with the Company/Depository Participants(s):a. Initial password is provided as below/at the bottom of the Attendance Slip for the AGM.b. Please follow all steps from Sl. No. (b) to Sl. No. (k) mentioned in the above section, to cast vote.c. In case of any queries, you may refer to the ‘Frequently Asked Questions’ (FAQs) and ‘e-voting user manual’

available in the downloads section of Karvy’s e-voting website https://evoting.karvy.com. If you are already registered with Karvy Computershare Private Limited for e-voting then you can use your existing user ID and password for casting your vote.

d. Mr. Manish Ghia, Partner, of M/s Manish Ghia & Associates, Practicing Company Secretaries, has been appointed as the Scrutinizer to scrutinize the e-voting process in a fair and transparent manner.

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e. The Chairman shall, at the AGM, at the end of discussion on the resolutions on which voting is to be held, allow voting with the assistance of scrutinizer, by use of “Ballot Paper” for all those members who are present at the AGM but have not cast their votes by availing the remote e-voting facility.

f. The Scrutinizer shall after the conclusion of voting at the Annual 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 witnesses not in the employment of the Company and shall submit, not later than forty eight hours of the conclusion of the AGM, a consolidated scrutinizer’s report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same and declare the result of the voting forthwith.

g. The Results declared alongwith the report of the Scrutinizer shall be placed on the website of the Company www.gitanjaligroup.com and on the website of https://evoting.karvy.com immediately after the declaration of result by the Chairman or a person authorized by him in writing. The results shall also be immediately forwarded to the BSE Limited and National Stock Exchange of India Limited, Mumbai.

By Order of the Board of Directors

Sd/-(Pankhuri Warange)Company Secretary

Place: MumbaiDate: August 11, 2017


STATEMENT PURSUANT TO SECTION 102 OF COMPANIES ACT, 2013ITEM NO 5Mr. Anil Haldipur (DIN : 07653590) was appointed as an Additional Director with effect from August 11, 2017, pursuant to provisions of Section 161 of the Companies Act, 2013 (“the Act”) and Articles of Association of the Company. As such Mr. Haldipur holds office up to the date of the ensuing Annual General Meeting ( “AGM”) and is eligible for appointment as Director. The Company has received notice in writing under the provisions of Section 160 of the Companies Act, 2013, from a member along with deposit of requisite amount proposing the candidature of Mr. Anil Haldipur for the office of Director at the ensuing AGM.As per the provisions of Section 149 of the Act, an Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and is not liable to retire by rotation.Mr. Anil Haldipur has given a declaration to the Board that he meets the criteria of independence as provided under Section 149 (6) of the Act. He is not disqualified from being appointed as director in terms of section 164 of the act and has given his consent to act as director. In the opinion of the Board, Mr. Anil Haldipur fulfills the conditions specified in the Act and the Rules made there under for appointment as Independent Director and he is independent of the management and possesses appropriate skills, experience and knowledge.The Board, based on recommendations of the Nomination & Remuneration Committee, recommends his appointment as an Independent Director for a term of five years from August 11, 2017 to August 10, 2022.The copy of draft letter for appointment of Mr. Anil Haldipur as independent director setting out the terms and conditions are available for inspection by members at the registered office of the Company during normal business hours on any working day of the Company.The details of Mr. Anil Haldipur are provided in “Annexure” to the notice pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing regulations”) and Secretarial Standards on General Meetings(“SS-2”) issued by Institute of Company Secretaries of India.The Board considers that his association would be of immense benefit to the Company and it is desirable to avail services of Mr. Anil Haldipur as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Anil Haldipur as an Independent Director, for the approval by the shareholders of the Company.Except Mr. Anil Haldipur, being an appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested financially or otherwise, in the said resolution.ITEM NO. 6The Board of Directors of the company at its meeting held on August 11, 2017 has, on the recommendation of Nomination and Remuneration Committee and subject to approval of members, appointed Mr. Dhanesh Sheth as Whole- Time Director, for a period of (Five) 5 years commencing from August 11, 2017, on the remuneration determined by the nomination and remuneration Committee and approved by the Board.Mr. Dhanesh Sheth has been associated with Company for a period over past two decades. He plays a major advisory role in the diamond procurement operation, the processing, buying and selling of rough diamonds and other aspects of the Business development of diamond segment. Currently he is non-executive Director of the Company. His expert knowledge in the area of cut and polished diamond has immensely contributed in accomplishment the objectives of the business.The principal terms and conditions of appointment of Mr. Dhanesh Sheth as Whole –Time Director are:1. Term of Appointment – 5 years.2. Period : August 11, 2017 to August 10, 20223. Salary : Rs.2,00,000/- per month with the powers to the Board to give such accelerated increments, as they deem fit and proper.

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Other terms and conditions:1. The Whole Time Director shall exercise and perform such powers and duties as the Board of Directors (hereinafter

called as ‘Board’) may from time to time determine and subject to any directions and restrictions given and imposed by the Board, shall look after such aspects of the business as assigned to him by the Board and perform the duties that may be delegated to him from time to time, subject to the overall supervision and control of the Board.

2. He shall, through the said term, devote attention and abilities to the business of the Company and shall conform to and comply with the directions and regulations issued by the Board, and shall faithfully serve the Company and use his utmost endeavor to promote the interest thereof.

3. The terms and conditions of the appointment and/or remuneration of the Whole Time Director may be varied by the Board in such a manner as may be mutually agreed between the Board and the Whole Time Director subject to applicable provisions of the Companies Act, 2013.

4. The Whole Time Director shall be entitled to be reimbursed all the expenses that may be incurred by him for and on behalf of the Company or in conduct of the business / affairs of the Company.

The above remuneration is fixed and may be altered, varied and increased from time to time by the Board as it may in its discretion deem fit so as not to exceed the limits as specified above.The copy of draft agreement for appointment of Mr. Dhanesh Sheth as Whole Time Director, setting out the terms and conditions of his appointment are available for inspection by members at the registered office of the Company during normal business hours on any working day of the Company.The details of Mr. Dhanesh Sheth are provided in “Annexure” to the notice pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards on General Meetings (“SS-2”) issued by Institute of Company Secretaries of India.Accordingly, it is proposed to seek consent of the members of the Company by way of a ordinary resolution for the appointment of Mr. Dhanesh Sheth as Whole –Time Director of the company.Except Mr. Dhanesh Sheth, none of the Directors, Key Managerial Personnel of the Company and their relatives is in any way concerned or interested, financially or otherwise, in the said resolution.ITEM NO. 7The members of the company at their Annual general meeting held on September 28, 2012, had by way of ordinary resolution approved re-appointment of Mr. Mehul Choksi (DIN:00060099) as Managing Director of the company for a period of five years with effect from August 01, 2012 to July 31, 2017 on the terms and conditions including payment of remuneration not exceeding Rs 60,00,000/- (Rupees Sixty lakhs only) per annum.Looking at improved performance of the Company in recent past and after taking into account the resolute and consistent efforts of Managing Director towards performance improvement of the Company during the difficult times, the Nomination and Remuneration Committee of the Company had proposed and recommended to the Board to increase the remuneration payable to Mr. Mehul Choksi from Rs. 60,00,000/- (Rupees Sixty lakhs only) per annum to Rs. 1,10,00,000/- (Rupees One Crore Ten Lakhs only) per annum which was later approved by the Board of Directors subject to approval and ratification of the same by the shareholders of the Company.As per the provisions prescribed under section 197 of the Companies Act, 2013, a company can pay remuneration to its managerial personnel in case the Company is having adequate profits. Further it says that a Company can pay remuneration to its directors including managing directors, whole time directors and managers up to a limit not exceeding 11% of the net profit as calculated in the manner laid down under section 198 of the Companies Act, 2013 wherein the limits prescribed for individual managing director, whole time director and manager being 5% of the net profits. Member may like to note that the proposed increase in the remuneration payable to Mr. Mehul Choksi is within the limits prescribed under the provisions of Companies Act, 2013.


The Nomination and Remuneration Committee and the Board of Directors have at their meeting(s) held on December 14, 2016, subject to approval and ratification of members of the Company, accorded their approvals for increase in managerial remuneration of Mr. Mehul Choksi as mentioned in resolution no. 7.Accordingly, it is proposed that consent of the members of the Company by way of a ordinary resolution be obtained for the ratification of increase in managerial remuneration paid to Mr. Mehul Choksi.Except Mr. Mehul Choksi, none of the Directors, Key Managerial Personnel of the Company / their relatives is in any way concerned or interested, financially or otherwise, in this resolution.ITEM NO. 8The Term of appointment of Mr. Mehul Choksi as Managing Director ended on 31st July, 2017. The Board of Directors in its meeting held on 30th May, 2017 has re-appointed Mr. Mehul Choksi as Managing Director for further period of five years with effect from 1st August, 2017 to 31st July, 2022, subject to approval of Shareholders in ensuing Annual General Meeting and on the basis of recommendation of Nomination and Remuneration Committee.Mr. Mehul Choksi aged 58 years, is the promoter of the company. He is a commerce graduate and is associated with diamond industry and has over three decades of experience in the jewellery and Diamond industry and has pioneered the use of corporate practices in the Indian Jewellery Industry.The appointment and terms of remuneration of Mr. Mehul Choksi as Managing Director are pursuant to the provisions of sections 197, 198 and 203 read with Schedule V and other applicable provisions, if any of the companies Act, 2013. Mr. Mehul Choksi shall not be subject to retire by rotation pursuant to provisions of Section 152 of the companies Act, 2013 while he continues to be the managing director of the Company.The particulars of terms and conditions relating to the re-appointment of Mr. Mehul Choksi as Managing Director are briefly mentioned as under.1. Salary : Not exceeding Rs.1,10,00,000/- per annum with the powers to the Board to give such accelerated increments, as

they deem fit and proper.2. Commission: Nil3. Perquisites and Allowance:

(i) Free furnished accommodation (company owned or leased/ rented) or house rent in lieu thereof, gas, electricity, water, telephone, furnishings, medical reimbursement and leave travel concession for self and family, club fees, medical and personal accident insurance, life insurance etc. in accordance with the rules of the Company. The aforesaid perquisites may be in the form of reimbursement or allowance. For the purpose of calculating the above ceiling, the perquisite shall be evaluated as per Income Tax Rules, 1962, wherever applicable.

(ii) Entitlement to Company’s contribution to Provident Fund, Superannuation Fund and Annuity Fund up to the tax exemption limit, benefits of Gratuity and Pension Scheme for Senior Management Staff, earned leave and encashment of earned leave at the end of the tenure and long service awards, as per the rules of the Company and these shall not be included in the computation of perquisites.

(iii) Reimbursement of travelling and all other expenses incurred by him for the business of the Company.4. The Managing Director subject to supervision, control and direction of the Board of Directors of the Company

shall have the power for general conduct and management of the business and affairs of the Company except in the matter which may be specifically required to be done by the Board, either under the applicable provisions of the Companies Act, 2013 or under the Articles of Association of the Company or under the requirements of Listing Regulations.

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5. The Managing Director shall also exercise and perform such powers and duties as the Board of Directors of the Company may from time to time determine, and shall also do and perform all other acts and things which in the ordinary course of business may be considered necessary or proper in the interest of the Company.

6. The Managing Director shall whenever required for the purposes of business, undertake such travelling in India and abroad has may be required from time to time in connection with the business of the Company.

7. If before the expiration of this agreement the tenure of office of the Managing Director is determined by any reason whatsoever he shall be entitled to by way of compensation for loss of office an amount equivalent to the remuneration which would have been earned by him if he had been in the office for the un expired residue of his term or for three years, whichever is shorter, calculated on the basis of average remuneration during the period of three years immediately preceding the date on which he ceased to hold the office.

The copy of draft agreement for appointment of Mr. Mehul Choksi as Managing Director, setting out the terms and conditions are available for inspection by members at the registered office of the Company during normal business hours on any working day of the Company.The details of Mr. Mehul Choski are provided in “Annexure” to the notice pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards on General Meetings (“SS-2”) issued by Institute of Company Secretaries of India.Accordingly, it is proposed to seek consent of the members of the Company by way of a ordinary resolution for the re-appointment of Mr. Mehul Choski as Managing Director of the Company.Except Mr. Mehul Choski, none of the Directors, Key Managerial Personnel of the Company and their relatives is in any way concerned or interested, financially or otherwise, in the ordinary resolution set out at Item No. 8 of the Notice.ITEM NO. 9As per the provisions of Section 20 of the Companies Act, 2013 a document may be served on any member by sending it to him by Post or by Registered Post or by Speed Post or by Courier or by delivering at his office or address or by such electronic or other mode as may be prescribed. It further provides that a member may request for delivery of any document to him/her through a particular mode for which he/she shall pay such fees as may be determined by the Company in its Annual General Meeting.Since the cost of providing documents may vary according to the mode of service, weight and its destination etc., therefore the actual expenses to be borne by the Company for such dispatch is proposed to be paid in advance by member to the Company.The Board recommends the resolution for the approval of Shareholders.None of the Directors and/or Key Managerial Personnel of the Company and their relatives is concerned or interested, financially or otherwise, in the proposed resolution.

By Order of the Board of Directors

Sd/-(Pankhuri Warange)Company Secretary

Place: MumbaiDate : August 11, 2017


Route Map of the venue of the 31st Annual General Meeting of Gitanjali Gems Limited to be held on Thursday, September 28, 2017 at 9.00 A.MVenue Address : Boundary Hall, First Floor, MCA Recreation Centre, RG – 2, G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400051.Landmark: Near Institute of Chartered Accountants of India

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AnnexureDetails of directors seeking appointment /reappointment in Annual General Meeting pursuant to Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements), Regulation, 2015 and Secretarial Standard 2

Name of Director Mr. Mehul Choksi Mr. Dhanesh Sheth Mr. Anil HaldipurDate of Birth May 05, 1959 July 11, 1957 October 22, 1951Date of Appointment/Re-appointment

August 1, 2012 September 30, 2016 August 11, 2017

Expertise in specific function area / Brief Resume

He has wide experience in the diamond industry having an exposure to the entire range of activities, from buying roughs to processing, manufacturing, distribution and retail of jewellery. He has been instrumental in establishing branded jewellery market in India. He has also been a pioneer in corporatizing the jewellery industry in India. He has been on the committee of the Gems and Jewellery Export Promotion Council of India besides holding several other key industry positions. He steers the group vision and strategy with his deep Knowledge and foresight.

He is commerce graduate and has been associated with the Company for over two decades. He advises the Company on procurement and processing of buying and selling of rough and polished diamonds and other aspects of Business Development pertaining to diamond division of the Company.

He holds a bachelor’s degree in science from the university of Mumbai. He has 40 years of experience in the banking and finance sector. He was responsible for the assessment of working capital requirements and assessment of term loan requirement for Corporate sectors in Canara Bank. He retired from Canara Bank as Assistant General Manager.

Qualification B.Com B.com BscTerms and Conditions of Appointment / Re-appointment

As per resolution in Item No. 8 of the notice convening Annual General Meeting on Thursday, September 28, 2017 read with explanatory statement thereto.



Remuneration last drawn Rs. 1,10,00,000/- p.a. NIL NILRemuneration proposed to be paid

Rs. 1,10,00,000/- p.a. Rs. 24,00,000/- p.a. As an Independent Director, Mr. Anil Haldipur is entitled to sitting fees for attending the meetings of the Board/ committees.

Date of first appointment on the Board

August 21,1986 August 01, 1990 August 11, 2017


Relationship with other Directors/Key Managerial Personnel

Not related to any Director / Key Managerial Personnel



List of other listed entities in which directorship is held

NIL NIL NIL

Chairman/Member of the Committee of the Board of Directors of the Company

1.Member of Audit Committee2.Chairman ofManagement Committee

1. Member of Corporate Social Responsibility Committee2. Member of Management Committee.

1. Member of Nomination and Remuneration Committee.

Chairman /Member of the committee of the Board of Directors of other listed Companies

NIL NIL NIL

Number of Shares held in Company as on March 31, 2017

3,09,46,456 NIL NIL

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DIRECTORS’ REPORT

To the Members of Gitanjali Gems LimitedThe Directors are pleased to present the 31st Annual Report and the Audited Statement of Accounts for the year ended 31st March 2017:FINANCIAL RESULTS

(Rs. in Lakhs)

Standalone ConsolidatedParticulars 2016-17 2015-16 2016-17 2015-16Sales & Other Income 10,61,126.93 10,81,559.30 16,83,143.97 14,15,920.86 Expenditure 10,07,790.87 10,29,232.61 15,90,113.13 13,25,050.28 Finance Cost 47,766.87 46,352.15 69,394.27 72,986.54 Depreciation & Amortization Expenses 1,653.16 1,988.05 7,496.47 8,101.89 Exceptional Items - - - - Profit before Taxes 3,916.03 3,986.49 16,140.10 9,782.15 Current Tax for the Year 1,135.00 1,102.20 3,903.98 3,638.24 Current Tax for Earlier Year 154.45 8.38 - - Deferred Tax (1,345.60) (1,609.76) (4,447.26) (4,415.99)Profit after Tax & before Other Comprehensive Income 3,972.18 4,485.67 16,683.38 10,460.90 Total Comprehensive Income 4,150.85 4,501.50 14,304.26 18,281.11

REGULATORY ENVIRONMENT AND ITS IMPACT ON BUSINESS AND INDUSTRYThe year 2016-17 was a tough year for the business and industry due to the unfavorable regulatory framework coupled with challenge of demonetization. Government took a very strong position against black money and cash transactions. The demonetization exercise, its impact on cash transactions and the subsequent raids conducted by Income Tax department on many jewellers created negative market sentiments.Government also implemented the ‘Rs. 2 lakh PAN card rule’ and ‘no cash beyond Rs. 2 lakh rule’ which impacted the business and made operations very difficult for jewellery industry across the country which has high dependence on cash transactions.Further Company was preparing itself to deal with the initial adaptability challenges that implementation of GST was about to bring due to rolling out of GST from July 1, 2017. Under new GST regimen, governments (central and state) are expected to be stringent with tax collections and this focus will positively drive noteworthy compliance from all sectors. Also in long run the organized players are going to be benefitted as consumers will increasingly turn to them due to trust, transparency, better consumer experience and quality of service.COMPANY’S PERFORMANCEPursuant to the notification dated February 16, 2015

issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards (”Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2016. Financial statements for the year ended and as at March 31, 2016 have been restated to conform to Ind AS.During the year under review, the Company’s standalone sales and other income stood at Rs. 10,61,126.93 Lakhs and Profit after Tax & before Other Comprehensive Income on standalone basis for the year was Rs. 3,972.18 Lakhs. The consolidated sales and other income of the company stood at Rs. 16,83,143.97 Lakhs and consolidated Profit after Tax & before Other Comprehensive Income for the year was Rs. 16,683.38 Lakhs. The performance of jewellery segment continued to dominate the diamond segment. The revenue from Jewellery segment stood at Rs. 7,77,730.63 Lakhs whereas income from diamond segment stood at Rs. 2,82,164.13 Lakhs. The consolidated revenue from Jewellery segment stood at Rs. 13,60,734.20 Lakhs whereas consolidated income from diamond segment stood at Rs. 3,85,413.21 Lakhs.DIVIDEND AND APPROPRIATIONThe Directors are pleased to recommend the payment of dividend on equity shares at the rate of 8% (Rs. 0.80 per equity share), subject to approval of the same by shareholders at the Annual General Meeting (AGM). No amount is Proposed to be transfer to general reserve.


PUBLIC DEPOSITSDuring FY 2013-14, the Company had accepted deposits of Rs. 227.29 lacs from the public in line with the provisions of section 58A of the Companies Act, 1956. Fixed deposits were for the period ranging from 1 year to 3 year and accordingly carried interest rate variance from 11.50% to 12.50%. As on March 31, 2017, the company repaid all the deposits except unclaimed matured deposit amounting to Rs. 1.25 lacs which will be paid by the company as and when claimed by the Fixed Deposit holders. During the year the company did not accept any further public deposit within the meaning of Section 73 to 76 of the Companies Act 2013 and rules framed there under.SHARE CAPITALAs on April 1, 2016 the paid up share capital of the Company was Rs. 1,02,43,77,240 consisting of 10,24,37,724 equity shares of Rs. 10 each. During the year under review 1,61,78,281 shares were allotted at a price of Rs. 72.39/- pursuant to conversion of warrants issued to the persons other than promoter on preferential basis in different tranches. Consequent to conversion, paid up capital of the Company as on date stood at Rs. 1,18,61,60,050 consisting of 11,86,16,005 equity shares of Rs. 10 each.SUBSIDIARIESA separate statement containing the salient features of financial statements of all subsidiaries of the Company forms a part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Companies Act, 2013. In accordance with Section 136 of the Companies Act, 2013, the financial statements of the subsidiary and associate companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company (www.gitanjaligroup.com). The Company has formulated a policy for determining material subsidiaries. The policy may be accessed on the website of the Company (www.gitanjaligroup.com).

During the year under review, Nakshatra World Limited (NWL), a wholly owned subsidiary of the Company decided to raised funds through Initial Public Offering (IPO) of its equity shares in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. NWL filed Draft Red Herring Prospectus with Securities and Exchange Board of India (SEBI) and stock exchanges i.e BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) on March 10, 2017. As on date, NWL has received in principle approval from BSE and NSE and also has received nod from SEBI to launch an IPO. NWL is in process of preparation of Red Herring Prospectus and has an option to open the issue within 12 months from the date of SEBI’s approval.With a view to rationalize the existing group structure, during the year under review various measures as enlisted herein below were undertaken:a) Aston Luxury Group Limited, a Hong Kong

based wholly owned subsidiary company sold its investment in Tianxin Diamonds (Shanghai) Co. Ltd.

b) Gitanjali Infratech Limited, another wholly owned subsidiary of the company acquired 100% stake in ‘Dynamic Infrazone Private Limited’.

c) Nakshatra World Limited, wholly owned subsidiary incorporated a wholly owned subsidiary in Dubai, UAE named “Kiam Jewels DMCC” with an objective of enhancing the group’s presence in the UAE market where the Company already has operations through its direct subsidiary Company, Gitanjali Ventures DMCC, Dubai.

d) During the year, Bezel Jewellery (India) Private Limited became the wholly owned step down subsidiary of the Company as the existing stakeholder ‘Damas Lewellery LLC’ sold off its equity stake to Nakshtra World Limited.

e) Members may recall that for consolidation of distribution activities, subsidiaries of the Company Asmi Jewellery India Limited and Spectrum Jewellery Limited were in process to merge with Nakshatra Brands Limited, another subsidiary. After complying with all the directions of the court and obtaining approval from requisite authorities, merger of Asmi Jewellery India Limited and Spectrum Jewellery Limited with Nakshatra Brands Limited became effective from July 7, 2016.

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f) Members may recall that for consolidation of manufacturing activities, wholly owned subsidiary, Gitanjali Exports Corporation Limited, was in process to merge with the Company. After complying with all the directions of the court and obtaining approval from requisite authorities, merger of Gitanjali Exports Corporation Limited with Company became effective from August 24, 2016.

g) The company acquired balance 1 (one) equity share of the face value of Rs.10/- in Nakshatra World Limited (NWL) pursuant to which NWL became wholly owned subsidiary of the Company.

h) Subsequent to the period of year under review, in order to avail various benefits of consolidation of operations, the group has undertaken two more consolidation exercise for its US based subsidiaries as enumerated herein below:i) Diamlink Jewelry Inc. and Jewelry Marketing

Company, LLC have merged with Diamlink Inc. New York. After merger of these entities the remaining entity is renamed as “Jewelry Marketing Company, Inc.”

ii) ABBEY USA, LLC (erstwhile GGL Diamond LLC) and Tri-Star Worldwide, LLC merged with Gitanjali USA Inc. After merger of these entities the remaining entity is renamed as “Tri-Star Worldwide Inc.”

A statement containing the financial performance of each of the subsidiaries companies is included in the consolidated financial statements of the Company as set out elsewhere in this Report.

CORPORATE GOVERNANCE

As per SEBI Listing Regulations, Corporate Governance Report and Auditors’ Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of provisions of Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Management Discussion and Analysis Report is given separately as part of this annual report.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited Consolidated Financial Statements are provided in this Annual Report which have been prepared in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements in Notes to the Financial Statements covered in the Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting financial position between end of the financial year and the date of the report and there are no significant and material orders passed by the regulators or any courts or tribunals impacting the going concern status and Company’s operations in future.

ADEQUACY OF INTERNAL CONTROLS AND COMPLIANCE

The Audit Committee of the Company has reviewed the existing Internal Financial Control systems and is of an opinion that Internal Financial Control framework as prescribed under the ambit of Section 134(5) of Companies Act, 2013 is functioning properly. The financial statements are prepared and presented in line with the essential components of internal control - as stated in the “Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI)”.

The existing Internal Financial Control framework ensures systematic and professional conduct of the Company’s business. It ensures that Company adheres to its stated policies and practices duly ensuring the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Based on the assessment carried out by the Audit Committee, Board of Directors are of the opinion that the Company has adequate Internal Financial Controls system, operating effectively as at March 31, 2017 and there were no instances of fraud which necessitates


reporting of material misstatement to the Company’s operations. There has been no communication from regulatory agencies concerning non-compliance with or deficiencies in financial reporting practices.

RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interests of the Company at large. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature and a statement of such transactions entered into pursuant to the omnibus approval, giving requisite details is placed before the Audit Committee and the Board of Directors for their noting and approval, if applicable, on a quarterly basis. The Policy on Related Party as approved by the Board is uploaded on the Company’s website. During the year under review, the contracts or arrangements with related parties referred to in section 188 of Companies Act, 2013 have been on arms length and in ordinary course of business and they were not material in nature. Accordingly, the particulars of the transactions as prescribed in form AOC -2 of the rules prescribed under chapter IX relating to accounts of companies under the Companies Act, 2013 are not required to be disclosed as they are not applicable.

None of the transactions with any of related parties were in conflict with the Company’s interest. The Company’s major related party transactions are generally with its subsidiaries. The related party transactions are entered into based on considerations of various business exigencies such as synergy in operations, Company’s long-term strategy for investments, optimization of market share, profitability, liquidity, capital resources of subsidiaries, etc.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company’s website athttp://gitanjaligroup.com/policies-codesAUDIT COMMITTEE:The Audit Committee of the company consists of the following Directors:Mr. S. Krishnan - ChairmanMs. Nazura Ajaney - Member

Mr. Mehul Choksi - MemberThe board accepted all the recommendations made by the audit committee during the year under review. The details of terms of reference, number of audit committee meetings held during the year under review, attendance, etc are separately given in the section of corporate governance.PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, EXPENDITURE ON RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE INFLOW/OUTFLOW, ETC.A. CONSERVATION OF ENERGY The operations of your company is not energy

intensive. However, the Company makes its best efforts for conservation of energy in its factory and office premises.

B. TECHNOLOGY ABSORPTION, ADAPTATIONS & INNOVATION

The Company has not carried out any specific research and development activities. The Company uses indigenous technology for its operations. Accordingly, the information related to technology absorption, adaptation and innovation is reported to be NIL.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of foreign exchange earnings and expenditure are as follows.

Particulars ( Rs. in lakhs)Foreign Exchange Earnings 7,32,149.19Expenditure in Foreign Exchange 7,38,434.63

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The said policy states the criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under section 178(3) of Companies Act, 2013. The said Policy of the Company is given as Annexure 1 of this report. The same can also be viewed by visiting following link:http://gitanjaligroup.com/policies-codes

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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A report on CSR is attached in Annexure 2 in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

PARTICULARS OF EMPLOYEES

The details in terms of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are forming part of this report as Annexure 3A and the statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is forming part of this report as Annexure 3B.

RISK MANAGEMENT POLICY

The Company has adopted a Risk Management Policy duly approved by the Board and also has in place a mechanism to identify, assess, monitor and mitigate various risks that the key business objectives might be exposed to. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure 4 in the prescribed Form MGT-9, which forms part of this Report.

VIGIL MECHANISM

The Company has a whistle blower mechanism wherein the employees can approach the senior management or Audit Committee and make disclosures about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or of an event that affect the business or reputation of the Company. A mechanism is in place whereby any employee of the Company has access to the Chairman of the Audit Committee to report any concern. No person has been denied access to the Chairman to report any concern. Further, the said policy has been disseminated within the organization and has also been posted on the Company’s website.DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013The Company is committed to provide a safe & conducive work environment to its employees and has zero tolerance for sexual harassment at workplace. It has adopted a

policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. During the financial year 2016-17, the Company has not received any complaints on sexual harassment.

NUMBER OF MEETINGS OF THE BOARDFive (5)meetings of the Board were held during the year. For details of the meetings of the Board, reference may be made to the Corporate Governance Report, which forms part of the Annual Report. The intervenimg gap between two consecutive board meetings did not exceed 120 days.DIRECTORS AND KEY MANAGERIAL PERSONNELMr. S. Krishnan, Ms. Nazura Ajaney and Mr. Anil Haldipur are independent directors on the Board and all have given declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.None of the Directors is related to each other within the meaning of the term “relative” as per Section 2(77) of the Act.In accordance with the provisions of the Act and in terms of the Memorandum and Articles of Association of the Company, Mr. Dhanesh Sheth retires by rotation at the Annual General Meeting and is eligible for re-appointment.Pursuant to Section 134 of the Act read with Rule 8(5) (iii) of Companies (Accounts) Rules, 2014, no Director or Key Managerial Personnel was appointed or has resigned during the year. However subsequent to the year under review following changes took place at Board level:* Mr. Mehul Choksi was re-appointed as managing

director on the Board w.e.f. August 1, 2017.* Mr. Dhanesh Sheth was designated as whole time

director on the Board w.e.f. August 11, 2017.* Mr. Anil Haldipur was appointed as an Additional

Director (Independent) on the Board of the Company on August 11, 2017.

Member’s attention is drawn to Item No. 5, 6 and 8 of the Notice for the appointment of above mentioned directors on the Board of the Company.Pursuant to the provisions of Section 203 of the Act, Mr. Mehul Choksi –Managing Director, Mr. Chandrakant Karkare - Chief Financial Officer and Ms. Pankhuri


Warange – Company Secretary continue to be the Key Managerial Personnel of the Company.DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to the requirements of Section 134 (5) of the Companies Act 2013, (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the Directors hereby confirm that: i. in the preparation of the annual accounts, the

applicable accounting standards have been followed and there are no material departures;

ii. they 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 profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARD EVALUATIONThe performance evaluation of the Board, its Committees and individual Directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a whole and its Committees. The Company obtained feedback on overall Board effectiveness as well as on each of the Directors. The performance of Directors was evaluated inter alia on the basis of key criteria for performance evaluation as enumerated herein below-Performance evaluation of Directors:• Contribution made by them at the Board / Committee

meetings• Guidance provided / Support given to Management

outside Board / Committee MeetingsPerformance evaluation of Board and Committees:

• The structure and composition of Board• Degree of fulfillment of key responsibilities in line

with prescribed requirements• Establishment and demarcation of responsibilities to

various Committees of Board• Effectiveness of Board Processes, Information and

Functioning• Quality of relationship between the Board and

Management• Effectiveness of communiqué with External

Stakeholders• The areas of improvement in the functioning of

committees on the basis of their terms of reference.INDEPENDENT DIRECTORSA separate meeting of the independent directors was convened, which reviewed the performance of the Board (as a whole), the performance of non-independent directors and the Chairman. Post the Annual Meeting of Independent Directors and performance evaluation of Board, its Committees and individual Directors, the collective feedback of each of the Directors was discussed and noted by the Nomination and Remuneration Committee.FAMILIARIZATION PROGRAMS FOR BOARD MEMBERSThe Board members are provided with necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company’s procedures and practices.Periodic presentations are made at the Board Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. The details of such familiarization programs conducted for Independent Directors are posted on the website of the Company.Further the policy of the Company on such familiarization programs can be accessed at the following link:http://gitanjaligroup.com/policies-codesAUDITORSa) Statutory Auditors and their report Pursuant to the provisions of Section 139 of the

Companies Act 2013 read with applicable Rules framed there under, M/s. Ford, Rhodes, Parks & Co. LLP, Chartered Accountants, the present Auditors of the Company complete their term as Auditors. In view of the above, M/s. Ambawat, Jain & Associates, LLP,

23

Chartered Accountants having LLP Registration No: AAA-7120 and ICAI Registration No: 109681W/ W 100012 is proposed to be appointed for a term of five years commencing from conclusion of the 31st Annual General Meeting of the Company till the conclusion of the 36th Annual General Meeting to be held for the financial year 2021-22 (subject to ratification of their appointment by the Members at every intervening Annual General Meeting held after this Annual General Meeting) on such remuneration and out of pocket expenses as may be decided by the Board of Directors. M/s. Ambawat, Jain & Associates, LLP, have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under for appointment as Auditors of the Company. As required under Regulation 33 of the Listing Regulations, they have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The statutory auditors in their report on the financials of the company have drawn attention towards the matter of emphasis. The response of directors on the same is as follows:

Response to point (a) Since 2013, the Company is passing through difficult

financial conditions due to extraneous factors beyond its control viz, unfavourable regulatory framework and adverse forex movement. Due to liquidity challenges, there remained an overdue of principal and interest amount and liquid reserve was partially created. However, management is confident of clearing the outstanding dues soon along with due compliance of requirement of creation of liquid reserve.

Response to point (b)(i) and (b) (ii) Due to liquidity challenges as mentioned above both

principal and interest amount of ECBs raised through ICICI Bank and principal amount of ECBs raised through IDBI (BOB portion) remained overdue. However management is confident of clearing the outstanding dues soon.

Response to point (c) Due to liquidity challenges, there have been

occasions during FY 2016-17 where there were few overdrawn position in some accounts. However, from time to time, the Company has been clearing

the said overdrawn positions and is making best efforts to regularise the status.

Response to point (d) The subsidiaries have been formed for providing

support of company’s business. The terms and conditions of amount given to the subsidiaries are not prejudicial to the interest of Company. The Company is making efforts to recover the advances given to these subsidiaries and regularize the existing status.

With regard to emphasis of matter mentioned in audit report on consolidated financial statements for the year ended March 31, 2017, the directors reply to points no (a), (b) and, (d) of auditors report are covered in reply to emphasis of matter in auditor report on standalone financial statement of the Company for the financial year ended March 31, 2017.

With regard to point (c), (e), and (f) of emphasis of matter in audit report on consolidated financial statements the response of your directors are as follows sequentially: Interest on ICDs availed from SICOM by one

of the subsidiary was overdue as at March 31, 2017 due to liquidity crunch

The group has been regularly honoring all its debt obligations/ statutory dues with some delays. Multiple extraneous factors have made significant negative impact on the liquidity status of the group. The group however is committed to pay all its outstanding undisputed statutory dues and liabilities and will pay the same gradually.

As on March 31, 2017, Bezel Jewellery (India) Private Limited, one of the step down subsidiary of the Company has not redeemed its Non cumulative redeemable 4% preference shares of Rs. 100 each which was partly due for redemption, as it was considering the option of extending due dates of redemption.

b) Secretarial Auditor and their report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Manish Ghia & Associates, a firm of Company


Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure-5.

During the period under review, the Company has complied with provisions of the Act, Rules, regulations, Guidelines, standards etc. subject to some observations made by secretarial auditors. The response of directors on the observations made in secretarial audit report is as follows:

Response to point (a)

Since 2013, the Company is passing through difficult financial conditions due to multiple extraneous factors beyond its control viz, unfavourable market conditions and unfavorable regulatory changes and adverse movement in forex etc. The Company has been facing liquidity challenges and due to this the liquid reserve was partially created. The Company has created liquid reserve to the tune of Rs. 63.47 lakhs as against required reserve of Rs. 2.11 crores. Management is taking adequate steps to comply with the requirement of creating the balance reserve soon.

Response to Point (b) and (c)

The filing of Annual Performance Report and Annual Return on Foreign Liabilities and Assets involves compilation and filing of details of various subsidiaries scattered across the globe. Due to technical difficulties in compiling the relevant information, the requirement of filing was unintentionally delayed.

Response to point (d)

The delays in filing of form ECB-2 was due to administrative issues. The requisite steps will be taken to ensure that Form ECB-2 is filed on time.

GENERAL

Your Directors state that no disclosure or reporting is

required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of sweat equity shares to employees of the Company under any scheme.

3. Issue of shares under Employee Stock Option Scheme.

4. The Managing Director of the Company is not in receipt of any commission from the Company nor he received any remuneration or commission from any of the subsidiary of the Company.

Acknowledgements

Your Directors wish to place on record their sincere appreciation of the support which the Company has received from its promoters, shareholders, lenders, business associates, vendors, customers, media and the employees of the Company.

We thank the Governments of various countries where we have operations. We also thank the Government of India, Ministry of Commerce & Industry, Ministry of Corporate Affairs, Ministry of Finance, Department of Economic Affairs, Customs & Excise Departments, Income Tax Department, Reserve Bank of India, BSE, NSE, NSDL, CDSL and various bankers, various State Governments and other Government Agencies for their support and we look forward to their continued support in the future.

On behalf of the Board of Directors

Sd/-(Mehul Choksi)

Chairman and Managing DirectorPlace : MumbaiDate : August 11, 2017

25

ANNEXURE 1 TO THE DIRECTORS REPORTPOLICY ON NOMINATION AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT FOREWORDA transparent, fair and reasonable process for selection of directors, key managerial personnel and senior management and appropriate remuneration at all levels of the Company is required to ensure that Shareholders remain informed and confident in the management of the Company. The Company also understands the importance of attracting and maintaining high quality individuals for managing its affairs from directors level right through to support staff.REGULATORY BACKGROUNDAs per regulation 19 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 and section 178 of the Companies Act, 2013 the Board of Directors of every listed company shall constitute a Nomination and Remuneration Committee and the role of the 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 a policy, relating to the remuneration of the directors, key managerial personnel and other senior management employees;

2. Formulation of criterion for evaluation Directors performance on the Board and also the performance of the Board as a whole.

3. Devising a policy on Board diversity;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 their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.

Section 178 (4) of the Companies Act, 2013 stipulates that while formulating the policy the Committee shall ensure that —(a) The level and composition of remuneration is

reasonable and sufficient to attract, retain and

motivate directors of the quality required to run the company successfully;

(b) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(c) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals:

In view of the above, a policy is formulated and established for nomination and remuneration of Directors, key managerial personnel and senior management of the Company.

1. PURPOSE This Policy on nomination and remuneration

(the “Policy”) describes the process through which candidates for possible inclusion in the Company’s recommended slate of director, key managerial personnel and senior management (the “Candidates”) are selected. The Policy is established and administered by the Nomination and Remuneration Committee (the “Committee”) of Gitanjali Gems Limited (the “Company”).

2. DEFINITIONS The definitions of some of the key terms used in this

Policy are given below.a) “Board” refers to collective body of board of

directors of the Company.b) “Director” means a director as defined under

section 2(34) of the act except nominee director and director appointed by small shareholders.

c) “Key Managerial Personnel” means a person appointed pursuant to section 203 of the act.

d) “Nomination and Remuneration Committee” means a committee formed pursuant to section 178 of the act.

e) “Senior Management” includes all personnel just below one level of board of directors of the Company and whose reporting is directly to the executive directors of the Company.

f) “The Act” means Companies Act, 2013.g) “The Company” means Gitanjali Gems

Limited incorporated under Companies act 1956


PART A – NOMINATION POLICY3. BOARD MEMBERSHIP CRITERIA The Committee is responsible for, among other

things for identifying individuals qualified to become members of the Company’s Board of Directors (the “Board”) and recommending to the Board, the nominees to stand for election as directors. The Nomination Committee shall take into account all of the following criteria while determining the qualifications of any candidate for director:• Integrity and Judgment : Directors should

have the highest level of integrity, ethical character and the ability to exercise sound business judgment on a broad range of issues consistent with the Company’s values.

• Qualification & Knowledge : Directors should be financially literate and have a sound understanding of business strategy, corporate governance and board operations.

• Diversity : Directors should be capable of representing the multi-cultural nature of our global corporation with consideration being given to a diverse board in terms of gender and ethnic membership. In addition, the Committee shall take into account diversity in professional experience, skills and background.

• Independence : Directors who are not current or former management should meet the spirit as well as the letter of the applicable independence standards. In addition, all Directors should be independent in their thought and judgment so that they represent the long-term interests of all shareholders of the Company.

• Experience and Accomplishments : Directors should have significant experience and proven superior performance in professional endeavors whether this experience is in business, government, academia or with non-profit organizations.

• Board Interaction: Directors should value board and team performance over individual performance, demonstrate respect for others and facilitate superior board performance. Directors should be willing and able to devote the time required to become familiar with Company’s business and to be actively involved in the Board and its decision-making.

• Skills: Directors should have expertise in one or more of the areas such as accounting and finance, technology, management, international business, compensation, legal, HR, corporate governance, strategy, industry knowledge and general business matters.

4. IDENTIFICATION OF CANDIDATES FOR BOARD MEMBERSHIPA. Internal Process for Identifying Candidates. The Committee has two primary methods for

identifying Candidates. First, the Committee may solicit ideas for possible Candidates from a number of sources including present members of the Board; senior level Company executives; individuals personally known to the members of the Board; and research, including database and Internet searches.

B. External Process for Identifying Candidates. Second, the Committee may from time to

time retain at the Company’s expense one or more search firms to identify Candidates (and to approve any such firms’ fees and other retention terms). If the Committee retains one or more search firms, such search firms may be asked to identify possible Candidates who meet the qualifications expressed in this Policy, to interview and screen such candidates (including conducting appropriate background and reference checks), to act as a liaison among the Board, the Committee and each Candidate during the screening and evaluation process, and thereafter to be available for consultation as needed by the Committee.

5. RECOMMENDATION OF CANDIDATE The Committee will consider all Candidates

identified through the processes described above, and will evaluate each of them, based on the criteria set forth above and if thought fit, will recommend their appointment to the Board.

6. CRITERIA FOR APPOINTMENT OF SENIOR MANAGEMENT AND KEY MANAGERIAL PERSONNEL

The Committee is also responsible for identifying individuals qualified to occupy position of key managerial personnel and in the senior management of the Company and selecting, or recommending

27

to the Board their appointment. The Nomination Committee shall take into account all of the following criteria when determining the qualifications of any candidate in senior management position:• Integrity and Judgment: Candidate should

have the highest level of integrity, ethical character and the ability to exercise sound business judgment on a broad range of issues consistent with the Company’s values.

• Qualification & Knowledge: Candidate should have expert knowledge in his field of work and should have industry knowledge and general business matters.

• Independence: The candidate should be independent in his thought and judgment so that he represents the long-term interests of the Company.

• Experience and Accomplishments : The candidate should have significant experience and proven superior performance in his professional endeavors

7. IDENTIFICATION OF CANDIDATES FOR SENIOR MANAGEMENT AND KEY MANAGERIAL PERSONNEL ROLEA. Internal Process for Identifying Candidates. The Committee may solicit ideas for possible

Candidates from a number of sources including present members of the Board; senior level Company executives; individuals personally known to the members of the Board; and research, including database and Internet searches.

B. Identification through Human Resource Department

The Committee may instruct human resource department to search through its available resources/network an appropriate candidate for the required position in senior management.

C. External Process for Identifying Candidates. The Committee may from time to time retain

at the Company’s expense one or more search firms to identify Candidates (and to approve any such firms’ fees and other retention terms). If the Committee retains one or more search firms, such search firms may be asked

to identify possible Candidates who meet the qualifications expressed in this Policy, to interview and screen such candidates (including conducting appropriate background and reference checks), to act as a liaison among the Board, the Committee and each Candidate during the screening and evaluation process, and thereafter to be available for consultation as needed by the Committee.

8. RECOMMENDATION The Committee shall consider all Candidates

identified through the processes described above, and shall evaluate each of them, based on the criteria set forth above and if thought fit, will recommend their appointment to the Board.

PART B – REMUNERATION POLICY9. EXECUTIVE DIRECTOR REMUNERATION Main principles The Remuneration and Nomination Committee’s

reward policy reflects its obligation to align executive directors’ remuneration with shareholders’ interests and to engage appropriately qualified executive talent for the benefit of the group. The nomination and remuneration committee shall consider following criteria before recommending the remuneration of executive directors: Reward reflects the competitive global market

in which the company operates. Individual reward should be linked to

performance criteria. Executives should be rewarded for both

financial and non-financial performance.Elements of Remuneration

The executive directors’ total remuneration consists of the following: Salary - each executive director receives a

fixed sum payable monthly in cash. Perquisites and allowances, if deem fit by

remuneration committee Other benefits - executive directors are eligible

to participate in superannuation schemes and such other benefits as may be prescribed by the nomination and remuneration committee.


Overall Director Remuneration Overall managerial remuneration shall not exceed

11% of net profit of the Company for a particular financial year. No remuneration (except sitting fees) shall be paid to any director of the company unless it is recommended to the board by remuneration committee of the Company and other applicable statutory provisions are complied with.

10. NON-EXECUTIVE DIRECTOR REMUNERATION No remuneration shall be paid to non executive

directors except sitting fees in the manner and as per the terms as approved by board of directors of the Company. The Nomination and remuneration Committee, if deem fit, may recommend to the board remuneration to non executive directors not exceeding 1% of net profit of the Company.

11. FORMS OF REMUNERATION Fixed Remuneration The Board in consultation with the Nomination

& Remuneration Committee will from time to time determine the fixed remuneration level for all Directors, key managerial personnel and senior management. For other employees, respective department heads, under an intimation to Human Resource Department, are allowed to fix such remuneration as they deem fit. Such remuneration levels will be determined according to industry standards, relevant laws and regulations, labour market conditions and scale of Company’s business relating to the position. The fixed remuneration will reflect the core performance requirements and expectations of the Company.

Performance based Remuneration In addition to fixed remuneration, the Company

may implement a system of bonuses and incentives designed to create a strong relationship between performance and remuneration. Performance based remuneration will be linked to specific performance targets which will disclosed to relevant employees regularly.

12. EMPLOYEE ENTITLEMENTS The Company will comply with all legal and

industrial obligations in determining the appropriate entitlement to long service, annual, personal and parental leave.

13. REVIEW The Nomination & Remuneration Committee is

responsible for the monitoring, implementation and review of this policy. The Nomination & Remuneration Committee will provide recommendations to the Board as to how to effectively structure and facilitate a remuneration strategy, which will meet the needs of the Company.

This Policy is intended to provide a set of flexible guidelines for the effective functioning of the Company’s nominations process for directors, KMPs and senior management. The Committee intends to review this Policy at least annually and anticipates that modifications may be necessary from time to time as the Company’s needs and circumstances evolve, and as applicable legal or listing regulation change. The Committee may modify or amend this Policy at any time without advance notice.

29

ANNEUXRE 2 TO THE DIRECTORS REPORTREPORT ON CORPORATE SOCIAL RESPONSIBILITY1. A brief outline of the company’s CSR policy, including

overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

Kindly refer the Corporate Social Responsibility Policy as stated herein below at the Company’s website at following link:http://gitanjaligroup.com/policies-codes

2. The Composition of the CSR Committee as on March 31, 2017 1. Ms. Nazura Ajaney - Chairperson2. Mr. S. Krishnan - Member3. Mr. Dhanesh Sheth - Member

3. Average net profit of the company for last three financial years Rs. 1,491.48 lakhs4. Prescribed CSR Expenditure (two per cent of the amount as in

item 3 above)Rs. 29.83 lakhs

5. Details of CSR spent during the financial year:-a) Total amount to be spent for the financial yearb) Amount Unspent, if any

Rs. 29.83 lakhsNot Applicable

c) Manner in which the amount spent during the financial year as given below:(1) (2) (3) (4) (5) (6) (7) (8)Sr. No

CSR Project or

activity identified

Sector in which the project is covered

Projects or programs

(1) Local area or other

(2) specify the state and district where projects

or programs was undertaken

Amount outlay

(budget)project or programs

wise

Amount spent on the projects or

programs(1) Direct

expenditure on projects or

programs(2) Overhead

Cumulative expenditure

upto the reporting

period

Amount spent: Direct or through

implementing agency

1. Education Cl (ii) Promoting education

State :- Maharashtra and Gujrat

Rs. 108.53 lakhs

Rs. 108.53 Lakhs Rs. 108.53 lakhs

Regd Trust

2. Healthcare Cl (i) Eradicating hunger, Promoting Healthcare

State:- Maharashtra Rs. 2.06 lakh Rs. 2.06 lakh Rs. 2.06 lakh Regd Trust

3 Animal Welfare

Cl - (iv)Animal welfare

State :- Gujarat Rs. 1.08 lakhs

Rs.1.08 lakhs Rs. 1.08 lakhs Regd Trust

Details of implementing agency: Donations have been given to various regd. trusts such as Shri 108 Paraswanath Bhaktivihar, Rotary Palanpur City Charitable Trust, Banaskantha District Kelavani Mandal, Shree Mangal Kalyan Charitable Trust, Jain Acadamy Educational Research Centre, Mahavir Heart Research Foundation and Iskcon Food Relief Foundation which are engaged in promotion of education, healthcare, eradicating hunger and promoting animal welfare.6. In case the Company has failed to spend two per cent of the average net profit of the last three financial years

or any part thereof, the Company shall provide the reasons for not spending the amount in its Board report: Not Applicable.7. The CSR Committee of the Company hereby confirms that the implementation and monitoring of CSR Policy, is in

compliance with CSR objectives and Policy of the Company.

For Gitanjali Gems Limited

Sd/-Nazura Ajaney Dhanesh ShethChairperson of Corporate Social Responsibility Committee Director


ANNEXURE 3A TO THE DIRECTORS REPORT

Details under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the

financial year;Sr. No

Name of Director/KMP Ratio of Remuneration of eachDirector/median remuneration of

Employees

% Increase in Remuneration inFY 16-17

1 Mr. Mehul Choksi 42.5:1 129.16%2 Mr. Dhanesh Sheth NA NA3 Mr. S. Krishnan NA NA4 Ms. Nazura Ajaney NA NA

(ii) the percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2016-17;

Sr. No.

Name of Director/KMP Designation % Increase in Remuneration

1 Mr.Mehul Choksi Managing Director 129.16%2 Mr. Dhanesh Sheth Director NIL3 Mr. S. Krishnan Director NIL4 Ms. Nazura Ajaney Director NIL5 Mr. Chandrakant Karkare Chief Financial Officer NIL6 Ms. Pankhuri Warange Company Secretary NIL

(iii) Percentage increase in the median remuneration of employees in the financial year 2016-17:

There was decrease by 5.44% in the median remuneration of employees in the financial year 2016-17.

(iv) There were 648 permanent employees on the rolls of company as on March 31, 2017.

(v) average percentile increase already made in the salaries of employees other than the director in the last financial year and its comparison with the percentile increase in the remuneration of director.

Average percentage increase made in the salaries of Employees other than the director in the financial year was 4.08% whereas the increase in the remuneration of director was 129.16%.

The average increase every year is an outcome of Company’s market competitiveness as against its peer group companies.

(vi) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company

31

ANNEXURE 3B TO THE DIRECTORS REPORT(i) PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5(2)(i) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Name Designation Remuneration (in Rs)

Qualification Experience DOJ Age Last employment

Mr. Sunil Varma Head- International Business

1,12,92,400 MBA, CFA, CPA, CA, B.COM

29 1-12-2009 50 Alpha Management

Services Co.LtdMr. Mehul Choksi Chairman and

Managing Director1,10,00,000 B.com 39 01-08-1994 58 N.A.

(ii) PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5(2)(ii) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Name Designation Remuneration(in Rs)


Mr. Saurav Bhattacharya

Group President 79,36,000 B. Tech, Business Education Programme (IIMA)

24 15-12-2013 47 Sahara

(iii) NAME OF TOP 10 EMPLOYEES IN TERMS OF REMUNERATION DRAWN

Sr. No



1 Mr. Sunil Varma Head- International Business

1,12,92,400 MBA, CFA, CPA, CA, B.COM

29 1-12-2009 50 Alpha Management Services Co. Ltd

2 Mr. Mehul Choksi Chairman and Managing Director

1,10,00,000 B.com 39 01-08-1994 58 N.A.

3 Mr. Saurav Bhattacharya Group President 79,36,000 B. Tech, Business Education Programme (IIMA)

2415-12-2013 47 Sahara

4 Mr. Vinod Juneja President-Accounts & Finance

68,18,150 B. Com. (Hon.), M.Com.

38 1-09-2016 68 Binani Group of Industries

5 Ms. Pankhuri Warange Vice President - Compliance & Company Secretary

39,63,408 CS, LLB 17 23-09-2005 40 P.S. Associates

6 Mr. Chandrakant Karkare Chief Financial Officer

33,11,640 B.Com, DFM, MBA

30 01-08-2011 52 Rolta India Ltd


Sr. No



7 Ms. Alpa Talsania Chief Operating Officer

30,24,000 Chartered Accountant

16 18-06-2007 44 Mangal Keshav Securities Ltd

8 Mr.Suresh Kayakkool Vice President - Supply Chain

27,21,000 B.Com, DMM, DEM, MBA

35 02-09-2011 52 Anchor Electricals Pvt Ltd

9 Ms. Simmi Sulke Vice President – Media

24,81,040 BA 16 02-02-2009 43 Times of India

10 Mr. Rajesh Chhatlani General Manager - MIS & Internal Audit

20,75,640 B.COM , AICWA 18 01-11-2010 45 Gold Star Corporate Solution Pvt. Ltd

Note for Annexure 3B (i)(ii) and (iii):

1. All appointments are contractual. Other terms and conditions are as per Company’s rules.

2. None of the employees mentioned above is related to any Director of the Company.

33

ANNEXURE 4 TO THE DIRECTORS REPORTForm No. MGT-9

EXTRACT OF ANNUAL RETURNas on the financial year ended on 31st March, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of theCompanies (Management and Administration) Rules, 2014]

I. Registration and other detailsCIN L36911MH1986PLC040689Registraion Date 21st August, 1986Name of the Company Gitanjali Gems LimitedCategory/ Sub-Category of the Company Company Limited by SharesAddress of the Registered office & Contact details

A-1, 7th Floor, Laxmi Tower,Bandra Kurla Complex, Bandra (East), Mumbai-400051 Tel No. 022- 4035 4600Fax No. 022-4010 2005Email: [email protected]

Whether Listed Company YesName, Address and Contact details of

Registrar & Share Transfer Agent, if AnyKarvy Computershare Private Limited Gitanjali Gems Limited Unit, Karvy Selenium Tower B,Plot No.31-32,Gachibowli, Financial District,Hyderabad-500032 Tel: +91-040-67162222 Fax: + 91-040-23001153Email: [email protected] Website: www.karvy.com

II. PRINCIPAL BUSINESS ACTIVITIES 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 Diamonds 32112 25.682 Jewellery 32111 74.32

*As per National Industrial Classification – Ministry of statistics and programme implementation.


III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

Sr. No.

Name and address of the Company CIN/GLN Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1 Naskshatra World Limited (Formerly known as Gitanjali Brands Limited) A-1 ,7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051

U01100MH1995PLC095425 Subsidiary 100 2(87)(ii)

2 Gitanjali Jewellery Retail Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


3 Gitanjali Lifestyle Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


4 MMTC Gitanjali Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051

U74999MH2008PLC187891 Subsidiary 73.85 2(87)(ii)

5 Gitanjali Infratech Limited A-1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


6 Hyderabad Gems SEZ Limited Survey no. 1/1, Ravirala Village Road,Opp. RcI IInd gate, Maheshwaram Mandal, Hyderabad, Telangana – 501 510

U27205TG2004PLC044751 Subsidiary 100 2(87)(ii)

7 Nashik Multi Services SEZ Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


8 Decent Securities and Finance Private Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051

U65910MH2006PTC160539 Subsidiary 100 2(87)(ii)

9 Eureka Finstock Private Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


10 N & J Finstocks Private Limited A-1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra, Mumbai 400051


11 Decent Investment and Finance Private Limited A-1, 7th Floor, Laxmi Towers, Bandra Kurla Complex, Bandra, Mumbai 400051


12 Nakshatra Brands Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


35

Sr. No.


% of shares held

Applicable Section

13 Gili India Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


14 Bezel Jewellery (India) Private Limited (Formerly Known as D’Damas Jewellery (India) Private Limited) B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051


15 Maya Retail Limited B-6, 1st Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051

U99999MH2001PLC231441 Subsidiary 95.94 2(87)(ii)

16 Vidarbha Multi Products SEZ Limited A-1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra, Mumbai 400051


17 Aston Luxury Group Limited Room 5B, 5/F, Block A, Hunghom Commercial Centre, 39 Ma Tau Wai Road, Hunghom, Kowloon, Hong Kong

N.A. Subsidiary 100 2(87)(ii)

18 Crown Aim Limited Room 5B, 5/F, Block A, Hunghom Commercial Centre, 39 Ma Tau Wai Road, Hunghom, Kowloon, Hong Kong


19 Leading Italian Jewels SRLVia Trento 7, 15048 Valenza, AL, Italy


20 Leading Jewels of Japan Kabushiki Kaisha Arai Bldg., 4F, 1-6-2, Higashi-Ueno, Taito-Ku, Tokyo-110 0015, Japan


21 Samuels Jewelers, Inc.2914, Montopolis Drive, Austin, Texas - 78741


22 Gitanjali USA, Inc.500, 7th Avenue, Fl 12B, New York, NY 10018, USA


23 Diamlink Inc 500, 7th Avenue, Fl 12B, New York, NY 10018, USA

N.A. Subsidiary 99.51 2(87)(ii)

24 LJOW Holdings, LLC 500, 7th Avenue, Fl 12B, New York, NY 10018, USA


25 Gitanjali Ventures DMCCDubai Multi Commodities Centre, Unit No. 33-B-C-D, Almas Tower, Plot No. LT-2, Jumeirah Lakes Towers, Dubai, U.A.E.



Sr. No.


% of shares held

Applicable Section

26 Abbeycrest (Thailand) Limited 99/29 Moo 5, Pasak District, Amphur Muang, Lamphun 51000, Thailand


27 Giantti Jewellery Trading (Shanghai) Co. LtdRoom 1106, No. 458, Fushan Road, Pudong district, Shanghai, P. R. China


28 Dynamic Infrazone Private Limited (Formerly known as Dynamic Multi Trading Private Limited)A-15, 1st Floor, 15A/15B, Supariwala Estate, Tata Road No 2, Roxy Cinema, Opera House, Girgaon Mumbai- 400004

U70102MH2009FTC195549 Subsidiary 100 2(87)(ii)

29 Kiam Jewels DMCCUnit No:963, DMCC Business Centre, Level No.1, Jewewllery & Gemplex 3, Dubai, UAE


30 Diamlink Jewelery Inc.500, 7th Avenue, Fl 12B, New York, NY 10018, USA


31 Jewelry Marketing Company LLC500, 7th Avenue, Fl 12B, New York, NY 10018, USA


32 Tri-star Worldwide LLC500, 7th Avenue, Fl 12B, New York, NY 10018, USA


33 Abbey USA LLC (Formerly known as GGL Diamond LLC)500, 7th Avenue, Fl 12B, New York, NY 10018, USA


34 Gitanjali Jewels LLCPlot No. 312, Al Souq Al Kabeer, Meena Bazaar, Bur Dubai, P.O. Box. 62851, Dubai, UAE

N.A. Associate 49 2(6)

35 Jewelsouk Marketplace Limited (Formerly known as eGitanjali Limited) A-1 ,7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051

U74120MH1989PLC054232 Associate 40 2(6)

36 GSTV Co. Ltd.TOC Ariake West Tower, 10th Floor, 3-5-7, Ariake Koto ku, Tokyo, Japan-135-0063.

N.A. Associate 20.20 2(6)

37

IV. SHAREHOLDING PATTERN ( EQUITY SHARE CAPITAL BREAK UP AS PERCENTAGE OF TOTAL EQUITY

i) Category Wise Shareholding

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change during

the year

Demat Physical Total % of Total

Shares


SharesA. Promoters(1) Indian

a) Individual / HUF 30768018 0 30768018 30.04 30946456 0 30946456 26.09 -3.95b) Central Govt. 0 0 0 0 0 0 0 0.00c) State Govt.(s) 0 0 0 0 0 0 0 0.00d) Bodies Corporate 4975583 0 4975583 4.86 5875305 0 5875305 4.95 0.09e) Banks / FI 0 0 0 0 0 0 0 0.00f) Any Other…. 0 0 0 0 0 0 0 0.00

Sub-Total (A)(1): 35743601 0 35743601 34.89 36821761 0 36821761 31.04 -3.85(2) Foreign 0 0 0

a) NRIs - Individuals 0 0 0 0 0 0 0 0.00b) Other - Individuals 0 0 0 0 0 0 0 0.00c) Bodies Corporate 0 0 0 0 0 0 0 0.00d) Banks / FI 0 0 0 0 0 0 0 0.00e) Any Other…. 0 0 0 0 0 0 0 0.00

Sub-Total (A)(2): 0 0 0 0 0.00Total Shareholding of Promoters (A) = (A)(1)+(A)(2)

35743601 0 35743601 34.89 36821761 36821761 31.04 -3.85

B. Public Shareholding(1) Institutions

a) Mutual Funds / UTI 923 0 923 0.00 0 0 0.00 0.00b) Banks / FI 70067 0 70067 0.07 62055 62055 0.05 -0.02c) Central Govt. 0 0 0 0 0 0 0.00d) State Govt.(s) 0 0 0 0 0 0 0.00e) Venture Capital Funds 0 0 0 0 0 0 0.00f) Insurance Companies 4799784 0 4799784 4.69 4799784 4799784 4.05 -0.64g) FIIs 3965288 0 3965288 3.87 97372 97372 0.08 -3.79h) Foreign Venture Capital Funds

0 0 0 0.00 0.00

i) Others (specify) 0.00i-i) Foreign Portfolio Investor 596197 0 596197 0.58 9693045 9693045 8.17 7.59Sub-Total (B)(1): 9432259 0 9432259 9.21 14652256 14652256 12.35 3.14(2) Non-Institutionsa) Bodies Corporatei) Indian 21380522 0 21380522 20.87 16158751 16158751 13.62 -7.25ii) Overseas - - - - -b) Individuals


Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Change during

the year


Shares


Sharesi) Individual Shareholders holding nominal share capital upto Rs. 1 lakh

22213496 259 22213755 21.69 20201672 1059 20202731 17.03 -4.66

ii) Individual Shareholders holding nominal share capital in excess of Rs. 1 lakh

7372359 0 7372359 7.20 13295803 0 13295803 11.21 4.01

c) Others (specify)i) NRI / OCBs 3774314 0 3774314 3.68 15783831 15783831 13.31 9.63ii) Clearing Members / Clearing House

1138274 0 1138274 1.11 157549 157549 0.13 -0.98

iii) Trusts 578000 0 578000 0.56 161 161 0.00 -0.56iv) HUF 787940 0 787940 0.77 1501851 1501851 1.27 0.50v) NBFCs registered with RBI

16700 0 16700 0.02 41311 41311 0.03

Sub-Total (B)(2): 57261605 259 57261864 55.90 67140929 67141988 56.60 0.70Total Public Shareholding (B)=(B)(1)+(B)(2)

66693864 259 66694123 65.11 81793185 81794244 68.96 3.85

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0.00 0 0 0 0.00

Grand Total (A+B+C) 102437465 259 102437724 100.00 118614946 1059 118616005 100.00 0

ii) Shareholding of Promoters

Shareholders Name Shareholding at the beginning of the year Shareholding at the end of the year % change in shareholding

during the year

No. of Shares % of total Shares of the

Company

% of Shares Pledged /

encumberedto total shares

No. of Shares % of total Shares of the

Company

% of Shares Pledged /

encumberedto total shares

Mr. Mehul Choksi 30768018 30.04 24.81 30946456 26.09 21.42 -3.95Partha Gems LLP 2069452 2.02 2.02 2069452 1.74 1.74 -0.28Priyanka Gems Private Limited

797748 0.78 0.78 797748 0.67 0.67 -0.11

Rohan Diamonds Private Limited

803216 0.78 0.41 803216 0.68 0.35 -0.11

Mozart Trading Private Limited

1305167 1.27 0.44 2204889 1.86 0.38 0.59

Total 35743601 34.89 28.46 36821761 31.04 24.56 -3.85

39

iii) Changes in promoter’s shareholding (Please specify if there is no change)

Sl No.

Name Shareholding Date Increase/ Decrease in shareholding

Reason Cumulative Shareholding during the year

No.of Shares at the beginning (01-04-16)/end

of the year(31-03-17)

% of total shares of the

Company

No. of Shares % of total shares of the

Company

1 Mr. Mehul Choksi 30768018 30.04 1-Apr-1625-May-16 Nil Movement 30768018 *28.27

9-Aug-16 Nil Movement 30768018 **25.942-Sep-16 121600 Purchase 30889618 26.04

20-Mar-17 56838 Purchase 30946456 26.0930946456 26.09 31-Mar-17

2 Partha Gems LLP 2069452 2.02 1-Apr-1625-May-16 Nil Movement 2069452 *1.90

9-Aug-16 Nil Movement 2069452 **1.742069452 1.74 31-Mar-17

3 Priyanka Gems Private Limited

797748 0.78 1-Apr-1625-May-16 Nil Movement 797748 *0.73


4 Rohan Diamonds Private Limited



5 Mozart Trading Private Limited

1305167 1.27 1-Apr-1625-May-16 Nil Movement 1305167 *1.2016-Jun-16 46000 Purchase 1351167 1.249-Aug-16 Nil Movement 1351167 **1.1419-Oct-16 729702 Purchase 2080869 1.7525-Oct-16 12500 Purchase 2093369 1.762-Nov-16 13018 Purchase 2106387 1.78

23-Nov-16 37000 Purchase 2143387 1.8131-Dec-16 61502 Purchase 2204889 1.86

2204889 1.86 31-Mar-17* Reduction in Shareholding Percentage is due to conversion of warrants into equity shares on May 25, 2016** Reduction in Shareholding Percentage is due to conversion of warrants into equity shares on August 09, 2016


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

Sl No.






Company


Company

1 Macquarie Finance (India) Private Limited



2 Life Insurance Corporation of India



3 Government Pension Fund Global

1614951 1.58 1-Apr-1613-May-16 85010 sale 1529941 1.4920-May-16 43941 sale 1486000 1.4525-May-16 Nil Movement 1486000 *1.3727-May-16 38120 sale 1447880 1.33

3-Jun-16 115353 sale 1332527 1.2210-Jun-16 31389 sale 1301138 1.2017-Jun-16 106116 sale 1195022 1.1024-Jun-16 180163 sale 1014859 0.9330-Jun-16 343259 sale 671600 0.62

1-Jul-16 124565 sale 547035 0.508-Jul-16 166994 sale 380041 0.35

15-Jul-16 278453 sale 101588 0.0922-Jul-16 101588 sale 0 0.00

0 0.00 31-Mar-174 Bennett,

Coleman and Company Limited


9-Aug-16 Nil Movement 1435107 **1.2114-Oct-16 200000 sale 1235107 1.0411-Nov-16 300000 sale 935107 0.79

9-Dec-16 200000 sale 735107 0.6216-Dec-16 100000 sale 635107 0.5423-Dec-16 50000 sale 585107 0.49

6-Jan-16 50000 sale 535107 0.4513-Jan-17 50000 sale 485107 0.4120-Jan-17 100000 sale 385107 0.3227-Jan-17 100000 sale 285107 0.243-Feb-17 100000 sale 185107 0.16

10-Feb-17 140000 sale 45107 0.0417-Feb-17 45107 sale 0 0.00

0 0.00 31-Mar-17

41

Sl No.






Company


Company

5 D B Corp Limited


9-Aug-16 Nil Movement 5201055 **4.3814-Oct-16 2500000 Sale 2701055 2.2821-Oct-16 2701055 Sale 0 0.00

0 0.00 31-Mar-176 Elara India

Opportunities Fund Limited



7 STCI Finance Limited



8 Ramesh Himatlal Shah

2924131 2.85 1-Apr-1625-May-16 3959301 Conversion of

warrants 6883432 6.32


9 Chaitya Shah 1408142 1.37 1-Apr-1625-May-16 Nil Movement 1408142 *1.29

9-Aug-16 5394754 Conversion of warrants

6802896 5.74

6802896 5.74 31-Mar-1710 AKG Finvest

Limited 1170000 1.14 1-Apr-16

8-Apr-16 1000000 Purchase 2170000 2.1225-May-16 Nil Movement 2170000 *1.99

9-Aug-16 Nil Movement 2170000 **1.8318-Nov-16 120000 Purchase 2290000 1.9325-Nov-16 35000 Purchase 2325000 1.96

3-Feb-17 160000 Purchase 2485000 2.0910-Feb-17 2325000 Sale 160000 0.13

160000 0.13 31-Mar-17


Sl No.






Company


Company

11 UNO Metals Limited

904999 0.88 1-Apr-1620-May-16 22751 Purchase 927750 0.9125-May-16 Nil Movement 927750 *0.8527-May-16 9750 Purchase 937500 0.8610-Jun-16 31616 Purchase 969116 0.8917-Jun-16 291134 Purchase 1260250 1.1624-Jun-16 179750 Purchase 1440000 1.3229-Jul-16 7620 Purchase 1447620 1.335-Aug-16 292440 Purchase 1740060 1.609-Aug-16 Nil Movement 1740060 **1.47

12-Aug-16 189940 Purchase 1930000 1.6325-Nov-16 130000 Purchase 2060000 1.7420-Jan-16 960000 Sale 1100000 0.933-Feb-17 1100000 Sale 0 0.00

10-Feb-17 1775000 Purchase 1775000 1.5017-Feb-17 2050000 Purchase 3825000 3.22

3825000 3.22 31-Mar-1712 Rakesh Gajera 0 0.00 1-Apr-16

25-May-16 2436376 Conversion of warrants

2436376 2.24

9-Aug-16 4387850 Conversion of warrants

6824226 5.75

6824226 5.75 31-Mar-17

43

Sl No.






Company


Company

13 The Calcutta Stock Exchange Limited

900000 0.88 1-Apr-168-Apr-16 900000 sale 0 0.008-Jul-16 100 Purchase 100 0.00

15-Jul-16 100 sale 0 0.0012-Aug-16 1300 Purchase 1300 0.0019-Aug-16 1300 sale 0 0.0016-Sep-16 175 Purchase 175 0.0023-Sep-16 175 sale 0 0.00

7-Oct-16 750 Purchase 750 0.0014-Oct-16 50 sale 700 0.0021-Oct-16 2301 Purchase 3001 0.0028-Oct-16 2751 sale 250 0.004-Nov-16 250 sale 0 0.00

18-Nov-16 40 Purchase 40 0.0025-Nov-16 40 sale 0 0.00

9-Dec-16 75 Purchase 75 0.0016-Dec-16 75 sale 0 0.0023-Dec-16 1282 Purchase 1282 0.0030-Dec-16 1282 sale 0 0.0020-Jan-17 1050 Purchase 1050 0.0027-Jan-17 958950 Purchase 960000 0.813-Feb-17 960000 sale 0 0.00

10-Feb-17 552025 Purchase 552025 0.4717-Feb-17 551925 sale 100 0.0024-Feb-17 500 Purchase 600 0.003-Mar-17 100 sale 500 0.00

10-Mar-17 500 sale 0 0.0017-Mar-17 4000 Purchase 4000 0.0024-Mar-17 4000 sale 0 0.00

0 0.00 31-Mar-17


Sl No.






Company


Company

14 ACADIAN EMERGING MARKETS SMALL CAP EQUITY FUND LLC

0 0.00 1-Apr-1628-Oct-16 48906 Purchase 48906 0.044-Nov-16 176191 Purchase 225097 0.19

18-Nov-16 235785 Purchase 460882 0.3918-Dec-16 130362 Purchase 591244 0.5013-Jan-17 122489 Purchase 713733 0.603-Feb-17 66509 Purchase 780242 0.66

17-Feb-17 175521 Purchase 955763 0.81955763 0.81 31-Mar-17

15 MORGAN STANLEY MAURITIUS COMPANY LIMITED

0 0.00 1-Apr-1621-Oct-16 48223 Purchase 48223 0.0428-Oct-16 89481 Purchase 137704 0.124-Nov-16 84109 Purchase 221813 0.199-Dec-16 63039 Purchase 284852 0.24

16-Dec-06 79215 Purchase 364067 0.3123-Dec-16 50538 Purchase 414605 0.35

3-Feb-17 335948 Purchase 750553 0.6310-Feb-17 410817 Purchase 1161370 0.9817-Feb-17 480659 Purchase 1642029 1.3824-Feb-17 22626 Sale 1619403 1.373-Mar-17 455938 Purchase 2075341 1.75

10-Mar-17 109293 Purchase 2184634 1.8417-Mar-17 16947 sale 2167687 1.8324-Mar-17 122571 Purchase 2290258 1.93

2290258 1.93 31-Mar-17

* Reduction in Shareholding Percentage is due to conversion of warrants into equity shares on May 25, 2016** Reduction in Shareholding Percentage is due to conversion of warrants into equity shares on August 09, 2016

45

V.) Shareholding of Directors & KMPSr. No.

Name Shareholding Date Increase/ Decrease in

shareholding

Reason Cumulative Shareholding during

the yearNo.of

Shares at the

beginning (01-04-16)/end of the

year(31-03-17)


Company

No. of Shares


Company

DIRECTORS :

1 Mr. Mehul Choksi 30768018 30.04 1-Apr-1625-May-16 Nil Movement *28.27

9-Aug-16 Nil Movement **25.942-Sep-16 121600 Purchase 30889618 26.04

20-Mar-16 56838 Purchase 30946456 26.0930946456 26.09 31-Mar-17

2 Mr. Dhanesh Sheth

- - 1-Apr-16 - NA - -- - 31-Mar-17 - - -

3 Ms. Nazura Ajaney

- - 1-Apr-16 - NA- - 31-Mar-17 - - -

4 Mr. S. Krishnan - - 1-Apr-16 - NA- - 31-Mar-17 - - -

KEY MANAGERIAL PERSONNEL :1 Mr. Chandrakant

Karkare, Chief Financial Officer

- - 1-Apr-16 - NA - -- - 31-Mar-17 - - -

2 Ms. Pankhuri Warange, Company Secretary

- - 1-Apr-16 - NA- - 31-Mar-17 - -

* Reduction in Shareholding Percentage is due to conversion of warrants into equity shares on May 25, 2016** Reduction in Shareholding Percentage is due to conversion of warrants into equity shares on August 09, 2016


V. INDEBTNESS OF THE COMPANY INCLUDING INTEREST OUTSTANDING / ACCRUED BUT NOT DUE FOR PAYMENT

Secured Loan Excluding Deposits

Unsecured Loan Deposits Total Indebtness

Indebtedness at the beginning i) Principal Amt 56,36,01,93,849.85 1,38,77,18,222.00 1,71,20,000.00 57,76,50,32,071.85 ii) Interest Due but not paid 2,46,29,517.00 - - 2,46,29,517.00 iii) Interest Accrued but not due 6,15,70,129.27 - 2,89,761.00 6,18,59,890.27 Total (i+ii+iii) 56,44,63,93,496.12 1,38,77,18,222.00 1,74,09,761.00 57,85,15,21,479.12 Change in Indebtedness During the year Addition - - - - Reduction (1,08,13,44,515.39) (78,73,21,110.00) (1,72,84,761.00) (1,88,59,50,386.39) Net Change (1,08,13,44,515.39) (78,73,21,110.00) (1,72,84,761.00) (1,88,59,50,386.39) Indebtedness at the end of the Year i) Principal Amt 55,15,34,37,890.70 60,03,97,112.00 1,25,000.00 55,75,39,60,002.70 ii) Interest Due but not paid 8,83,71,533.00 - - 8,83,71,533.00 iii) Interest Accrd but not due 12,32,39,557.03 - - 12,32,39,557.03

Total (i+ii+iii) 55,36,50,48,980.73 60,03,97,112.00 1,25,000.00 55,96,55,71,092.73

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole-time Director/ and/or Manager:

Sr. No.

Particulars of Remuneration Mr. Mehul Choksi (Chairman & Managing Director)

Total Amount (Rs.)

Gross Salary1 (a) Salary as per provisions contained in Section 17(1) of the Income Tax Act, 1961 1,10,00,000 1,10,00,000

(b) Value of perquisites under Section 17(2) Income Tax Act, 1961 - -(c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961 - -

2 Stock Options - -3 Sweat Equity - -4 Commission - -

- as % of profitothers, specify

5 Others, please specify - -Total (A) 1,10,00,000 1,10,00,000B. Remuneration to other Directors:1. Independent Directors

Sr. No.

Particulars of Remuneration Name of DirectorMs. Nazura Ajaney

(In Rs)Mr. S. Krishnan

(In Rs)Total Amount (Rs.)

1 Fee for attending Board/Committee Meetings

2,50,000 2,50,000 5,00,000

2 Commission - - -3 Others, please specify - - -

Total B (1) 2,50,000 2,50,000 5,00,000

47

2. Other Non Executive DirectorsSr. No.

Particulars of Remuneration Name of Director Total Amount (Rs.)Mr. Dhanesh Sheth

1 Fee for attending Board/Committee Meetings - -2 Commission - -3 Others, please specify - -

Total B (2) - -Total (B) = B (1) + B (2) 5,00,000

C. Remuneration to Key Managerial Personnel other than MD/WTD/Manager

Sr. No.

Particulars of Remuneration Key Managerial PersonnelMr. Chandrakant K.

Karkare (Chief Financial

Officer)

Ms. Pankhuri Warange

(Company Secretary)

Total Amount (Rs.)

Gross Salary1 (a) Salary as per provisions contained

in Section 17(1) of the Income Tax Act, 1961

33,11,640 39,63,408 72,75,048

(b) Value of perquisites under Section 17(2) Income Tax Act, 1961

- - -

(c) Profits in lieu of salary under Section 17(3) Income Tax Act, 1961

- - -

2 Stock Options - - -3 Sweat Equity - - -4 Commission - - -

- as % of profitothers, specify

5 Others, please specify - - -Total (C) 33,11,640 39,63,408 72,75,048

VII. PENALTIES/ PUNISHMENT/COMPOUNDING OF OFFENCES:Type Section of the

Companies Act

Brief Description

Details of Penalties/ Punishment/

Compounding fees imposed

Authority [RD/NCLT/COURT]

Appeal made, if any (give

details)

A. COMPANYNonePenalty

PunishmentCompoundingB. DIRECTORSPenalty

NonePunishmentCompoundingC. OTHER OFFICERS IN DEFAULTPenalty

NonePunishmentCompounding


ANNEXURE 5 TO THE DIRECTORS REPORTSECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2017[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,

The Members,Gitanjali Gems LimitedMumbai

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Gitanjali Gems Limited (CIN:L36911MH1986PLC040689) and having its registered office at A-1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai- 400051 (hereinafter called ‘the Company’). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/ statutory compliances and expressing our opinion thereon.

Based on our verification of the company’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 on 31st March, 2017 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 31st March 2017 according to the provisions of:

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

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

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) 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;

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

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

(d) Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (Not applicable to the Company during the audit period);

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (Not applicable to the Company during the audit period);

49

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (Not applicable to the Company during the audit period);

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 (Not applicable to the Company during the audit period); and

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

(vi) There are no laws that are specifically applicable to the company based on their sector/industry.

We have also examined compliance with the applicable clauses of the Secretarial Standards issued by The Institute of Company Secretaries of India;

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above subject to the following observations:

I. Pertaining to Companies Act, 2013

(a) the Company has not deposited 15% of the amount of its non-convertible debentures maturing during the year in Liquid Assets as required under Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014;

II. Pertaining to Foreign Exchange Management Act, 1999

(b) the submission of Annual Performance Report in respect of two of it’s overseas wholly owned subsidiaries with the Reserve Bank of India, as required under Foreign Exchange Management Act,1999, was not made within the stipulated time limit of 31stDecember,2016;

(c) the company is yet to file Annual Return on Foreign Liabilities and Assets as required under Foreign Exchange Management Act, 1999 relevant to the year ended 31st March 2016 which was to be filed on or before 15th July 2016 (the company is also yet to file this return for the year ended 31st March 2015 which was to be filed latest by 15th July, 2015);and

(d) the filing of Form ECB-2 (monthly return) with the Reserve Bank of India as required under Foreign Exchange Management Act,1999 in respect of ECB loan availed from Banks has been delayed for some of the months.

We further report that

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

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.

Majority decision is carried through while the dissenting member’s views, if any, are captured and recorded as part of the minutes.

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, guidelines, standards.


We further report that during the audit period:

1. the company acquired balance 1 (one) equity share of the face value of Rs.10/- in Nakshatra World Limited (NWL) on 23rd November, 2016 pursuant to which NWL became its wholly owned subsidiary;

2. the Bombay High Court vide order dated 18th June, 2016 sanctioned the Scheme of Amalgamation of its wholly owned subsidiary Gitanjali Exports Corporation Limited with the Company from the appointed date of 1st April, 2014;

3. 63,95,677 Equity Shares(of face value of Rs.10/- each) were allotted on 25th May, 2016 pursuant to conversion of equal number of Warrants of face value of Rs.10/- each issued on preferential basis at a price of Rs.72.39 (including a premium of Rs.62.39). The aforesaid shares were listed and admitted for trading at BSE Ltd. on 2nd August, 2016 and at National Stock Exchange of India Ltd. on 3rd August, 2016;

4. 30,51,640 Warrants (of the face value of Rs.10/- each and issued at a premium of Rs.62.39 on preferential basis on 22nd January, 2015) lapsed upon non-exercise of option for conversion to equity shares on or before the maturity date of 21st July 2016 and the amount already received at time subscription stood forfeited;

5. 97,82,604 Equity Shares(of face value of Rs.10/- each) were allotted on 9th August, 2016 pursuant to conversion of equal number of Warrants of face value of Rs.10/- each issued on preferential basis at a price of Rs.72.39 (including a premium of Rs.62.39).The aforesaid shares were listed and admitted for trading at BSE Ltd. and National Stock Exchange of India Ltd. on 30th November, 2016; and

6. the members of the company vide special resolution passed at the Annual General Meeting held on 30th September 2016 accorded approval under section 62(1)(c) of the Act authorising the issuance and allotment up to 2,08,44,400 Warrants on a preferential basis to the promoter/promoter group/persons other than promoters carrying an option/entitlement to subscribe to equivalent number of Equity Shares of Rs.10 each at a future date not exceeding Rs.110 crores.

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

Place : MumbaiDate: August 11, 2017

For Manish Ghia & AssociatesCompany Secretaries

Manish L. GhiaPartner

M. No. FCS 6252 C.P. No. 3531

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‘Annexure A’

To,

The Members,Gitanjali Gems LimitedMumbai

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

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

2. We have followed the audit practices and processes 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 provided a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Book 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, regulation, standards is the responsibility of management. Our examination was limited to the verification of procedures on the test basis.

6. The Secretarial Audit Report 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.

Place : MumbaiDate: August 11, 2017

For Manish Ghia & AssociatesCompany Secretaries

Manish L. GhiaPartner

M. No. FCS 6252 C.P. No. 3531


MANAGEMENT DISCUSSION AND ANALYSIS REPORTINDUSTRY OVERVIEWGlobal Gems & Jewellery Industry:The global gems and jewellery industry over the past decade has witnessed significant changes and reported growth on account of increasing income as well as demand from the emerging economies across the world. Among the various types of jewellery, diamond studded jewellery accounted for the largest share of the global jewellery market, followed by plain gold jewellery. The growth in demand for diamond-studded jewellery has been due to diamond’s inherent value and strong economic growth in key diamond jewellery consuming nations coupled with marketing efforts of diamond companies. According to CARE Research, US, China, and India are the largest consumers of gems and jewellery with China and India being largely gold dominated. In Western Europe, the UK and Italy are the largest consumers and Italy is also one of the world´s largest jewellery fabrication centers. Emerging markets, like China and India which have been traditional hubs of jewellery consumption, are expected to develop as the largest consumption markets for both traditional as well as branded jewellery.(Source: CARE Research)According to CARE Research, Asia Pacific consists of the world’s largest jewellery market, with the main contributors being China and India, who are the largest consumers of jewellery in the world and have a large number of processing and manufacturing units.Global Gems & Jewellery Structure

(Source: CARE Research)Indian Gems & Jewellery Industry:India is a major processing hub for the global jewellery market, owing to its low-cost and highly-skilled labour advantage. According to CARE Research, India is also the world’s largest diamond-cutting and polishing centre and second largest gold jewellery centre.The Indian gems and jewellery market comprises of jewellery (gold and silver), diamonds, coloured stones and pearls. According to CARE Research, Gold and diamond jewellery are the two major segments of the industry globally and India dominates in both of them. Of the total diamonds sold around the world, more than 90% (14 out of 15) diamonds are cut and polished in India (60% by value) because of the low-cost and highly-skilled manpower. Further, India continues to consume and import gold which crossed 850 tonnes per annum (CY2015). The gems and jewellery market is broadly bifurcated as shown in the following chart:

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The Gems and Jewellery sector plays a significant role in the Indian economy, contributing to around 6-7 per cent of the country’s GDP (Source: CARE Research). India is deemed to be the hub of the global jewellery market because of its low costs and availability of high-skilled labour.According to CARE Research, the gems and jewellery market in India is home to more than 500,000 players, with the majority being small players. The industry is also highly unorganized dominated by family run jewellers. However, in the recent years there has been a gradual shift to organized players, at both, a national as well as a regional level. The organized sector accounts for around 28% - 30% of the total market share as per CARE Research. However, an increasing number of large showrooms have quickly gained trust among customers with their diverse products, guarantee for purity and value for money. Driven by these factors, the organized sector is expected to grow at a steady pace and increase its market share in the future. Further, Indian consumers also lay emphasis on branded goods, designs and certification. Demand for studded jewellery has witnessed an upswing in stark contrast to pure gold jewellery purchased in earlier years.Exports & ImportsAccording to CARE Research, Gems & Jewellery is one of the fastest growing sectors and is extremely export oriented and labour intensive. Based on its potential for growth and value addition, the Government of India has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote ‘Brand India’ in the international market.ExportsAccording to CARE Research, India is one of the largest exporters of gems and jewellery and the industry is considered to play a vital role in the Indian economy as it contributes a major chunk to the total foreign reserves of the country. The overall net exports of Gems & Jewellery in FY 2016 stood at US$31.98 billion, whereas exports of cut and polished diamonds stood at US$19.99 billion. The Gems & Jewellery segment contributed 13.3% share in total exports, which makes the sector second largest exporter after petrochemicals which contributed 18.3% share in total exports in FY15, thereby contributing in a big way to the country’s foreign exchange earnings


The contribution of the gems & jewellery sector to the country’s total exports is as follows:

Year Export of Gems & Jewellery (US$ billion)

Gold (US$ billion) Diamond (US$ billion)

FY2011-12 43.21 9.79 25.12FY2012-13 39.13 13.03 19.01FY2013-14 34.99 11.44 12.74FY2014-15 36.26 26.08 24.58FY2015-16 31.98 13.84 21.16H1FY17 17.84 7.03 12.43

(Source: GJEPC website, CMIE, CARE Research)The composition of various segments to the total exports of G&J sector is as depicted below:

(Source: CMIE, CARE Research)Gems and Jewellery exports declined in FY2015-16 to the lowest in six years, due to a slowing global economy which reduced the demand for luxury goods. India’s net G&J export at almost $31.98 billion, as compared to $36.22 billion the previous year, was down 5.3 per cent in dollar terms. The fall in G&J shipment was largely driven by a sharp fall in export of cut and polished diamonds at almost $19.99 bn as against $23.16 bn in 2014-15 (a fall of 7.5 per cent). In rupee terms, however, the slump was 13.7 per cent to Rs 1.31 lakh crore from Rs 1.41 lakh crore the previous year. The decline was partly compensated by a sharp upsurge in export of gold medallions and coins, and silver jewellery. The former jumped 84 per cent to $5.2 bn (Rs 34,243 crore) and of silver jewellery by 44.2 per cent to almost $3 bn (Rs 19,407 crore) from $2.1 bn (Rs 12,569 crore) the previous year (Source: CARE Research).Exports market grew at 14.43% in H1FY17 in comparison to H1FY16 mainly on account of picking up demand in markets like US, led by an increase in the Cut & Polished Diamond segment. However, the shipments of gold jewellery contracted by 26% during the period. (Source: CARE Research)The export markets for the Indian gold jewellery segment are UAE, Hong Kong, USA, UK, Singapore, Bahrain, Australia, Canada, Malaysia, Kuwait and others (Source: CARE Research). Amongst them top 3 countries contributed 90%, 83% & 86% in FY2013, FY2014 & FY2015 respectively; as depicted below-

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ImportsIn CY2015, total domestic gold jewellery demand stood at 654.3 tonnes. Demand for domestic gold jewellery reached a historic high of 212.10 tonnes in Q3CY15; y-o-y growth of 15% on the back of drop in local price to ~Rs.25,000/10gms. However, gold jewellery demand hit a seven-year low of 88.4 tonnes during Q1CY16; a 41% y-o-y decline. This was largely on account of sharp rise in the local gold price and jewellers strike for more than 40 days to protest against imposition of 1% excise duty on jewellery manufacturing in the Union Budget 2016-17. Most of the gold demand is met by imports. The below chart depicts gold imports by India as a percentage to total imports:

(Source: CMIE, CARE Research, in calendar years)During FY16, import of rough diamonds dropped in India in line with weaker exports on account of weak international demand, high rough diamond prices and high inventory holding by manufactures. Rough diamond imports reduced by 16.17% in FY16 to USD 14.04 billion compared to USD 16.75 billion in FY15, mirroring the fall in India’s export of polished diamonds. Imports of polished diamonds slumped nearly 58.28% to USD 2.77 billion. (Source: CARE Research).


The overall gross imports of Gems & Jewellery in FY16 stood at US$24.30 billion (Source: CARE Research). The percentage of imports of rough diamonds from various countries is as mentioned below:

(Source: GJEPC, CARE Research)Value Chain AnalysisIndia has very limited access to gold and diamond mines domestically and a significant proportion is imported every year. India imports rough diamonds in huge quantities which are then cut & polished and are exported back generating huge value addition. Some of these polished diamonds are used in manufacturing jewellery again for both local and international markets. Gold is also imported, refined and fabricated into fine jewellery primarily for local consumption but is also exported to the Middle East, US and Europe. Jewellery retailing is still evolving and more and more people are choosing branded products given demographic transformation.Certification and HallmarkingThe Government of India has been protecting consumers from adulterated and sub-standard quality of gold by introducing the Hallmarking Scheme through the Bureau of Indian Standards (BIS). In January 2012 the Government of India has proposed to make hallmarking gold jewellery for quality control, mandatory. This would provide a boost to the growth of organized retailers.With increased consumer awareness and demand for branded jewellery, there is increase in requirement for authoritative diamond grading and certification from reputed bodies. The diamond certification business has gone up in the country in the last few years, which has attracted many foreign gemological institutes to set up their offices in Mumbai, Surat and Delhi. Diamonds are typically priced by their actual quality grade, according to the Clarity, Colour, Cut and Carat weight (4Cs) and other factors. Unless a diamond is graded from a respected laboratory one will have little financial interest in the diamond and will also remain unsure about whether he’s buying the right quality.BrandingTraditionally, gold jewellery in India has been purchased because of its investment value along with aesthetic value, unlike in foreign countries where it is bought only for ornamental purposes. With changing demographics, the branding of jewellery and the retail revolution, young customers (from age groups of 20-40 years) prefer buying jewellery for fashion rather than for investment. Even the organized retailers in the sector have focused on advertisements by appointing celebrities to endorse products, organizing fashion shows and exhibitions to promote growth. All these efforts will lead to a much higher growth in the branded and therefore organized jewellery market.

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Changing Trends in the Indian Jewellery Sector

Traditional Practice Emerging TrendGold jewellery consumption emanates from traditional and investment-related demand.

It is regarded as a fashion accessory by the growing young population.

Demand peaks during weddings and festival seasons. Weddings & Festivals still remain the main demand drivers but jewellery use for regular wear and gifting has evened out the demand throughout the year.

Consumption of pure gold (22 Karat)- preferred . Traditional & ethnic designs preferred.

Lower karatage & light-weight jewellery preferred. Trend is more towards fashionable and contemporary designs.

Purchase from unorganized family jewellers dominated. Hence the industry lacked transparency.

Growing preference for brands, retail stores & e-retailing. Introduction of hallmarking & certifications.

Pre-dominance of gold (yellow)-based jewellery. Acceptance of white gold, platinum and diamond-studded jewellery. Even imitation jewellery is gaining acceptance.

Jewellery largely sold on prevailing gold price, per gram, plus labour charges.

Branded players sell on a fixed-price basis.

(Source: CARE Research)Growth Prospects for Domestic Gems and Jewellery in IndiaTraditionally gold jewellery has been an important part of Indian culture. The demand for gold jewellery is driven by festivals and weddings. As per Indian tradition, buying gold is considered auspicious on days like ‘Akshay-Tritiya’ and ‘Dhan-Teras’. In marriages, gold jewellery is a preferred gift given by the family of the bride and the groom. About 60% of the Indian jewellery market is contributed by rural India. Gold jewellery is popular among farmers and an upsurge in gold demand is typically seen after a good harvest season. According to CARE Research, on an average, India consumes about 800-850 tonnes of gold annually, majority of which is imported.Further, demand for diamond jewellery in India has not only increased due to changes in consumer preferences and increase in income levels but also because of rising gold prices and increasing cost effectiveness of diamonds as India is a low cost diamond processing hub.Important Savings and Investment ChannelApart from cultural and social significance, gold is also valued as an important savings and investment vehicle in India, second only to bank deposits. People in rural India have very few savings options and make it a point to save or invest their money in gold given that gold is highly portable, holds its value well, in times of uncertainty and can be easily converted to cash either through sale or for loan guarantees. More importantly, it has been observed that gold acts as a natural hedge against inflation. Gold is easily available throughout India and can be used for dual purpose of investment as well as jewellery. Also, other asset classes like equities are too complicated and volatile, whereas real estate requires an investment which is too high for an average household in India. Gold is a simpler alternative and can be bought in smaller denominations. As gold can be bought in smaller denominations, investment in gold is a common saving strategy for Indian households. Investing in gold is matter of culture and is a value instilled in Indians from very early on.Increasing acceptability of diamond jewelleryTraditionally, jewellery industry in India mainly comprised jewellery made from gold, as there were misconceptions and myths associated with diamonds of being unlucky. This is changing with an increased acceptance of diamond jewellery in the domestic markets. Also, diamond jewellery is increasingly accepted for weddings and engagement especially bridal jewellery.


Diamond as a fashion statementDiamond jewellery is increasingly contributing to the changing fashion trends of the high class and middle class society of India, to differentiate them from other people. Diamond demand has also been benefited by increasing exposure to glamorous and fashionable world.Increased MarketingDe Beers constantly works towards promoting the diamond jewellery market worldwide including India and has launched flagship brands in local markets, after intensive consumer research. Based on their market research and analysis, brands are introduced, nurtured and then handed over to its promoter partners to run. This brings awareness amongst people and induces them to buy diamond.Rising income, urbanization and increasing savings levelsBeing one of the youngest nations in the world, India is poised for a steady economic growth. According to United Nations, urban population in India now comprises 30% of the total population and is estimated that the percentage of urban population will increase to 41% of the total population by 2030. According to CARE Research, the average household savings are expected to triple during the period from 2010 to 2020; the average savings rate in India is about 30-40% which only helps in further demand for gold since gold and silver are the traditional saving options. The average investment pattern of savings in India is follows.

Average Households Savings Pattern

Source:CARE ResearchFurther, increasing education levels among women has increased the percentage of women workforce in the country, thereby increasing influence on purchasing decisions. Furthermore, increase in disposable income in the hands of working couples and changing lifestyles have contributed to the demand for diamond jewellery.The median age in the country is 26.2 years, one of the lowest in the world compared to 36.9 years in US, 44.8 years in Japan and 35.5 years in China. With rising young and urban population in the country combined with the higher growth rate of GDP, there would be an increase in the annual disposable income with the people. Also, the enhanced efforts on quality certifications for gold have helped in removing the malpractices in the industry, moving towards global standards (Source: CARE Research).

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Low-cost and highly-skilled labour advantage in the countryThe G&J industry is highly labour intensive, employs between 3.2 million to 3.4 million people directly or indirectly. It has highly skilled and low-cost manpower with a vast traditional knowledge and expertise in jewellery-making, which provides a huge fillip to the growth of the G&J industry. India has well-established capabilities in making hand-made jewellery in traditional as well as modern designs. The Indian hand-made jewellery has a large ethnic demand in various countries with a high Indian population like the Middle East, USA and Canada. With the traditional hand-made jewellery, India has also progressed in using the latest technologies in diamond-processing and jewellery-making.Jewellery-making, diamond polishing and setting are high-skilled jobs. Although, machines are required to complete some part of the work, the processing is essentially labour intensive. India, with its availability of low-cost skilled labour is in an ideal position to deliver products of good design and quality. India is, therefore, the largest country for diamond processing and gold manufacturing in the world.Branded & Retail Jewellery SegmentBranded JewelleryJewellery companies seek to strengthen and differentiate their brands through unique, distinctive designs. The growth in the branded jewellery segment is primarily driven by young consumers who are generally brand conscious, emerging market consumers for whom established brands inspire trust and a sense of upgraded lifestyle. Further the gradual shift in jewellery retailing from the traditional way of retailing to the modern, organized way of selling – both online and offline has attracted PE firms as well.According to CARE Research, gold jewellery makes up for 80% of the Rs.300,000 crore gems and jewellery market of India during CY15.The organized segment accounts for almost 28% - 30% while the unorganized one; primarily comprising local and independent stores, makes up for balance of the retail gems and jewellery market. Jewellery in India is retailed mainly through single stores, shop-in-shops, regional stores and national stores. The purchase of jewellery is largely based on trust exhibited by customers.

(Source: CARE Research)According to CARE Research, India’s organized gems and jewellery retail market has been growing at a much faster pace in recent years than the unorganized one. According to CARE Research, organized retailers are expected to continue to gain market share at the expense of unorganized players by expanding in to Tier – II/ III markets which are expected to be the major growth drivers of domestic gold jewellery. Compulsory hallmarking of jewellery is also expected to aid the organized retailers. Further, the organized retailers, having strong financial strength, provide a whole new shopping experience for customers through the ambience of their stores, range of product, quality and trust factor leading to rising demand for branded jewellery. (Source: CARE Research)Online Jewellery Market PlaceThe growing e-commerce market has been challenging all conventional modes of business recently, unlike old times where buying jewellery traditionally meant a visit to the trusted family jeweler. The growth in the online space has compelled even the top jewellery houses to adapt to the changing trends by tying up with online service providers. The rationale for this is the change seen in consumer behavior over the years especially that of young Indian women, who are exposed to global trends and are increasingly shopping online. Due to comfort and convenience for shoppers along with giving the considerable time to decide and not making it obligatory to purchase at the visit; the online jewellery market is projected to grow leaps & bounds. According to industry news, the Indian online jewellery market is estimated to be USD 150 million in FY2015, forming about 0.35% of the domestic market size. However, the market is growing at a high growth rate. CARE Research estimates online retail to grow at a faster rate than organized retail largely due to base effect, convenience and young buyers open to experience new buying trends.


Competitive LandscapeTraditionally, the Indian G&J industry was highly fragmented with consumers typically buying from their family jewellers. However, in the last decade the industry has undergone a structural change and more G&J players are moving up the value chain towards an increasing focus for branded jewellery. According to CARE Research, Jewellery retailing is not only high margin and lucrative but is also largely untapped in India, thereby offering a huge upside. Also due to rising gold prices, plain gold jewellery is losing ground to diamond jewellery. Further, jewellers have also launched low-value low-priced diamonds targeted at wider audiences, which further fuels overall demand. Increased off-take in diamonds and other precious stone jewellery, serves well for jewellers, since margins on these products are higher.The market is hugely underpenetrated and there is ample scope for all new entrants. Given rising media and western influences people are more inclined towards branded jewellery and are willing to pay a premium for the same. In the past few years, many domestic companies have opened G&J specialty stores in India to meet the changing taste of local populace and have also opened stores abroad to serve the Indian diaspora in countries where demand for traditional Indian crafted jewellery is high.Challenges faced by the Gems and Jewellery SectorDependence on import for key raw materialsIndigenous availability of raw material plays a crucial role in the growth of any industry. In India 90 per cent of raw material is imported and its supply is limited. Rough diamonds as raw material account for more than 50 per cent of imports. The top 4 Diamond mining companies account for approximately 70% of total Rough diamonds mined globally and can potentially control their prices.These rough diamonds are cut, polished and exported. India imports rough diamonds mainly from Africa, Belgium, the UK, Israel and the UAE etc while gold jewellery is imported from Switzerland, South Africa, the UAE and Australia etc. Raw pearls and precious and semi-precious stones are imported from Belgium, the UK and Hong Kong etc. Europe has become the largest importing destination of raw material for Indian gems and jewellery industry. The sector being hugely dependent on imported raw material and exports giving fewer earnings in foreign exchange stands a concern. (Source: CARE Research)

Competition ThreatsAccording to CARE Research, India presently enjoys dominance in the world’s cut and polished diamonds market. However, in the long run China is expected to emerge as a major rival on account of similar qualities like cheap economic labour, infrastructure and technology.Highly Regulated SectorImport duties on gold have often been raised (currently 10%) to align with the overall economic interest of the nation, with gold imports being a key contributor to the nation’s current account deficit (CAD).Government Initiatives• The Reserve Bank of India has announced norms for

gold monetization scheme, which allows individuals, trusts and mutual funds to deposit gold with banks in return for interest, to help reduce gold imports and alleviate pressure on trade balance.

• The Reserve Bank of India (RBI) has liberalized gold import norms. With this, star and premier export houses can import the commodity, while banks and nominated agencies can offer gold for domestic use as loans to bullion traders and jewellers.

• India has signed a Memorandum of Understanding (MoU) with Russia to source data on diamond trade between the two countries. According to CARE Research, India is the top global processor of diamonds, while Russia is the largest rough diamond producer. Further, Government of India is planning to establish a special zone with tax benefits for diamond import and trading in Mumbai, in an effort to develop the city as a rival to Antwerp and Dubai, which are currently the top trading hubs for diamond. (Source: CARE Research)

• Due to shortage of skilled manpower, the Gems and Jewellery Skill Council of India is planning to train over four million people till 2022. The council aims to train, skill and enhance 4.07 million people by 2022. The council plans to tie-up with the existing training institutes including Gemological Institute of America (GIA) and Indian Gemological Institute (IGI), along with setting up of new institutes in major diamond cutting and processing centres. (Source: CARE Research)

• The GJEPC has also proposed to develop a jewellery park on Thane-Belapur Road which is around five kilometers from Mumbai with a view to boost the

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Mumbai-based jewellery industry by providing modern facilities and services.

• In September 2015, the Government of India approved the gold monetization plan in the form of revamped Gold Deposit Scheme (GDS) and the Gold Metal Loan Scheme (GML) to mobilize tonnes of gold stored in households and temples across the country.

(Source: CARE Research)The recent announcement by the government with regards to proposed amendments to the Income tax act stipulates; whereby no seizure of gold jewellery and ornaments to the extent of 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of family. Further the proposed amendments also do not seek to tax inherited gold & jewellery and also those items that are purchased through disclosed or agriculture income by Central Board of Direct Taxes (CBDT), the apex direct taxes body.OutlookIt can be said that the prospects of the Indian gems and jewellery market are quite promising due to overall rising disposable incomes and the emergence and growth of innovating selling concepts in this digital era which offer the new age consumers the convenience and quality that they seek. Further, the government’s overall policies supporting the industry make for a rather conducive environment for growth.Key Developments during the yearIn February 2016, the Govt. of India (GOI) announced 1% excise duty on jewellery under the Union Budget 2016-17. As a matter of protest, many jewellers pan-India participated in a strike from March-April 2016. This resulted in loss of business due to closure of outlets of many jewellers. It also impacted festive purchases of many people who may have delayed their purchases or purchased through modern channels of trade like Shop-in-Shops or though e-Commerce.In November 2016, due to demonetization our business was impacted for about 3 months in India. However due to good demand overseas there was recovery in sales during that period. In long run it would be favorable for organized players like us. Also, In June 2017, the GST council decided to tax polished diamonds, gold and gold jewellery at 3% and rough diamonds at 0.25% under the Goods and Services

Tax (GST) applicable from 1st July 2017. As a unified tax nationally, the GST replaced Value Added Tax (VAT), Excise Duty, Octroi and other duties levied on the sector. As input credit is available under GST, it is expected that there will be a limited impact on the industry. GST is expected to increase compliance and bring all players at par, thus giving an impetus to organized channels of sale. As GST is also expected to help pan-India sale of goods and services under the same framework, it is expected to boost trade and commerce.Corporate ProfileGitanjali Group is the world’s largest integrated branded jewellery manufacturer-retailer with an annual turnover of around $ 2.5 billion. Established in 1966, today its activities are spread across the entire value chain from rough diamond sourcing, cutting, polishing and distribution, jewellery manufacturing to branding and retailing gold and diamond jewellery in India and abroad.The Group pioneered jewellery retail revolution in India by launching ‘Gili’ way back in 1994. It today owns and distributes eight out of the top ten jewellery brands in the country including Gili, Nakshatra, Asmi, Sangini, Nizam and Parineeta to name a few. Gitanjali’s extensive network of own stores, shop-in-shops and franchise outlets span across 200 cities and 3,000 points of sale.It has world-class diamond processing facilities in India located at Surat and Hyderabad. Domestic jewellery manufacturing facilities are located at Mumbai, Hyderabad, Surat and Jaipur while the international manufacturing set up is in Thailand. The Group’s international design hub is located in Italy.Over the last two decades, the Group has expanded operations in USA, UK, Belgium, Italy, Singapore and Japan.Today the group owns a large retail chain in the US, Samuels Jewelers Inc; and has acquired a number of brands such as Stefan Hafner, Valente, Io Si, Poratti and others in Italy, and has also launched a collection of Italian jewellery called Viola Italia. The group also has a fast developing presence in China, the Middle East and other new markets.Competitive Strengths• Integrated Play – Presence at every stage of the

value chain allows for supply chain efficiencies and overall operational synergies.


• Designing Strength – Designs are the Group’s key assets. Gitanjali ensures to pick the finest designers from top institutes. Many of these today are award-winning designers and are integral for the group’s strategy of brand creation and growth. Italy is the company’s international design centre and mainly caters to the company’s international operations. Our manufacturing and designing strengths allow us to constantly innovate and cater to evolving consumer trends across the globe.

• Manufacturing Prowess – Gitanjali has its state of the art manufacturing facilities strategically located across India and Thailand with the facility in Thailand being one of the largest in Thailand. Our strong manufacturing base serves as a solid back-end to feed our retailing business. This integration ensures consistent supply, economies of scale, superior quality finish and allows us the flexibility to adapt to changing consumer needs rapidly.

• Well Established Brands – Gitanjali changed the way jewellery was viewed and bought in India, when it launched Gili in 1994. Ever since, the company acquired and even created several brands which have become household names today. Some of these like Nakshatra and Asmi are doing well not just in India, but also in international markets which have an Indian populace. Over the years the group has created a bouquet of Indian and international brands with a view to cater to various occasions, price points, age groups as well as geographies.

• Omni-Channel Retail Network – The group has a well established network of stores, shop-in-shops, franchisees and distributors. After having explored multiple retail formats like these, over the years, Gitanjali has now forayed into innovative selling concepts such as digital selling and is also exploring other channels such as Canteens, Cruise Liners, In-flight, Duty free Stores at airports, etc with a view to widen its reach and acceptability.

• Global Presence – Gitanjali enjoys a well established presence not only in India but also overseas. Truly a global player, it is present across the top jewellery markets of the world. In the largest diamond jewellery market of the world, which is the USA, Gitanjali has a footprint of around 118 stores of Samuels Jewelers and also several retailers. It also has a minority stake in the 3rd largest retail chain in Japan (Verite) and a

20% stake in GSTV Co. Ltd. (One of Japan’s largest jewellery selling TV channels). In the Middle East, the group enjoys a presence through a few own stores as well as through shop-in-shops in leading jewellery retailers. Gitanjali also supplies jewellery to several retail stores in China. Our diversified presence across geographies helps in de-risking our portfolio.

• Ability to Innovate – The ability to innovate has been one of Gitanjali’s biggest strengths as it has allowed the group to keep up with the latest trends and address evolving needs. The group’s integrated play is what has allowed it the flexibility to innovate and adapt to changing preferences in a time-effective manner. The latest addition to the list of innovations is the introduction of jewellery range made of new age unique precious metal positioned between Gold and Silver, which is all set to revolutionise the jewellery industry.

• Strong Marketing Capabilities - Gitanjali’s brands are a testimony of the marketing efforts that go in creating and maintaining their image. Most of the group’s brands are a household name today, and reckon with jewellery in India. Tremendous efforts are consistently made to grow and establish these brands. Today, the group is recognised as one of the largest investors in media in the diamond jewellery sector in the country and also the largest print advertiser across categories in the country.

Development PlansOur strategic intent is to leverage upon the strength of our well balanced business model and to build brands and products that offer quality, trust and value to consumers. The focus has always been and continues to be value creation. We plan to achieve this by implementing the following strategies:Focus on studded jewelleryGitanjali has been focused on the growth of its studded jewellery business globally. As a category, studded jewellery is not just high-margin but also extremely popular in large global markets like USA, China, Japan and Middle East. Gitanjali’s presence and aggressive expansion plans in these markets have attributed and will continue to attribute to overall growth.Focus on Product InnovationsProduct innovations have been part of Gitanjali’s DNA. After having introduced coloured gemstones

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with alternative metals, the latest one from the group is jewellery range made of New Age Metal which is positioned between silver and gold and comes with its unique set of benefits to consumers and investors alike. This metal is all set to revolutionize the Indian jewellery market. The group will continue to churn out more such ideas and products in the time to come.Focus on Channel InnovationsThe Group has always focused on expanding its reach and acceptance. Over the years after having explored multiple retail formats such as stores, franchisees, shop-in-shops and distribution, the group has very effectively made a mark in the digital space as well, through its exclusive and multi-brand portals as well as through market places. Going forward, growth will come through expansion of modern retail as well as the digital space and newer avenues such as army canteens, duty free stores at airports, in-flight, cruise liners, etc.Expanding International PresenceGitanjali plans to increase its international presence by expanding the studded jewellery retail and distribution business worldwide. In the US Samuels plans to expand in 15 key locations in Texas, California, Ohio, Indiana and Utah. This market cluster offers economies of scale for operations and marketing. Samuels is also considering expansion in boutique store formats. Also, the group’s Indian brands like Nakshatra & Asmi have been well received in international markets with an Indian diaspora. So the Group will continue to expand and grow these brands globally.Brand ExtensionGitanjali has leveraged upon the tremendous brand recall its brands enjoy and have extended some brands to include lifestyle categories such as apparels and accessories. Going forward, this segment shall also continue to grow to support the company’s online growth.Opportunities and ThreatsThe jewellery industry worldwide is evolving and we perceive this as an opportunity to pursue tremendous growth in all the key global markets.In India approximately 90% of the jewellery purchase is for weddings and investments and the market is mindset driven as jewellery purchase in India is more of a necessity than a luxury. This aspect renders this category as relatively price inelastic.Also, the advent of the millennial consumer provides a more conducive environment for organized players like Gitanjali. These new age consumers who prefer quality and convenience are the ones who will contribute to

major growth of modern retail and digital channels. This offers a huge growth opportunity to players like Gitanjali who are already into this space.Another opportunity that the company sees is the huge potential in rural India and we intend tapping that market further, with new concepts which will appeal to both, rural entrepreneurs as well as rural consumers.Further a lot of international markets like Russia, Brazil, Saudi Arabia, etc offer tremendous growth potential for players like Gitanjali and we are well poised to capitalize on this opportunity.On the other hand, there would still be some factors that could impact demand. These would mainly pertain to macro economic conditions such as the regulatory environment, slow demand, price volatility, etc. These are the key factors which could impact the company’s growth and margins.Human CapitalGitanjali recognizes its employees as a key asset and has immense faith and confidence in their capability to contribute significantly to the growth of the organization. The company believes in building a distinctly progressive organization by developing & nurturing competent and highly engaged employees across all levels. Gitanjali empowers its employees and provides them with opportunities to grow along with the organization. The company always strives to ensure that it makes for a great work place.Internal ControlsThe framework for our Roadmap guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable growth.• People: Provide for a conducive atmosphere for

growth where people are inspired to be the best they can.

• Portfolio: Constantly innovate and make pioneering introductions in the branded Jewellery space by offering high-quality, varied branded jewellery options at competitive prices.

• Process: We believe in and adhere to structured operating processes in order to achieve profits and productivity.

• Profit: Focus on value creation and maximize long-term returns to stakeholders while being mindful of our overall responsibilities.

• Productivity: Be a highly effective, lean and fast-moving organization.


In order to ensure the above, the company has adequate internal control systems in place. These govern its internal business processes across departments to ensure operational efficiency, adherence to internal policies, compliance with applicable laws and regulations, optimum resource and asset utilization, and accurate reporting of financial transactions. The adequacy and efficacy of the control environment is assessed periodically to ensure that its strength is reinforced in keeping with the requirements of a dynamic business environment. Observations of significance in summarized internal audit reports are reviewed by a qualified and independent Audit Committee on a regular basis.Potential Risks and ConcernsAt Gitanjali, risks are identified and managed through a range of measures and initiatives that have allowed the company to achieve success across markets.• Macro economic factors such as a downturn and

changes in the regulatory environment do play an important role in impacting the company’s business. However the company’s vertically integrated model and geographically diversified presence immunizes the business against these risks to a great extent.

• Manufacturing risks could arise from the inability to maintain a stable operating environment. The company mitigates this risk by operating state-of-the-art manufacturing units. Also, the geographic diversification of the facilities helps mitigate the risk of region-specific uncertainties in terms of the regulatory environment, calamities - natural or otherwise and any other such issues.

• Competitor risks could arise from a growing presence of local, national and international luxury players in terms of impact on growth and market share. However, Gitanjali’s size and integration allow it to capture additional margins across the value chain. Further its innovative spirit constantly enables it to explore and introduce new avenues for growth. Thus helping it to not only preserve but also increase its market share.

• Innovation risks could arise from an inability to innovate which could weaken the sales cycle. Gitanjali’s vertical integration allows for it to constantly innovate. The group’s innovative initiatives such as design, product & channel innovations help it to mitigate the risk of constantly changing consumer trends.

• Commodity price fluctuation risks could arise on account of changes in the prices of raw materials

and inconsistency in the availability of the same. These could adversely impact earnings. However, the Company being a DTC Sightholder manages to procure rough diamonds in a timely and cost-effective manner. The company’s strong brands command a premium, which helps absorb price fluctuations to a fair extent. This helps mitigate commodity price fluctuation risks.

• Forex risks could arise from the company being exposed to foreign currency fluctuations which could impact its rupee earnings. Gitanjali imports rough diamonds but since it is a net exporter of diamonds and jewellery, it only needs to hedge the net exposure which it adequately does via hedging instruments such as forward contracts, etc.

• Intellectual Property risks could arise if the Company is unable to protect its intellectual property rights. The Group’s brands are a significant part of its identity. Gitanjali has invested considerable effort in protecting its intellectual property rights, including trademark registrations, designs and domain names.

• Human Capital risks could arise from the non-availability of an adequately trained and skilled workforce. In order to mitigate this risk the Company ensures regular training and mentoring sessions and takes every effort to build and retain a skilled workforce. The company also has processes and systems in place to help assess and rationalize manpower and other operational costs in order to enhance operational efficiencies and sustain and grow in a challenging business environment.

Corporate Performance

• Consolidated revenues increased from Rs. 1,415,920.86 lacs in 2015-16 to Rs 1,683,143.97 lacs in 2016-17. The increase in revenues has been due to improved global demand.

• Consolidated PBT increased from Rs. 9,782.15 lacs in 2015-16 to Rs. 16,140.10 lacs in 2016-17. Consolidated PAT increased from Rs. 10,460.90 lacs in 2015-16 to Rs. 16,683.38 lacs in 2016-17. This increase was mainly due to better demand coupled with reduction in finance and operational costs.

• The Jewellery segment revenues grew from Rs. 1,126,240.29 lacs in 2015-16 to Rs. 1,416,303.43 lacs in 2016-17. The diamond segment revenues declined from Rs. 272,209.08 lacs in 2015-16 to Rs. 240,983.19 lacs in 2016-17.

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• The overall Indian business was Rs. 471,864.30 lacs in 2016-17 as compared to Rs. 635,652.42 lacs in 2015-16, while the international business improved to Rs. 1,185,422.32 lacs in 2016-17 from Rs. 762,796.95 lacs in 2015-16.

• The Depreciation & Amortisation expenses decreased from Rs. 8,101.89 lacs in 2015-16 to Rs. 7,496.47 lacs in 2016-17.

• The finance cost decreased from Rs. 72,986.54 lacs in 2015-16 to Rs. 69,394.27 lacs in 2016-17 on account of decrease in long term borrowings from Rs. 67,481.36 lacs in 2015-16 to Rs. 37,630.98 lacs in 2016-17 and increase in short term borrowings from Rs. 746,423.39 lacs in 2015-16 to Rs. 757,400.22 lacs in 2016-17.

• Basic & Diluted Earnings per share increased from Rs. 10.32 in 2015-16 to Rs. 14.62 in 2016-17.

• The Other Equity grew from Rs. 622,330.14 lacs in 2015-16 to Rs. 644,370.58 lacs in 2016-17.

• Inventories increased from Rs. 572,271.00 lacs in 2015-16 to Rs. 717,194.73 lacs in 2016-17.

• Trade receivables increased from Rs. 1,154,268.73 lacs in 2015-16 to Rs. 1,282,866.04 lacs in 2016-17.


REPORT OF CORPORATE GOVERNANCE1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE: Corporate Governance is concerned with the way corporate entities are governed, as distinct from the way businesses

within those companies are managed. It is a broad term which is used to refer to a range of corporate controls and accountability mechanisms designed to meet the aims of all stakeholders. ‘Transparency’ and ‘Accountability’ are fundamental principles to sound Corporate Governance, which ensures that the organization is managed and monitored in a responsible manner.

The Company has a strong legacy of fair, transparent and ethical governance practices. The Company’s business practices are based on the conviction that good business sense underpins good ethics. The Company is committed towards transparency in all its dealings and places high emphasis on business principles and believes the good corporate governance goes beyond working results and financial priority and is pre-requisite for attainment of excellent performance. The Company believes that adopting the best governance practices is not only non – negotiable but it is foundation to good business.

The report of Corporate Governance is prepared in accordance with SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 (hereinafter referred to as Listing Regulations).

2. THE BOARD OF DIRECTORS The Board of Directors of the Company ensures Company’s prosperity by collectively directing the Company

affairs towards securing appropriate interests of its shareholders and stakeholders. They are the key person who deals with the challenges and issues relating to good Corporate Governance, Corporate social responsibility and corporate ethics.i) COMPOSITION OF THE BOARD As of March 31, 2017 the Company’s Board comprised of Four Directors, including two independent Directors. The composition and the category of Directors on the Board of the Company as on March 31, 2017 were as

under:

Name Category DesignationMr. Mehul Choksi Promoter & Executive Director Chairman & Managing Director

Mr. Dhanesh Sheth Non – ExecutiveNon-Independent Director Director

Mr. S. Krishnan Independent Director DirectorMs. Nazura Ajaneyii) CONDUCT OF BOARD PROCEEDINGS The day to day matters concerning the business is conducted by the Executives of the Company under the

directions of Managing Director with the ultimate supervision of Board. The Board holds its meetings at regular intervals to review and discuss the performance of the Company, its future plans, strategies and other pertinent issues relating to the Company.

iii) BOARD AGENDA Meetings are governed by a structured agenda. All agenda items are backed by comprehensive background

information to enable the Board to take informed decisions. The Board Members are presented in advance with the detailed agenda in respect of all Board meetings.

iv) AVAILABILITY OF INFORMATION TO BOARD MEMBERS The Board has unfettered and complete access to any information within the Company, and to any of our

employees. At Board meetings, managers who can provide additional insights into the items being discussed are invited. During the year 2016-17, information as mentioned in Part A Schedule II of the Listing Regulations has been placed before the Board for its consideration.

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v) ATTENDANCE OF THE DIRECTORS AT BOARD MEETINGS DURING THE YEAR AND AT PREVIOUS AGM

Name of the Director Status No. of Board meetings held during the year 2016-17

No of Board Meetings attended

Attendance at last AGM

Mr. Mehul Choksi C.M.D. 5 5 YesMr. Dhanesh Sheth N.E.D. 5 4 NoMr. S. Krishnan I. N.E.D. 5 5 YesMs. Nazura Ajaney I.N.E.D 5 5 No

C.M.D. - Chairman & Managing DirectorN.E.D. - Non Executive DirectorI. N.E.D. - Independent Non Executive Director

vi) BOARD MEETINGS HELD DURING THE YEAR 2016 - 17 The Board held five meetings during the year. The meetings of the Board of Directors are scheduled well in

advance. The intervening period between two Board meetings was well within the maximum period of 120 days prescribed under Listing Regulations. The details of Board Meetings are as under:

Sr. No. Date Board Strength No. of Directors present1. May 28, 2016 4 42. August 11, 2016 4 43. September 12, 2016 4 34. December 14, 2016 4 45. February 14, 2017 4 4

The Board, in addition to the review of the corporate plans, strategies and financials, takes periodical review of compliance reports of all laws applicable to the Company.

vii) OTHER DIRECTORSHIPS AND COMMITTEE MEMBERSHIP The details of Directorship and Committee Membership & Chairmanship held by the Directors as on March

31, 2017 are as follows:

Name of the Director No. of other Directorships(Including GGL)

Committee (Including GGL)Member Chairman

Mr. Mehul Choksi 8 3 2Mr. Dhanesh Sheth 7 3 2Mr. S.Krishnan 2 1 1Ms. Nazura Ajaney 4 3 2

Notes:1. There is no inter se relationship between our board members2. The Directorships held by Directors as mentioned above, do not include Alternate Directorships,

Directorships of Foreign Companies, Private Limited Companies and Companies covered under Section 8 of the Companies Act, 2013.

3. In Accordance with Regulation 26 of the Listing Regulations, Membership/ Chairpersonship of only the Audit Committees and Stakeholder Relationship Committees of all Public Limited Companies have been considered.

4. Non Executive Directors do not hold any shares or convertible instruments.5. Brief profiles of all the Directors are available on the website of the Company at: http://gitanjaligroup.com/board-of-directors/


viii) INDEPENDENT DIRECTORS Your Company appointed Independent Directors who are renowned people having expertise / experience in

their respective field / profession. None of the Independent Directors are promoters or related to Promoters. They do not have pecuniary relationship with the Company. Every Independent Director at the first meeting of the Board in which he/she participates as a Director and thereafter at the first meeting in the Board in every financial year, gives declaration that he/she meets the criteria of independence as required under Section 149(7) of the Companies Act, 2013.

All Independent Directors maintain their limits of directorships as required under Regulation 25 of the Listing Regulations.

ix) FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS The Company has taken initiatives to familiarize its Independent Directors with the Company, their roles,

rights, responsibilities in the Company, nature of the industry, etc through various programmes as per Regulation 25 of the Listing Regulations.

The details of said familiarization programme is provided on the website of the Company.x) MEETING OF INDEPENDENT DIRECTORS In accordance to Schedule IV of the Companies Act, 2013 and the rules made there under, the meeting of

Independent Directors of the Company shall be held at least once in a year without the attendance of non-independent directors and members of the management.

Every year, meeting of Independent Directors is held to review the performance of the Chairman, Non executive Directors, and Board as a whole and to assess the quality, quantity and timeliness of flow of information between the management and board.

3. COMMITTEES OF THE BOARDi) AUDIT COMMITTEE The Audit Committee which acts as a link between the management, external and internal auditors and the

Board of Directors of the Company is responsible for overseeing the Company’s financial reporting process by providing direction to audit function and monitoring the scope and quality of Internal and Statutory Audits.

The Audit Committee of the Company is entrusted with the responsibility to supervise the Company’s financial reporting process and terms of reference of the Committee are as per the guidelines set out in Listing Regulations and Section 177 of the Companies Act, 2013 and it inter alia includes the following:1. the recommendation for appointment, remuneration and terms of appointment of auditors of the Company;2. to review and monitor the auditor’s independence and performance, and effectiveness of audit process;3. examination of the financial statement and the auditors’ report thereon;4. approval or any subsequent modification of transactions of the Company with related parties5. scrutiny of inter - corporate loans and investments6. valuation of undertakings or assets of the company, wherever it is necessary;7. evaluation of internal financial controls and risk management systems8. monitoring the end use of funds raised through public offers;9. such other matters as specified under Listing Regulations and requirements of section 177 of Companies

Act, 2013 or as may be delegated by Board of Directors. The Audit Committee of the Company shall review the following information:

1. Management discussion and analysis of financial condition and results of operation;

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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 weakness; and5. The appointment, removal and terms of reference of the Chief Internal auditor shall be subject to review

by the Audit Committee.a) Composition As on March 31, 2017, the Audit Committee comprised of Mr. S. Krishnan - Chairman and Ms. Nazura

Ajaney and Mr. Mehul Choksi as its other members. The composition of committee did not change during the year.

Ms. Pankhuri Warange, Company Secretary is Secretary of the Committee. The Composition of the Audit Committee meets the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations.

All the members of the Audit Committee are financially literate and atleast one member is having accounting or related financial management expertise as per the requirement of Regulation 18 of the Listing Regulations.

b) Meetings and Attendance during the year During the financial year ended March 31, 2017, five meetings of the committee were held. The attendance

of committee members at the meetings was as follows:

Name of Member Category No. of Meetings held during the year 2016-17

No. of Meetings Attended

Mr. S. Krishnan Non Executive – Independent Director

5 5

Ms. Nazura Ajaney Non Executive – Independent Director

5 5

Mr. Mehul Choksi Chairman & Managing Director 5 5ii) STAKEHOLDER’S RELATIONSHIP AND INVESTOR’S GRIEVANCE COMMITTEE

a) Composition As on March 31, 2017, the Stakeholders Relationship and Investor’s Grievance Committee comprised

of Ms. Nazura Ajaney as its Chairperson and Mr. S. Krishnan, as other member. The composition of committee did not change during the year.

Ms. Pankhuri Warange, Company Secretary is Secretary of the Committee.b) The terms and reference of Stakeholder’s Relationship and Investor’s Grievance Committee

broadly includes the following:1. Reviewing and redressing complaints from various security holders such as shareholders, debenture

holders and any other security holders such as non receipt of interest on debentures, annual report, transfer of shares or debentures, issue of duplicate share / debenture certificates, etc;

2. Overseeing and reviewing all matters connected with transfers, transmissions, dematerialization, rematerialization, splitting and consolidation of securities issued by the Company.

c) Meetings and Attendance During the financial year ended March 31, 2017, four meetings of the committee were held. The attendance


of Committee members at the meetings was as follows:-

Name of Member No. of MeetingsHeld during the year 2016-17


Ms. Nazura Ajaney 4 4Mr. S. Krishnan 4 4

d) Details of Shareholders’/Investors’ Complaints Ms. Pankhuri Warange, Company Secretary is the Compliance Officer for resolution of Shareholders’ /

Investors’ complaints. During the financial year ended 31st March, 2017, 30 complaints were received from the shareholders. All complaints have been redressed to the satisfaction of the shareholders and none of them were pending as on 31st March, 2017.

Particulars No. of Complaints

Complaints pending as on April 1, 2016 NILComplaints received during the period April 1, 2016 to March 31, 2017 30Complaints disposed off during the period April 1, 2016 to March 31, 2017 30Complaints outstanding as on March 31, 2017 NIL

Name, designation, address of the Compliance OfficerName : Ms. Pankhuri WarangeDesignation : Vice President- Compliance and Company SecretaryAddress : A/1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (E) Mumbai – 400 051 Tel +91- 022 – 40354600/40102012 Fax +91- 022 - 40102005Email : [email protected]

iii) NOMINATION & REMUNERATION COMMITTEE In Compliance with the provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of

Listing Regulations, ‘Nomination & Remuneration Committee’ has been constituted.a) Composition As on March 31, 2017, the Committee comprised of Mr. S. Krishnan as its Chairman and Ms. Nazura

Ajaney and Mr. Dhanesh Sheth as its other members, all of whom are non executive directors. The composition of committee did not change during the year.

Ms. Pankhuri Warange, Company Secretary is Secretary of the Committee.b) The terms and reference of nomination and remuneration committee broadly includes the

following:1. Formulation of the criteria for determining qualifications, positive attributes and independence of

a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other senior management employees;

2. Formulation of criterion for evaluation of performance of independent directors and the Board of Directors.

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3. Devising a policy on Board diversity;4. Identifying persons who are qualified to become directors and who may be appointed in senior

management in accordance with the criteria laid down by the committee and recommend their appointment and removal to the Board.

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

c) Meetings and Attendance During the financial year ended March 31, 2017, three meetings of the committee were held. The

attendance of committee members at the meetings was as follows:-



Mr. S. Krishnan 3 3Mr. Dhanesh Sheth 3 3Ms. Nazura Ajaney 3 3

d) Performance Evaluation Criteria for Independent Directors The performance evaluation of Independent Directors were based on the criteria viz. attendance at Board

and Committee Meetings, skill, experience, understanding of key issues, etc.e) Remuneration of Non-Executive Directors and their Shareholding

Name of Directors Sitting Fees Paid for attending meetings of Board and its

Committees (Rs.)

No. of Shares held as on March 31, 2017

Mr. Dhanesh Sheth Nil NilMr. S. Krishnan 2,50,000 NilMs. Nazura Ajaney 2,50,000 Nil

Apart from the sitting fees that are paid to the non-executive directors for attending the board / committee meetings, no other fees / commission were paid during the year. No significant material transactions have been made with the Non-Executive Directors vis-à-vis the Company.

f) Remuneration of Executive Directors and their Shareholding

Name of the Directors Remuneration paid during the year 2016-17

Number of shares held as on March 31, 2017

Mr. Mehul Choksi Rs. 1,10,00,000 3,09,46,456• The Company has re-appointed Mr. Mehul Choksi as Managing Director for a period of five years

effective from August 01, 2017 subject to the approval of members in the upcoming Annual General Meeting. The Director’s remuneration consists of fixed salary component payable to them. There is no performance linked incentives payable to directors for achievement of targets.

• During 2016-17, the Company did not issue any stock options neither did it advance any loans to any of its Directors.

g) Remuneration Policy: The Board of Directors has on the recommendation of the Committee framed a policy for selection and

appointment of Directors, senior management and their remuneration. The said policy has been attached as ‘Annexure 1’ of board’s report.


iv) CORPORATE SOCIAL RESPONSIBILITY COMMITTEEa) Composition: As on March 31, 2017 the Committee comprised of Ms. Nazura Ajaney as its Chairperson and

Mr. S. Krishnan and Mr. Dhanesh Sheth as its other members. The composition of Committee did not change during the year. Ms. Pankhuri Warange, Company Secretary is Secretary of the Committee.

b) The terms and reference of Corporate Social Responsibility committee broadly includes the following:1. To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall

indicate the activities to be undertaken by the Company as specified in Schedule VII;2. To recommend the amount of expenditure to be incurred on the activities as indicated in the CSR

Policy;3. Monitor the Corporate Social Responsibility Policy of the Company from time to time.

c) Meetings and Attendance During the financial year ended March 31, 2017, three meetings of the committee were held. The

attendance of Committee members at the meetings was as follows:-



Ms. Nazura Ajaney 3 3Mr. S. Krishnan 3 3Mr. Dhanesh Sheth 3 2

4. GENERAL BODY MEETINGSa) Annual General Meetings: Location, time and date where the three immediately preceding Annual General Meetings of the Company

were held are given below:

General Meeting &Financial Year

Day & Date Time Venue

Special Resolutions passed

28th AGM – 2013-14 M o n d a y , September 29, 2014

10.00 a.m Boundary Hall, 1st Floor, MCA Recreation Centre, RG-2, G Block,Bandra Kurla Complex, Bandra (East),Mumbai – 400 051

Adoption of new sets of Articles of Association(AOA) substituting existing AOA of the Company

29th AGM – 2014-15 Wednesday, September 30, 2015

9.00 a.m. Boundary Hall, 1st Floor, MCA Recreation Centre, RG-2, G Block,Bandra Kurla Complex, Bandra (East),Mumbai – 400 051

NIL

30th AGM – 2015-16 Friday,September 30, 2016

9.00 a.m. Boundary Hall, 1st Floor, MCA Recreation Centre, RG-2, G Block,Bandra Kurla Complex, Bandra (East),Mumbai – 400 051

Allotment of Convertible Warrants on a preferential basis to Promoters as well as Persons other than Promoters

All resolutions moved at the last Annual General Meeting were passed by the requisite majority of shareholders.

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b) Extra Ordinary General Meeting No Extra-ordinary General Meeting of the shareholders was held during the financial year 2016-17. c) Special Resolution passed through postal ballot During the year under review, no resolution was put through by Postal Ballot and there is no immediate

proposal for passing any resolution through Postal Ballot.5. MEANS OF COMMUNICATION During the year Quarterly results and Annual results have been published in leading newspaper such as ‘Business

Standard’, ‘The Free Press Journal’ in English and ‘Navshakti’ in Marathi. Annual report containing inter alia Audited Annual Accounts, Consolidated Financial Statements, Director’s

Report, Management Discussion & Analysis (MD&A) Report, Auditor’s Report and other information is circulated to members and others who are entitled to it.

All important information relating to the Company and its performance including the financial results and shareholding pattern are displayed on the Company’s website www.gitanjaligroup.com. The website also displays all official press releases issued by the Company and Presentations made to institutional investor or to the analyst.

The Company puts all the price sensitive information’s in to public domain by way of intimating the same to Stock Exchange immediately.

All periodical compliance filings like Shareholding Pattern, Corporate Governance Report, Results, among others are filed electronically on the websites of the Stock Exchanges i.e. BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). NSE and BSE have introduced NSE Electronic Application Processing System (NEAPS) and BSE Listing Centre respectively. Various compliances as required / prescribed under the Listing Regulations are filed through these systems.

The Company has designated an e-mail id for registering investor complaints namely [email protected]. GENERAL SHAREHOLDERS INFORMATION

a) Annual General Meeting for the Financial Year 2016-17 Date & Time : Thursday, September 28, 2017 at 9 a.m. Venue : Boundary Hall, First Floor, MCA Recreation Centre, RG – 2, G Block,

Bandra Kurla Complex, Bandra (E), Mumbai – 400051b) Financial Year : The financial year of the Company is from April 1 to March 31.c) Dates of Book Closure Our register of members and share transfer books will remain closed from September 16, 2017 to September

28, 2017 (both days inclusive) to determine the entitlement of Shareholders to receive the final dividend as may be declared at the ensuing Annual General Meeting.

d) Dividend Payment Date: The final dividend, if declared, shall be paid/credited on or after October 03, 2017.e) Listing on Stock Exchanges

Name of Stock Exchange

Stock Code / symbol

Address ISIN

BSE Limited (“BSE”) 532715 Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001

INE346H01014

National Stock Exchange of India Limited (“NSE”)

GITANJALI Exchange Plaza, C/1, G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051

INE346H01014


f) Listing Fees Listing fees as applicable have been paid to the above stock exchanges.g) Market Price Data The Equity Shares of the Company are listed on the BSE Ltd and National Stock Exchange of India Ltd. The

monthly high and low of the Company’s price is as follows:

Stock Exchange BSE Limited* National Stock Exchange of India Limited*

Month HighRs.

LowRs.

HighRs.

LowRs.

April-16 42.30 32.05 42.45 32May-16 38.00 34.00 38.10 33.45June-16 42.60 34.30 42.80 34.50July-16 42.65 38.60 42.65 38.60August-16 51.50 38.00 51.65 38.05September-16 68.65 44.60 68.70 43.55October-16 93.60 61.40 93.60 61.05November-16 78.45 48.70 78.40 48.60December-16 68.85 52.65 68.85 52.60January-17 73.90 56.20 73.85 56.05February-17 77.40 64.00 77.40 64.40March-17 70.55 62.85 70.55 63.00

*Source - Respective websites of BSE & NSE.h) (i) Performance of share price of the Company in comparison with BSE Sensex

Note: Indicates monthly closing positions.

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h) (ii) Performance of share price of the Company in comparison with NSE Nifty

Note: Indicates monthly closing positionsi) Registrars & Share Transfer Agents Karvy Computershare Private Limited Unit: Gitanjali Gems Limited Karvy Selenium Tower B,Plot No.31-32, Gachibowli,Financial District, Nanakramguda , Hyderabad-500032 Phone: 040-67162222, Fax: 040-23001153, Email: [email protected] Website : www.karvy.comj) Debentures Trustee Axis Trustee Services Limited Ground Floor, E-Wing, Axis House, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai 400 025 Tel: 022 6226 0054 Fax: 022 2425 2525 e-mail: [email protected] Website: www.axistrustee.comk) Share Transfer System Transfer of the shares held in the dematerialized form is done through the Depositories with no involvement

of the Company. As regards transfer of shares in physical form, the transfer documents can be lodged with Registrar & Share Transfer Agents of the Company, Karvy Computershare Private Limited, at the address mentioned above.


l) Distribution of Share Holding as on March 31, 2017No. of Shares Shareholders Shares held

Nos. % Nos. %001 to 5000 60619 86.79 7391167 6.235001 to 10000 4770 6.83 3907635 3.2910001 to 20000 2219 3.18 3431007 2.8920001 to 30000 771 1.10 2000065 1.6930001 to 40000 376 0.54 1331355 1.1240001 to 50000 294 0.42 1387453 1.1750001 to 100000 433 0.62 3182391 2.68100001 and above 362 0.52 95984932 80.92

TOTAL 69844 100 118616005 100m) Dematerialization of equity shares As on March 31, 2017, 1059 equity shares of the Company constituting 0.001 per cent of the share capital were

held in physical form and the balance 118614946 equity shares constituting 99.999 per cent of the share capital were held in dematerialized form.

n) Liquidity The Equity Shares of the Company are actively traded on BSE Limited and National Stock Exchange of India

Limited.

0) Outstanding GDRs /ADRs / Warrants or any convertible instruments and likely impact on equity The Company does not have any outstanding GDRs, ADRs, warrants or convertible instruments.p) Corporate Identification Number (CIN) The Corporate Identification Number (CIN) allotted by Ministry of Corporate Affairs, Government of India is

L36911MH1986PLC040689 and Company registration number is 040689. The Company is registered in the state of Maharashtra with Registrar of Companies, Mumbai, Maharashtra.

q) Transfer of unpaid / unclaimed amount to Investor Education and Protection Fund During the year under review, the Company transferred Rs. 4,55,190/- to investor education and protection

fund in relation to unpaid and unclaimed dividend amount.r) Commodity price risk or foreign exchange risk and hedging activities Commodity price fluctuation risks could arise on account of changes in diamond and gold prices and

inconsistency in the availability of the same. These could adversely impact earnings. Diamond prices usually are not very volatile over a long period of time. Gold price risk is one of the important market risk for the Company. Your Company has a requisite framework and governance mechanism in place to ensure that the organization is adequately protected from the market volatility in terms of price and availability. The company’s strong brands enable it to charge a premium which helps mitigate commodity price fluctuation risks.

Your Company has managed the foreign exchange risk with appropriate hedging activities in accordance with policies of the Company. The Company uses the following instruments to hedge against its foreign currency exposures:1. Forward Contracts with Banks2. Futures Contracts traded on NSE and BSE3. Option Contracts traded on NSE and BSE

Foreign exchange transactions are covered with strict limits placed on maximum exposure, stop loss and maximum deal size at any point in time.

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s) Plant Locations

LOCATION ADDRESS

Mumbai 1. Gemplus Jewellery Divsion. Unit No.1, Plot No.61, SEEPZ, Andheri (East), Mumbai-400 096.2. Block-D, Plot No.16,17,28,&29, SEEPZ, Andheri (East), Mumbai-400 096.3. Plot no. 131/90, Plot no. 20, Marol Co-operative Industrial Estate, M.V. Road,

Opp Star Audio, Marol Bhawan, Marol, Andheri (E), Mumbai – 400 059

Surat 1. Diamond Park-2, 2nd Floor, Opp. Savani Estate, Varachha Road, Surat-395 006, Gujarat.2. Unit No. 376, 377 & 378 at Plot No.241, Surat Special Economic Zone, G.I.D.C. Road No.4, Sachin, Surat-394 230, Gujarat.

Hyderabad 1. SDF-1, Plot No.15, Survey No.1/1, Hyderabad Gems SEZ Ltd., Raviryala Village, Maheshwaram Mandal, Ranga Reddy District, Telangana-501510. Andhra Pradesh.

Jaipur 1. Basement & Ground floor, G-185, EPIP, Sitapura Industrial Area, Jaipur-302022.

2. Plot No.H-120, Phase-II, Jaipur Special Economic Zone, Sitapura, Jaipur-302022.

Thailand 99/29, Moo 5, Tambon Pasak, Amphur Muang, Lamphun 51000, Thailandt) Shareholding Pattern as on March 31, 2017

Category Code

Category of Shareholder Number of Shareholders

Total Number of Shares

Percentage of Shareholding

(A) Shareholding of Promoter and Promoter Group1) Indian

a) Individuals/ Hindu Undivided Family

1 30946456 26.09

b) Central Government/ State Government(s)

0 0 -

c) Bodies Corporate 4 5875305 4.95d) Financial Institutions/ Banks 0 0 -e) Any Other (specify) 0 0 -

Sub-Total (A)(1) 5 36821761 31.04


2) Foreigna) Individuals (Non- Resident

Individuals/Foreign Individuals)0 0 -

b) Government 0 0 -c) Institutions 0 0 -d) Foreign Portfolio Investor 0 0 -e) Any Other (specify) 0 0 -

Sub-Total (A)(2) 0 0 - Total Shareholding of Promoter and Promoter Group A)= (A)(1)+(A)(2)

5 36821761 31.04

(B) PUBLIC SHAREHOLDING(1) Institutions

a) Mutual Funds/ UTI 0 0 -b) Financial Institutions/ Banks 2 62055 0.05c) Venture Capital Funds 0 0 -d) Insurance Companies 2 4799784 4.05e) Foreign Venture Capital Investors 0 0 -f) Alternate Investment Funds 0 0 -g) Foreign Portfolio Investor 32 9693045 8.17h) Provident Fund/Pension Fund 0 0 -

i) Any others (specify) -i-i) Foreign Institutional Investor 1 97372 0.08Sub-Total (B)(1) 37 14652256 12.35(2). Central Government/ State Government(s)

0 0 -

Sub-Total (B)(2) 0 0 -(2) Non-Institutions

(a) Individualsi. Individual shareholders

holding nominal Share capital up to Rs.2 lakh

66671 21945516 18.50

ii. Individual shareholders holding nominal share capital in excess of Rs.2 lakh

91 11553018 9.74

(b) NBFC’s Registered with RBI 4 41311 0.03(c) Employee Trusts 0 0 -(d) Overseas Depositories (Holding

DRs)0 0 -

(e) Any Other (e-i) Clearing Member 107 157549 0.13 (e-ii) NRI 761 15783831 13.31 (e-iii) HUF 1480 1501851 1.27 (e-iv) Trust 2 161 0.00(e-v) Directors 0 0 -(e-vi) Bodies Corporate 686 16158751 13.62

Sub-Total (B)(3) 69802 67141988 56.60 Total Public Shareholding (B)= (B)(1)+(B)(2)+(B)(3)

69839 81794244 68.96

Total (A)+(B) 69844 118616005 100.00Grand Total (A)+(B)+( C ) 69844 118616005 100.00

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u) Equity Shares in the suspense account: In accordance with the requirement of Regulation 34 (3) and Schedule V Part F of Listing Regulations, the

Company reports the following details in respect of equity shares lying in the Gitanjali Gems Limited – Unclaimed Shares Demat Suspense Account till March 31, 2017:

Particulars Number ofShareholders

Number ofequity shares

Aggregate number of shareholders and the outstanding shares in the suspense account lying as on April 1, 2016

24 973

Number of shareholders who approached for transfer of shares from suspense account during the year

NIL NIL

Shareholders to whom shares were transferred from thesuspense account during the year

NIL NIL

Aggregate number of shareholders and the outstanding shares in the suspense account lying as on March 31, 2017

24 973

All the corporate benefits in terms of securities, accruing on these unclaimed shares shall be credited to such account. Voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

v) Address for Correspondence Shareholding related queries: General correspondence: Gitanjali Gems Limited Gitanjali Gems Limited A/1, 7th Floor, Laxmi Tower, A/1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051 Bandra (E), Mumbai – 400 051 Tel: +91-022-40354600 Tel: +91-022-40354600 Fax: +91-022-40102005 Fax: +91-022-40102005 Email: [email protected] Email:[email protected] Registrar and Transfer Agents: Karvy Computershare Private Limited Unit: Gitanjali Gems Limited Karvy Selenium Tower B,Plot No.31-32, Gachibowli,Financial District, Nanakramguda , Hyderabad-500032 Phone: 040-67162222, Fax: 040-23001153, Email: [email protected] Website : www.karvy.com


Depositories:

National Securities Depository Limited,Trade World, A Wing, 4th and 5th Floor Kamala Mills Compound,Senapati Bapat Marg,Lower Parel,Mumbai – 400013Tel – 022-24994200Fax – 022-24976351e-mail – [email protected] – www.nsdl.co.in

Central Depository Services (India) LimitedPhiroze Jeejeebhoy Towers,17th Floor,Dalal Street, FortMumbai – 400001Tel – 022-22723333Fax – 022-22723199e-mail – [email protected] – www.cdslindia.com

Stock Exchanges:

BSE Limited,Phiroze Jeejeebhoy Towers, Dalal Street,Mumbai – 400 001Tel – 022- 22721233Fax – 022- 22721919website – www.bseindia.com

National Stock Exchange of India LimitedExchange Plaza, C/1, G Block,Bandra Kurla Complex, Bandra (E),Mumbai – 400 051Tel – 022- 26598100Fax – 022- 26598120website – www.nseindia.com

7. OTHER DISCLOSURES(i) Related Party Transactions There are no materially significant related party transactions which have potential conflict with the interest of

the Company at large. Transactions with related parties are disclosed separately as Annexure in the Notes to Accounts in the Annual Report.

The policy on Related Party Transaction is hosted on the website of the Company under the web link: http://gitanjaligroup.com/policies-codes(ii) Detail of Non-Compliance There were no instances of non-compliance on matters related to the capital markets, during the last three years.

Your Company has complied with all the requirements of the Stock Exchange(s) and the SEBI on matters related to Capital Markets. There were no penalties imposed or strictures passed against your Company by the statutory authorities in this regard. Further, the Company has complied with the requirements specified in Regulations 17 to 27 and clauses (b) to (i) of the Regulation 46(2) of the Listing Regulations.

(iii) Management Discussion and Analysis A management discussion and analysis report forms part of the Annual Report.(iv) Subsidiary Companies All the Subsidiary Companies are Board managed with their Boards having the rights and obligations to

manage the Company in the best interest of the stakeholders. The audit committee reviews consolidated financial statements of the Company and investments made by its unlisted subsidiary companies. The minutes of the Board Meeting are periodically placed before the Board of Directors of the Company.

The Company has a policy for determining ‘material subsidiaries’ which is hosted on the website of the Company under the web link:

http://gitanjaligroup.com/policies-codes(v) Secretarial Audit for Reconciliation of Share Capital A qualified Practicing Company Secretary has carried out secretarial audit for every quarter to reconcile the

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total admitted capital with both the depositories; viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the aggregate total number of shares in physical form, shares allotted & advised for demat credit but pending execution and the total number of dematerialized shares held with NSDL and CDSL. The Company has submitted the secretarial audit report to BSE and NSE within 30 days from the end of each quarter in accordance with the SEBI requirements.

(vi) Risk Management The Company has laid down procedures to inform the members of the Board about the risk assessment and

minimization procedures. The Company has framed the risk assessment and minimization procedure which is periodically reviewed by the Board.

(vii) Code of Conduct As provided under Listing Regulations and in line with the Company’s objective of following the best Corporate

Governance Standards the Board of Directors has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The members of the Board and senior management personnel have affirmed compliance with the Code of Conduct during the year ended March 31, 2017.

The code has been circulated to all the members of the Board and Senior Management and the same has been hosted on the Company’s website under the web link:

http://gitanjaligroup.com/policies-codes(viii) Whistle Blower Policy / Vigil Mechanism The Company has established Vigil Mechanism and adopted Whistle blower policy for its directors and

employees to report concern about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy. The mechanism provides adequate safeguards against victimization of persons who use such mechanism.

The Company has formulated a Whistle blower policy and has been posted on the website of the Company which is accessible at the below web link:

http://gitanjaligroup.com/policies-codes We affirm that no personnel were denied access to the Chairman of the Audit Committee.(ix) CEO/CFO certification A certificate as required under Regulation 17(8) of Listing Regulations from Managing Director and Chief

Financial Officer was placed before the board.(x) Policy for Determining Materiality of Events The Company has adopted a Policy on Determination of Materiality of Events which is posted on the website

of the Company and the same can be accessed at the below web link: http://gitanjaligroup.com/policies-codes(xi) Policy on Archival and Preservation of Documents The Company has adopted a Policy on Archival and Preservation of Documents. The Company has formulated such policy and it has been posted on the website of the Company which is

accessible at the below web link: http://gitanjaligroup.com/policies-codes(xii) Compliance with Mandatory requirements Your Company has complied with all the mandatory requirements of the Listing Regulations relating to

Corporate Governance.(xiii) Compliance with Non-mandatory requirements

a) Reporting of internal auditor The internal auditor directly reports to audit committee.


AUDITOR’S CERTIFICATE ON CORPORATE GOVERNANCETo the members of Gitanjali Gems LimitedWe FORD RHODES PARKS & CO LLP, Chartered Accountants, Statutory Auditors of Gitanjali Gems Limited (“the Company”) have examined the compliance of conditions of Corporate Governance by the Company for the year ended March 31, 2017, as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46 (2) and para C and D of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).Managements’ ResponsibilityThe preparation of the Corporate Governance Report is the responsibility of the Management of the Company including the preparation and maintenance of all relevant supporting records and documents. This responsibility also includes the design, implementation and maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in the SEBI Listing Regulations.Auditors’ ResponsibilityOur responsibility is limited to examining the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.We have examined the books of account and other relevant records and documents maintained by the Company for the purpose of providing reasonable assurance on the compliance with Corporate Governance requirements by the Company.We have carried out an examination of the relevant records of the Company in accordance with the Guidance Note on Certification of Corporate Governance issued by the Institute of Chartered Accountants of India ( the ICAI), the Standards on Auditing specified under Section 143(10) of the Companies Act, 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.OpinionBased on our examination of the relevant records and according to the information and explanations provided to us and the representations provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C and D of Schedule V of the SEBI Listing Regulations during the year ended March 31, 2017.We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Ford, Rhodes, Parks & Co. LLP Chartered Accountants ICAI Firm Registration No. 102860W/ W100089

A.D.SHENOY Partner Membership No.: 11549Place: MumbaiDate: August 11, 2017

83

MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATIONWe, Mehul Choksi, Chairman & Managing Director and Chandrakant Karkare, Chief Financial Officer of Gitanjali Gems Limited, to the best of our knowledge and belief, certify that:A. We have reviewed financial statements and the cash flow statement for the financial year 2016-17 and that to the

best of our knowledge and belief:(1) These statements do not contain any materially untrue statement or omit any material fact or Contain statements that might be misleading;(2) These statements together present a true and fair view of the Company’s affairs and are in Compliance with

existing accounting standards, applicable laws and regulations.B. 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 violative of Company’s code of conduct.C. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we

have evaluated the effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

D. We have indicated to the auditors and the Audit committee:(1) Significant changes in internal control over financial reporting during the year if any;(2) Significant changes in accounting policies during the year if any and that the same has been disclosed in the

notes to the financial statements; and(3) Instances of significant 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 Gitanjali Gems Limited For Gitanjali Gems Limited

Sd/- Sd/- Mehul Choksi Chandrakant Karkare Chairman & Managing Director Chief Financial OfficerPlace: MumbaiDate: May 30, 2017

CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCTI, Mehul Choksi, Managing Director of the Company, hereby declare that the Company has adopted a Code of Conduct for its Board Members and Senior Management and they have confirmed compliance with the Code of Conduct for the year ended March 31, 2017. For Gitanjali Gems Limited

sd/-Place: Mumbai Mehul ChoksiDate: May 30, 2017 Managing Director


To the members of Gitanjali Gems LimitedReport on the standalone Indian Accounting Standard (“Ind AS”) Financial Statements for the year ended 31st March, 2017We have audited the accompanying Standalone Ind AS financial statements of Gitanjali Gems limited (“the Company”) which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Cash Flow and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS financial statements “).Management’s Responsibility for the Standalone Ind AS financial statementsThe Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the state of affairs(financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.Auditor’s ResponsibilityOur responsibility is to express an opinion on these Standalone Ind AS 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 of the Standalone 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 Standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone 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 the 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 Standalone Ind AS 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 Standalone Ind AS financial statements.OpinionIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone 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 the Ind AS, of the state of affairs (financial position) of the Company as at 31st March, 2017, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.Emphasis of matterWe draw attention to following Notes to Standalone Ind AS financial statements:a. Note No. 45 A (a) relating to 12% Non-

Convertible Debenture issued to LIC where the company has not paid overdue principal and interest aggregating to ` 348.94 Lakhs. Further, the company has not created liquid assets of ` 148 Lakhs as required under Rule 18 (7) (c) of the company’s (Share capital & Debenture) Rule 2014 in respect of debentures installments maturing during the following year.

b. Note No. 45 A(b) relating to overdcue principal and Interest of ECBs:

i. Principal of USD 8.75 million (equivalent ` 5,674.38 Lakhs ) and interest of USD 0.97 million (equivalent ` 631.71 Lakhs) to ICICI ECB.

ii. Principal of USD 0.73 million (equivalent ` 474.99 Lakhs) to IDBI (BOB portion) ECB.

INDEPENDENT AUDITOR’S REPORT

85

c. Note No. 45 B relating to overdrawn position in the working Capital borrowing from banks aggregating to ` 3,115.17 Lakhs as compared with sanctioned limit; and

d. Note no. 56 relating to Loans and Advances granted to its subsidiaries , Associates and Others not in conformity with the Sec 186 of the Companies Act,2013 .

(As fully described in respective notes)Our opinion is not qualified in respect of above matters.Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report)

Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(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;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss (including Other Comprehensive Income) and Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid Standalone 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 31st March 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2017, from being appointed as a director in terms of sub section (2) of section 164 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”; Our report expresses an unqualified opinion on the adequacy and

operating effectiveness of the Company’s internal financial controls over financial reporting;

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements. As represented by the company the group does not expect any cash outgo and there will be no impact on the financial position of the group Refer Note no. 38 to the standalone Ind AS financial Statement

ii) As represented by the company, there are no foreseeable material losses in respect of long-term contracts including derivative contracts. Refer Note No. 23 to the standalone Ind AS financial statement.

iii) There has been no delay in transferring amount required to Investor Education and Protection Fund by the Company. Refer Note No. 61 to the standalone Ind AS financial Statement.

iv) The Company has provided requisite disclosures in its Standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the company and as produced to us by the Management– Refer Note No. 51 to the Standalone Ind AS financial statements.

For FORD RHODES PARKS & CO.LLPChartered AccountantsICAI Firm Registration No.102860W/W100089

A.D. ShenoyPartnerMembership No.11549

Place: MumbaiDate : May 30, 2017


i. a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

b) Fixed assets are physically verified by the management at reasonable intervals. The discrepancies between the book records and the physical inventory are not material and have been adjusted in the books. In our opinion, the frequency of verification is reasonable.

c) According to the information and explanations given to us and the records examined by us, in case of properties earlier held by merged entity namely Gitanjali Exports Corporation Limited we report that the title deeds of immovable properties are yet to be transferred in the name of the company. In respect of few land pieces procedure for transfer in the name of the company are yet to be completed. The company has clear title in respect of other immovable properties

ii. The inventory has been physically verified by the management during the year as well as at year end. In our opinion, the frequency of verification is reasonable. On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory and there is no material discrepancies noticed on physical verification of inventory.

iii. The Company has granted unsecured loans, to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. These loans are Interest free and there are no stipulation as to repayment of the loan. In our opinion and according to the information and explanation given to us, the terms and conditions of the loans given by company are prima facie not prejudicial to the interest of the company for the reasons fully explained in Note No. 35 and 48 to the standalone Ind AS financial statements

iv. In our opinion and according to information and explanation given to us, the company has complied with the provision of Section 186 of the Act with respect to its Investments. The company has given

guarantees and security in compliance with section 185 and 186 of the Act. The company has granted Loans and advances u/s. 185 and 186 of the Act which as per the information and explanations given by the company to us and as described in the financial statements are interest free and given to promote the interest of the company are not in conformity of the provision of Section 186 of the Companies Act 2013. We are informed that , due to bad financial position, some of these subsidiaries are unable to regularize the advances given earlier as described in Note No 48 to the standalone Ind AS financial statements.

v. The Company in earlier year has accepted deposits from the public, within the meaning of Sections 73 to 76 of Companies Act 2013 and the rules framed there under. In our opinion and according to the information and explanations given to us the company has complied with the provision of Section 73 to 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014. There are no further deposit accepted by the Company.

vi. Reporting under clause 3 (vi) of the order is not applicable to the company as the company’s business activities / products are not covered by the companies (cost records and audit) Rule 2014 as prescribed under section 148 of the Company Act 2013.

vii. a) According to the information and explanation given to us and records of the company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, employee’s state insurance fund, wealth tax, custom duty, excise duty, cess and any other statutory dues with the appropriate authorities. There are no undisputed statutory dues payable for a period of more than six month from the date they become payable as at 31st March 2017.

b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income tax, service tax, customs duty and cess as at 31st March 2017 which has not been deposited on account of dispute, except the following:-

ANNEXURE A

[Referred to in paragraph pertaining to “Report on Other Legal and Regulatory Requirement” of our Report of even date to the members of Gitanjali Gems Limited on the Standalone Ind AS financial statements for the

year ended 31st March, 2017]

87

Period ` in Lakhs Remark Authority where appeal is pending

INCOME TAXAY 2006-2007 587.73 Section 143(3) r.w.s 153 A CIT (A)AY 2007-2008 610.79 Section 143(3) r.w.s 147 CIT (A)AY 2007-2008 334.96 Section 143(3) r.w.s 147 (Amalgamating company) CIT (A)AY 2008-2009 6,065.15 Section 143(3) r.w.s 153 A CIT (A)AY 2008-2009 713.62 Section 143(3) r.w.s 147 (Amalgamating Company) CIT (A)AY 2009-2010 1,381.85 Section 143(3) r.w.s 153 A CIT (A)AY 2009-2010 885.74 Section 143(3) r.w.s 147 (Amalgamating Company) CIT (A)AY 2009-2010 3,768.74 Section 143(3) r.w.s 147 CIT (A)AY 2009-2010 25.95 Section 271(1) (amalgamating company) CIT (A)AY 2010-2011 5,020.32 Section 143(3) r.w.s 153 A CIT (A)AY 2010-2011 550.79 Section 143(3) r.w.s 147 (Amalgamating Company) CIT (A)AY 2010-2011 5861.02 Section 143(3) r.w.s 147 CIT (A)AY 2010-2011 530.90 Section 271(g) CIT(A)AY 2011-2012 8,411.78 Section 143(3) r.w.s 153 A CIT (A)AY 2011-2012 1,789.60 Section 143(3) r.w.s 144C (Amalgamating company) CIT (A)AY 2011-2012 9654.74 Section 143(3) r.w.s 147 CIT (A)AY 2011-2012 594.63 Section 271(g) CIT (A)AY 2012-2013 1,072.36 Section 143(3) r.w.s 144C (Amalgamating company) CIT (A)AY 2012-2013 1,115.59 Section 271(g) CIT (A)AY 2013-2014 850.41 Section 143(3) r.w.s 144C CIT (A)AY 2013-2014 1,074.38 Section 143(3) r.w.s 144C (amalgamating company) CIT (A)AY 2013-2014 1,760.18 Section 271(g) CIT (A)AY 2013-2014 815.57 Section271(g) (Amalgamating company) CIT (A)various years 17.97 Tax demand as per TRACES Rectification pending to file

Various years 580.54 Appeal filed with Service tax authoritiesCommissioner of Service tax and CESTAT

18.04.2006 to 31.03.2011 22.21 Service tax (Amalgamating company)

Appeal pending before commissioner

01.05.2006 to 31.03.2011 13.01 Service tax (Amalgamating company)

Appeal pending before commissioner

2011-12 5.76 Service tax (Amalgamating company)Appeal pending before commissioner

FY 2005-2006 1,746.32 VAT Assessment Deputy Commissioner of Sales Tax (Appeals)

FY 2005-2006 22.33 CST Assessment Deputy Commissioner of Sales Tax (Appeals)

FY2010-2011 104.94 CST Assessment Joint commissioner of Sales Tax (Appeals)

FY2010-2011 51.33 VAT Assessment Joint commissioner of Sales Tax (Appeals)

FY2012-2013 154.48 CST Assessment Appeal to be filedFY 2012-2013 344.49 VAT Assessment Appeal to be filed


viii. Based on our audit procedures and as per the information and explanation given to us by the management, during the year there has been delay in timely repayment of its dues to banks for ECB and to financial institution for debentures. In respect of working capital facilities from Banks there has been over drawings in the accounts during the year as well as at year end. Accounts were overdrawn by ` 3,115.17 Lakhs as at 31st March 2017. Following amounts which were due during the year are outstanding as at 31st March 2017:

Lender Due Date Nature Currency Amount RemarkLIC 30/03/2017 Interest INR 11,493,939.00 Fully paid till signing date LIC 22/02/2017 Principal INR 11,700,000.00 Fully paid till signing dateLIC 22/03/2017 Principal INR 11,700,000.00 UnpaidICICI ECB 31/03/2017 Principal USD $ 8,750,000.00 $ 1,950,000 paid till signing dateICICI ECB 31/03/2017 Interest USD $ 974,108.01 Fully paid till signing dateBOB ECB 31/03/2016 Principal USD $ 732,440.47 Unpaid

ix. During the year the Company has not raised any Initial Public Offer or further public offer. The Company has raised term loan from a financial institution during the year. The Company has External Commercial Borrowing from foreign branch of Indian banks in earlier years. The Term loan and ECB proceeds has been utilized for the purpose for which they were availed.

x. Based upon the audit procedures performed and information and explanations given by the management, we report that we have not come across any instances of fraud by the company or any material fraud on the company by its officers or employees that have been noticed or reported during the year nor have we been informed of such a case by management.

xi. In our opinion and according to information and explanation given to us, the company has paid /provided Managerial remuneration during the year as per the Board resolution which is subject to approval by the shareholders in the forthcoming meeting, as fully explained in Note No 52 to the standalone Ind AS financial statements.

xii. The Company is not a Chit Fund Company/or Nidhi/ mutual benefit fund/society.

xiii. In our opinion and according to information and explanation given to us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the standalone Ind AS Financial Statements as required by the applicable accounting standards.

xiv. The Company had issued fully convertible warrants in earlier year on receipt of 25% of the consideration as the subscription money. These warrants were issued on preferential basis to persons other than promoters. During the year the company has issued equity shares in respect of warrants against which balance amount has been received, as fully described in note no 16(H)). Requirement of Section 42 of the Companies Act 2013 has been complied and amount raised was used for purpose for which it was raised.

xv. In our opinion and according to the information and explanation given to us, during the year company has not entered into non-cash transactions covered by Section 192 of Companies Act, 2013 with directors or persons connected with him. Hence the provision of section 192 is not applicable to the company.

xvi. The company is not engaged in the business of non-banking financial institution (NBFI) and not required to obtain a Certificate of Registration (CoR) from Reserve Bank of India to commence/carry on business of NBFI in terms of Section 45-IA of the RBI Act, 1934.




89

ANNEXURE B

[Referred to in paragraph pertaining to “Report on Other Legal and Regulatory Requirement” of our Report of even date to the members of Gitanjali Gems limited on the standalone Ind AS financial statements for the

year ended 31st March, 2017]

Report on the Internal Financial Controls under Clause (i) 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 Gitanjali Gems Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone 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 (IFCOFR) issued by the Institute of Chartered Accountants of India. 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 judgments, 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 Reporting

A 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 standalone Ind AS 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 standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations 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.

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.

Opinion

In our opinion to the best of our information and according to explanation given to us, the Company has, 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, 2017, 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.




91

BALANCE SHEET AS AT,

As per our attached report of even date. For and on behalf of the BoardFor FORD RHODES PARKS & CO. LLPChartered AccountantsICAI Firm Regn No : 102860W/W100089

Mehul C. Choksi Dhanesh ShethA. D. Shenoy Managing Director DirectorPartnerM. No. 11549

Place : Mumbai Pankhuri Warange Chandrakant KarkareDated : May 30, 2017 Company Secretary Chief Financial Officer

( ` in Lacs)Particulars Note

No. March 31, 2017 March 31, 2016 April 1, 2015

ASSETSNon-Current Assets

Property, Plant and Equipment 3 25,827.54 27,289.02 29,166.40Capital Work-In-Progress - - 62.32Financial Assetsi) Investments 4 101,361.05 102,347.14 104,861.48ii) Loans 5 1,235.50 1,596.47 4,256.68iii) Other Non Current Financial Assets 6 2,885.23 4,043.07 3,293.86Deferred Tax Assets [Net] 5,633.00 4,257.97 2,656.59Other Non-Current Assets 7 859.14 865.79 888.08

137,801.46 140,399.46 145,185.41Current Assets

Inventories 8 253,055.40 183,566.07 239,063.41Financial Assetsi) Trade Receivables 9 856,701.75 691,014.82 665,711.10ii) Cash and Cash Equivalents 10 6,221.06 3,710.42 690.98iii) Other Bank Balances 11 11,326.52 9,718.38 12,575.94iv) Loans 12 23,140.67 28,690.47 23,379.48v) Other Current Financial Assets 13 2,796.45 850.47 1,128.06Current Tax Assets [Net] 14 3,277.12 1,770.29 1,249.28Other Current Assets 15 8,255.40 18,713.61 13,585.63

1,164,774.37 938,034.53 957,383.88Total Assets 1,302,575.83 1,078,433.99 1,102,569.29

EQUITY AND LIABILITIESEquity

Equity Share Capital 16 11,861.60 10,243.77 9,812.05Other Equity 17 336,668.40 326,956.63 319,654.72

348,530.00 337,200.40 329,466.77LiabilitiesNon-Current Liabilities

Financial Liabilitiesi) Borrowings 18 27,740.25 57,810.84 69,883.15Provisions 19 648.91 480.11 449.64Other Non-Current Liabilities 20 - 5.22 10.43

28,389.16 58,296.17 70,343.22Current Liabilities

Financial Liabilitiesi) Borrowings 21 499,396.67 500,801.12 513,897.85ii) Trade Payables 22 385,940.73 154,865.29 171,800.16iii) Other Current Financial Liabilities 23 33,141.56 20,044.86 12,205.42Provisions 24 86.09 77.65 66.19Current Tax Liabilities [Net] 25 1,091.48 2,228.55 2,258.64Other Current Liabilities 26 6,000.14 4,919.95 2,531.04

925,656.67 682,937.42 702,759.30Total Equity and Liabilities 1,302,575.83 1,078,433.99 1,102,569.29Significant Accounting Policies 1Notes to the Financial Statements 2 to 62Significant Accounting Policies and Notes attached thereto form an integral part of Financial Statements


STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED,

( ` in Lacs)Particulars Note March 31,2017 March 31,2016

No.REVENUE

Revenue From Operations 27 1,046,476.60 1,075,072.31Other Income 28 14,650.33 6,486.99Total Revenue 1,061,126.93 1,081,559.30

EXPENSESPurchases of Stock in Trade and Raw Material 29 1,051,611.26 952,341.46Changes in Inventories of Finished goods and Stock-in-Trade 30 (69,489.33) 55,497.34Employee Benefit Expenses 31 3,876.02 3,516.67Finance Cost 32 47,766.87 46,352.15Depreciation and Amortization Expenses 3 1,653.16 1,988.05Other Expenses 33 21,792.92 17,877.14Total Expenses 1,057,210.90 1,077,572.81

Profit before Tax 3,916.03 3,986.49Less: Tax Expense:

Current TaxFor the year 1,135.00 1,102.20For earlier years 154.45 8.38Deferred Tax (1,345.60) (1,609.76)

(56.15) (499.18)Profit for the year 3,972.18 4,485.67OTHER COMPREHENSIVE INCOME:

Items not to be reclassified to profit or loss in subsequent periodsRemesurements of the defined benefit plans 34 (85.05) 24.21Equity Instruments through Other Comprehensive Income 234.29 -Income tax relating to items that will not be reclassified to profit or loss

34 29.43 (8.38)

Other Comprehensive Income for the year, net of Tax 178.67 15.83Total Comprehensive Income for the year, net of Tax 4,150.85 4,501.50Basic & Diluted Earning per Equity Share [EPS] 35 3.46 4.46Significant Accounting Policies 1Notes to the Financial Statements 2 to 62

Significant Accounting Policies and Notes attached thereto form an integral part of Financial Statements




93

CASH FLOW STATEMENT FOR THE YEAR ENDED,

( ` in Lacs)March 31, 2017 March 31, 2016

ParticularsCashflow From Operating Activities :Net profit before Tax 3,916.03 3,986.49

Adjustment for :Depreciation 1,653.16 1,988.05Interest (net) 47,766.87 46,352.15Bad Debts and Sundry Amount Written Off - 2,390.53Gratuity and Leave Encashment Provision 119.13 116.32Gain on Mutual Funds (21.10) 10.74Gain on Fair Valuation of Derivatives (861.92) (583.79)Unrealised Exchange (Gain)/Loss (160.76) 147.54Dividend Received (7.50) (7.50)Excess / (Short) Provision - (8.38)Fixed Assets Written Off - 106.57Loss / (profit) on Sale of Shares / Investments - (51.68)Loss / (Profit) on sale of Fixed Assets 8.21 -

52,412.12 54,447.04Changes in Working Capital :(Increase)/Decrease in Inventories (69,489.33) 55,497.34(Increase)/Decrease in Sundry Debtors (180,048.67) (17,821.68)(Increase)/Decrease in Loans & Advances 12,644.66 (5,316.11)Increase/(Decrease) in Current Liabilities / Provisions 241,996.02 (16,393.41)

5,102.68 15,966.14Cash Generated From Operations 57,514.80 70,413.18Income Tax Paid (2,558.31) (1,653.30)Net Cash Flow From Operating Activities 54,956.49 68,759.88

Cashflow From Investing Activities :Sale of Investments (Net) 1,241.48 2,555.28Receipt of Dividend 7.50 7.50Purchase of Fixed Assets (Net) (199.90) (154.92)Net Cash Flow From Investing Activities 1,049.08 2,407.86


CASH FLOW STATEMENT FOR THE YEAR ENDED,

( ` in Lacs)March 31, 2017 March 31, 2016

ParticularsCash Flow From Financing Activities :Issue of Share Warrants 7,895.41 3,232.14Increase / (Decrease) in Bank Borrowings 3,501.62 (18,159.05)Repayment of Non Convertible Debentures (1,296.80) (1,405.98)Repayment of External Commercial Borrowings (10,439.47) (7,027.36)Proceeds of Term Loan 2,500.00 -Proceeds of Unsecured Loans (7,786.44) 1,366.70Issuue / (Maturity) of Fixed Deposit Scheme (172.85) (16.69)Dividend Paid (593.17) -Corporate Dividend Tax Paid (123.50) -Interest Paid (Net) (46,979.74) (46,138.06)Net Cash Flow From Financing Activities (53,494.94) (68,148.30)

Net Increase/(Decrease) in cash and cash equivalents 2,510.64 3,019.44Cash and cash equivalents at the beginning of the year 3,710.42 690.98Cash and cash equivalents at the end of the year 6,221.06 3,710.42

Notes :

1) Cash Flow statement has been prepared under the indirect method as set out in Ind AS 7 as per the Companies (Indian Accounting Standards) Rule 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rule 2016

2) Previous Year figures have been restated and regrouped wherever necessary.

3) Figures in bracket indicates outflows.

4) Components of Cash and Cash equivalents at the year end comprise of :Particulars March 31, 2017 March 31, 2016Balance with Banks In Currents Account 6,209.44 3,677.59Cash on Hand 11.62 32.83

6,221.06 3,710.42




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NOTES FORMING PART OF THE FINANCIAL STATEMENTS


Note: 1

Significant Accounting Policies on Standalone Financial Statements for year ended March 31, 2017

BACKGROUND AND OPERATIONS

Gitanjali Gems Limited (the ‘Company’ or ‘GGL’), a public limited company is incorporated in India. The Company’s registered office and principal place of business is situated at A-1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai.

The shares of the Company are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The company is engaged in the business of trading, manufacturing, import and export of Diamond Cutting and Polishing, Diamond Studded Jewellery and Plain Gold Jewellery. For this purpose the company has its own manufacturing facilities at Mumbai, Surat and Hyderabad within and outside the Special Economic zone (SEZ). The company also purchases jewellery produced by reputed manufacturers. The company has presence in India as well as all over world through network of its subsidiaries and associates.

The company had resolved to merge one of its wholly owned subsidiary viz. Gitanjali Exports Corporation Limited within itself. The scheme for merger was approved by Hon. High Court of Bombay on 17th June, 2016. The certified copies of the aforementioned order approving the scheme are filed with the Registrar of Companies, N.C.T. of Mumbai on 24th August, 2016. The scheme is effective from 1st April, 2014 as per Hon. High Court Bombay. The Financials prepared for current year as well as comparative years is inclusive of balances of this merged subsidiary.

The Financial statements are reviewed and recommended by the Audit Committee and approved by the Board of Directors of the Company at the Board meeting held on 30th May, 2017.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation

The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended. The Ministry of “Corporate Affairs” (MCA) has notified a road map to implement Ind AS. As per the said road map, the Company is required to apply Ind AS starting from the financial year beginning April 1, 2016. Accordingly the first Ind AS financial statements shall be for the financial year 2016-17 with comparables for the financial year 2015-16 (Refer Note no. 2 for information on Ind AS adoption).

The Financial Statements have been prepared under historical cost convention basis except the following assets and liabilities which have been measured at fair value or revalued amounts.

l Certain Financial instruments measured at fair value through other comprehensive income (FVTOCI);

l Certain Financial instruments measured at fair value through Profit and Loss (FVTPL);

l Defined Benefit Plan asset measured at fair value;

The functional and presentation currency of the company is Indian rupees.

These standalone financial statements are presented in Indian rupees and all values are stated in lakhs of Rupees except otherwise indicated Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures.

2. Use of judgments, estimates and assumptions

The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates, judgments and assumptions. These estimates, judgments


97

and assumptions affect application of accounting policies and the reported amount of assets, liabilities, disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of income and expenses for the periods presented. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Accounting estimates could change from period to period. Any revision to accounting estimates is recognised prospectively. Actual results could differ from the estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/materialize. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are as below:

1. Valuation of Financial Instruments;2. Valuation of inventories;3. Evaluation of recoverability of deferred tax assets;4. Useful lives of property, plant and equipment and intangible assets;5. Measurement of recoverable amounts of cash-generating units;6. Obligations relating to employee benefits;7. Provisions and Contingencies; 8. Provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions; and9. Recognition of Deferred Tax Assets.

3. Business Combination and goodwill

In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from 1 April 2015. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward.

The Company applies the acquisition method in accounting for business combinations. The consideration transferred by the Company to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities assumed and the equity interests issued by the Company, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date.

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 recognizes the gain directly in equity as capital reserve.



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 the statement of profit and loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Common control transactions

A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are specifically covered by Ind AS 103. Such transactions are accounted for using the pooling-of-interest method or as specified under provisions of law or order governing the scheme . The assets and liabilities of the acquired entity are recognised at their carrying amounts of the parent entity’s consolidated financial statements with the exception of certain income tax and deferred tax assets. No adjustments are made to reflect fair values, or recognise any new assets or liabilities. The components of equity of the acquired companies are added to the same components within the Company’s equity. The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves. The Company’s shares issued in consideration for the acquired companies are recognized from the moment the acquired companies are included in these financial statements and the financial statements of the commonly controlled entities would be combined, retrospectively, as if the transaction had occurred at the beginning of the earliest reporting period presented. However, the prior year comparative information is only adjusted for periods during which entities were under common control.

4. 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:l Expected to be realised or intended to be sold or consumed in normal operating cyclel Held primarily for the purpose of tradingl Expected to be realised within twelve months after the reporting period, orl 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:


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l It is expected to be settled in normal operating cyclel It is held primarily for the purpose of tradingl It is due to be settled within twelve months after the reporting period, orl There is no unconditional right to defer the settlement of the liability for at least twelve months after the

reporting Period

All other liabilities are classified as non-current.

For this purpose, the operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.

Deferred tax assets (including Minimum Alternate Tax Credit) and liabilities are always classified as non-current assets and liabilities.

5. Property, plant and equipment (PP&E)

An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost. Cost comprises of the purchase price and any attributable / allocable cost of bringing the asset to its working condition for its intended use. Cost also includes direct cost and other related incidental expenses.

Borrowing costs relating to acquisition / construction / development of tangible assets, intangible assets and capital work in progress which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

When significant components of property, plant and equipment are required to be replaced at intervals, recognition is made for such replacement of components as individual assets with specific useful life and depreciation if these components are initially recognised as separate asset. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.

Capital work in progress is carried at cost and capitalised when the asset is ready to be put to use.

Depreciation is provided from the date the assets are ready to be put to use, as per written down value (WDV) method over the useful life of the assets, as prescribed under Part C of Schedule II of the Companies Act, 2013.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss within ‘other income’ or ‘other expenses’ respectively.

Transition to INDAS: Under the previous GAAP, property plant and equipment were carried in the balance sheet at cost less accumulated depreciation and impairment losses, if any The Company has opted to measure PP&E at fair value as deemed cost on the date of transition to Ind AS (April 1, 2015).

6. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Cost comprises the acquisition price, development cost and any attributable / allocable incidental cost of bringing the asset to its working condition for its intended use.

Intangible assets acquired in a business combination that qualify for separate recognition are recognised as intangible assets at their fair values at the date of acquisition. The useful life of intangible assets are assessed as either finite or indefinite.

All finite-lived intangible assets, are accounted for using the cost model whereby intangible assets are stated at cost less accumulated amortisation and impairment losses, if any. Intangible assets are amortised over the useful life. Residual values and useful lives are reviewed at each reporting date.



Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in the statement of profit and loss within ‘other income’ or ‘other expenses’ respectively.

7. Impairment of non-financial assets

At each reporting date, the Company assesses whether there is any indication based on internal /external factors, that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the statement of profit and loss. All assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount.

8. Investment in subsidiaries

Investment in subsidiaries is valued at cost. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable value and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.

9. Inventories

Inventories raw materials, finished goods, rejections, trading goods and stores are valued at the lower of cost and net realisable value. Cost includes cost incurred in bringing each product to its present location. Net realizable value is the estimated selling price in the ordinary course of business and the estimated cost necessary for completion and the estimated cost necessary to make the sale.

Raw Material Lower of cost and net realizable valueRough Diamond Rejections At net realizable valueTrading Goods Lower of cost and net realizable valueFinished Goods – Polished Diamonds Lower of cost and net realizable valueWork in progress - Jewellery Lower of net realizable value and material cost plus

proportionate labour and overheadsFinished Goods - Jewellery Lower of net realizable value and material cost plus labour

and overheadsFinished Goods – Gold Lower of cost and net realizable valueConsumables, Stores and Tools At cost

10. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 3 months from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

11. Provisions and contingent liabilities

A provision is recognised when:


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l The Company has a present obligation as a result of a past event;l It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;

and

l A reliable estimate can be made of the amount of the obligation.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Company is virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

No liability is recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are disclosed as contingent liabilities unless the outflow of resources is remote.

12. Equity , Reserves and Dividend

Share capital represents the nominal value of shares that have been issued. Share premium includes any premium received on issue of share capital. Any transaction costs associated with issuing of shares are deducted from share premium account, net of any related income tax benefits.

Other components of equity include the following:

l Securities Premium Reserve

l General Reserve

l Capital Redemption Reserve

l Debenture Redemption Reserve

l Fair Value through OCI Reserve

l Capital Reserve

l Retained Earnings

l Money received against Share Warrants

Retained earnings include all current and prior period retained profits. All transactions with owners of the company are recorded separately within equity.

Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been approved in a general meeting prior to the reporting date.

13. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss which are measured initially at fair value.



A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

l The rights to receive cash flows from the asset have expired, or

l The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

1. Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

Debt instruments at fair value through profit or loss : FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria forcategorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

2. Debt instruments at Amortised cost: A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a. The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b. Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) 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 statement of profit and loss.


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3. Equity instruments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS 103 applies are classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of Profit and Loss.

Impairment of financial assets

The Company follows ‘simplified approach’ to recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit and loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL . For all other financial assets, ECLs are measured at an amount equal to the 12 Month ECL, unless there has been a significant increase in Credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in the statement of profit and loss

Classification and subsequent measurement of financial liabilities

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade payables, other payables, loans and borrowings

The Company classifies all financial liabilities as subsequently measured at amortised cost.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. 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 as finance costs in the statement of profit and loss.

Derivative financial instruments

The Company uses derivative financial instruments, (forward currency contracts and interest rate swap) to hedge its foreign currency risks and interest rate risk.

Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured 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.



14. Fair value measurement

The Company measures financial instruments such as, investment in equity shares, at fair value on initial recognition

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(i) In the principal market for the asset or liability, or

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

l Level 1 – Inputs are quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

l Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

l Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

15. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government

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, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is inclusive of Excise duty but exclusive of other tax which is collected on behalf of government.


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ii. Interest income: For all debt instruments measured at amortised cost interest income is recognised using the effective interest rate (EIR) method. Interest income is shown as net of finance expense in the statement of profit and loss.

iii. Dividend income: Dividend income is recognised when the right to receive dividend is established.

iv. Other income: Other Income is recognized only when it is reasonably certain that the ultimate collection will be made.

v. Excise duty:

Excise duty in respect of closing Inventory of finished Goods is included as part of inventory. The amount of Cenvat credits in respect of material consumed is deducted from cost of material consumed .Excise duty relating to difference between the closing stock and opening stock of finished goods has been recognised under Other expenses.

16. Foreign currencies Transaction and translation

a) Monetary items: Transactions in foreign currencies are initially recorded at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in the statement of profit and loss.

b) Non – Monetary items: Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

17. Leases

Operating Lease:

Leases where the lessor effectively retains substantially all the risks and rewards of the ownership are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

Finance Lease:

Leases under which the Company (as a lessee) substantially assumes all the risks and rewards of ownership are classified as finance lease. Assets taken on such finance leases are capitalized at the commencement of the lease term at the fair value of the leased item or, if lower, at the present value of the minimum lease payments.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

The costs incurred on leased properties are capitalised and disclosed appropriately.

18. Tax

Tax expense recognised in the statement of profit and loss comprises the sum of deferred tax and current tax not recognised in OCI or directly in equity.

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income-tax Act. Current income tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in OCI or in equity).

Deferred income taxes are calculated using the liability method. Deferred tax liabilities are generally recognised



in full for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Company’s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in OCI or in equity).

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Deferred Tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realized.

MAT credit can be carried forward for a period of 10 years. However as per Budget 2017, the period for carry forward has been revised to 15 years.

19. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and reported in finance costs

20. Employee benefits

i. Defined contribution plans: Contributions payable by the Company to the concerned Government authorities in respect of Provident Fund, Family Pension Fund, Employees State Insurance and labour welfare fund charged to the Statement of Profit and Loss.

ii. Defined benefit plans: Gratuity is in the nature of a defined benefit plan. Provision for gratuity is calculated on the basis of actuarial valuations carried out at balance sheet date and is charged to the statement of profit and loss. The actuarial valuation is performed using the projected unit credit method.

Remeasurement, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

iii. Other employee benefits: Leave encashment is recognised as an expense in the statement of profit and loss as and when they accrue. The Company determines the liability using the projected unit credit method, with actuarial valuations carried out as at balance sheet date. Actuarial gains and losses are recognised in the statement of profit and loss .

21. Segment reporting

The company is primarily engaged in the business of Diamond and Jewellery. This represents a primary segment.


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22. Earnings per share

Basic earnings per share is calculated by dividing the net profit / (loss) for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit / (loss) for the year attributable to equity shareholders and the weighted average numbers of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted at the beginning of the year and not issued at a later date.

In computing the diluted EPS, potential equity shares that either increase earnings per share or decrease loss per equity share, being anti-dilutive are ignored.

23. 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.

24. Standards not yet made effective:

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7 “Statement of cash flows” and Ind AS 102 “Share-based payment”. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7 “Statement of cash flows” and IFRS 2 “‘Share-based payment”, respectively. The amendments are applicable to the company from April 1, 2017.

i. Amendment to Ind AS 7: The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The company is evaluating the requirements of the amendment and its effect on the financial statements.

ii. Amendment to Ind AS 102: The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the “fair values”, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that includes a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. This amendment does not apply to the company.



Note: 2 Transition to Ind AS For the purposes of reporting as set out in Note 1, we have transitioned our basis of accounting from Previous GAAP to

Ind AS. The accounting policies set out in note 1 have been applied in preparing the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 (the “transition date”). An explanation of how the transition from Previous GAAP to Ind AS has affected the company's financial statements is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates Previously made under Previous GAAP except where required by Ind AS.

Notes on transition to Ind AS:1 Equity Reconciliation The above changes increased / (decreased) total equity as follows:

( ` in Lacs )Particulars Note

No. 3March 31,2016 April 1,2015

Equity as per Previous GAAP 298,919.55 291,427.58Add/Less Impact of Amaglamation 20,215.02 19,939.12Restated Previous GAAP as on March 31,2016 319,134.57 311,366.70Adjustment in Equity due to Transition to Ind ASImpact on financial liabilities recognised initially at fair value and subsequently at amortised cost

III & IV

451.09 698.10

Impact on financial assets recognised initially at fair value and subsequently at amortised cost

II & V 617.44 511.99

Impact of fair valuation of financial instruments I & IX 745.71 172.66Impact of deemed cost exemption taken on fixed assets on the date of transition to Ind AS

VIII 24,486.65 25,967.92

Impact of proposed dividend derecognised in Ind AS VII 616.46 -Tax impact of above mentioned adjustments XI (8,851.52) (9,250.61)Total of all Ind AS adjustments 18,065.83 18,100.06Equity as per Ind AS 337,200.40 329,466.76

2 Total comprehensive Income Reconciliation The above changes increased / (decreased) total comprehensive income as follows: (` in Lacs )

Particulars Note No. 3

March 31,2016

Net Profit reported for year ended March 31,2016 as per Previous GAAP 4,876.29Add/Less: Amalgamation Adjustments 275.91Restated Net Profit as per Previous GAAP 5,152.20Impact on financial instruments recognised initially at fair value and subsequently at amortised cost

II,III,IV & V

(141.57)

Impact of fair valuation of financial instruments I & IX 573.05Impact of deemed cost exemption taken on fixed assets on the date of transition to Ind AS

VIII (1,481.27)

Impact of remeasurement of post retirement defined benefit obligations VI (24.21)Tax impact of above mentioned adjustments XI 407.47Net Profit as per Ind AS 4,485.67Impact of remeasurement of post retirement defined benefit obligations VI 24.21Tax impact of above mentioned adjustments III (8.38)Other comprehensive Income X 15.83Total comprehensive Income 4,501.50


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3 Notes To First Time Adoption

I Fair Valuation Of Investments

Under the Previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2016. This increased the retained earnings by ` 21.11 lakhs as at March 31, 2016 (April 1, 2015 - ` 31.85 lakhs) and decreased profit for year ended March 31, 2016 by ` 10.74 lakhs

Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognised in fair value through OCI as at the date of transition and subsequently in the other comprehensive income for the year ended 31 March 2016. This increased other reserves by ` 100.00 lakhs as at March 31, 2016 (April 1,2015 - ` 100.00 lakhs) and there is no impact on profit and loss for year ended March 31, 2016.

II Investment In Non-Cumulative Redeemable Preference Shares

Under Previous GAAP Investment in preference shares was accounted at cost. According to provision of Ind AS it is a debt instrument which is recognised initially at fair value and subsequently at amortised cost.This has increased retained earnings as at March 31, 2016 by ` 634.13 lakhs (April 1, 2015 - ` 532.45 lakhs). Profit for the year ended March 31, 2016 has increased by ` 101.67 lakhs.

III Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Under Previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at 31 March, 2016 have been reduced by ̀ 444.15 lakhs (April 1, 2015 - ̀ 689.11 lakhs) with a corresponding adjustment to retained earnings. The profit for the year ended March 31, 2016 reduced by ` 244.96 lakhs as a result of the additional interest expense.

IV Other Loans Taken

In the financial statements prepared under Previous GAAP, the carrying value of Interest free loan was recognised at the principal amounts payable by the borrower. Under Ind AS, Interest free borrowing being a financial liability is required to be recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. The difference between such fair value and the carrying value is recognised as deferred income disclosed under Other liabilities. This has increased retained earning as at March 31,2016 by ` 6.94 lakhs (April 1, 2015 - ` 8.99 lakhs) and reduced profit for year ended March 31, 2016 by ` 2.05 lakhs

V Other Loans Given

In the financial statements prepared under Previous GAAP, the carrying value of Interest free loan given was recognised at the principal amounts recievebale by the lender. Under Ind AS, Interest free loans given being a financial asset is required to be recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. The difference between such fair value and the carrying value is recognised as deferred expense disclosed under Other assets.This has decreased retained earning as at March



31, 2016 by ` 16.69 lakhs (April 1, 2015 - ` 20.46 lakhs) and increased profit for year ended March 31, 2016 by ` 3.77 lakhs.

VI Remeasurements Of Post-Employment Defined Benefit Obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 decreased by ` 15.83 lakhs (Net of Tax). There is no impact on the total equity as at March 31, 2016.

VII Proposed Dividend

Under the Previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of ` 616.46 lakhs (including DDT) as at March 31, 2016 (April 1, 2015 – NIL) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

VIII Deemed Cost

Ind AS 101 permits a first-time adopter to elect to continue with the fair value for all of its property, plant and equipment recognised in the financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for consequential impacts of applying standards.Accordingly, the Company has elected to measure all of its property, plant and equipment at their fair values.This has increased retained earnings as at March 31, 2016 by ` 24,486.65 lakhs (April 1, 2015 - ` 25,967.92 lakhs) and decreased profit for the year ended March 31, 2016 by ` 1,481.27 lakhs.

IX Fair Value Of Derivative Financial Instruments

Under Previous GAAP, the Group accounted for gain or loss realised on derivative financial instrument at the time of maturity or cancellation of the instrument whichever was earlier.As per Ind AS 109 derivative financial instrument should be measured at fair value and gain or loss on fair valuation should to be accounted in the statement of profit and loss.This has increased retained earnings as at March 31, 2016 by ` 624.60 lakhs (April 1, 2015 ̀ 40.81 lakhs). Profit for the year ended March 31, 2016 has increased by ̀ 583.79 lakhs.

X Other Comprehensive Income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as other comprehensive income includes remeasurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under Previous GAAP.

XI Deferred Tax

Deferred tax have been recognised on the adjustments made on transition to Ind AS.These has decrease retain earnings as at March 31, 2016 by ̀ 8,851.52 lakhs (April 1, 2015 - ̀ 9,250.61 lakhs). Profit for the year ended March 31, 2016 has increased by ` 407.47 lakhs.


111

4 Other Exemptions And Exceptions Availed

I Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Previous GAAP [after adjustments to reflect any difference in accounting policies], unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with Previous GAAP.

II Designation Of Previously Recognised Financial Instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments [other than investment in subsidiary].

III Classification Of Financial Assets

As per the requirements of Ind AS 101 the Company has assessed classification of financial assets on the basis of the facts and circumstances that existed at the date of transition to Ind AS.

IV De-Recognition Of Financial Assets And Liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of entity's choosing; provided that the information needed to apply Ind AS 109 to financial assets or financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provision of Ind AS 109 prospectively from the date of transition to Ind AS.

V Business Combinations

Ind AS 101 provides an option to apply Ind AS 103 prospectively from the transition date or from a specified date from a transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to transition date. The Company has elected to apply Ind AS 103 prospectively to the business combination occuring after its transition date. Business combinations occurred prior to date of transition have not been restated. The Company applies the requirements of Ind AS 103 to business combinations occurring after the date of transition to Ind AS.

5 Statement Of Cash Flows

The transition from Previous GAAP to Ind AS did not have a material impact on the statement of cash flows.



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113

( ` in Lacs)March 31, 2017 March 31, 2016 April 1,2015

Note: 4 Non Current InvestmentsInvestments in Mutual FundsUnquoted [valued at FVTPL]

i Axis income fund - 521.03 -March 31, 2017: NILMarch 31, 2016: 3,662,536.446 unitsApril 1, 2015: NIL

ii Union KBC Ultra Short term debt fund DIR - 29.03 564.45March 31, 2017: NILMarch 31, 2016: 2,069.780 unitsApril 1, 2015: 43,370.729 units

iii Union Kbc Ultra Short Term Debt Fund - - 15.99March 31, 2017: NILMarch 31, 2016: NILApril 1, 2015: 1,231.022 unitsTotal Investment measured at fair value through P&L - 550.06 580.44

Investment in Equity Instruments

Unquoted:In Subsidiaries [Valued at Cost]

In fully paid-up Equity Shares :i Nakshatra World Ltd (Formerly known as Gitanjali

Brands Ltd) 21,012.93 21,012.91 21,012.91

March 31,2017: 43,727,635 Equity Shares of `10/- eachMarch 31,2016: 17,491,053 Equity Shares of ` 5/- eachApril 1,2015: 17,491,053 Equity Shares of ` 5/- each

ii Hyderabad Gems SEZ Ltd 5.00 5.00 5.00March 31,2017: 50,000 Equity Shares of ` 10/- eachMarch 31,2016: 50,000 Equity Shares of ` 10/- eachApril 1,2015: 50,000 Equity Shares of ` 10/- each

iii Gitanjali Jewellery Retail Ltd 80.00 80.00 80.00March 31,2017: 1,000,000 Equity Shares of ` 10/- eachMarch 31,2016: 1,000,000 Equity Shares of ` 10/- eachApril 1,2015: 1,000,000 Equity Shares of ` 10/- each

iv Gitanjali Infratech Ltd 5,000.00 5,000.00 5,000.00March 31,2017: 50,000,000 Equity Shares of ` 10/- eachMarch 31,2016: 50,000,000 Equity Shares of ` 10/- eachApril 1,2015: 50,000,000 Equity Shares of ` 10/- each




v Gitanjali Lifestyle Ltd 5,280.00 5,280.00 5,280.00March 31,2017: 25,000,000 Equity Shares of ` 10/- eachMarch 31,2016: 25,000,000 Equity Shares of ` 10/- eachApril 1, 2015: 25,000,000 Equity Shares of ` 10/- each

vi Nashik Multi Services SEZ Ltd 5.00 5.00 5.00March 31,2017: 50,000 Equity Shares of ` 10/- eachMarch 31,2016: 50,000 Equity Shares of ` 10/- eachApril 1, 2015: 50,000 Equity Shares of ` 10/- each

vii Eureka Finstock Pvt Ltd 5.00 5.00 5.00March 31,2017: 50,000 Equity Shares of ` 10/- eachMarch 31,2016: 50,000 Equity Shares of ` 10/- eachApril 1,2015: 50,000 Equity Shares of ` 10/- each

viii Decent Securities and Finance Pvt Ltd 5.00 5.00 5.00March 31,2017: 50,000 Equity Shares of ` 10/- eachMarch 31,2016: 50,000 Equity Shares of ` 10/- eachApril 1,2015: 50,000 Equity Shares of ` 10/- each

ix N & J Finstock Pvt Ltd 4.50 4.50 4.50March 31,2017: 50,000 Equity Shares of ` 10/- eachMarch 31,2016: 50,000 Equity Shares of ` 10/- eachApril 1,2015: 50,000 Equity Shares of ` 10/- each

x MMTC Gitanjali Ltd 848.50 848.50 848.50March 31,2017: 8,485,011 Equity Shares of ` 10/- eachMarch 31,2016: 8,485,011 Equity Shares of ` 10/- eachApril 1,2015: 8,485,011 Equity Shares of ` 10/- each

xi Decent Investment and Finance Pvt. Ltd 1,630.00 1,630.00 1,630.00March 31,2017: 2,000,000 Equity Shares of ` 10/- eachMarch 31,2016: 2,000,000 Equity Shares of ` 10/- eachApril 1,2015: 2,000,000 Equity Shares of ` 10/- each

xii Gitanjali Ventures DMCC 11,553.61 11,553.61 11,749.63March 31,2017: 200 Shares of AED 1000 eachMarch 31,2016: 200 Shares of AED 1000 eachApril 1,2015: 200 Shares of AED 1000 each

xiii Gitanjali USA Inc 7,704.05 8,374.39 10,662.33March 31,2017: 100 Common SharesMarch 31,2016: 100 Common SharesApril 1,2015: 100 Common Shares

xiv Samuels Jewelers Inc.USA 31,801.47 31,801.47 31,801.47March 31,2017: 1,960 Common Stock of USD 0.01 eachMarch 31,2016: 1,960 Common Stock of USD 0.01 eachApril 1,2015: 1,960 Common Stock of USD 0.01 each


115


xv Aston Luxury Group Ltd 14,751.67 14,751.67 14,751.67March 31,2017: 29,071,690 Shares of USD 1 eachMarch 31,2016: 29,071,690 Shares of USD 1 eachApril 1,2015: 29,071,690 Shares of USD 1 each

In Associates [Valued at Cost]xvi Jewelsouk Marketplace Ltd (Earlier known as

e-Gitanjali Ltd) 99.00 99.00 99.00

March 31,2017: 99,000 Equity Shares of ` 10/- eachMarch 31,2016: 99,000 Equity Shares of ` 10/- eachApril 1,2015: 99,000 Equity Shares of ` 10/- each

In Preference Shares [Valued at Cost]xvii Investment in Bezel Jewellery (India) Pvt Ltd

(Formerly Known as D'Damas Jewellery (India) Pvt Ltd) 740.17 740.17 740.17

March 31,2017: 1,018,795 4% Non Cummulative Redeemable Preference Shares of ` 100/- eachMarch 31,2016: 1,018,795 4% Non Cummulative Redeemable Preference Shares of ` 100/- eachApril 1,2015: 1,018,795 4% Non Cummulative Redeemable Preference Shares of ` 100/- each

Total Investment Valued at Cost 100,525.90 101,196.22 103,680.18In Others [Fair Value through OCI]

i Diamond India Limited (Paid up ` 5/-) 834.29 600.00 600.00March 31,2017: 1,000,000 equity shares of ` 10/- eachMarch 31,2016: 1,000,000 equity shares of ` 10/- eachApril 1,2015: 1,000,000 equity shares of ` 10/- each

ii Shamrao Vithal Co-op Bank Ltd. 0.01 0.01 0.01March 31,2017: 25 equity shares of ` 25/- each ofMarch 31,2016: 25 equity shares of ` 25/- each ofApril 1,2015: 25 equity shares of ` 25/- each of

iii GEMTA Coles Mines Ltd 0.85 0.85 0.85March 31,2017: 8,500 Equity shares of ` 10/- eachMarch 31,2016: 8,500 Equity shares of ` 10/- eachApril 1,2015: 8,500 Equity shares of ` 10/- each

Total Investment measured at fair value through OCI 835.15 600.86 600.86

Total Investments 101,361.05 102,347.14 104,861.48Aggregate Amount of Quoted Investments - - -Aggregate Amount of Unquoted Investments 101,361.05 102,347.14 104,861.48




Note: 5 Non Current Loans[Unsecured, considered good unless otherwise stated]

Receivable from Redeemable Preference Shares 995.60 912.75 811.07Other loans 239.90 683.72 3,445.61

Total 1,235.50 1,596.47 4,256.68

Note: 6 Other Non-Current Financial AssetsFixed Deposits (More Than 12 Months) 164.83 1,092.87 312.64Security Deposits 2,720.40 2,950.20 2,981.22Total 2,885.23 4,043.07 3,293.86A. Earmarked balances with banks

Balances to the extent held as margin money deposits against Guarantee

164.83 1,092.87 312.64

Note: 7 Other Non-Current AssetsCapital Advances 859.14 843.50 843.50Others Interest Paid in Advance - 22.29 44.58Total 859.14 865.79 888.08

Note: 8 InventoriesClassification of Inventories:

Raw Materials 125,243.50 72,032.82 119,741.12Work-in-progress 1,615.95 1,462.78 1,003.92Finished Goods 18,690.87 12,942.51 18,968.20Trading Goods 107,505.08 97,127.96 99,350.17

Total 253,055.40 183,566.07 239,063.41

Note: 9 Trade ReceivablesUnsecured - Considered good

Trade Receivable 856,701.75 691,014.82 665,711.10Provision for Doubtful Debts 247.96 247.96 -

856,949.71 691,262.78 665,711.10Less: Provision for Doubtful Debts 247.96 247.96 -

Total 856,701.75 691,014.82 665,711.10

Note: 10 Cash and Cash EquivalentsBalances with Banks 6,209.44 3,677.59 655.49Fixed Deposits with Maturity Less than 3 months - - 12.63Cash in Hand 11.62 32.83 22.86Total 6,221.06 3,710.42 690.98A. Earmarked balances with banks:

Balances in unclaimed dividend accounts 11.48 13.83 15.85Balances to the extent held as margin money deposits against Guarantee

- - 12.63

B. Company keeps fixed deposits with the Nationalised/ Scheduled banks, which can be withdrawn on approval of CFO and CMD


117


Note: 11 Other Bank BalancesFixed Deposits (Maturity more than 3 months and less than 12 months)

11,326.52 9,718.38 12,575.94

Total 11,326.52 9,718.38 12,575.94A. Earmarked balances with banks

Balances to the extent held as margin money deposits against Guarantee

11,326.52 9,718.38 12,575.94

Note: 12 Current Loans[Unsecured, Considered Good]

Loans to Related Parties [*] 23,006.15 28,600.72 23,336.78Loans to Employees 134.52 89.75 42.70

Total 23,140.67 28,690.47 23,379.48[*] Details of Loans to Related Parties are as under:

Subsidiary Company:Decent Investment & Finance Pvt Ltd 271.54 295.99 318.62Decent Securities & Finance Pvt Ltd. 849.93 875.13 893.99Dynamic Multitrading Pvt.Ltd. 0.23 - -Eureka Finstock Pvt Ltd. 1,020.89 1,046.58 1,065.52Gitanjali Capital Pvt.Ltd. 0.87 - 0.73Gitanjali Holdings Limited - 0.32 0.32Gitanjali Infratech Ltd. 11,168.69 10,162.10 8,993.88Gitanjali Jewellery Retail Ltd - - 1,704.62Gitanjali USA,Inc. - 9.12 9.12Gitanjali Ventures DMCC - 4.97 4.97Hyderabad Gems SEZ Limited 6,111.87 6,418.59 6,432.94Maya Retails Limited - 5,989.93 -MMTC Gitanjali Ltd - - 19.34Mobile Next Teleservice Pvt Ltd 130.42 130.41 130.41N & J Finstock Pvt Ltd 1,971.74 1,998.71 2,016.93Nashik Multi Services Sez Ltd. 831.32 827.15 824.88Shubhalavanyaa Jewel Crafts Pvt Ltd. 8.28 7.99 8.55Tri StarWorldwide LLC - 254.43 254.43Vidarbha Multi Products SEZ Limited 11.21 - -Associate Company:Jewelsouk Marketplace Ltd. - 71.96 657.54Company In Which Directors Or Officers arePartner,Director Or MemberGitanjali Gold & Precious LLP 360.81 507.36 -Priyanka Gems Pvt.Ltd. 23.37 - -Rohan Diamond Pvt.Ltd. 244.98 - -

23,006.15 28,600.74 23,336.79




Details of Loans to Employees at the end of respective financial year by:Other officersChandrakant Karkare 60.00 - -

60.00 - -

Note: 13 Other Current Financial AssetsForeign Exchange Forward Contracts 1,573.92 693.95 147.22Security Deposits 229.24 - -Other Assets 993.29 156.52 980.84Total 2,796.45 850.47 1,128.06

Note: 14 Current Tax Assets [Net]Income Tax (Net of provision) 3,277.12 1,770.29 1,249.28Total 3,277.12 1,770.29 1,249.28

Note: 15 Other Current AssetsAdvances to Suppliers 3,055.06 14,248.83 10,953.83Service Tax Receivable 34.32 46.61 57.04Sales Tax Receivable 320.73 330.95 310.58Prepaid Expenses 4,823.00 4,064.93 2,241.23Other Assets 22.29 22.29 22.95

Total 8,255.40 18,713.61 13,585.63


119

(` in Lacs) March 31, 2017 March 31, 2016

Note: 16 Equity Share CapitalAuthorised:

150,000,000 Equity Shares of ` 10/- 15,000.00 15,000.00[150,000,000 Equity Shares in March 31,2016 & April 1,2015]Add:17,250,000 Equity shares of ` 10/- each on account of Amalgamation 1,725.00 1,725.00

16,725.00 16,725.00Issued, Subscribed and Paid-up:

118,616,005 (March 31,2016:102,437,724 and April 1,2015: 98,120,451) 11,861.60 10,243.77Equity Shares of ` 10/- each fully Paid

Total 11,861.60 10,243.77A The reconciliation in number of shares is as under:

Number of shares at the beginning of the year 10,24,37,724 9,81,20,451 Shares Issued during the year on conversion of share warrants 1,61,78,281 43,17,273 Number of shares at the end of the year 11,86,16,005 10,24,37,724

B Rights, Preferences and Restriction of Share holders: The company has only one class of Equity shares having par value of ` 10/- each. The equity shares have rights, Preferences and restrictions which are in accordance with the provision of law, in particular the Companies Act 2013. The dividend proposed by the Board of Directors is subject to shareholders approval in the ensuing Annual General Meeting.

C Details of Shareholder holding more than 5% of aggregate Equity Shares of ` 10/- eachMarch 31,2017 March 31,2016 April 1,2015

Name of share holder Number ofShares

% to totalshare holding

Number ofShares


Number ofShares


Mehul C Choksi 3,09,46,456 26.09% 3,07,68,018 30.04% 3,03,43,018 30.92%D. B. Corp Limited NIL NIL 52,01,055 5.08% 60,54,960 6.17%Macquarie Finance (India) Private Limited

* * * * 50,00,000 5.10%

Ramesh shah 68,83,432 5.80%Rakesh Gajera 68,24,226 5.75%Chaitya Shah 68,02,896 5.74%* During the year, percentage of holding reduced to 5%

D Particulars of shares issued for consideration other than cash, shares bought back and bonus shares in last five years:i. Shares bought back -- NILii. Issue of bonus shares – NIL.

E There are no shares reserved for issue under options, contracts / commitments for sale of Shares/ disinvestments.F 3,051,640 warrants became in-eligible for conversion into equity shares and were forfeited by the Company.G Particulars of calls in arrears by directors and officers of the company. – NILH Security convertible into equity shares:

On January 22, 2015, the Company allotted 23,547,194 warrants on preferential basis to persons other than promoters. The said warrants carry an option / entitlement to subscribe to equivalent number of Equity Shares of ` 10/- each at a future date, not exceeding 18 (eighteen) months from the date of issue of such warrants at a price of ` 72.39 which includes a premium of ` 62.39 per share. Following is the summarized position as at March 31, 2017:



Particulars March 31, 2017 March 31, 2016 Number ` in Lacs Number ` in Lacs

No of Warrants pending allotment and balance in share warrants account

1,92,29,921 4,368.31 2,35,47,194 4,261.45

Amount received during the year:a) Being balance 75% of the amount on exercise of conversion option during the year

7,896.47 2,343.96

b) As advance against convertible warrants - 888.18 12,264.78 7,493.59

Less: Amount utilized on conversion of warrants:a) Towards Equity shares of ` 10/- each 1,61,78,281 (1,617.83) 43,17,273 (431.73)b) Towards Share premium of ` 62.39 each (10,093.63) (2,693.55)c) Towards Share Forfeited 30,51,640 (552.27) -d)Amount Refunded (1.05) -f) Amount Written off - -

(12,264.78) (3,125.28)No of Warrants pending allotment and balance in share warrants account

- - 1,92,29,921 4,368.31

( ` in Lacs )March 31, 2017 March 31, 2016

Note: 17 Other EquitySecurities Premium ReserveOpening Balance 136,183.96 133,490.41Add: On account of conversion of share warrants 10,093.63 2,693.55Closing Balance 146,277.59 136,183.96General ReserveOpening Balance 13,578.27 13,578.27Closing Balance 13,578.27 13,578.27Capital Redemption ReserveOpening Balance 79.29 79.29Closing Balance 79.29 79.29Debenture Redemption ReserveOpening Balance 10,000.00 10,000.00Closing Balance 10,000.00 10,000.00Fair Value Through OCIOpening Balance 100.00 100.00[Less]/ Add: [Debited]/ Credited during the year 234.29 -Closing Balance 334.29 100.00Capital ReserveOpening Balance - -Add : On Account of Forfeiture of Share Warrants 552.27 -Closing Balance 552.27 -


121

( ` in Lacs )March 31, 2017 March 31, 2016

Retained EarningsOpening Balance 162,646.80 158,145.30Add: Profit for the year 3,972.18 4,485.67

166,618.98 162,630.97Add/Less: Items of other in other comprehensive income recognised Re-measurement gains/[losses] defined benefit plans [net of tax] (55.62) 15.83Less: DividendsDividends [Refer Note-59(b)] (593.17) -Corporate Dividend Tax on Dividend (123.50) -

(716.67) -Closing Balance 165,846.69 162,646.80Money Received Against Share WarrantsOpening Balance 4,368.31 4,261.45Add: Money received during the year

a) Being balance 75% of the amount on exercise of conversion option during the Year

7,896.47 2,343.96

b) As advance against convertible warrants - 888.18Less: Amount used in conversion of warrants

a) Towards Equity shares of ` 10/- each (1,617.83) (431.73)b) Towards Share premium of ` 62.39 each (10,093.63) (2,693.55)

Less: Forfeiture of Share Warrants (552.27) -Less : Refund of Share Warrants Money (1.05) -Closing Balance - 4,368.31Total 336,668.40 326,956.63

Securities Premium ReserveSecurities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act.General ReserveGeneral reserve can be used for the purpose and as per provisions of the Companies ActCapital Redemption ReserveThis reserve was created for buyback of shares in FY 2009-10 as per the provisions of the Companies Act, 1956. This will be utilised as per provisions of the Companies Act.Debenture Redemption ReserveThis reserve was created for issue of 12% reedamble Non Cumulative Convertible Debentures to LIC of India in FY 2009-10. This reserve will be utilised as per provisions of the Companies Act.Fair Value Through OCIThe company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the Other Comprehensive Income [FVTOCI] reserve wthin equity. The company transfers amount from this reserve to retained earnings when the relevant equity securities are derecognised Capital Reserve Company has accounted for forfeiture of share warrants under capital reserve. This reserve shall be utilised as per provisions of the Companies Act




Note: 18 Non Current BorrowingsSecured

From BanksExternal Commercial Borrowings 18,011.70 40,764.43 52,616.90From Financial InstitutionsNon-Convertible Debentures 1,852.00 3,256.00 4,660.00Term Loans from Others 1,872.58 - -Total Secured borrowings 21,736.28 44,020.43 57,276.90

UnsecuredFixed Deposit Scheme - - 187.89Loans from Related Parties 5,949.95 13,742.39 12,375.69Other Loans 54.02 48.02 42.67Total Unsecured borrowings 6,003.97 13,790.41 12,606.25

Total 27,740.25 57,810.84 69,883.15[For Terms and Condition refer Note: 45]

Note: 19 ProvisionsProvision for Employee Benefits 648.91 480.11 449.64Total 648.91 480.11 449.64

Note: 20 Other Non Current LiabilitiesLong Term Advances - 5.22 10.43Total - 5.22 10.43

Note: 21 Current BorrowingsSecured

Working Capital Facilities from Banks 499,396.67 500,801.12 513,897.85Total 499,396.67 500,801.12 513,897.85[For terms and condition refer note 45]

Note: 22 Trade PayablesMicro, Small and Medium Enterprises - - -Others

Creditors for Goods 381,544.08 148,087.50 164,318.08Creditors for Expenses / Labour 4,396.65 6,777.79 7,482.08Total 385,940.73 154,865.29 171,800.16


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Note: 23 Other Current Financial LiabilitiesCurrent Maturities of Long Term Debti Non Convertible Debentures 1,752.94 1,645.74 1,647.73ii External Commercial Borrowings 28,035.82 17,134.63 8,520.20iii Fixed Deposit Scheme 1.25 171.20 -iv Term Loan 612.67 - -Interest accrued on External Commercial Borrowings 1,232.39 615.70 612.89Interest accrued on Fixed Deposit Scheme - 2.90 7.82Interest accrued but not paid on bank loans 883.71 246.30 767.48Unpaid Dividends 11.48 13.83 15.85Bank Overdraft 584.05 145.22 527.04Interest Swap 27.25 60.14 106.41Forward Contract - 9.20 -Total 33,141.56 20,044.86 12,205.42Interest SwapThe Company had an interest rate swap agreement whereby the Company receives a fixed rate of interest of 1.52% and pays interest at a variable rate. The swap is being used to hedge the exposure to changes in the fair value of its variable rate secured loan. Any changes in fair value of the interest rate swap has been recognised in finance costs. The Company has reviewed its long term Contract, there are no material foreseeable losses on such contracts.

Foreign Exchange Forward ContractsWhile the Company entered into other foreign exchange forward contracts with the intention of reducing the foreign exchange risk of expected sales and purchases, these other contracts are not designated in hedge relationships and are measured at fair value through profit or loss.

Note: 24 Current ProvisionsProvision for Employee Benefits 86.09 77.65 66.19Total 86.09 77.65 66.19

Note: 25 Current Tax Liabilities [Net]Income Tax (Net of Advance Tax) 1,091.48 2,228.55 2,258.64Total 1,091.48 2,228.55 2,258.64

Note: 26 Other Current LiabilitiesAdvance Received from Customers 5,913.41 4,722.78 2,225.18Statutory Liabilities 81.51 191.95 300.63Others 5.22 5.22 5.23Total 6,000.14 4,919.95 2,531.04



( ` in Lacs) March 31, 2017 March 31, 2016

Note: 27 Revenue from OperationsSale of Products

Export (Including deemed exports)Diamonds 49,708.61 37,332.45Jewellery & Others 682,678.05 511,295.27

DomesticDiamonds 219,037.36 247,571.34Jewellery & Others 95,052.58 278,873.25

Total 1,046,476.60 1,075,072.31

Note: 28 Other IncomeDividend Income 7.50 7.50Gain on Mutual Funds 52.54 40.94Gain on fair valuation of derivatives 861.92 583.79Exchange Difference Gain 13,725.31 5,853.22Service Tax Refund Received 3.06 -Miscellaneous Income - 1.54Total 14,650.33 6,486.99

Note: 29 Purchase of Stock in Trade and Raw MaterialDiamonds 267,214.75 311,569.64Jewellery & Others 784,396.51 640,771.82Total 1,051,611.26 952,341.46

The Company is engaged in business of trading and manufacturing of Plain Gold Jewellery, Diamond Studded Jewellery, Diamond Cutting and Polishing. For this purpose Company has its own manufacturing facility and also undertakes job work for others. The company also purchases jewellery produced by reputed manufacturers. Considering the nature of product and type of business, cost of material consumed includes value of traded goods purchased for trading.

Note: 30 Changes in InventoriesStock at commencement:

Finished GoodsDiamonds 132,673.95 125,917.89Jewellery & Others 50,892.12 113,145.52

183,566.07 239,063.41Less: Stock at close:

Finished GoodsDiamonds 116,852.86 132,673.95Jewellery & Others 136,202.54 50,892.12

253,055.40 183,566.07

Total (69,489.33) 55,497.34


125


Note: 31 Employee Benefits ExpenseSalaries and wages 3,514.36 3,183.61Contribution to gratuity 102.60 93.59Contribution to provident and other funds 128.32 119.98Staff welfare expenses 130.74 119.49Total 3,876.02 3,516.67

Note: 32 Finance CostInterest on financial instruments measured at amortised cost 46,969.05 44,824.97Processing Fees and Bank Guarantee Charges 753.69 1,491.42Others 44.13 35.76Total 47,766.87 46,352.15

Note: 33 Other ExpensesAdvertisement, Selling & Distribution expenses 1,171.76 656.21Auditor's Remuneration 33.75 33.61Bad Debts w/off - 1,712.78Bank charges & Commission 2,433.65 2,062.74Commission & Assortment Charges 73.11 18.25Computer Expenses 32.52 53.05Consumption of stores & spare parts 166.86 143.36CSR Expenses / Donations 269.68 129.51Custom Duty 187.25 555.92E.C.G.C Premium 567.67 949.88Electricity Charges 301.80 261.02Event,Exhibition & Business Promotion Expenses 209.53 219.28Export Sales Charges 234.09 216.56Fixed Assets W/off - 106.57Foreign Travelling Expenses 298.00 343.34Import Expenses 148.09 129.40Insurance 38.11 50.74Labour Charges 12,960.89 7,560.82Legal,Professional and Service Charges 879.53 644.77Local Travelling Expenses 248.43 213.36Loss on Sale of Investments/Fixed Assets 8.21 -Membership/Subscription 27.07 24.47Packing Materials Consumed 8.85 7.99Postage, Telephones & Communication charges 77.91 48.25Printing & Stationery 51.09 33.68Provision for Doubtful debts - 247.96Rent, Rates & Taxes 467.39 523.37Repairs & Maintenance-Others 42.11 29.97




Repairs to Plant & Machinery 9.51 12.09Security Service Charges 108.84 67.26Sundry Amount W/off 78.64 -Miscellaneous Expenses 658.58 820.93Total 21,792.92 17,877.14

Note: 34 Other Comprehensive Income not to be reclassified to Profit or Loss in subsequent periodsRemeasurements of the defined benefit plans (85.05) 24.21Equity Instruments through Other Comprehensive Income 234.29 -Tax effects on above 29.43 (8.38)Total 178.67 15.83


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Note: 35 Calculation of Earning per Equity Share (EPS)The numerators and denominators used to calculate basic and diluted EPS are as follows:Particulars Year ended

March 31,2017 March 31,20161 Profit attributable to Equity shareholder (A) ` in Lacs 3,972.18 4,485.672 Number of Shares at the beginning of the year of ̀ 10 /- each Numbers 102,437,724 98,120,451

Share warrant Converted to Equity During the Year Numbers 16,178,282 4,317,273Basic and weighted average number of Equity shares outstanding at year end

(B) Numbers 114,694,812 100,506,512

3 Nominal Value of equity share (`) 10.00 10.004 Basic & Diluted EPS 3.46 4.46

NOTE: 36 Details of Auditors Remuneration

(` in Lacs)Particulars Year ended

March 31,2017 March 31,2016As Auditor: Audit Fees 25.05 25.05 Tax Audit Fees 4.30 4.30 Service Tax 4.40 4.26 Total Payment to Auditors 33.75 33.61

Note: 37 Detail of Corporate Social Responsibility

As per Companies Act 2013, Company is required to spend 2% of the average profit of last three years for CSR activities. Detail of the same are as follows:

(` in Lacs)Particulars Year ended

March 31,2017 March 31,2016Education 108.53 105.50Health Care 2.06 6.00Animal Welfare 1.08 0.50Total CSR Expenditure 111.67 112.00Amount required to be spent as per section 135 of the act 29.83 177.39Amount spent during the year on(i) Construction/acquisition of an asset - -(ii) On purpose other than (i) above 111.67 112.00



NOTE: 38 Contingent Liabilities and Commitments (to the extent not provided for): (` in Lacs)

Sr. No. Particulars March 31,2017 March 31,2016 April1, 2015

I. Claims against the Company not acknowledged as debtA 2 parties have filed suits against the company for recovery of

amount due for supply of Goods /Services. The management has assessed these matters and is of the view that this will not result in demand over and above provision made in the accounts.

208.07 727.68 282.00

B 2 party has filed winding up petition against the company for recovery of its dues. The management does not expect the petitioner’s claim to succeed

80.30 452.36 11.24

C Writ petition filed under The Forest (conversation) Act, 1980 2375.00 - -D Cases filed by consumer 0.17 - -E 1 party has filed labour case in Bandra Labour Court 5.0F 1 party has filed case for recovery before Mumbai Debt Recovery

Tribunal against the Company and its erstwhile wholly owned subsidiary GECL which is now merged with the Company

1033.51

II Income Tax liability that may arise in respect of which the company is in appeal with CIT (A)

53,476.80 24,573.73 27,446.20

Assessment Year

` in Lacs Remark Authority Where appeal is pending

2006-2007 587.73 Section 143(3) r.w.s 153 A CIT (A)2007-2008 610.79 Section 143(3) r.w.s 147 CIT (A)2007-2008 334.96 Section 143(3) r.w.s 147 (Amalgamating company) CIT (A)2008-2009 6,065.15 Section 143(3) r.w.s 153 A CIT (A)2008-2009 713.62 Section 143(3) r.w.s 147 (Amalgamating Company) CIT (A)2009-2010 1,381.85 Section 143(3) r.w.s 153 A CIT (A)2009-2010 885.74 Section 143(3) r.w.s 147 (Amalgamating Company) CIT (A)2009-2010 3,768.74 Section 143(3) r.w.s 147 CIT (A)2009-2010 25.95 Section 271(1) (amalgamating company) CIT (A)2010-2011 5,020.32 Section 143(3) r.w.s 153 A CIT (A)2010-2011 550.79 Section 143(3) r.w.s 147 (Amalgamating Company) CIT (A)2010-2011 5861.02 Section 143(3) r.w.s 147 CIT (A)2010-20112011-2012

530.90 8,411.78

Section 271(g)Section 143(3) r.w.s 153 A

CIT(A)CIT (A)

2011-2012 1,789.6 Section 143(3) r.w.s 144C (Amalgamating company) CIT (A)2011-2012 9654.74 Section 143(3) r.w.s 147 CIT (A)2011-2012 594.63 Section 271(g) CIT (A)2012-2013 1,072.36 Section 143(3) r.w.s 144C (Amalgamating company) CIT (A)2012-2013 1,115.59 Section 271(g) CIT (A)2013-2014 850.41 Section 143(3) r.w.s 144C CIT (A)2013-2014 1,074.38 Section 143(3) r.w.s 144C (amalgamating

company)CIT (A)

2013-2014 1,760.18 Section 271(g) CIT (A)2013-2014 815.57 Section271(g)(Amalgamating company) CIT (A)


129

The above Income Tax demands are as consequence to assessment and reassessment for various years and are mainly on account of additions due to disallowance of business expenses, disallowance of exemption and transfer pricing adjustment. In respect of Assessment year 2007-08 in addition to above, there is a demand by tax authority on assessment under Section 143(3) r.w.s. 153A of ` 473.90 Lacs.In respect of AY 2008-09 to AY 2010-11 in addition to above, there is a demand by tax authority on assessment under section 143(3) r.w.s 144C of ` 1,693.77 Lacs. The company has filed appeals against the said orders. These orders and appeals are not likely to have effect in view of the assessment under section 143(3) r.w.s 147 and therefore is not included under above figure of disputed Income Tax.The management has reviewed the above demands and is of the opinion that it has good chances of succeeding in the appeal.

III Tax demand for various years as per TRACES 17.97 42.48 301.48

The company is in process of filing rectification and on rectification the demand is not likely to materialise.

16.75

The company is in process of filing rectification and on rectification the demand is not likely to materialise. (Amalgamating Company)

1.22

IV Service Tax 621.52 617.39 581.79The Company has filed appeal against service tax assessments in respect of assessed service tax payable on service component relating to FCCB, GDR, etc. Based on the internal assessment of the company, the demand is not likely to be crystallized.

580.54

Disputed Service Tax (Amalgamating Company) 40.98V Corporate guarantees (CG) 225,896.00 303,178.00 375,017.46

CGs are given to various banks for availing working capital facility/ term loan by subsidiary / Associate companies.

VI Sales Tax 2,423.89 1,768.65 -Financial Year Amount Remark Authority where appeal

is pending2005-2006 1,746.32 VAT Assessment Deputy Commissioner of

Sales Tax (Appeals)2005-2006 22.33 CST Assessment2010-2011 104.94 CST Assessment Joint commissioner of

Sales Tax (Appeals)2010-2011 51.33 VAT Assessment Joint commissioner of Sales

Tax (Appeals)2012-2013 154.48 CST Assessment Appeal to be filed2012-2013 344.49 VAT Assessment Appeal to be filed

The Company has filed appeal against above VAT/CST assessments order. Based on the internal assessment of the company, the demand is not likely to be crystallized.

VII Outstanding letter of credit 174.38 1,161.64 627.48

Except as described above, there are no pending litigations which the company believes could reasonably be expected to have a material adverse effect on the result of operations, cash flow or the financial position of the Company.



Note: 39 Operating leases: Assets taken on lease

The Company has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits under certain agreements. Lease payments of `334.20 [March 31, 2016 `393.21] are recognized in the Statement of profit and loss under the head ‘Rent, rates and taxes’

The future minimum lease payments are as follows: - ( ` in Lacs)

Particulars March 31,2017 March 31,2016 April 1,2015Not later than one year 503.65 544.00 839.12Later than one year and not later than five years 189.14 849.15 991.42Later than five years NIL 8.23 NIL

Note: 40 Property, Plant and Equipment

There is no impairment loss on property, plant and equipment assets on the basis of review carried out by the management. Company carries out physical verification of its Property, Plant and Equipment at once in two year. During the year, the Company has not carried out physical verification of it's property, plant and equipment.

Title deeds of immovable properties are yet to be transferred in the name of the company in case of properties earlier held by merged entity namely Gitanjali Exports Corporation Limited. In respect of few land pieces procedure for transfer in the name of the company are yet to be completed. The company has clear title in respect of other immovable properties.

Note: 41 Investments

1) Gitanjali USA, Inc.

During the year the company has received back USD 1.50 million (Equivalent amount in ̀ 1,019.13 Lacs) towards refund of part of its additional paid-in capital in its overseas subsidiary namely Gitanjali USA, Inc. The balance investment as at March 31, 2017 stands at USD 17.22 million (Equivalent amount in ` 7,704.05 Lacs).

2) The Company with a view to consolidate the business model, appointed reputed firm of consultants to advise on future business model and restructuring of domestic and overseas subsidiaries. Based on the recommendations, as part of restructuring of overseas subsidiaries, the Holding company has plans of disinvestment in equity share of three of the foreign subsidiaries to it’s another overseas wholly owned subsidiary namely Aston Luxury Group Ltd, Hong Kong. As part consideration for restructuring, the company has received advance of USD 6.44 Million in earlier year from Aston Luxury Group Limited. The Company has not yet completed the restructuring process. The company under the changed market scenario is re considering the proposed restructuring which may include refunding the advance received.

3) The company acquired 1 share held by Bennett Coleman & Co limited of Nakshatra World Limited( formerly Known as Gitanjali Brands Limited ) vide transfer on 26th November 2016 for a consideration of ` 2,275.50 whereby Nakshatra World Limited has become wholly owned subsidiary of the Company. Nakshatra World Limited issued bonus share in the ratio of 4:1 whereby the company received 34,982,108 numbers of shares.

Note: 42 Inventory

The inventory comprising of raw material and finished goods is physically verified by the management at regular intervals and as at the end of the year. In respect of stock lying with third parties as at the year end written confirmations has been obtained by the management. The quantity and valuation inventory at the year end has been certified by the management.


131

Note: 43 Loans and Advances

Advance to supplier and Loans to Employees as at March 31, 2017 includes `1,763.56 Lacs outstanding for more than 2 years. These are unsecured loans and confirmation of balances is not received. The management has reviewed their advances and is of the opinion, these advances are good and recoverable / adjustable and no provision is required in respect of these advances. The auditor has relied on the management representation in this regard. During the year the Company has reviewed outstanding advances and has written off ` 268.83 Lacs as bad and irrecoverable advances.

a) �Advances to suppliers includes Nil (March 31, 2016 ` 10,368.21 Lacs ,April 1, 2015 ` 5,113.30 Lacs) given to group subsidiaries and concerns in which Directors are interested as Directors/Members/Partners.

b) �Loans and advances to other than group parties amounting to NIL (March 31, 2016 ` 546.03 Lacs, April 1, 2015 ` 1,858.81 Lacs ) were considered irrecoverable and has been written off during the year and shown net of advances received written back.

Note: 44 Trade Receivable

a)� �Trade Receivable as at March 31, 2017 includes ` 200,450.01 Lacs (for March 31, 2016 ` 71,206.61 Lacs and April 1, 2015 are ` 146,129.51 Lacs) due from group subsidiaries both domestic and overseas.

b)� �There are some cases where the export receivables are outstanding for more than permissible limits for which the company is in process of filing application to authorized dealer / Reserve Bank of India.

c)� �The Company has reviewed its domestic and export receivables during the year and has not written off receivables during the year ended March 31, 2017 (For March 31, 2016 is ` 2,515.79 Lacs and April 1, 2015 is ` 9,193.48 Lacs).

Note: 45 Borrowings

A. Non-Current Borrowings

� (a) 12% Non-Convertible Debentures issued to LIC of India :

The company had issued 12% Non-Convertible debentures in FY 2009-10 aggregating to ` 125 crores. The repayment term were revised in the FY 2014-15. Principal Payable for future year as per revised schedule is as under:

Year Principal Amount repayable ( ` in Lacs)2017-2018 1,4042018-2019 1,4042019-2020 448

As at March 31, 2017 there is an overdue amount of ` 348.94 Lacs which includes overdue interest of ` 114.94 Lacs. The said debentures are secured by first paripassu charge over immovable properties in Hyderabad belonging to Hyderabad Gems Sez Limited, a wholly owned subsidiary.

In respect of debentures installments maturing during the following year, the company could not create liquid assets of ` 148.00 Lacs as required under Rule 18 (7)(c) of the Company’s (Share capital and Debenture) Rule 2014 due to continued Cash flow constraints arising out of regulatory restrictions on import of gold and unfavorable INR v/s USD currency fluctuation since FY 2012-13.



(b)� External Commercial Borrowings (ECB) :

During the financial year 2011-12 the company raised ECBs aggregating USD 107.19 million from the following two banks

Sr. No Name of Bank Amount (USD in millions)1. IDBI Bank Limited (Dubai)* 57.192. ICICI Bank Limited(Dubai) 50.00Total 107.19

* In respect of ECB from IDBI, on 22nd January 2012 IDBI downsold ECB of USD 10 million to Bank of Baroda

Out of the above ECB proceeds, USD 57.19 million was utilised to redeem the outstanding Foreign Currency Convertible Bonds (FCCBs) and balance USD 50 million was utilised towards capital expenditure in SEZ unit in Hyderabad and investment in overseas subsidiaries.

The company’s request for restructuring of ECB has been approved by RBI vide its letter dated November 27, 2014 and by IDBI vide its letter dated January 6, 2015 IDBI/DIFC/LOI/37/2014-15. As per revised terms, principal is repayable in 10 structured half yearly installments beginning from 30th September 2015, last installment being due on 31st March 2020. Interest is set at 6 months LIBOR rate + 490 BPS. The Company has entered into derivative contract for hedging interest rate related risk via interest rate swap agreement while availing ECB from IDBI, Dubai.

The said ECBs are secured by first paripassu charge over certain immovable properties belonging to the company’s subsidiaries and second charge on the company’s assets, namely, raw materials, stock in progress, finished goods, all book debts, movable plant and machinery, consumable stores and stores and spares, both present and future. During FY 2013-14, the company also provided additional security by way of properties of various subsidiaries in respect of the said ECBs.

During the year there have been delays in servicing the principal and interest in respect of these ECBs. Amount due in next 12 months is USD 43.45 million (Equivalent INR ` 28,174.23 Lacs).

In respect of ICICI as at March 31, 2017 principal overdue is USD 8.75 million(Equivalent INR ` 5,674.38 Lacs).Interest outstanding as on March 31,2017 is USD 0.97 million(Equivalent INR ` 631.71 Lacs). In respect of IDBI (BOB portion) ECB as at March 31, 2017 principal overdue is USD 0.73 million (Equivalent INR ` 474.99 Lacs)

� (c) Term Deposit :

The company has obtained corporate loan facility from IFCI limited for meeting long term working capital requirement of ` 2,500 Lacs. The tenure of the loan is 36 months including moratorium of 12 months. Interest rate is 11.70% plus margin of 3.30% with floor of 15%. The loan is secured by pledge of shares of Gitanjali Gems Limited, hypothecation of studded jewellery and personal guarantee of Mehul Choksi. The outstanding balance as at March 31, 2017 ` 2,500 Lacs. Principal Payable for future year as per schedule is as under:-

Year Principal Amount repayable ( ` in Lacs)2017-2018 520.832018-2019 1,250.002019-2020 729.17


133

(d) Borrowings from Related Party :

The Company has obtained Interest Free Loan from related party of ` 5,949.95 Lacs (March 31, 2016 is Rs.13,742.39 Lacs) without any stipulations for repayment.

B. Current Borrowings

Working Capital Borrowing – from consortium of bankers

The total outstanding balance of Working Capital Borrowing from consortium of bankers as at March 31, 2017 amounted to ` 499,396.67 Lacs (net). The above facility carries interest ranging from 4.5 % to 13% per annum. The working capital borrowings are secured as under:

� i.� �In respect of working capital borrowing of ` 439,022.93 Lacs by Gitanjali Gems Limited pre merger against certain immovable properties of the company and its subsidiaries and hypothecation by way of first charge on all present and future goods, movable assets, vehicles, furniture, stock in trade, fixed deposits, book debts along with the personal guarantee of the Managing Director.

� ii.� �In respect of working capital borrowing of ` 60,372.74 Lacs by Gitanjali Exports Corporation Limited (Amalgamating Company) secured against hypothecation by way of first charge ranking pari - passu on all the present and future goods, movable assets, vehicles, furniture, stock-in–trade, fixed deposits, book debts, mortgage by way of deposit of title deeds of companies office premises, one of the office premises owned by Gitanjali Gems Limited, premises owned by director & relative of director together with corporate guarantee of the Gitanjali Gems Limited and personal guarantee of Mehul C Choksi .

In the month of May/June 2013, there have been changes in RBI Policy relating to issuance of BG/LC for purchase of gold. Due to this restriction, there has been sudden and severe impact on cash flow which started in May 2013 and continued to affect cash flows during 2016-17.

During the year there were delay in servicing the interest on working capital borrowing and repayment of principal amounts. As at March 31, 2017 the facilities are overdrawn by ` 3,115.17 Lacs mainly on account of non-servicing of interest.

Note: 46 Public Deposits

During FY 2013-14, the Company accepted deposits of ` 227.29 Lacs from the public within the meaning of section 58A of the Companies Act, 1956. Fixed deposits were for the period ranging from 1 year to 3 year and accordingly carried interest rate variance from 11.50% to 12.50%. As on March 31, 2017, the company repaid all the deposits which were maturing during the year except unclaimed matured deposit amounting to ` 1.25 Lacs which will be repaid by the company as and when claimed by the Fixed Deposit holders. The company did not accept any further public deposit within the meaning of Section 73 to 76 of the Companies Act 2013 and rules framed there under during the year.

Note: 47 Trade Payables

Suppliers covered by Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and Industrial (Development & Regulation) Act, 1951.

a)� �Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Micro, Small and Medium Enterprises Development Act, 2006. The auditors have relied upon the management information in this regard.

b)� � To the extent information available with the Company, does not owe any sum to small scale industrial unit as defined in clause (j) of Section 3 of the Industrial (Development & Regulation) Act, 1951.

c)� � As represented by the Company, does not owe any sum to micro enterprises and small enterprises. Accordingly, the Company has not made a separate disclosure under Trade Payables in Balance Sheet as required by the notification dated 04th September, 2015 pertaining to alterations in Schedule III issued by MCA.



Note: 48 Employee Benefits(` in Lacs)

Particulars March 31, 2017 March 31, 2016 April 1, 2015Current Non-current Current Non-current Current Non-current

Gratuity 65.29 567.99 64.39 400.91 55.72 380.18Compensated Absences(Leave Salary)

20.80 80.92 13.21 79.23 10.43 69.45

I) Gratuity (Defined benefit plan):

A. General Description:

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 5 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 for the number of years of service. The company’s liability towards gratuity is determined on the basis of year end actuarial valuations applying the Projected Unit Credit Method done by an independent actuary.

(` in Lacs)

Particulars March 31, 2017 March 31, 2016

B Change in the present value of the defined benefit obligation:Opening defined benefit obligation 465.31 435.95Interest cost 33.98 32.32Current service cost 68.63 61.27Benefits paid (19.67) (40.03)Actuarial [gains]/ losses on obligation 85.03 (24.21)Closing defined benefit obligation 633.28 465.31

C Change in the fair value of plan assets:Opening fair value of plan assets - -Expected return on plan assets - -Contributions by employer 19.67 40.03Benefits paid (19.67) (40.03)Actuarial [losses]/ gains - -Closing fair value of plan assets - -Total actuarial [losses]/ gains to be recognized (24.21) 93.57

D Breakup of Actuarial gain/lossActuarial [gain]/ loss arising from change in demographic assumption - -

Actuarial [gain]/ loss arising from change in financial assumption 35.82 10.72Actuarial [gain]/ loss arising from experience adjustment 57.75 (34.93)


135

Particulars March 31, 2017 March 31, 2016

E Expenses/ [Incomes] recognised in the Statement of Profit and Loss:Current service cost 68.63 61.27Interest cost on benefit obligation 33.98 32.32Expected return on plan assets - -Net actuarial [gains]/ losses in the year - -Net expenses/ [benefits] 102.61 93.59

F Other Comprehensive IncomeActuarial (Gain)/Loss recognized for the period 85.03 (24.21)Asset limit effect - -Return on plan assets excluding net interest - -Unrecognized Actuarial (Gain) / Loss from previous period - -Total Actuarial (Gain)/Loss recognized in OCI 85.03 (24.21)

G Movement in net liabilities recognised in Balance Sheet:Opening net liabilities 465.31 435.95Expenses as above [P & L Charge] 102.61 93.59Benefits Paid (19.67) (40.03)Other Comprehensive Income (OCI) 85.03 (24.21)Liabilities/ [Assets] recognised in the Balance Sheet 633.28 465.31

H Amount recognized in the balance sheet: March 31,2017 March 31,2016 April 1,2015PVO at the end of the year 633.28 465.31 435.95

Fair value of plan assets at the end of the year - - -

Deficit (633.28) (465.31) (435.95)

Unrecognised past service cost - - -

(Liabilities)/Assets recognized in the Balance Sheet (633.28) (465.31) (435.95)

I Principal actuarial assumptions as at Balance sheet date:Discount rate 6.69% 7.46% 7.77%[The rate of discount is considered based on market yield on Government Bonds having currency and terms in consistence with the currency and terms of the post-employment benefit obligations]Annual increase in salary cost 6.00% 6.00% 6.00%[The estimates of future salary increases are considered in actuarial valuation, taking into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market]Employee Attrition Rate (Past Services (PS)) H.O 6.50% 6.50% 6.50%

Gemplus 2.10% 2.10% 2.10%

Hyderabad 2.50% 2.50% 2.50%



Expected average remaining services H.O 9.59 9.67 9.58

Gemplus 15.25 14.13 13.82

Hyderabad 16.64 16.28 16.90

Expected Contributions to gratuity benefit plans for the year ending March 31, 2018 is ` 75.91 Lacs

Sensitivity analysis:March 31, 2017 Discount Rate Salary Escalation Rate

Increase 1% Decrease 1% Increase 1% Decrease 1%Impact on Statement of Profit and Loss 45.81 (52.66) (46.18) 42.15

II) Compensated absence (Long term employee benefit)

� A)� General Description:

The company has provided for liability towards leave salary based on actuarial valuation. The Company’s liability towards leave salary is determined on the basis of year end actuarial valuations applying the Projected Unit Credit Method done by an independent actuary.

B) Principal actuarial assumptions as at Balance sheet date:

March 31,2017 March 31,2016 April 1,2015

Discount rate 6.69% 7.46% 7.77%[The rate of discount is considered based on market yield on Government Bonds having currency and terms in consistence with the currency and terms of the post-employment benefit obligations]Annual increase in salary cost 6.00% 6.00% 6.00%[The estimates of future salary increases are considered in actuarial valuation, taking into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market]Employee Attrition Rate (Past Services) H.O 6.50% 6.50% 6.50%

Gem plus 2.10% 2.10% 2.10%Hyd 2.50% 2.50% 2.50%

Expected average remaining services H.O 9.59 9.67 9.57Gemplus 15.25 15.43 15.66Hyd 16.64 16.28 16.90

III) Defined Contribution Plans

The Company also has certain defined contribution plans. Contributions payable by the Company to the concerned Government authorities in respect of Provident Fund, Family Pension Fund and Employees State Insurance are charged related standalone Statement of Profit and Loss. The obligation of the Company is limited to the amount contributed and it has no contractual or any constructive obligation. Amount recognized during the year as contribution in related standalone statement of Profit & Loss is ` 128.31 Lacs and As at March 31, 2016 is ` 119.98 Lacs


137

Note: 49 Segment Reporting

The Management of the company identifies two major reportable segments viz. Diamond Business & Jewellery Business. Activity in diamond business includes manufacturing and export of cut & polished diamonds and sales in local market. Activity in jewellery business includes manufacturing and export of plain gold and diamond studded jewellery and manufacturing and sales in local market of branded and unbranded jewellery. All Business Assets are located in India.

(` in Lacs)

Particulars For Year Ended March 31, 2017 March 31, 2016

Primary Segment (By Business Segment)1. Segment Revenuea. Segment - Diamond 282,164.13 294,242.98b. Segment - Jewellery 777,730.63 790,168.52Total 1,059,894.76 1,084,411.50Less: Inter Segment sales 13,418.16 9,339.19Net Sales 1,046,476.60 1,075,072.31

2. Segment Results

Profit/(Loss) before Tax and interest from each segmenta. Segment – Diamond 1,174.51 2,017.16b. Segment – Jewellery 50,508.39 48,321.48Total 51,682.90 50,338.64Less: Interest 47,766.87 46,352.15Total Profit Before Exceptional Item & Tax 3,916.03 3,986.49

3. Capital Employed

Segment Assetsa. Segment – Diamond 296,073.08 413,568.89b. Segment – Jewellery 858,682.65 629,249.19c. Unallocated net assets 147,820.10 144,864.54Total 1,302,575.83 1,187,682.62

Segment Liabilities

a. Segment – Diamond 203,445.15 289,619.07b. Segment – Jewellery 696,002.31 296,611.53c. Unallocated net assets 54,598.37 64,251.62Total Capital Employed 954,045.83 850,482.22

348,530.00 337,200.40



Note: 50 Related Party Disclosures

A. List of related parties

1. Enterprises controlled by the Company

Aston Luxury Group Ltd. SubsidiaryDecent Investment and Finance Pvt. Ltd. SubsidiaryDecent Securities and Finance Pvt. Ltd. SubsidiaryEureka Finstock Pvt. Ltd. SubsidiaryGitanjali Infratech Ltd. SubsidiaryGitanjali Jewellery Retail Ltd. SubsidiaryGitanjali Lifestyle Ltd. SubsidiaryGitanjali USA Inc. SubsidiaryGitanjali Ventures DMCC SubsidiaryHyderabad Gems SEZ Ltd. SubsidiaryMMTC Gitanjali Ltd. SubsidiaryN & J Finstock Pvt. Ltd. SubsidiaryNakshatra World Ltd.(Formerly known as Gitanjali Brands Ltd.) SubsidiaryNashik Multi Services SEZ Ltd. SubsidiarySamuels Jewelers Inc. SubsidiaryAbbey USA LLC (Formerly Known as GGL Diamond LLC) Step Down SubsidiaryAbbeycrest ( Thailand) Ltd. Step Down SubsidiaryBezel Jewellery (India)Pvt.Ltd.(Formerly known as D'Damas Jewellery (India) Pvt.Ltd.)

Step Down Subsidiary

Crown Aim Ltd. Step Down SubsidiaryDiamlink Inc Step Down SubsidiaryDiamlink Jewelery Inc. Step Down SubsidiaryDynamic Infrazone Private Limited (Formerly known as Dynamic Multitrading Pvt. Ltd. (w.e.f 14th February 2017 ))

Step Down Subsidiary

Giantii Jewellery Trading (Shanghai) Co. Ltd. Step Down SubsidiaryGili India Ltd. Step Down SubsidiaryJewelery Marketing Company LLC Step Down SubsidiaryLeading Italian Jewels SRL Step Down SubsidiaryLeading Jewels of Japan K.K. Step Down SubsidiaryLJOW Holdings, LLC Step Down SubsidiaryMaya Retail Ltd. Step Down SubsidiaryNakshatra Brands Ltd. Step Down SubsidiaryTiaxin Diamonds(Shanghai) Co. Ltd. (upto 01st March 2017) Step Down SubsidiaryTri-Star Worldwide LLC Step Down SubsidiaryVidarbha Multi Products SEZ Limited Step Down Subsidiary

2. Key Managerial personnel(KMP)

Mr. Mehul C. Choksi Managing DirectorMs. Pankhuri Warange Company SecretaryMr. Chandrakan Karkare Chief Financial OfficerMr. Dhanesh V. Sheth DirectorMr. S. Krishnan DirectorMs. Nazura Muhammad Ajaney Director


139

3. Enterprises under common control of KMP

Audarya Investments Pvt. Ltd. Promoter CompanyCoronet Gems Pvt Ltd Promoter CompanyGitanjali Gold and Precious LLP. Promoter CompanyGitanjali Realtors LLP Promoter CompanyIvida Technologies Private Limited Promoter CompanyJoyce Trading (formerly known as Gitanjali Capital Ltd.) Promoter CompanyLJOW Private Limited Promoter CompanyMannat Jewellery Manufacturing Pvt.Ltd Promoter CompanyMast Jewellery Distributions LLP Promoter CompanyMerlyn Luxury Group Pte Ltd [formerly known as Leading Italian Jewels (Singapore) pte Ltd (upto 16th November 2016)]

Promoter Company

Midas Creations Partnership firm in which KMP is partner

Mobilenxt Teleservices Private Limited Promoter CompanyMozart Trading Pvt. Ltd. Promoter CompanyPartha Gems LLP Promoter CompanyPriyanka Gems Pvt. Ltd. Promoter CompanyRohan Diamonds Pvt. Ltd. Promoter CompanyShubhlavanyaa Jewel crafts Pvt. Ltd. Promoter CompanyEvergold Jewels Pvt. Ltd. Promoter CompanyThe Next Diamond Company (as HUF) Partnership firm in

which KMP is partner

4. Enterprises controlled by relatives of KMP

Diminco N.V. Company belonging to relative of KMP

Rohan Mercantile Pvt. Ltd. Company belonging to relative of KMP

Lustre Industries Private Limited Company belonging to relative of KMP

Naviraj Estate Pvt. Ltd. Company belonging to relative of KMP

5. JV/Associate Company

Jewelsouk Market Place Ltd. (Formerly known as e-Gitanjali Ltd.) AssociateImacbc Associate Company of

SubsidiaryGitanjali Jewels LLC JV of Subsidiary

6. Relatives of KMP Guniyal C. Choksi Mother of key Management Personnel

Amita R. Bhansali Sister of key Management Personnel



The Following transactions were carried out with the related parties in the ordinary course of business and at arm's length.A. Transactions with Related Parties.

(` in Lacs)Nature of Transaction Particular March 31,2017 March 31,2016Sales Enterprises Controlled by the Company 2,95,185.84 303,111.88

Key Managerial personnel - 0.24JV/ Associate Company 660.06 521.90

Sales Return Enterprises Controlled by the Company 29.26 -Purchase Enterprises Controlled by the Company 3,03,239.53 259,265.01

JV/ Associate Company 577.08 269.53Purchase Return Enterprises Controlled by the Company 135.04 1.39Purchase of Fixed Assets Enterprises Controlled by the Company - 9.80Consumable Sales Enterprises Controlled by the Company 1.40 -Consumable Purchase Enterprises Controlled by the Company 0.77 6.52Labour Charges Paid Enterprises Controlled by the Company 136.01 901.21Finance Income Enterprises Controlled by the Company 101.68 82.84Rent Paid Enterprises controlled by relatives of KMP 1.20 1.20

Enterprises Controlled by the Company 255.19 255.19Investments Enterprises Controlled by the Company 0.02 -Investments-additional paid in capital received back

Enterprises Controlled by the Company 670.34 3,624.03

Reimbursement of Expenses Enterprises Controlled by the CompanyJV/Associate Company

168.83-

2.580.14

Expenses Recovered Enterprises controlled by relatives of KMP 0.07 -Enterprises Controlled by the Company 829.49 3023.91Enterprises under common control of KMP 7.17 1.83JV/ Associate Company 1.33 226.56

Salary and Other PaymentsShort term employee benefits Key Managerial personnel 183.11 117.93

Post-employment benefits Key Managerial personnel - - Other benefits Key Managerial personnel - -Advance given(Net) Enterprises Controlled by the Company 1,006.59 9842.91

Enterprises under common control of KMP 268.63 66.27JV/ Associate Company - 507.18

Advance given received back Enterprises Controlled by the Company 256.14 3,845.51Enterprises under common control of KMP 146.55 66.83

Advance received (Net) Enterprises Controlled by the Company 1,852.39 -Enterprises under common control of KMP 0.05 -

Advance received given back Enterprises under common control of KMP - 808.27Loan repaid Key Managerial personnel 8,670.04 251.66Loan taken Key Managerial personnel - 1,618.60Corporate Guarantees given to the bankers for letter of credit facility

Enterprises Controlled by the Company 2,25,896.43 2,17,314.00


141

B. Balance Outstanding of Related Paties (` in.Lacs)

Nature of Transaction

Particular Year EndedMarch 31,2017 March 31,2016 April 1,2015

Trade payable Enterprises controlled by relatives of KMP 3,375.12 4,171.91 4,695.07Enterprises Controlled by the Company 59,115.45 80,476.16 29,737.28Enterprises under common control of KMP 0.33 0.33 0.33

Trade Receivable Enterprises Controlled by the Company 1,98,778.03 223,396.04 1,09,440.76Enterprises controlled by relatives of KMP - 797.99 1,895.18JV/ Associate Company 1,671.99 528.16 -

Receivable from redeemable preference shares

Enterprises Controlled by the Company 745.60 912.75 811.07

Loans & Advances to Related Party

Enterprises Controlled by the Company 22,237.43 27,882.68 22,669.65Enterprises under common control of KMP 768.72 645.76 9.35JV/ Associate Company - 71.96 729.49

Loans & Advances from Related Party

Enterprises Controlled by the Company 4,178.29 3,374.69 3,840.72Key Managerial personnel 1,636.66 10,306.71 8,940.01Relatives of key Managerial personnel 135.00 135.00 135.00

Advances from Customer

Enterprises Controlled by the Company 1,852.39 53.07 0.02Enterprises under common control of KMP 0.05 - 827.14

Advances to Supplier

Enterprises under common control of KMP 7.51 7.51 4,038.92Enterprises Controlled by the Company - 9203.50 1,074.39JV/ Associate Company - 1164.71 -

Advances received Enterprises Controlled by the Company - 45.25 -

Note: 51 DemonetizationDemonetization: As per MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes(SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the SBNs and other notes as per the notification is given below:

( ` in Lacs)

ParticularsSBNs(1) Other

denomination notes (2)

Total ` (1+2)

Closing cash in hand as on November 8, 2016 46.93 13.09 60.02(+) Permitted receipts - 15.54 15.54(-) Permitted payments - (15.25) (15.25)(-) Amount deposited in Banks (46.93) (0.19) (47.12)Closing cash in hand as on December 30, 2016 - 13.19 13.19

For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.



Note: 52 Particulars of Remuneration to Managing Directors & Executive Director during the year

(` in Lacs)

Managing Director March 31,2017 March 31,2016Salary & Other Allowances 110.00 48.00Contribution to PF NIL NILOther Perquisites NIL NILTotal 110.00 48.00

(` in Lacs)

Independent Director March 31,2017 March 31,2016Director Sitting Fees 5.89 3.86

The computation of Net profit under section 198 of the Companies Act 2013 has not been given since no commission is paid or payable to any director during current year.

The managing Directors remuneration of ` 48 Lacs pa, was approved by the Shareholders in the meeting held on September 28, 2012 for a period of five years ending 31st July, 2017. The Board of directors vide resolution dated December 14, 2016 has approved enhanced remuneration to Managing Director from ̀ 48 Lacs p.a. to ̀ 110 Lacs p.a. for remaining period, keeping all other terms and conditions unchanged. For Financial Year 2016-17 the remuneration is in excess by ` 62 Lacs. The increase in remuneration is subject to subsequent approval and ratification by the shareholders of the Company in the Next General Meeting.

Note: 53 Interest Cost

Interest received during the year was ` 779.28 Lacs (March 31, 2016 ` 886.51 Lacs) and Tax Deducted at Source from interest income was ` 75.16 Lacs (March 31, 2016 ` 91.73 Lacs) for the year ended March 31, 2017.

Note: 54 Deferred Tax Assets & Liabilities as at.a) Reconciliation of effective tax rate

(` in Lacs)

Particulars

For the year ended

Mar 31, 2017

For the year ended

Mar 31, 2016Profit before tax 3,916.03 3,986.49Company's domestic tax rate (current year 34.608% and previous year 34.608%) 34.608% 34.608%Tax on profit before tax 1,355.26 1,379.65Tax effect of:Expenditure in the nature of permanent disallowances/(allowances) [Net] 20.01 193.16Unabsorbed loss and depreciation on which deferred tax not created (1,850.09) (2,057.07)Tax adjustment of prior period 154.45 8.38Others 264.23 (23.30)Deferred tax (56.15) (499.18)

The Company's effective tax rate for the year ended March 31 ,2017 is 1.43% (for March 31,2016 was 12.52%).Income tax income is ` 56.15 Lacs For the year ended March 31,2017 (` 499.18 Lacs For the year ended March 31,2016).


143

(b)� Deffered Tax

(i) �Break up of Deferred Tax Liabilities and Assets into major components of the respective balances are as under:

(` in Lacs)

Particulars As at April 1,

2015

Chargefor year

As atMarch 31,

2016

Charge for year

As atMarch 31,

2017Deferred Tax Liabilities:Impact on statement of profit and lossDeferred tax on unamortised processing fees 238.49 (84.78) 153.71 (65.65) 88.06Deferred tax on fair valuation of forward contract export 50.95 186.03 236.98 329.18 566.16Deferred tax on gain on Mutual Fund 11.02 (3.72) 7.30 - 7.30Deferred tax on differences in depreciation as per tax books and financial books 9,152.07 (612.40) 8,539.67 (437.97) 8,101.70Total Impact on statement of profit and loss 9,452.53 (514.87) 8,937.66 (174.44) 8,763.22Impact on statement on other comprehensive income - - - - -Deferred Tax on actuarial gain/loss of post employment benefit plan - 8.38 8.38 (29.43) (21.06)Total Impact on other comprehensive income - 8.38 8.38 (29.43) (21.06)Total Deferred Tax Liabilities [A] 9,452.53 (506.50) 8,946.04 (203.87) 8,742.17Deferred Tax Assets:Impact on statement of profit and lossDeferred tax on Fair valuation of interest swap 36.83 (16.01) 20.81 (11.38) 9.43Deferred tax on Provision for leave salary/gratuity 171.29 8.70 179.99 47.54 227.54MAT Credit Entitlement 11,901.00 1,102.20 13,003.20 1,135.00 14,138.20Total Impact on statement of profit and loss 12,109.12 1,094.89 13,204.01 1,171.16 14,375.17Total Impact on other comprehensive income - - - - -Total [B] 12,109.12 1,094.89 13,204.01 1,171.16 14,375.17Net Deferred Tax Asset/ ( Liabilities) [B-A] 2,656.59 1,601.38 4,257.97 1,375.03 5,633.00

i) Deferred Tax Income/(Expense) of ` 1,345.06 Lacs [March 31,2016: ` 1,609.76 Lacs] for the year has been provided in the Statement of Profit and Loss and ` 29.43 Lacs [March 31,2016: (` 8.38 Lacs)] for the year has been provided in other comprehensive income.

ii) Deferred Tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realized.



iii) MAT credit can be carried forward for a period of 10 years. However as per Budget 2017, the period for carry forward has been revised to 15 years. Details of the same are as follows:

Year ` in Lacs Expiry DateAY 2011-12 5,385.00 AY 2026-27AY 2012-13 6,105.00 AY 2027-28AY 2014-15 411.00 AY 2029-30AY 2015-16 1,102.20 AY 2030-31AY 2016-17 1,135.00 AY 2031-32

iv) The Company has the following unused tax losses which arose on incurrence of Long Term Capital Losses, Depreciation and Ordinary Business Losses under the Income Tax Act, 1961, for which no deferred tax asset has been recognised in the Balance Sheet.

(` in Lacs)

Assessment Year Particulars March 31,2017 March 31,2016 April 1,2015 Expiry Date2013-14 Long term capital loss 119.07 119.07 119.07 AY 2021-222014-15 Long term capital loss 379.67 379.67 379.67 AY 2022-232015-16 Long term capital loss 0.92 0.92 0.92 AY 2023-242012-13 Depreciation 311.85 311.85 332.88 Indefinite2013-14 Depreciation 489.09 489.09 489.09 Indefinite2014-15 Depreciation 519.38 519.38 519.38 Indefinite2012-13 Ordinary business loss - - 752.60 AY 2020-212013-14 Ordinary business loss 21,397.65 21,397.65 20,642.12 AY 2021-222014-15 Ordinary business loss 3,205.91 3,205.91 3,205.91 AY 2022-23

Note:55 Value of import on CIF basis

(` in Lacs)Particulars March 31,2017 March 31,2016Diamonds & Jewellery 734,740.31 456,442.90

Expenditure in foreign currency (` in Lacs)

Particulars March 31,2017 March 31,2016Foreign travelling 137.35 156.35Others 3,556.96 4,099.63Total: 3,694.32 4,255.98

Earnings in foreign currency (` in Lacs)

Particulars March 31,2017 March 31,2016FOB value of exports 732,149.19 548,402.25


145

Disclosure of Foreign Currency Exposures:

The details of outstanding foreign currency exposure of the company as at March 31, 2017 are as under:

Particulars USD(In Million)

A.Covered by Forward ContractDebtors 57.12Creditors 17.48B. Covered by Foreign bill purchasedDebtors 210.02C. Not Covered by Forward ContractDebtors 683.20Creditors 714.01ECB 71.37Bank Facility 202.73

Note: Forward contracts for debtors and creditors are not intended for trading or speculation.

Note: 56 Disclosure of Loans to Subsidiaries, Associates and Others

Pursuant to Para A of Schedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

( ` in Lacs)

March 31,2017 March 31,2016Name of the Company Amount

outstandingMaximum O/s. during the year

Amount outstanding

Maximum O/s. during the year

Decent Securities and Finance Pvt. Ltd. 849.93 881.93 875.13 907.64Eureka Finstock Pvt. Ltd. 1,020.89 1,051.69 1,046.58 1,077.72Gitanjali Infratech Ltd. 11,168.69 11,168.69 1,0162.10 1,0162.10Gitanjali USA INC - 9.12 9.12 9.12Gitanjali Ventures DMCC - 4.97 4.97 4.97Hyderabad Gems SEZ Ltd. 6,111.87 6,473.79 6,418.59 6,510.17Decent Investment and Finance Pvt. Ltd. 271.54 305.82 295.99 329.73Maya Retail Limited - 5,989.93 5,989.93 5,990.71Mobilnext Teleservices Pvt Ltd. 130.42 130.42 130.41 130.41N & J Finstocks Pvt. Ltd 1,971.74 2,004.09 1,998.71 2,031.35Nashik Multi Services SEZ Ltd. 831.32 831.38 827.15 827.15Tri Star Worldwide LLC - 254.43 254.43 254.43Jewelsouk Marketplace Ltd. - 71.96 71.96 71.96Gitanjali Gold And Precious LLP 360.81 507.36 507.36 507.36Shubhalavanyaa Jewel Crafts Pvt. Ltd. 8.28 8.28 - -Priyanka Gems Pvt. Ltd. 23.37 2,049.77 - -Rohan Diamond Pvt. Ltd. 244.98 247.48 - -Vidarbha Multi Products SEZ limited 11.21 11.21 - -



Considering that the subsidiaries overseas and domestic have been formed for promoting company’s business, the above Loans to its various subsidiaries are interest free and carry no stipulation as to repayment.

The Company has not given loans for a term exceeding 7 years. Accordingly, the terms and conditions of these loans are not prejudicial to the interest of the company and the management is of the opinion that these are compliant with the provisions of sec 185 of the Companies Act 2013.Some of these loans were given under the provisions of Section 372 of the Companies Act 1956.These loans are not in conformity with the provision of Section 186 of the Companies Act 2013.

In respect of few of its subsidiaries efforts are being made to recover the loans, however due to financial weakness of those subsidiaries they are unable to repay and regularize the Loans.

Under the aforesaid circumstances, the holding company is looking at various options to regularize the loans.

Auditors have relied on the Management’s representation.

Note: 57 Financial Instruments – Fair Values and Risk Management

A. Accounting classification (` in Lacs)

March 31, 2017 fair value through profit or loss

fair value through OCI

Amortised Cost Total

Financial assets - Non CurrentInvestments - 835.15 - 835.15Loans - - 1,235.50 1,235.50Others - - 2,885.23 2,885.23Financial assets - CurrentTrade Receivables - - 856,701.75 856,701.75Cash and Cash Equivalents - - 6,221.06 6,221.06Other Bank Balances - - 11,326.52 11,326.52Loans - - 23,140.67 23,140.67Others - 1,222.53 1,222.53Derivatives 1,573.92 - - 1,573.92Total Financial Assets 1,573.92 835.15 902,733.26 905,142.33Financial liabilities - Non CurrentBorrowings - - 27,740.25 27,740.25Financial liabilities – CurrentWorking Capital Loan - - 499,396.66 499,396.66Trade Payables - - 385,940.73 385,940.73Others - 33,114.32 33,114.32Derivatives 27.25 - - 27.25Total Financial Liabilities 27.25 - 946,191.96 946,219.21


147

(` in Lacs)

March 31, 2016 fair value through profit or loss



Financial assets - Non CurrentInvestments 550.05 600.86 - 1,150.91Loans - - 1,596.47 1,596.47Others - - 4,043.07 4,043.07Financial assets - CurrentTrade Receivables - - 691,014.82 691,014.82Cash and Cash Equivalents - - 3,710.42 3,710.42Other Bank Balances - - 9,718.38 9,718.38Loans - - 28,690.47 28,690.47Others - 156.52 156.52Derivatives 693.94 - - 693.94Total Financial Assets 1,243.99 600.86 738,930.15 740,775.00Financial liabilities - Non CurrentBorrowings - - 57,810.84 57,810.84Financial liabilities – CurrentWorking Capital Loan - - 500,801.12 500,801.12Trade Payables - - 154,865.29 154,865.29Others - - 19,975.52 19,975.52Derivatives 69.34 - - 69.34Total Financial Liabilities 69.34 - 733,452.77 733,522.11

(` in Lacs)

April 1, 2015 fair value through profit or loss



Financial assets - Non CurrentInvestments 580.44 600.86 - 1,181.30Loans - - 4,256.68 4,256.68Others - - 3,293.86 3,293.86Financial assets - CurrentTrade Receivables - - 665,711.10 665,711.10Cash and Cash Equivalents - - 690.98 690.98Other Bank Balances - - 12,575.94 12,575.94Loans - - 23,379.48 23,379.48Others - 980.84 980.84Derivatives 147.22 - - 147.22Total Financial Assets 727.66 600.86 710,888.88 712,217.40Financial liabilities - Non CurrentBorrowings - - 69,883.15 69,883.15Financial liabilities – CurrentWorking Capital Loan - - 513,897.86 513,897.86Trade Payables - - 171,800.16 171,800.16Others - - 12,099.01 12,099.01Derivatives 106.41 - - 106.41Total Financial Liabilities 106.41 - 767,680.18 767,786.59



B. Fair value Measurement

All assets and liabilities for which the fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 – Inputs are quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Particulars Level 1 Level 2 Level 3 TotalApril 1,2015Financial assets :Investment at FVTPLMutual Fund - 580.44 - 580.44Investment at FVTOCIInvestments in equity instruments - 600.86 - 600.86Derivative not designated as hedgeForward - 147.22 - 147.22Total financial assets - 1,328.52 - 1,328.52Financial Liabilities :Derivative not designated as hedgeInterest Swap - 106.41 - 106.41Total financial liabilities - 106.41 - 106.41

Particulars Level 1 Level 2 Level 3 TotalMarch 31,2016Financial assets :Investment at FVTPLMutual Fund - 550.05 - 550.05Investment at FVTOCIInvestments in equity instruments - 600.86 - 600.86Derivative not designated as hedgeForward - 693.94 - 693.94Total financial assets - 1,844.85 - 1,844.85Financial Liabilities :Derivative not designated as hedgeInterest Swap 60.14 60.14Forward - 9.20 - 9.20Total financial liabilities - 69.34 - 69.34


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Particulars Level 1 Level 2 Level 3 TotalMarch 31,2017Financial assets :Investment at FVTPLMutual Fund - - - -Investment at FVTOCIInvestments in equity instruments - 835.15 - 835.15Derivative not designated as hedgeForward - 1,573.92 - 1,573.92Total financial assets - 2,409.06 - 2,409.06Financial Liabilities :Derivative not designated as hedgeInterest Swap - 27.25 - 27.25Total financial liabilities - 27.25 - 27.25

Financial instruments measured at amortised cost:

The carrying value approximates fair value for long term financial assets and liabilities measured at amortised cost. There are no transfers during the year in level 1, 2 and 3. The Company policy is to recognize transfers into and transfers out of fair value hierarchy level as at the end of reporting period.

C. Financial risk management

Risk management framework

The Company’s board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company has exposure to the following risks arising from financial instruments:

i. Credit risk

ii. Liquidity risk and

iii. Market risk

i. Credit risk Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay

amounts due to the Company causing financial loss. It arises from cash and cash equivalents, deposits with banks and financial institutions, security deposits, loans given and principally from credit exposures to customers relating to outstanding receivables. The Company's maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at reporting date.

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. The Company’s policy is to deal only with creditworthy counterparties.



In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. The Company has very limited history of customer default, and considers the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and cash equivalents, mutual funds, bank deposits, loans and derivative financial instruments is considered negligible, since the counterparties are reputable organisations with high quality external credit ratings.

Company provides for expected credit losses on financial assets by assessing individual financial instruments for expectation of any credit losses. Since the assets have very low credit risk, and are for varied natures and purpose, there is no trend that the company can draws to apply consistently to entire population. For such financial assets, the Company's policy is to provide for 12 month expected credit losses upon initial recognition and provides for lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.Reconciliation of loss allowance provision-Trade receivableParticulars ` in LacsLoss allowances on April 1,2015 -Changes in Loss allowances 247.96Loss allowances on March 31,2016 247.96Changes in Loss allowances -Loss allowances on March 31,2017 247.96

ii. Liquidity risk

Liquidity Risk is defined as the risk that the Company will not be able to settle or meets its obligations on time at a reasonable price In addition; processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity through rolling forecasts of expected cash flows.

Exposure to liquidity risk

The table below is an analysis of Company’s financial liabilities based on their remaining contractual maturities of financial liabilities at the reporting date.

(` in Lacs)

March 31, 2017Contractual cash flows

Within 1 year 1 year and above

Non-derivative financial liabilities :Borrowings 34,033.60 29,657.20Working Capital Facilities from Banks 500,280.38 -Trade payables 385,940.73 -Other Financial Liabilities 11.90 -Financial Guarantee (Contingent Liability) 219,708.88 -Derivative Financial liabilities :Interest Swap 27.25 -


151

( ` in Lacs)



Non-derivative financial liabilities :Borrowings 22,245.06 61,531.91Working Capital Facilities from Banks 501,047.42 -Trade Payables 154,865.29 -Other Financial Liabilities 14.25 -Financial Guarantee (Contingent Liability) 303,178.00 -Derivative Financial liabilities :Interest Swap 60.14 -Forward Contract 9.20 -

(` in Lacs)



Non-derivative financial liabilities :Borrowings 13,558.89 75,596.35Working Capital Facilities from Banks 514,665.34 -Trade Payables 171,800.16 -Other Financial Liabilities 16.27 -Financial Guarantee (Contingent Liability) 330,581.50 -Derivative Financial liabilities :Interest Swap 106.41 -

iii. Market risk

Market risk is the risk that changes in market prices that will affect the Company’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments.

a. Currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency. The Company as per its overall strategy uses forward contracts to mitigate its risks associated with fluctuations in foreign currency such contracts are not designated as hedges under Ind AS 109. The Company does not use forward contracts and swaps for speculative purposes.

Sensitivity analysis

A reasonably possible strengthening /weakening of the Indian Rupee against US dollars at March 31 would have affected the measurement of financial instruments denominated in US dollars and affects profit or



loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Particulars Impact on statement of profit and loss (Net of tax)

March 31,2017 March 31,2016INR/USD Strengthening [4%Movement (Previous year 5%)] (1,647.90) (1,923.61)INR/USD Weakening [4%Movement (Previous year 5%)] 1,647.90 1,923.61

b. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.

Sensitivity Below is the sensitivity of profit or loss to changes in Interest rates.

Particulars Impact on statement of profit and loss (net of tax)

March 31, 2017 March 31, 2016 Interest sensitivity* - -Interest rates – increase by 100 basis points (100 bps) (3,350.09) (3,657.31)Interest rates – decrease by 100 basis points (100 bps) 3,350.09 3,657.31

Holding all other variable constant.

Note: 58 Business Combinations

The Amalgamated Financial statement have been prepared to give effect to the merger of Gitanjali Exports Corporation Limited with the company as per the order of the Hon. High Court of Bombay

Scheme of Amalgamation:

The Board of Directors of the Company in its meeting held on 21st April 2015 considered and approved a Scheme of Amalgamation (“the Scheme”) between Gitanjali Export Corporation Limited and “Gitanjali Gems Limited” under Sections 391 to 394 of the Companies Act, 1956. As per the Scheme, all the businesses, properties, assets, liabilities of “Gitanjali Export Corporation Limited” (‘Transferor Company’) have been transferred to the Company, on a going concern basis and have been consolidated with the properties, assets, liabilities of the Company

The Shareholders of Gitanjali Gems Limited and Gitanjali Export Corporation Limited approved the Scheme on 15th October, 2015 respectively. The Scheme was approved by the Hon. High Court of Bombay on 17th June 2016. The certified copies of the aforementioned orders approving the Scheme are filed with the Registrar of Companies, N.C.T. of Mumbai on 24th August, 2016. On date the Scheme is effective from the Appointed Date i.e. 1 April, 2014 as per the Hon. High Court Bombay.

The financial impact of the Scheme referred to above on the Amalgamated financial statements is as follows:


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Transfer of businesses, properties, assets, liabilities of Gitanjali Export Corporation Limited

As per the Scheme “Gitanjali Export Corporation Limited” businesses, properties, assets, liabilities and the undertakings were transferred to the Company, as a going concern. The details of the assets and liabilities of “Gitanjali Export Corporation Limited” transferred to the Company at its book value as at the appointed date is mentioned below:

(` in Lacs)

Particulars Amount Amount1.Non-current assets

Fixed assets 570.31Non-Current Investment 548.59Deferred tax assets(net) 37.48Long-term loans and advances 693.45Other non-current assets 2,848.95 4,698.78

2.Current assetsInventories 36,478.08Trade receivables 140,986.14Cash and cash equivalents 5,469.00Short-term loans and advances 6,678.79 189,612.01

3. Total assets (1+2) 194,310.794. Non-current liabilities

Long Term Borrowing 2,660.62Long-term provisions 132.88 2,793.51

5. Current liabilitiesShort Term Borrowing 78,154.30Trade payables 53,752.30Other current liabilities 2,647.56Short-term provisions 17.50 134,571.66

6.Total liabilities (4+5) 137,365.17Net value of assets transferred (3-6) 56,945.62

i. Since the subsidiary amalgamated was wholly owned subsidiary of the Company, there was no exchange of shares to effect the amalgamation. The difference between the amounts recorded as investments of the Company and the amount of share capital of the aforesaid amalgamating subsidiaries have been adjusted in the reserves.

ii. As per the Scheme, during the intervening period (i.e. 2014-15 and 2015-16), Gitanjali Export Corporation Limited was deemed to have been carrying on all business and activities on behalf of the Company and all profits or losses was to be treated as the profits or losses of the Company. Accordingly the Statement of Profit and Loss included profit of ` 214.91 Lacs for the period 2014-15.

iii. The amalgamation has been accounted for under the “Pooling of Interests” method, as prescribed by Accounting Standard 14, “Accounting for Amalgamations’, in Previous GAAP, as required under the scheme of amalgamation.

Note: 59 Capital Management:

a) The primary objective of the company's capital management is to maximize the shareholders, safeguard its ability to continue as a going concern and reduce its cost of capital. Company is focused on keeping strong total equity



base to ensure independence, security as well as high financial flexibility for potential future borrowings required if any. Company’s capital for capital management includes long term debt and total equity. As at March 31, 2017 total capital is ̀ 3,76,270.25 Lacs (` 3,95,011.24 Lacs and ̀ 3,99,349.91 Lacs for March 31,2016 and April 1,2015 respectively). No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2017, March 31, 2016 and April 1, 2015.

b) Dividend (` in Lacs)

Particulars March 31,2017 March 31,2016 April 1,2015(i) Equity sharesFinal dividend for the year ended March 31, 2016 of 0.5 per share approved in FY 2016-17 - 512.19 -

(ii) Dividend not recognised at the end of the reporting period

In addition to the above dividends, since year end the directors have recommended the payment of a final dividend of Rs.0.8 per fully paid equity share. This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

948.93 - -

Note : 60 Undisputed Statutory Dues Outstanding for period over 180 Days

There is no undisputed statutory due outstanding over 180 days for March 31, 2017 (March 31, 2016: ` 1,759.92 Lacs & March 31, 2015: ` 2,533.44 Lacs)

Note : 61 Investor Education & Protection Fund

There has been no delay in transferring amount required to be transferred to Investor Education and Protection Fund by the Company.

Note : 62

Previous year’s figures have been regrouped/rearranged/reworked wherever necessary and possible so as to confirm to current year’s classification.

Signatures to Significant Accounting Policies and Notes 1 to 62 to the Financial Statements





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INDEPENDENT AUDITORS’ REPORT ON CONSOLIDATED IND AS FINANCIAL STATEMENTS

TO THE MEMBERS OF GITANJALI GEMS LIMITED

We have audited the accompanying consolidated Ind AS financial statements of GITANJALI GEMS LIMITED (“the Company”) and its subsidiaries (the Company and its subsidiaries constitute the “Group”) and its associate which comprise the Consolidated Balance Sheet as at 31st March, 2017, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Cash Flow Statement, the Consolidated Statements of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).

Management’s Responsibility for the Consolidated Ind AS Financial StatementsThe Holding Company’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the 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 including its Associate in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group and of its Associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and its Associates and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Ind AS 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 Ind AS financial statements by the Directors of the Holding Company, as aforesaid. Auditors’ ResponsibilityOur responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. In conducting the 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 Ind AS 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 Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement in preparation of the consolidated 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 the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors and the Boards of its subsidiaries in the Group, as well as evaluating the overall presentation of the consolidated Ind AS financial statements. We believe that the audit evidence is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.OpinionIn our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated Ind AS financial statements of the Group give the information required by the Act in the manner so required and gives a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group and its Associates as at 31st March, 2017, and their consolidated profit, (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 matterWe draw attention toa. Note No. 46 A (a) relating to 12% Non-Convertible Debenture issued to LIC of India where the company has not paid

overdue principal and interest aggregating to Rs 348.94 Lakhs. Further, the company has not created liquid assets of ` 148 Lakhs as required under Rule 18 (7) (c) of the company’s (Share capital & Debenture) Rule 2014 in respect of debentures installments maturing during the following year;

b. Note No.46 A (b) 46 B (b) relating to overdue principal and Interest of ECBs: (i) principal of USD 8.75 million (equivalent Rs 5674.38 Lakhs ) and interest of USD 0.97 million (equivalent Rs

631.71 Lakhs) to ICICI ECB and(ii) principal of USD 0.73 million (equivalent Rs 474.99 Lakhs ) to IDBI(BOB portion) ECB;

c. Note No.46 B (b) relating to ICDs availed from SICOM by one of the subsidiary where interest of ` 10.46 Lakhs is overdue as at 31st March 2017.

d. Note No. 46 B (a) relating to overdrawn position in the working Capital borrowing of the Group entities from their respective consortium of bankers aggregating to ` 6,648.94 lakhs as compared with sanctioned limit;

e. Note No.54 relating to non- payment of Income Tax dues by Group of ` 1,458.92 Lakhs and other statutory dues amounting to Rs 542.25 Lakhs.

f. Note No. 37(7) relating to non redemption of redeemable preference shares due for redemption by one of the subsidiary for which the subsidiary is considering option to extend the due date.

(As fully described in respective notes)Our opinion is not qualified in respect of above matters.Other Matters1. We did not audit the financial statements of 6 (six) subsidiaries included in the consolidated Ind AS financial statements

whose financial statements reflect total assets of Rs 193,167.86 Lakhs as at 31st March 2017,the total revenue of ` 97,812.80 Lakhs for the year April 1, 2016 to March 31, 2017. These financial statements have been audited by others whose reports have been furnished to us, and our opinion on Consolidated Ind AS financial statements have been derived from such financial statements is based solely on the report of such auditors.

2. The consolidated financial statements also contain the unaudited financial information in respect of 17 ( seventeen) subsidiaries and 1(one) associates whose unaudited financial information reflect total assets of ` 320.618.02 Lakhs as at 31st March 2017 and total revenue of ` 196,763.19 Lakhs for the year ended on that date, as considered in the financial statements. The above mentioned unaudited financial information of the subsidiaries/associate 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 entities and our report in terms of sub-sections 3 and 11 of sections 143 of the Act, in so far as it relates to the aforesaid subsidiaries is based solely on such unaudited financial information.

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 the financial statements certified by the Management.

Report on Other Legal and Regulatory Requirements1. As required by Section143(3) of the Act, 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 purposes of our audit of the aforesaid consolidated Ind AS financial statements of the Group.

157

(b) In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements of the Group have been kept so far as it appears from our examination of those books.

(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Cash Flow Statement and the Consolidated Statement of changes in equity of the Group dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements.

(d) In our opinion the aforesaid consolidated Ind AS financial statements of the Group comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors of the holding Company and its subsidiaries as on 31st March, 2017 taken on record by the Board of Directors of the Holding Company and its subsidiaries, none of the directors of the Holding and Subsidiary Companies are disqualified as on 31st March, 2017 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 Group and the operating effectiveness of such controls, refer to our separate Report in Annexure A which is based on auditor’s report of holding company, subsidiaries and associate incorporated in India. Our report expresses an unqualified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting of the holding Company, its subsidiaries and associate incorporated in India.

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:i. The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated

financial position of the Group. Refer Note No 40 to Consolidated Ind AS financial statement. ii. The Group, did not have any material foreseeable losses on long-term contracts including derivative

contracts. Refer Note No 25 to Consolidated Ind AS financial statement. iii. There has been no delay in transferring amounts required to be transferred to Investor Education and

Protection Fund by Holding Company and its subsidiaries, associate incorporated in India.iv. The Holding Company and its subsidiaries and associate incorporated in India have provided requisite

disclosures in Note 43 to these consolidated Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation of the Holding Company regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Group and as produced to us by the Management of the Holding Company and based on the consideration of report of other auditors, referred to in the Other Matters paragraph above.

For FORD RHODES PARKS & CO.LLP Chartered Accountants ICAI FRNo. 102860W/W100089

A.D.SHENOYDate : May 30, 2017 PartnerPlace: Mumbai Membership No. 11549


ANNEXURE A

[Referred to in paragraph pertaining to “Report on Other Legal and Regulatory Requirement” of our Report of even date to the members of Gitanjali Gems Limited on the Consolidated Ind AS financial statements for the year ended 31st March, 2016]

Report on the Internal Financial Controls under Clause (i) 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 GITANJALI GEMS LIMITES (“the Company”) and its subsidiaries (the Company and its subsidiaries constitute the “Group”) and its associate as of March 31, 2017 in conjunction with our audit of the Consolidated Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Respective Board of Director’s of Holding Company’s and its subsidiary Companies are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by these entities considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (IFCOFR) issued by the Institute of Chartered Accountants of India. 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 Holding 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 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 judgments, 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 Group’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A 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

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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.

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.

Opinion

In our opinion and to the best of our information and according to the explanation given to us, the Holding Company ,its subsidiaries and its associate incorporated in India have, 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, 2017, based on the internal control over financial reporting criteria established by these entities 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.

For FORD RHODES PARKS & CO.LLP Chartered Accountants ICAI FRNo.102860W/W100089

A.D. ShenoyPlace: Mumbai PartnerDate: 30th May 2017 Membership No.11549


CONSOLIDATED BALANCE SHEET AS AT MARCH 31,

(` in Lakhs)Particulars Note As at

No. March 31, 2017 March 31, 2016 April 1, 2015ASSETSNon-Current AssetsProperty, Plant and Equipment 3 184,300.89 184,851.58 185,851.41 Capital Work-In-Progress 3 4,013.23 8,056.09 8,103.16 Goodwill 4 21,720.03 18,697.06 17,910.45 Other Intangible Assets 4 46,806.84 48,465.14 49,018.15 Investments accounted for using the Equity Method 5 1,306.32 1,334.62 1,397.23 Financial Assetsi) Investments 6 4,875.34 3,611.81 4,084.00 ii) Loans 7 8,812.85 2,027.70 14,787.15 iii) Other Non Current Financial Assets 8 1,758.82 6,760.99 4,073.76 Deferred tax assets [Net] 53 7,162.43 4,255.62 - Other Non-Current Assets 9 1,397.96 8,897.69 6,747.20

282,154.71 286,958.30 291,972.52 Current AssetsInventories 10 717,194.73 572,271.00 519,531.60 Financial Assetsi) Trade Receivables 11 1,282,866.04 1,154,268.73 991,579.31 ii) Cash and Cash Equivalents 12 8,656.67 7,849.92 10,164.27 iii) Other Bank Balance 13 19,888.72 17,877.98 15,603.60 iv) Loans 14 8,293.70 44,853.81 9,649.37 v) Other Current Financial Assets 15 4,736.91 2,155.29 11,770.72 Current Tax Assets [Net] 16 4,841.40 479.28 1,650.95 Other Current Assets 17 25,261.86 10,812.46 16,890.46

2,071,740.03 1,810,568.47 1,576,840.28 Total Assets 2,353,894.74 2,097,526.77 1,868,812.80 EQUITY AND LIABILITIESEquityEquity Share Capital 18 11,861.60 10,243.77 9,812.05 Other Equity 644,370.58 622,330.14 602,950.27

656,232.18 632,573.91 612,762.32 Non-Controlling Interests 4,300.64 4,820.76 4,471.38

660,532.82 637,394.67 617,233.70 LiabilitiesNon-Current LiabilitiesFinancial Liabilitiesi) Borrowings 19 37,630.98 67,481.36 79,504.58 ii) Other Non Current Financial Liabilities 20 - 2,394.50 6,040.46 Deferred Tax Liabilities [Net] 53 - - 181.43 Other Non-Current Liabilities 21 209.90 15,806.29 56.40 Employee Benefit Obligation 22 1,209.83 982.02 828.76

39,050.71 86,664.17 86,611.63 Current LiabilitiesFinancial Liabilitiesi) Borrowings 23 757,400.22 746,423.39 794,814.60 ii) Trade Payables 24 824,553.57 575,710.21 330,273.67 iii) Other Financial Liabilities 25 44,251.00 36,000.42 22,186.80 Employee Benefit Obligation 26 180.49 133.55 119.01 Current Tax Liabilities [Net] 27 4,505.24 1,581.70 1,466.16 Other Current Liabilities 28 23,420.69 13,618.66 16,107.23

1,654,311.21 1,373,467.93 1,164,967.47 Total Equity and Liabilities 2,353,894.74 2,097,526.77 1,868,812.80 Significant Accounting Policies 1 Notes to the Consolidated Financial Statements 2 to 59Significant Accounting Policies and Notes attached thereto form an integral part of Consolidated Financial StatementsAs per our attached report of even date For and on behalf of the BoardFor FORD RHODES PARKS & Co. LLPChartered AccountantsICAI FR No.102860W/W100089

A.D.SHENOY Partner Membership No.11549

Mehul C. Choksi Chairman & Managing Director

Dhanesh Sheth Director

Pankhuri Warange Company Secretary

Chandrakant Karkare Chief Financial Officer

Mumbai, Dated: May 30, 2017

161

CONSOLIDATED STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED MARCH 31,

(` in Lakhs)Particulars Note

No.Year ended

March 31, 2017 March 31, 2016REVENUE

Revenue From Operations 29 1,657,286.62 1,398,449.37 Other Income 30 25,857.35 17,471.49Total Revenue 1,683,143.97 1,415,920.86

EXPENSESPurchases of Stock in Trade and Raw Material 31 1,661,597.46 1,319,318.91 Changes in Inventories of Finished Goods and Stock in Trade 32 (147,748.11) (39,549.57)Excise Duty 217.46 - Employee Benefits Expense 33 31,157.57 27,344.44 Finance Costs 34 69,394.27 72,986.54 Depreciation and Amortisation Expenses 3 7,496.47 8,101.89 Other Expenses 35 44,888.75 17,936.50 Total Expenses 1,667,003.87 1,406,138.71

Profit before Tax 16,140.10 9,782.15 Less: Tax Expense

Current tax 3,903.98 3,638.24 Deferred Tax (4,447.26) (4,415.99)

(543.28) (777.75)Profit after tax before share of profit / (loss) of equity accounted investees 16,683.38 10,559.90

Share of Profit / (Loss) of equity accounted investees - (99.00)Profit after Tax 16,683.38 10,460.90OTHER COMPREHENSIVE INCOME:

Items that will not to be reclassified to profit or loss in subsequent periodsRemeasurements of the defined benefit plans (140.23) 136.49Fair Value of Equity Instruments accounted through Other Comprehensive Income 995.48 (532.76)Income tax relating to items that will not be reclassified to profit or loss 53.36 (38.94)

Items that will be reclassified to profit or loss in subsequent periodsExchange differences on translation of financial statements of a foreign operation (3,156.91) 8,604.81Income tax relating to items that will be reclassified to profit or loss - -

Other Comprehensive Income for the year, net of Tax (2,248.30) 8,169.60Total Comprehensive Income for the year, net of Tax 14,435.07 18,630.50Profit after tax for the year attributable to

Owners of the Company 16,771.46 10,371.36Non- Controlling Interests (88.09) 89.53

Other Comprehensive Income for the year attributable toOwners of The Company (2,467.20) 7909.75Non- Controlling Interests 218.89 259.85

Total Comprehensive Income for the Year attributable toOwners of the Company 14,304.26 18,281.11Non- Controlling Interests 130.80 349.38

Basic Earning per Equity Share [ EPS ] 39 14.62 10.32Diluted Earning per Equity Share [ EPS ] 39 14.62 10.32Significant Accounting Policies 1Notes to the Consolidated Financial Statements 2 to 59Significant Accounting Policies and Notes attached thereto form an integral part of Consolidated Financial Statements

As per our attached report of even date For and on behalf of the BoardFor FORD RHODES PARKS & Co. LLPChartered AccountantsICAI FR No.102860W/W100089








CONSOLIDATED STATEMENT OF CASH FLOW FOR THE MARCH 31,

` in Lakhs Year Ended

Particulars March 31, 2017 March 31, 2016Cashflow From Operating Activities :Net profit before Tax 16,140.10 9,782.15 Adjustment for :Depreciation 7,496.47 8,101.89 Interest (net) 69,394.27 72,986.54 Bad Debts and Sundry Amount Written Off 6,304.13 7,473.82 Gratuity and Leave Encashment Provision 186.82 244.41 Miscellaneous Income 271.57 (435.18)Gain on Mutual Funds (21.11) - Gain on Fair Valuation of Derivatives (918.81) (584.52)Unrealised Exchange (Gain)/Loss 1,538.17 (7,556.40)Dividend Received (7.50) (7.50)

1,00,384.11 90,005.21 Changes in Working Capital :(Increase)/Decrease in Inventories (1,48,142.62) (45,248.71)(Increase)/Decrease in Sundry Debtors (2,65,200.76) (1,49,619.73)Increase/(Decrease) in Current Liabilities / Provisions 3,90,521.83 2,42,001.59

(22,821.55) 47,133.15 Cash Generated From Operations 77,562.56 1,37,138.36 Income Tax Paid (3,247.89) (3,358.63)Cash Flow Before Exceptional Item 74,314.67 1,33,779.73 Exceptional item - - Net Cash Flow From Operating Activities 74,314.69 1,33,779.72

Cashflow From Investing Activities :Investment in Subsidiaries / Joint Venture (Net) (6.84) 2,300.29 Proceeds from Sale of Subsidiary 108.71 - Receipt of Dividend 7.50 7.73 Interest Received 21.34 - Net change in other assets - 7.02 Purchase of Fixed Assets (Net) (4,373.97) (5,630.46)Net Cash Flow From Investing Activities (4,243.26) (3,315.42)

Cash Flow From Financing Activities :Proceeds from Issue of Share Capital - (1,994.03)Proceeds from Issue of Share Warrants 7,895.41 2,872.14 Proceeds / (repayment) of term loans & working capital loans (7,618.21) (61,327.04)Issuue / (Maturity) of Fixed Deposit Scheme (172.85) (17.26)Dividend Paid (593.17) - Dividend and Dividend Tax Paid (123.50) - Interest Paid (Net) (68,546.03) (72,564.52)Net Cash Flow From Financing Activities (69,158.35) (1,33,030.71)

163

CONSOLIDATED STATEMENT OF CASH FLOW FOR THE MARCH 31,


A. D. ShenoyPartnerM. No. 11549 Managing Director Director

Place : MumbaiDated : May 30, 2017 Company Secretary Chief Financial Officer

` in Lakhs Year Ended

Particulars March 31, 2017 March 31, 2016Net increase/(decrease) in cash and cash equivalents 913.08 (2,566.41)Cash and cash equivalents at the beginning of the yearOpening Balance of Cash & Cash Equivalents 7,849.92 10,164.26 Add: Adjustment on account of exchange rate (71.70) 196.31 Add: Upon addition / exclusion of Subsidiaries / J.V. (34.63) 55.76

7,743.59 10,416.33 Cash and cash equivalents at the end of the year 8,656.67 7,849.92

Notes : 0.02

1) Cash Flow statement has been prepared under the indirect method as set out in Ind AS 7 as per the Companies (Indian Accounting Standards) Rule 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rule 2016

2) Previous Year figures have been restated and regrouped wherever necessary.3) Figures in bracket indicates outflows.4) Components of Cash and Cash equivalents at the year end comprise of :

Particulars March 31, 2017 March 31, 2016Balance with Banks In Currents Account 8,477.46 7,690.37 Fixed Deposits / Margin Money with Maturity Less than 3 Months 36.86 33.81Cash on Hand 142.35 125.74

8,656.67 7,849.92


b O

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` in

Lakh

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curit

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prem

ium

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Gen

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7 12

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- 66

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4,26

1.45

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Profi

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e year

- -

- -

- -

10,37

1,36

- -

- 10

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6 89

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9 O

CI du

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- -

- -

-16

7.55

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7,90

9.75

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the ye

ar -

- -

- -

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1 (5

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6 -

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8 18

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ther A

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(1,70

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--

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(1,70

1.65)

Tran

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h own

ers in

their c

apaci

ty as o

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: -

- -

- -

- -

- -

- -

- -

Less

: On a

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of sh

are w

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t 2,

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5 -

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2,69

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the Y

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- -

- -

- -

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3,23

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3,23

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- -

- -

- -

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(3,12

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at M

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1, 20

161,3

6,183

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7 12

9.29

10,00

0.00

- 66

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33,8

3,998

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8,27

4.96

4,36

8.31

6,22,3

30.14

4,82

0.76

6,27,1

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Add:

Profit

for th

e year

- -

- -

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16,77

1.46

16,77

1.46

(88.0

9) 16

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7 O

CI du

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- -

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(2,24

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ome f

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year

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16,63

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14,30

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130.8

0 14

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6 O

ther A

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2,73

3.23

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2 96

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- -

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- -

- -

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145.5

7 -

- -

145.5

7 (7

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forfe

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warra

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- -

- 55

2.27

- -

- -

- 55

2.27

- 55

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on ac

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subsi

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- -

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- -

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2) -

(1,06

8.62)

Add :

Mon

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ceive

d duri

ng th

e Year

- -

- -

- -

- -

- 7,

896.4

7 7,

896.4

7 -

7,89

6.47

Add /

(Less)

: On a

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10,09

3.63

- -

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Forfe

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- -

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(552

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(552

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- -

- -

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(1.06

) (1

.06)

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and d

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- -

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- (7

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(716

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at M

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1, 20

171,4

6,277

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7 12

9.29

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552.2

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1,813

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8.22

5,30

9.90

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4,370

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4 6,

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1956

. This

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in FY

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Fair

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o reta

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as ac

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panie

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a

Equ

ity S

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Cap

ital

No.

of S

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in

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quity

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ares

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IN

R

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each

, Is

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ly P

aid-

up:

As a

t Apr

il 1,

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5 9

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Issu

ed d

urin

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riod

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Con

solid

ated

Sta

tem

ent o

f Cha

nges

in E

qyity

165

Significant Accounting Policies on Consolidated Financial Statement for the year ended March 31, 2017

BACKGROUND AND OPERATIONS

Gitanjali Gems Limited (the ‘Company’ or ‘GGL’), a public limited company is incorporated in India. The Company’s registered office and principal place of business is situated at A-1, 7th Floor, Laxmi Tower, Bandra Kurla Complex, Bandra (East), Mumbai.

The shares of the Company are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The company is engaged in the business of trading, manufacturing, import and export of Diamond Cutting and Polishing, Diamond Studded Jewellery and Plain Gold Jewellery. For this purpose the company has its own manufacturing facilities at Mumbai, Surat and Hyderabad within and outside the Special Economic zone (SEZ). The company also purchases jewellery produced by reputed manufacturers. The company has presence in India as well as all over world through network of its subsidiaries and associates.

Mergers and Amalgamation:

The holding company viz. Gitanjali Gems Limited had resolved to merge one of it’s wholly owned subsidiary viz. Gitanjali Exports Corporation Limited within itself. The scheme for merger was approved by Hon. High Court of Bombay on 17th June, 2016. The certified copies of the aforementioned order approving the scheme are filed with the Registrar of Companies, N.C.T. of Mumbai on 24th August, 2016. On date, the scheme is effective from 1st April, 2014 as per Hon. High Court Bombay.

One of the Subsidiary viz. Nakshara brands Limited’s application for amalgamation of Asmi Jewellery India Limited and Spectrum Jewellery Limited with itself was approved by Hon. High Court of Bombay on April 22, 2016. The scheme is effective from the appointed date i.e. 1st April, 2014.

The Financials statement prepared for current year as well as comparative years is inclusive of balances of this merged subsidiaries.

Honorable high court of Mumbai vide order dated July 8, 2016 approved merger of two of Company’s fellow subsidiaries viz. Gitanjali Lifestyle Limited (GLL) and Gitanjali Jewellery Retail Limited (GJRL) with the Company’s subsidiary viz. Gili India Limited (GILI). Pending completion of formalities under the Companies Act 1956/2013 entities are not merged .As per scheme proposed appointed date is 1st April 2014.

The Financial statements are reviewed and recommended by the Audit Committee and approved by the Board of Directors of the Company at the Board meeting held on 30th May, 2017.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Preparation

The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended. The Ministry of corporate affairs (MCA) has notified a road map to implement Ind AS. As per the said road map, the Company is required to apply the Ind AS starting from the financial year beginning April 1, 2016. Accordingly, the first Ind AS financial statements shall be for the financial year 2016-17 with comparables for the financial year 2015-16 (Refer Note no. 2 for information on Ind AS adoption) and as per requirements of SEBI circular SEBI/HO/CFD/DIL/CIR/P/2016/4 Dated March 31,2016.

The Consolidated Financial Statements have been prepared under historical cost convention basis except the following assets and liabilities which have been measured at fair value or revalued amounts.


l Certain Financial instruments measured at fair value through other comprehensive income (FVTOCI);l Certain Financial instruments measured at fair value through Profit and Loss (FVTPL);l Defined Benefit Plan asset measured at fair value;

The functional and presentation currency of the company is the Indian rupees.

These Consolidated Financial Statements are presented in Indian rupees and all values rupee are stated in lakhs except otherwise indicated. Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures.

2. Basis of consolidation

The consolidated financial statements include the financial statements of the Group companies. The consolidated financial statements have been prepared on the following basis:

i. The consolidated financial statements of the Company and its subsidiaries are combined on a line by line basis by adding together like items of assets, liabilities, equity, incomes, expenses and cash flows, after fully eliminating intra-group balances and intra-group transactions.

ii. In case of foreign subsidiaries, revenue items are consolidated at the average rate prevailing during the year. All assets and liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognised in the Foreign Currency Translation Reserve.

iii. the carrying amount of the parent’s investment in each subsidiary and the parent’s portion of equity of each subsidiary is Offset.

iv. The difference between the proceeds from disposal of investment in subsidiaries and the carrying amount of its assets less liabilities as on the date of disposal is recognised in the consolidated statement of profit and loss being the profit or loss on disposal of investment in subsidiary.

v. Non Controlling Interest’s share of profit / loss of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at the net income attributable to shareholders of the Company.

vi. Non Controlling Interest’s share of net assets of consolidated subsidiaries is identified and presented in the Consolidated Balance Sheet separate from liabilities and the equity of the Company’s shareholders.

vii. Investments in associates are accounted for using the equity method. An associate is an entity over which the Group is in a position to exercise significant influence over operating and financial policies. Goodwill arising on the acquisition of associates is included in the carrying value of investments in associate.

3. Use of judgments, estimates and assumptions

The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect application of accounting policies and the reported amount of assets, liabilities, disclosure of contingent assets and liabilities at the date of financial statements and the reported amount of income and expenses for the periods presented. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Accounting estimates could change from period to period. Any revision to accounting estimates is recognised prospectively, and if material, their effects are disclosed in the financial statements. Actual results could differ from the estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/materialize. In particular, information about significant areas of estimation uncertainty and critical judgments in applying

167

accounting policies that have the most significant effect on the amounts recognized in the financial statements are as below:

1. Valuation of Financial instruments;2. Valuation of inventories;3. Evaluation of recoverability of deferred tax assets;4. Useful lives of property, plant and equipment and intangible assets;5. Measurement of recoverable amounts of cash-generating units;6. Obligations relating to employee benefits;7. Accounting for common control transactions;8. Provisions and Contingencies; and9. Provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.

4. Business Combination and goodwill

In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from 1 April 2015. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward.

The Company applies the acquisition method in accounting for business combinations. The consideration transferred by the Company to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Company, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date.

Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised in profit and loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and subsequent to its settlement is accounted for within equity.

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 recognizes 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 the statement of profit and loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.

Common control transactions

A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are specifically covered by Ind AS 103. Such transactions are accounted for using the pooling-of-interest method or as specified under provisions of law or order governing the scheme . The assets and liabilities of the acquired entity are recognised at their carrying amounts of the parent entity’s consolidated financial statements with the exception of certain income tax and deferred tax assets. No adjustments are made to reflect fair values, or recognise any new assets or liabilities. The only adjustments that are made are to harmonise accounting policies. The components of equity of the acquired companies are added to the same components within the Company’s equity. The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves. The Company’s shares issued in consideration for the acquired companies are recognized from the moment the acquired companies are included in these financial statements and the financial statements of the commonly controlled entities would be combined, retrospectively, as if the transaction had occurred at the beginning of the earliest reporting period presented. However, the prior year comparative information is only adjusted for periods during which entities were under common control.

5. 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:

l Expected to be realised or intended to be sold or consumed in normal operating cycle

l Held primarily for the purpose of trading

l Expected to be realised within twelve months after the reporting period, or

l 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:

l It is expected to be settled in normal operating cycle

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l It is held primarily for the purpose of trading

l It is due to be settled within twelve months after the reporting period, or

l There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting Period

All other liabilities are classified as non-current.

For this purpose, the operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.

Deferred tax assets (including Minimum Alternate Tax) and liabilities are always classified as non-current assets and liabilities.

6. Property, plant and equipment (PP&E)

An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost. Cost comprises of the purchase price and any attributable / allocable cost of bringing the asset to its working condition for its intended use. Cost also includes direct cost and other related incidental expenses.

Borrowing costs relating to acquisition / construction / development of tangible assets, intangible assets and capital work in progress which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

When significant components of property, plant and equipment are required to be replaced at intervals, recognition is made for such replacement of components as individual assets with specific useful life and depreciation if these components are initially recognised as separate asset. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.

Capital work in progress is carried at cost and capitalised when the asset is ready to be put to use.

Depreciation is provided from the date the assets are ready to be put to use, as per written down value (WDV) method over the useful life of the assets, as prescribed under Part C of Schedule II of the Companies Act, 2013. In respect of Fixed Assets of few foreign Subsidiaries, the depreciation method and rates followed are different from those followed by the Parent Company.

Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss within ‘other income’ or ‘other expenses’ respectively.

The costs incurred on leased properties are capitalized and disclosed appropriately.

Transition to IndAS: Under the previous GAAP, property plant and equipment were carried in the balance sheet at cost less accumulated depreciation and impairment losses, if any. The Company has opted to measure PP&E at fair value as deemed cost on the date of transition to Ind AS (April 1, 2015).

7. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Cost comprises the acquisition price, development cost and any attributable / allocable incidental cost of bringing the asset to its working condition for its intended use.

Intangible assets acquired in a business combination that qualify for separate recognition are recognised as intangible assets at their fair values at the date of acquisition. The useful life of intangible assets are assessed as either finite or indefinite.


The useful lives of intangible assets are assessed as either finite or indefinite.

All finite-lived intangible assets, are accounted for using the cost model whereby intangible assets are stated at cost less accumulated amortisation and impairment losses, if any. Intangible assets are amortised over the useful life. Residual values and useful lives are reviewed at each reporting date. Foreign subsidiaries amortises intangibles viz, trade marks and customer relationships, as per its accounting policy.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds and the carrying amount of the asset, and is recognised in the statement of profit and loss within ‘other income’ or ‘other expenses’ respectively.

8. Investment property

Investment properties are properties held to earn rentals or for capital appreciation, or both.

Investment properties are measured initially at cost, including transaction costs and depreciated as per written down value (WDV) method over the useful life of the assets determined based on technical assessment made by technical expert and management estimate, as prescribed under Part C of Schedule II of the Companies Act, 2013.

Though the Group measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer or as assessed by the management

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

9. Impairment of non-financial assets

At each reporting date, the Company assesses whether there is any indication based on internal /external factors, that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the statement of profit and loss. All assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment loss is reversed if the asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount.

10. Inventories

Inventories raw materials, finished goods, rejections, trading goods and stores are valued at the lower of cost and net realisable value. Cost includes cost incurred in bringing each product to its present location. Net realizable value is the estimated selling price in the ordinary course of business and the estimated cost necessary for completion and the estimated cost necessary to make the sale.

Raw Material Lower of cost and net realizable value Rough Diamond Rejections At net realizable valueTrading Goods Lower of cost and net realizable valueFinished Goods – Polished Diamonds Lower of cost and net realizable value

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Work in progress - Jewellery Lower of net realizable value and material cost plus proportionate labour and overheads

Finished Goods - Jewellery Lower of net realizable value and material cost plus labour and overheads

Finished Goods – Gold Lower of cost and net realizable valueConsumables, Stores and Tools At cost

11. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 3 months from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

12. Provisions and contingent liabilities

A provision is recognised when:

l The Company has a present obligation as a result of a past event;

l It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

l A reliable estimate can be made of the amount of the obligation.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of money is material.

Any reimbursement that the Company is virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

No liability is recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are disclosed as contingent liabilities unless the outflow of resources is remote.

13. Equity , Reserves and Dividend

Share capital represents the nominal value of shares that have been issued. Share premium includes any premium received on issue of share capital. Any transaction costs associated with issuing of shares are deducted from share premium account, net of any related income tax benefits.

Other components of equity include the following:

• Securities Premium Reserve• General Reserve• Capital Redemption Reserve• Debenture Redemption Reserve• FVTOCI Reserve • Capital Reserve• Capital Reserve on consolidation


• Foreign Currency Translation reserve • Non Controlling Interest• Retained Earnings• Money received against Share Warrants • Re-measurement of defined benefit liability through retained earning

Retained earnings include all current and prior period retained profits. All transactions with owners of the company are recorded separately within equity.

Dividend distributions payable to equity shareholders are included in other liabilities when the dividends have been approved in a general meeting prior to the reporting date.

14. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value through profit or loss which are measured initially at fair value.

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

l The rights to receive cash flows from the asset have expired, or

l The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

1. Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

Debt instruments at fair value through profit or loss : FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

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2. Debt instruments at Amortised cost: A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a. The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b. Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) 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 statement of profit and loss.

3. Equity instruments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS 103 applies are classified as at fair value through profit and loss (FVTPL). For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of Profit and Loss.

Impairment of financial assets

The Company follows ‘simplified approach’ to recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit and loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL . For all other financial assets, ECLs are measured at an amount equal to the 12 Month ECL, unless there has been a significant increase in Credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of ECL (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be is recognised as an impairment gain or loss in the statement of profit and loss.

Classification and subsequent measurement of financial liabilities

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade payables, other payables, loans and borrowings.

The Company classifies all financial liabilities as subsequently measured at amortised cost.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process. 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 as finance costs in the statement of profit and loss.


Derivative financial instruments

Initial recognition and subsequent measurement

The Company uses derivative financial instruments, (forward currency contracts and interest rate swap) to hedge its foreign currency risks and interest rate risk.

Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured 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.

15. Fair value measurement

The Company measures financial instruments such as, investment in equity shares, at fair value on initial recognition

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(i) In the principal market for the asset or liability, or

(ii) In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

l Level 1 – Inputs are quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

l Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

l Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

External valuer is involved for valuation of significant assets, such as properties, derivatives (Interest rate swap) etc.

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For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. This note summarises accounting policy for fair value. Other fair value related disclosures are given in the relevant notes.

16. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government

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, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.Revenue is inclusive of Excise duty but exclusive of other tax.

ii. Revenue from real estate projects: The Group follows the percentage of project completion method (PoCM) for its projects. The revenue recognition policy is as under:

In case of real estate project, the Group recognises revenue in proportion to the actual project cost incurred (including land cost) as against the total estimated project cost (including land cost), subject to achieving the threshold level of project cost (excluding land cost) as well as area sold, in line with the Guidance Note on Accounting for Real Estate Transaction (for entities to whom Ind AS is applicable) and depending on the type of project.

PoCM is applied when the outcome of a real estate project can be estimated reliably and when all the following conditions are satisfied:

(a) total project revenues can be estimated reliably;

(b) it is probable that the economic benefits associated with the project will flow to the entity;

(c) the project costs to complete the project and the stage of project completion at the reporting date can be measured reliably; and

(d) the project costs attributable to the project can be clearly identified and measured reliably so that actual project costs incurred can be compared with prior estimates

The estimates relating to percentage of completion, costs to completion, area available for sale etc. being of a technical nature are reviewed and revised periodically by the management and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognised prospectively in the period in which such changes are determined.

Land cost includes the cost of land, land related development rights and premium.

iii. Revenue from lease rentals and related income: Lease income is recognised in the statement of profit and loss on straight line basis over the lease term, unless there is another systematic basis which is more representative of the time pattern of the lease.

iv. Interest income: For all debt instruments measured at amortised cost interest income is recognised using the effective interest rate (EIR) method. Interest income is shown as net off finance expense in the statement of profit and loss.

v. Dividend income: Dividend income is recognised when the right to receive dividend is established.


vi. Other income: Revenue is recognized only when it is reasonably certain that the ultimate collection will be made.

vii. Excise duty:

Excise duty in respect of closing Inventory of finished Goods is included as part of inventory. The amount of Cenvat credits in respect of material consumed is deducted from cost of material consumed .Excise duty relating to difference between the closing stock and opening stock of finished goods has been recognised under Other expenses.

17. Foreign currencies Transaction and translation

a) Monetary items: Transactions in foreign currencies are initially recorded at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in the statement of profit and loss.

b) Non – Monetary items: Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

18. Leases

Operating Lease:

Leases where the lessor effectively retains substantially all the risks and rewards of the ownership are classified as operating leases. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

Finance Lease:

Leases under which the Company (as a lessee) substantially assumes all the risks and rewards of ownership are classified as finance lease. Assets taken on such finance leases are capitalized at the commencement of the lease term at the fair value of the leased item or, if lower, at the present value of the minimum lease payments.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

The costs incurred on leased properties are capitalised and disclosed appropriately.

19. Tax

Tax expense recognised in the statement of profit and loss comprises the sum of deferred tax and current tax not recognised in OCI or directly in equity.

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income-tax Act. Current income tax relating to items is recognised outside statement of profit and loss (either in OCI or in equity).

Deferred income taxes are calculated using the liability method. Deferred tax liabilities are generally recognised in full for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Company’s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in OCI or in equity).

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Deferred Tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realized.

MAT credit can be carried forward for a period of 10 years. However as per Budget 2017, the period for carry forward has been revised to 15 years.

20. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and reported in finance costs

21. Employee benefits

i. Defined contribution plans: Contributions payable by the Group Companies to the concerned Government authorities in respect of Provident Fund, Family Pension Fund, Employees State Insurance and labour welfare fund charged to the Statement of Profit and Loss.

ii. Defined benefit plans: Gratuity is in the nature of a defined benefit plan. Provision for gratuity is calculated on the basis of actuarial valuations carried out at balance sheet date and is charged to the statement of profit and loss. The actuarial valuation is performed using the projected unit credit method.

Remeasurement, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

iii. Other employee benefits: Leave encashment is recognised as an expense in the statement of profit and loss as and when they accrue. The Company determines the liability using the projected unit credit method, with actuarial valuations carried out as at balance sheet date. Actuarial gains and losses are recognised in the statement of profit and loss .

iv. In case of foreign subsidiaries, employee benefits are accounted in accordance with the applicable local laws.

22. Segment reporting

The company is primarily engaged in the business of Diamond and Jewellery comprising of Diamond studded Jewellery and Plain Gold Jewelley. This represents a primary segment. The company operates in India as well as abroad.


23. Earnings per share

Basic earnings per share is calculated by dividing the net profit / (loss) for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit / (loss) for the year attributable to equity shareholders and the weighted average numbers of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted at the beginning of the year and not issued at a later date.

In computing the diluted EPS, potential equity shares that either increase earnings per share or decrease loss per equity share, being anti-dilutive are ignored.

24. 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.

25. Standards not yet made effective:

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7 “Statement of cash flows” and Ind AS 102 “Share-based payment”. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7 “Statement of cash flows” and IFRS 2 “‘Share-based payment”, respectively. The amendments are applicable to the company from April 1, 2017.

i. Amendment to Ind AS 7: The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The company is evaluating the requirements of the amendment and its effect on the financial statements.

ii. Amendment to Ind AS 102: The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the “fair values”, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that includes a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. This amendment does not apply to the company.

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Note: 2 Transition to Ind ASFor the purposes of reporting as set out in Note 1, we have transitioned our basis of accounting from previous GAAP to Ind AS. The accounting policies set out in note 1 have been applied in preparing the comparative information presented in these financial statements for the year ended March 31,2016 and in the preparation of an opening Ind AS balance sheet at April 1,2015 (the “transition date”). An explanation of how the transition from previous GAAP to Ind AS has affected the Group's financial statements is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under previous GAAP except where required by Ind AS.

Notes on transition to Ind AS:1 Equity Reconciliation

The above changes increased / (decreased) total equity as follows:` in lakhs

Particulars Note No. March 31,2016 April 1,2015Equity as per Previous GAAP 442,384.92 421,199.08Add/Less Impact of Amaglamation 45,182.76 45,176.29Add/Less Impact of translation of certain assets in foreign subsidiaries at closing rate 5,953.70 4,382.49Restated Previous GAAP as on March 31,2016 493,521.38 470,757.86Adjustment in Equity due to Transition to Ind AS - -Impact of measuring financial liabilities recognised initially at fair value and subsequently at amortised cost

II,III & IV

(417.00) (64.48)

Impact of measuring financial assets recognised initially at fair value and subsequently at amortised cost

V (16.69) (20.54)

Impact of measuring financial instruments at fair value I & IX 649.43 422.93Impact of deemed cost exemption taken on fixed assets on the date of transition to Ind AS

VIII 159,106.92 163,545.61

Impact of proposed dividend derecognised in Ind AS VII 616.46 -Tax impact of above mentioned adjustments XI (16,065.83) (17,407.68)Total of all Ind AS adjustments 143,873.28 146,475.83Equity as per Ind AS 637,394.67 617,233.70

2 Comprehensive Income ReconciliationThe above changes increased / (decreased) total comprehensive income as follows:

` in lakhsParticulars Note No. March 31,2016Profit reported for year ended March 31,2016 as per Previous GAAP 13,413.78Add/Less: Amalgamation Adjustments 6.48Restated Net Profit for year ended March 31,2016 as per Previous GAAP 13,420.26Impact of measuring financial instruments recognised initially at fair value and subsequently at amortised cost

II,III,IV & V

(349.50)

Impact of measuring financial instruments at fair value I & IX 584.52Impact of deemed cost exemption taken on fixed assets on the date of transition to Ind AS VIII (4,438.69)Impact of remeasurement of post retirement defined benefit obligations VI (136.49)Tax impact of above mentioned adjustments XI 1,380.79Net Profit for year ended March 31,2016 as per Ind AS 10,460.89Other comprehensive Income X & I 8,169.60Total comprehensive Income for year ended March 31,2016 as per Ind AS 18,630.49

Notes Forming Part of the Consolidated Financial Statements March 31, 2017


3 Notes to First time adoption

I Fair valuation of investments

Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2016. This has increased retained earnings by ` 21.11 lakhs as at March 31, 2016 (April 1, 2015 - ` 31.85 lakhs).Profit and loss for year ended March 31, 2016 has decreased by ` 10.74 lakhs

Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognised in Fair Value through OCI reserve as at the date of transition and subsequently in the other comprehensive income for the year ended March 31, 2016. This increased/(decreased) other reserve by ` (7.76) lakhs as at March 31, 2016 (April 1,2015 - ` 350.28 lakhs). Comprehensive Income for the year has decreased by ` 532.76 lakhs

II Non-cumulative redeemable preference shares

Under Previous GAAP Preference shares issued formed part of Share capital of the Group. Under Ind AS 4% Non-Cumulative Redeemable Preference Shares being a compound instrument contains both equity and liability component.This has decreased other equity as at March 31, 2016 by ̀ 881.18 lakhs (April 1, 2015 - ̀ 783.02 lakhs). This has decreased profit for the year March 31, 2016 by ` 98.16 lakhs.

III Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Under previous GAAP, these transaction costs were charged to profit or loss as and when incurred. Accordingly, borrowings as at March 31, 2016 have been reduced by ` 444.14 lakhs (April 1, 2015 - ` 689.11 lakhs) with a corresponding adjustment to retained earnings. The profit for the year ended March 31, 2016 reduced by ` 244.96 lakhs as a result of the additional interest expense.

IV Other loans taken

In the financial statements prepared under previous GAAP, the carrying value of Interest free loan was recognised at the principal amounts payable by the borrower. Under Ind AS, Interest free borrowing being a financial liability is required to be recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.This has increased retained earning as at March 31, 2016 by ` 20.03 lakhs (April 1, 2015 - ` 29.43 lakhs) and reduced profit for year ended March 31, 2016 by ` 10.14 lakhs

V Other Loans given

In the financial statements prepared under previous GAAP, the carrying value of Interest free loan given was recognised at the principal amounts recievebale by the lender. Under Ind AS, Interest free loans given being a financial asset is required to be recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.This has decreased retained earning as at March 31, 2016 by `16.69 lakhs (April 1, 2015 - ` 20.54 lakhs) and increased profit for year ended March 31, 2016 by ` 3.77 lakhs


181

VI Remeasurements of post-employment defined benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2016 decreased by ` 97.55 lakhs (Net of Tax). There is no impact on the total equity as at March 31, 2016.

VII Proposed dividend

Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of ` 616.45 lakhs (including DDT) as at March 31, 2016 (April 1, 2015 – NIL) included under provisions has been reversed with corresponding adjustment to retained earnings.

VIII Deemed Cost :

Ind AS 101 permits a first-time adopter to elect fair value for all of its property, plant and equipment recognised in the financial statements as at the date of transition to Ind AS and use that as its deemed cost as at the date of transition after making necessary adjustments for consequential impacts of applying other standards. Accordingly, the Group has elected to measure all of its property, plant and equipment at their fair values.This has increased retained earnings as at March 31, 2016 by ` 159,106.90 lakhs (April 1, 2015 - ` 163,545.59 lakhs) and Profit for the year ended March 31, 2016 has decreased by ` 4,438.68 lakhs. For intangible assets the Company has used its IGAAP carrying amount as deemed cost at the date of transition.

IX Fair Value of Derivative Financial Instruments:

Under Previous GAAP, the Group accounted for gain or loss realised on derivative financial instrument at the time of maturity or cancellation of the instrument whichever was earlier.As per Ind AS 109 derivative financial instrument should be measured at fair value and gain or loss on fair valuation should to be accounted in the statement of profit and loss.This has increased retained earnings as at March 31, 2016 by ` 636.07 lakhs (April 1, 2015 ` 40.81 lakhs). Profit for the year ended March 31, 2016 has increased by ` 595.27 lakhs.

X Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

XI Deferred tax

Deferred tax have been recognised on the adjustments made on transition to Ind AS.This has decreased retained earnings as at March 31, 2016 by ` 16,065.82 lakhs (April 1, 2015 - ( ` 17,407.67) lakhs). Profit for the year ended March 31, 2016 has increased by ` 1,380.79 lakhs.



4 Other Exemptions and Exceptions availed

I Estimates: An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates

made for the same date in accordance with previous GAAP [after adjustments to reflect any difference in accounting policies], unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP.

II Designation of previously recognised financial instruments: Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and

circumstances at the date of transition to Ind AS. The Group has elected to apply this exemption for its investment in equity investments [other than investment in subsidiary].

III Classification of financial assets: As per the requirements of Ind AS 101 the Group has assessed classification of financial assets on the basis of the

facts and circumstances that existed at the date of transition to Ind AS.IV De-recognition of financial assets and liabilities: Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for

transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of entity's choosing; provided that the information needed to apply Ind AS 109 to financial assets or financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Group has elected to apply the de-recognition provision of Ind AS 109 prospectively from the date of transition to Ind AS.

V Cumulative translation differences Ind AS 101 permits cumulative translation gains and losses to be reset to zero at the transition date. This provides

relief from determining cumulative currency translation differences in accordance with Ind AS 21 from the date a subsidiary or equity method investee was formed or acquired.

The group elected to reset all cumulative translation gains and losses to zero by transferring it to opening retained earnings at its transition date.

VI Business combinations: Ind AS 101 provides an option to apply Ind AS 103 prospectively from the transition date or from a specified date

from a transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to transition date. The Group has elected to apply Ind AS 103 prospectively to the business combination occuring after its transition date. Business combinations occurred prior to date of transition have not been restated. The Group applies the requirements of Ind AS 103 to business combinations occurring after the date of transition to Ind AS.

VII Non-controlling Interests Ind AS 110 requires entities to attribute the profit or loss and each component of other comprehensive income to the

owners of the parent and to the non-controlling interests. This requirement needs to be followed even if this results in the non-controlling interests having a deficit balance. Ind AS 101 requires the above requirement to be followed prospectively from the date of transition.

Consequently, the group has applied the above requirement prospectively.5 Statement of Cash Flows: The transition from previous GAAP to Ind AS did not have a material impact on the statement of cash flows.


183

Notes Forming Part of the Consolidated Financial Statements March 31, 2017NO

TE 3:

Prop

erty,

Plant

and E

quipm

ent

Amt R

s. In L

akhs

Freeh

old

Land

Lease

hold

Land

Facto

ry

Build

ings

Offic

e Pr

emise

s Pl

ant a

nd

Mac

hinery

Furn

iture

and

Fixtur

es

Offic

e Eq

uipme

ntCo

mpute

rsVe

hicles

Elect

rical

equip

ments

&

fitting

s

Moto

r Bo

at Le

aseho

ld Im

prov

emen

ts To

tal C

WIP

Gross

Car

rying

Value

(C

ost or

Deem

ed C

ost):

Balan

ce as

at Ap

ril 1,

2015

1,15,8

22.13

3,15

1.44

44,48

9.86

12,28

8.56

1,56

9.04

961.5

6 70

1.60

336.1

8 48

.23 81

.10 22

.89 6,

378.8

21,8

5,851

.418,1

03.16

Addit

ions

443.4

6 (3

70.36

) -

2,66

9.89

194.8

1 49

4.75

15.76

107.0

6 7.

64 12

.64 -

5.24

3,58

0.89

18.94

Dispo

sals /

Adju

stmen

ts -

- -

- (1

50.58

) (1

.53)

- (0

.23)

- -

- 2,

845.8

6 2,

693.5

2 (6

6.01)

Exch

ange

diffe

rence

on

transl

ation

of fo

reign

op

eratio

n

9.25

(18.3

9) (1

9.73)

34.27

(54.9

6) 15

.67 80

.60 9.

67 62

.92 -

- 58

0.90

700.2

0 -

As at

Mar

ch 31

,2016

1,16,2

74.84

2,76

2.69

44,47

0.13

14,99

2.72

1,55

8.31

1,47

0.45

797.9

6 45

2.68

118.7

9 93

.74 22

.89 9,

810.8

21,9

2,826

.028,0

56.09

Addit

ions

- -

- 4,

042.8

5 13

1.37

258.0

4 19

.44 85

.83 73

.26 -

- 10

,064.3

8 14

,675.1

7 -

Dispo

sals /

Adju

stmen

ts -

- -

- (7

.20)

(0.01

) -

(2.28

) (4

1.99)

- -

- (5

1.48)

(4,04

2.86)

Othe

r adju

stmen

ts -

- -

- -

- -

- -

- -

- -

-Ex

chan

ge di

fferen

ce on

tra

nslati

on of

forei

gn

opera

tion

0.60

5.70

1.23

(57.3

4) (1

9.95)

2,08

0.93

552.2

4 48

.85 (0

.30)

- -

(10,8

21.20

) (8

,209.2

4) -

As at

Mar

ch 31

,2017

1,16,2

75.44

2,76

8.39

44,47

1.36

18,97

8.23

1,66

2.53

3,80

9.41

1,36

9.64

585.0

8 14

9.76

93.74

22.89

9,05

4.00

1,99,2

40.47

4,013

.23Ac

cumu

lated

De

preci

ation

and

Impa

irmen

t:De

precia

tion f

or the

year

- 11

8.52

4,26

1.62

(317

.09)

387.8

7 58

7.22

286.5

4 21

4.07

34.90

52.94

8.30

1,09

8.50

6,73

3.39

-Im

pairm

ent lo

ss -

- -

- -

0.06

1.15

- -

- -

- 1.

21 -

Exch

ange

diffe

rence

on

transl

ation

of fo

reign

op

eratio

n

- 0.

97 0.

86 1,

213.0

6 0.

17 3.

18 5.

64 1.

11 0.

04 -

- 14

.81 1,

239.8

4 -

As at

Mar

ch 31

,2016

- 11

9.49

4,26

2.48

895.9

7 38

8.04

590.4

6 29

3.33

215.1

8 34

.94 52

.94 8.

30 1,

113.3

1 7,

974.4

4 -

Depre

ciatio

n for

the ye

ar -

62.72

3,72

7.33

923.8

3 28

7.02

270.4

1 22

6.09

128.0

5 31

.69 16

.95 5.

29 1,

408.2

7 7,

087.6

5 -

Impa

irmen

t loss

- -

- -

- 19

.69 1.

98 0.

50 -

1.28

- 3.

25 26

.70 -

Dispo

sals/o

ther

adjus

tmen

ts -

- -

- -

- -

- -

- -

- -

-

Exch

ange

diffe

rence

on

transl

ation

of fo

reign

op

eratio

n

- (1

.85)

(1.22

) (1

3.80)

(20.5

6) (1

7.04)

(23.2

1) (3

.98)

(0.13

) -

- (6

7.42)

(149

.21)

-

As at

Mar

ch 31

,2017

- 18

0.36

7,98

8.59

1,80

6.00

654.5

0 86

3.52

498.1

9 33

9.75

66.50

71.17

13.59

2,45

7.41

14,93

9.58

-Ne

t Car

rying

Value

:Ne

t Bloc

k As a

t Apri

l 1,

2015

1,15,8

22.13

3,15

1.44

44,48

9.86

12,28

8.56

1,56

9.04

961.5

6 70

1.60

336.1

8 48

.23 81

.10 22

.89 6,

378.8

21,8

5,851

.418,1

03.16

Net B

lock A

s at M

arch

31, 2

016

1,16,2

74.84

2,64

3.20

40,20

7.65

14,09

6.75

1,17

0.27

879.9

9 50

4.63

237.5

0 83

.85 40

.80 14

.59 8,

697.5

11,8

4,851

.588,0

56.09

Net B

lock A

s at M

arch

31, 2

017

1,16,2

75.44

2,58

8.03

36,48

2.77

17,17

2.23

1,00

8.03

2,94

5.89

871.4

5 24

5.33

83.26

22.57

9.30

6,59

6.59

1,84,3

00.89

4,013

.23


Note 3:- Intangible Assets (` in Lakhs)

Computer Software

Trademarks / Patents

Trade Names

Others Total Goodwill

Gross Carrying Value:As at April 1,2015 65.66 48,857.89 - 94.60 49,018.15 17,910.45Additions 667.24 15.39 - 148.52 831.15 -Disposals / Adjustments - - - - - -Other adjustments - - - - - -Currency translation (2.17) 50.42 - (48.19) 0.06 786.61As at March 31, 2016 730.73 48,923.70 - 194.93 49,849.36 18,697.06Additions 1.33 (3,098.34) - - (3,097.01) 3,098.34Disposals / Adjustments (4.92) - - - (4.92) -Other adjustments - - - - - -Currency translation 273.14 1,643.07 - (65.02) 1,851.19 (75.37)As at March 31, 2017 1,000.28 47,468.43 - 129.91 48,598.62 21,720.03Depreciation and Impairment:Depreciation 675.08 571.17 - 122.23 1,368.48 -Impairment - - - - - -Currency translation 5.63 8.44 - 1.68 15.75 -As at 31 March 2016 680.71 579.61 - 123.91 1,384.23 -Depreciation 290.45 115.42 - 2.98 408.85 -Impairment 0.27 - - 0.15 0.42 -Disposals/other adjustments - - - - - -Currency translation 0.83 - - (2.54) (1.71) -As at 31 March 2017 972.26 695.03 - 124.50 1,791.79 -Net Carrying Value:Net Block As at April 1, 2015 65.66 48,857.89 - 94.60 49,018.15 17,910.45Net Block As at March 31, 2016 50.02 48,344.09 - 71.02 48,465.13 18,697.06Net Block As at March 31, 2017 28.02 46,773.40 - 5.41 46,806.83 21,720.03

(` in Lakhs)As at

March 31, 2017 March 31, 2016 April 1, 2015Note: 5 Investments accounted for using the Equity Methodi Jewelsouk Marketplace Pvt. Ltd (Earlier known as

e-Gitanjali Pvt Ltd)- - 99.00

March 31,2017: 99,000 Equity Shares of ` 10/- each March 31,2016: 99,000 Equity Shares of ` 10/- each April 1,2015: 99,000 Equity Shares of ` 10/- each ii Gems London 1,306.32 1,334.62 1,253.44 iii Gitanjali Jewels LLC - - 44.79 Total investments in Associates 1,306.32 1,334.62 1,397.23

185

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2017

(` in Lakhs)As at

March 31, 2017 March 31, 2016 April 1, 2015Note: 6 Non Current Investments

Investments in Mutual Funds [valued at FVTPL]Unquoted

i Axis Income Fund Collection a/c 577.98 521.03 - March 31, 2017: 3,250,767.945 units March 31, 2016: 3,662,536.446 units April 1, 2015: NILii Union KBC Ultra Short Term Debt Fund DIR - 29.03 564.45 March 31, 2017: NIL March 31, 2016: 2,069.780 units April 1, 2015: 43,370.729 unitsiii Union KBC Ultra Short Term Debt Fund - - 15.08 March 31, 2017: NIL March 31, 2016: NIL April 1, 2015: 1,231.022 units

Total Investment Measured at Fair Value through P&L 577.98 550.06 579.53

Investment in Equity Instruments [valued at FVTOCI]Quoted:

i Verite Company Limited 3,458.64 2,457.32 2,815.23ii Shoppers Stop Limited 0.91 0.91 1.02 March 31, 2017: 125 equity shares of ` 10/-each March 31, 2016: 125 equity shares of ` 10/-each April 1, 2015: 125 equity shares of ` 10/-each

Unquoted:i GEMTA Coles Mines Ltd 0.85 0.85 0.85 March 31, 2017: 8,500 Equity Shares of ` 10/- each March 31, 2016: 8,500 Equity Shares of ` 10/- each April 1, 2015: 8,500 Equity Shares of ` 10/- eachii Citizen Co-orporative bank 0.01 0.01 0.01 March 31,2017: 51 equity shares of `10/-each March 31,2016: 51 equity shares of ` 10/-each April 1,2015: 51 equity shares of ` 10/-eachiii Diamond India Limited (Paid up ` 5/-) 834.29 600.00 600.00 March 31,2017: 1,000,000 equity shares of ` 10/-

each March 31,2016: 1,000,000 equity shares of ` 10/-

each April 1,2015: 1,000,000 equity shares of ` 10/- eachiv Shamrao Vithal Co-op Bank Ltd. 0.03 0.03 0.03 March 31,2017: 125 equity shares of ` 25/- each March 31,2016: 125 equity shares of ` 25/- each April 1,2015: 125 equity shares of ` 25/- eachv Mannat Jewellery Manufacturing Pvt Ltd. - - 84.35 April 1,2015: 84,351 equity shares of ` 10/- each

Total Investment Measured at FVTOCI 4,294.73 3,059.12 3,501.49


(` in Lakhs)As at

March 31, 2017 March 31, 2016 April 1, 2015

Investment Measured at Amortised Cost :In Government SecuritiesNSC under lien with Sales Tax Authority 2.63 2.63 2.98Total Investment Measured at Amortised Cost 2.63 2.63 2.98Total 4,875.34 3,611.81 4,084.00Aggregate amount of quoted investments 3,459.55 2,458.23 2,816.25Aggregate amount of unquoted investments 1,415.79 1,153.58 1,267.75

Note: 7 Non current Loans[Unsecured, Considered Good unless otherwise stated]Loans to Others 7,580.65 1,665.27 6,536.38Loans to Related Parties 1,232.20 272.68 8,208.07Loans to Employee - 89.75 42.70Total 8,812.85 2,027.70 14,787.15

Note: 8 Other Non-Current Financial AssetsFixed Deposits (More than 12 Months) 568.04 1,293.71 438.04Security Deposits 1,190.78 5,467.28 3,635.72Total 1,758.82 6,760.99 4,073.76

A Earmarked balances with banksBalances to the extent held as margin money deposit against Guarantee

535.05 1,435.78 314.99

Note: 9 Other Non-Current AssetsBalance With Revenue Authorities 252.18 414.89 1,087.79Others 1,145.78 8,482.80 5,659.42Total 1,397.96 8,897.69 6,747.21

Note: 10 InventoriesClassification of Inventories:Raw Materials 3,66,655.56 2,40,871.04 1,87,482.84Work-In-Progress 1,743.88 14,475.58 13,256.78Finished Goods/ Trading Goods 3,48,795.29 3,16,884.67 3,18,733.32Consumables, Stores and Tools - 39.71 58.66Total 7,17,194.73 5,72,271.00 5,19,531.60

Note: 11 Trade ReceivablesUnsecured - Considered Good 12,82,866.04 11,54,268.73 9,91,579.31Unsecured - Considered Doubtful 207.10 208.87 1,369.77Less: Provision for Doubtful Debt (207.10) (208.87) (1,369.77)Total 12,82,866.04 11,54,268.73 9,91,579.31

Note: 12 Cash and Cash EquivalentsBalances with Banks 8,477.46 7,690.37 4,098.03Cash in Hand 142.35 125.74 272.12Fixed Deposits / Margin Money with Maturity Less than 3 Months

36.86 33.81 5,794.12

Total 8,656.67 7,849.92 10,164.27


187

(` in Lakhs)As at

March 31, 2017 March 31, 2016 April 1, 2015A. Earmarked balances with banks:

Balances in unclaimed dividend accounts Balances to the extent held as margin money deposits against Guarantee

- - 1,868.60

Note: 13 Other Bank BalancesFixed Deposit with Maturity More than 3 Months but Less than 12 Months

19,888.72 17,877.98 15,603.60

Total 19,888.72 17,877.98 15,603.60A Earmarked balances with banksBalances to the extent held as margin money deposit against Guarantee

19,838.16 17,503.05 14,837.30

Note: 14 Current Loans[Unsecured, Considered Good]Loan to Related Parties 2,567.28 2,822.97 9,431.72Loan to Others 5,571.56 41,936.19 121.85Loan to Employee 154.86 94.65 95.80Total 8,293.70 44,853.81 9,649.37

Note: 15 Other Current Financial AssetsSecurity Deposits (Unsecured, Considered Good) 1,133.30 1,293.35 795.07Others 2,029.69 156.52 10,828.43Forward Contract 1,573.92 705.42 147.22Total 4,736.91 2,155.29 11,770.72

Note: 16 Current Tax Assets (Net)Tax Deducted at Source 4,841.40 479.28 1,650.95Total 4,841.40 479.28 1,650.95

Note: 17 Other Current Assets[Unsecured, Considered Good]Advances to Suppliers 16,905.04 6,762.61 11,535.51Advances to Employee 59.29 29.20 12.13Security Deposits 23.76 1.05 -Balance with Revenue Authorities 1,580.97 786.07 2,224.65Prepaid Expenses 5,054.75 474.17 601.44Others 1,638.05 2,759.36 2,516.73Total 25,261.86 10,812.46 16,890.46



(` in Lakhs)As at

March 31, 2017 March 31, 2016Note: 18 Equity Share Capital

Authorised:150,000,000 Equity Shares of `10/- 15,000.00 15,000.00[150,000,000 Equity Shares in March 31,2016 & April 1,2015]Add:17,250,000 Equity shares of `10/- each on account of Amalgamation 1,725.00 1,725.00

16,725.00 16,725.00Issued, Subscribed and Paid-up: As at April 1, 2015 (98,120,451/- equity shares of `10/- each fully Paid) 9,812.05 Shares Issued during the year on conversion of share warrants 431.73 As at March 31, 2016 (102,437,724/- equity shares of ` 10/- each fully Paid)

10,243.77

Issued during the period 1,617.83 As at March 31, 2017 (118,616,005 equity shares of ` 10/- each fully Paid) 11,861.60 10,243.77

A The reconciliation in number of shares is as under: Number of shares at the beginning of the year 10,24,37,724 9,81,20,451 Shares Issued during the year on conversion of fully convertible debenture

- -

Shares Issued during the year on conversion of share warrants 1,61,78,281 43,17,273 Number of shares at the end of the year 11,86,16,005 10,24,37,724

B Rights, Preferences and Restriction of Share holders:The company has only one class of Equity shares having par value of ` 10/- each. The equity shares have rights, Preferences and restrictions which are in accordance with the provision of law, in particular the Companies Act 2013. The dividend proposed by the Board of Directors is subject to shareholders approval in the ensuing Annual General Meeting.

C Details of Shareholder holding more than 5% of aggregate Equity Shares of ` 10/- each

March 31,2017 March 31,2016 April 1,2015Name of share holder Number of

Shares% to total

share holdingNumber of

Shares % to total

share holdingNumber of

Shares % to total

share holdingMehul C Choksi 3,09,46,456 26.09% 3,07,68,018 30.04% 3,03,43,018 30.92%D. B. Corp Limited NIL NIL 52,01,055 5.08% 60,54,960 6.17%Macquarie Finance (India) Private Limited

* * * * 50,00,000 5.10%

Ramesh shah 68,83,432 5.80%Rakesh Gajera 68,24,226 5.75%Chaitya Shah 68,02,896 5.74%* During the year, percentage of holding reduced to less than 5%

D Particulars of shares issued for consideration other than cash, shares bought back and bonus shares in last five years:i. Shares bought back -- NILii. Issue of bonus shares – NIL.

E There are no shares reserved for issue under options, contracts / commitments for sale of Shares/ disinvestments.


189

F 3,051,640 warrants became in-eligible for conversion into equity shares and were forfeited by the Company.G Particulars of calls in arrears by directors and officers of the company. – NILH Security convertible into equity shares:

On January 22, 2015, the Company allotted 23,547,194 warrants on preferential basis to persons other than promoters. The said warrants carry an option / entitlement to subscribe to equivalent number of Equity Shares of ` 10/- each at a future date, not exceeding 18 (eighteen) months from the date of issue of such warrants at a price of ` 72.39 which includes a premium of ` 62.39 per share. Following is the summarized position as at March 31, 2017:

Particulars March 31, 2017 March 31, 2016 Number Amount

in ` Number Amount

in `No of Warrants pending allotment and balance in share warrants account

1,92,29,921 4,368.31 2,35,47,194 4,261.45

Amount received during the year:a) Being balance 75% of the amount on exercise of

conversion option during the year 7,896.47 2,343.96

b) As advance against convertible warrants - 888.18 12,264.78 7,493.59

Less: Amount utilized on conversion of warrants:a) Towards Equity shares of ` 10/- each 1,61,78,281 (1,617.83) 43,17,273 (431.73)b) Towards Share premium of ` 62.39 each (10,093.63) (2,693.55)c) Towards Share Forfeited 30,51,640 (552.27) -d)Amount Refunded (1.05) -f) Amount Written off - -

(12,264.78) (3,125.28)No of Warrants pending allotment and balance in share warrants account

- - 1,92,29,921 4,368.31

(` in Lakhs)As at

March 31, 2017 March 31, 2016 April 1, 2015Note: 19 Loans & Borrowings

SecuredFrom BanksExternal Commercial Borrowings 18,006.04 40,764.44 52,616.90Term Loans from Others 1,875.00 - -From Finanacial InstitutionsNon-Convertible Debentures 1,852.00 3,256.00 4,660.00Term Loan 7,445.20 6,625.50 6,222.50Total Secured borrowings 29,178.24 50,645.94 63,499.40UnsecuredPayable on preference shares 960.08 881.18 783.02Loans from Related Parties 7,438.64 15,906.22 14,991.60Other 54.02 48.02 42.67Fixed Deposit Scheme - - 187.89Total Unsecured borrowings 8,452.74 16,835.42 16,005.18Total 37,630.98 67,481.36 79,504.58[For Terms and Conditions refer Note : 46]



(` in Lakhs)As at


Note: 20 Other Non Current Financial LiabilitiesOther Payables - 2,394.50 6,040.46Total - 2,394.50 6,040.46

Note: 21 Other Non Current LiabilitiesLong term advance - 22.47 56.40Others 209.90 15,783.82 -Total 209.90 15,806.29 56.40

Note: 22 Employee Benefit ObligationsProvision for Employee Benefits 1,209.83 982.02 828.76Total 1,209.83 982.02 828.76

Note: 23 BorrowingsSecuredWorking Capital Facilities from Banks 7,55,575.71 7,44,337.69 7,92,323.60Working Capital Facilities from Financial Institution 1,510.46 2,085.70 2,491.00Loan from Director 314.05 - -Total 7,57,400.22 7,46,423.39 7,94,814.60[For Terms and Conditions refer Note : 46]

Note: 24 Trade PayablesMicro, Small and Medium EnterprisesCreditors for Goods / Labour 8,15,436.50 5,58,680.82 3,00,473.34Creditors for Expenses 9,117.07 17,029.39 29,800.33Total 8,24,553.57 5,75,710.21 3,30,273.67

Note: 25 Other Current Financial LiabilitiesAdvances To Staff 116.25 1,569.51 801.88Current Maturities of Long Term Debt 30,401.41 22,204.09 10,167.93Fixed Deposit Scheme 1.25 171.20 -Interest accrued 1,232.40 1,150.04 1,589.03Loan & Advances from Related Parties 2,267.08 - 438.79Deposits 115.71 - 600.85Unpaid Dividends 11.48 13.83 15.85Bank Overdraft 584.05 145.42 527.04Derivatives

Interest Swap 27.25 60.14 106.41 Forward Contract - 9.20 -

Others Payable 9,494.12 10,595.10 7,821.56Creditors payable for capital goods - 81.89 117.46Total 44,251.00 36,000.42 22,186.80Interest SwapThe Company had an interest rate swap agreement whereby the Company receives a fixed rate of interest of 1.52% and pays interest at a variable rate. The swap is being used to hedge the exposure to changes in the fair value of its variable rate secured loan. Any changes in fair value of the interest rate swap has been recognised in finance costs. The Company has reviewed its long term contract, there are no material foresseeable losses on such contracts.


191

(` in Lakhs)As at


Foreign Exchange Forward ContractsWhile the Company entered into other foreign exchange forward contracts with the intention of reducing the foreign exchange risk of expected sales and purchases, these contracts are not designated in hedge relationships and are measured at fair value through profit or loss.

Note: 26 Employee Benefit ObligationsProvision for Employee Benefits 180.49 133.55 119.01Total 180.49 133.55 119.01

Note: 27 Current Tax Liabilities NetProvision for Taxation 4,505.24 1,581.70 1,466.16Total 4,505.24 1,581.70 1,466.16

Note: 28 Other Current LiabilitiesAdvance Received from Customers 17,439.78 10,774.69 13,709.30Statutory Liabilities 1,149.31 1,593.26 2,023.62Other Advances 4,831.60 1,250.71 374.31Total 23,420.69 13,618.66 16,107.23

Note: 29 Revenue from OperationsExport (Inluding deemed exports)Diamonds 19,002.62 51,954.39Jewellery & Others 11,66,419.70 7,10,842.56DomesticDiamonds 2,21,980.57 2,20,254.69Jewellery & Others 2,49,883.73 4,15,397.73Total 16,57,286.62 13,98,449.37

Note: 30 Other IncomeDividend Income 7.50 7.50Exchange Difference 18,222.78 15,503.87Gain on Sale of Fixed Assets 0.31 3.36Gain on Sale of Investments 52.54 51.68Income from construction activities 6,275.57 -Lease Rental 151.29 -Miscellaneous Income 236.77 1,300.61Gain on fair valuation of derivatives 910.59 604.47Total 25,857.35 17,471.49

Note: 31 Purchase of Raw Material & Traded GoodsDiamonds 2,50,848.50 2,32,826.43Jewellery & Others 14,09,430.94 10,86,492.48Others 1,318.02 -Total 16,61,597.46 13,19,318.91



The Group is engaged in business of trading and manufacturing of Plain Gold Jewellery, Diamond Studded Jewellery, Diamond Cutting and Polishing. For this purpose Group has its own manufacturing facility and also undertakes job work for others.The company also purchases jewellery produced by reputed manufacturers. Considering the nature of product and type of business, cost of material consumed includes value of traded goods purchased for trading.

(` in Lakhs)As at

March 31, 2017 March 31, 2016Note: 32 Changes in Inventories of finished goods and stock in tradeStock at commencement:

Diamonds 1,86,395.81 1,29,477.95Jewellery & Others 3,87,777.64 5,69,877.58

5,74,173.45 6,99,355.53Less: Stock at closure:

Diamonds 2,21,056.37 1,33,351.76Jewellery & Others 5,00,865.19 6,05,553.34

7,21,921.56 7,38,905.10Total (1,47,748.11) (39,549.57)

Note: 33 Employee Benefits ExpenseSalaries and wages 30,273.62 26,388.26Contribution to gratuity 186.58 232.90Contribution to provident and other funds 415.72 487.96Staff welfare expenses 281.65 235.32Total 31,157.57 27,344.44

Note: 34 Finance CostInterest on financial instruments measure at amortised cost 67,026.69 70,327.92Processing and bank charges 2,367.58 2,658.62Total 69,394.27 72,986.54

Note: 35 Other ExpensesAdvertisement, Selling & Distribution expenses 7,782.63 6,323.02Auditor's Remuneration 91.77 86.42Bank charges & Commission 2,715.14 4,236.56Consumption of stores & spare parts 627.73 328.17Custom Duty 242.02 625.80Exchange Difference (Net) 121.05 (72.41)Insurance 162.58 201.23Labour Charges 14,296.80 8,037.36Legal, Professional And Service Charges 3,499.94 1,671.51Power & fuel 116.79 33.87Provision for Doubtful debts and Bad Debts W/off 6,304.13 3,512.42Rent, Rates & Taxes 3,051.86 3,447.22Repairs to Machinery 582.97 706.14Travelling Expenses 1,521.90 1,515.88Postage, Telephones & Communication charges 2,530.83 1,706.56Miscellaneous Expenses 1,240.61 (14,423.25)Total 44,888.75 17,936.50


193

NOTE 36: Investments

a. List of companies considered in the Consolidated Financial Statement are as follows:

Name of the companies

Country of Incorporation

Percentage of

ownership interest as at March 31, 2017

Percentage of

ownership interest

as at March 31,

2016

Percentage of

ownership interest as at April 1,

2015

Relationship Principal Activities

1 Gitanjali Exports Corporation Limited

India Refer note no. 38

100% 100% Subsidiary Diamond and

Jewellery Business

2 Gitanjali Infratech Limited

India 100% 100% 100% Subsidiary Infratech Business

3 Hyderabad Gems SEZ Limited

India 100% 100% 100% Subsidiary Special Economic

Zone develoment

Business4 Nashik Multi

Services SEZ Limited


Zone develoment

Business5 Eureka Finstocks

Private LimitedIndia 100% 100% 100% Subsidiary Financial

Securities Business

6 N&J Finstocks Private Limited

India 100% 100% 100% Subsidiary Financial Securities Business

7 Decent Securities & Finance Private Limited


8 Decent Investment & Finance Private Limited


9 Gitanjali Jewellery Retail Limited

India 100% 100% 100% Subsidiary Jewellery Business

10 MMTC Gitanjali Limited

India 73.85% 73.85% 73.85% Subsidiary Jewellery Business

11 Gitanjali Lifestyle Limited

India 100% 100% 100% Subsidiary Diamond, Jewellery

and Lifestyle Products Business






Percentage of


Percentage of

ownership interest

as at March 31,

2016

Percentage of


2015


12 Maya Retail Ltd India 95.94% 95.94% 95.94% Subsidiary Jewellery Business

13 Mobile NXT teleservices Pvt Ltd

India - - 70% Subsidiary Jewellery Business

14 Vidarbha Multiproduct SEZ Ltd


Zone Develoment

Business15 Nakshatra World

Limited (Formerly known as Gitanjali Brands Limited)

India 100% 99.99% 99.99% Subsidiary Jewellery Business

16 Nakshatra Brands Limited


17 Bezel Jewellery India Private Limited (Formerly known as D’Damas Jewellery (India) Private Limited)


18 Gili India Limited India 100% 100% 100% Subsidiary Jewellery Business

19 Asmi Jewellery India Limited


100% 100% Subsidiary Jewellery Business

20 Spectrum Jewellery Limited


100% 99.60% Subsidiary Jewellery Business

21 Aston Luxury Group Limited

Hongkong 100% 100% 100% Subsidiary Investment Activity

22 Crown Aim Limited

Hongkong 100% 100% 100% Subsidiary Jewellery Business

23 Leading Italian Jewels SRL

Italy 100% 100% 100% Subsidiary Jewellery Business

24 Tianxin Diamonds (Shanghai) Co. Ltd

China NIL 100% 100% Subsidiary Diamond Business Centre

195

NOTES FORMING PART OF THE FINANCIAL STATEMENTS AS AT 31ST MARCH,



Percentage of


Percentage of

ownership interest

as at March 31,

2016

Percentage of


2015


25 Leading Jewels of Japan Kabushiki Kaisha

Japan 100% 100% 100% Subsidiary Diamond and

Jewellery Business

26 Samuels Jewelers, Inc.

USA 100% 100% 100% Subsidiary Jewellery Retail

27 Gitanjali USA, Inc. USA 100% 100% 100% Subsidiary Investment Activity

28 Diamlink Inc USA 99.51% 51% 51% Subsidiary Diamond and

Jewellery Business

29 Diamlink Jewellery Inc

USA 99.51% 51% 51% Subsidiary Diamond and

Jewellery Business

30 Jewelry Marketing Company LLC


Jewellery Business

31 LJOW Holdings, LLC


Jewellery Business

32 Tri-star Worldwide LLC

USA 100% 100% 100% Subsidiary Diamond Business

33 GGL Diamonds LLC

USA 100% 100% 100% Subsidiary Diamond Business

34 Gitanjali Ventures DMCC

UAE 100% 100% 100% Subsidiary Dimond and Jewellery Business

35 Abbeycrest (Thailand) Limited

Thailand 99.99% 99.99% 99.99% Subsidiary Jewellery Business

36 Giantti Jewellery Trading (SH) Co. Ltd

China 100% 100% 100% Subsidiary Jewellery Business

37 Gitanjali Jewels LLC *

UAE 49% 49% 49% Associate Jewellery Business




Percentage of


Percentage of

ownership interest

as at March 31,

2016

Percentage of


2015


38 Jewelsouk Marketplace Ltd (formerly known as E Gitanjali Ltd)

India 40% 40% 40% Associate Jewellery Business

39 Dynamic Infrazone Private Limited (Formerly known as Dynamic Multi Trading Pvt. Ltd.)

India 100% - - Subsidiary Infratech Business

40 Kiam Jewels DMCC

U.A.E. 100% - - Subsidiary Jewellery Business

41 GSTC Co Ltd (earlier known as Gems TV)

Hong Kong 20.2% 20.2% 20.2% Associate Jewellery Business

* Financials of Gitanjali Jewels LLC are consolidated as subsidiary as the composition of board of directors is controlled by GGL.

b. List of companies considered in the Consolidated Financial Statements based on unaudited financial statement as approved by the Board of Directors of respective companies:

Name of the companies Country of Incorporation

Percentage of ownership interest as at March 31,

2017

Percentage of ownership interest as at

March 31, 2016


April 1, 2015

Relationship

1 Gitanjali Infratech Limited India 100% 100% 100% Subsidiary2 Hyderabad Gems SEZ Limited India 100% 100% 100% Subsidiary3 Aston Luxury Group Limited Hongkong 100% 100% 100% Subsidiary4 Crown Aim Limited Hongkong 100% 100% 100% Subsidiary5 Leading Jewels of Japan

Kabushiki KaishaJapan 100% 100% 100% Subsidiary

6 Leading Italian Jewels SRL Italy 100% 100% 100% Subsidiary7 Samuels Jewelers, Inc. USA 100% 100% 100% Subsidiary8 Gitanjali USA, Inc. USA 100% 100% 100% Subsidiary9 Diamlink Inc USA 99.51% 51% 51% Subsidiary10 Diamlink Jewelery Inc USA 99.51% 51% 51% Subsidiary11 Jewelry Marketing Company

LLCUSA 99.51% 51% 51% Subsidiary

12 LJOW Holdings, LLC USA 99.51% 51% 51% Subsidiary13 Tri-star Worldwide LLC USA 100% 100% 100% Subsidiary14 GGL Diamonds LLC USA 100% 100% 100% Subsidiary


197


Name of the companies Country of Incorporation

Percentage of ownership interest as at March 31,

2017


March 31, 2016


April 1, 2015

Relationship

15 Abbeycrest (Thailand) Limited Thailand 99.99% 99.99% 99.99% Subsidiary16 Jewelsouk Marketplace Ltd

(formerly known as E Gitanjali Ltd)

India 40% 40% 40% Associate

17 Kiam Jewels DMCC U.A.E. 100% - - Subsidiary18 Dynamic Infrazone Private

LimitedIndia 100% - - Subsidiary

19 Vidarbha Multi Product SEZ Limited

India 100% 100% 100% Subsidiary

c. The Consolidated Financial Statements includes accounts of ten subsidiaries(March 31,2016 Sixteen and April 1, 2015 Thirteen) subsidiaries (direct / indirect) whose net worth is negative. These being strategic investments, they continued to do business with the support of the holding company. The holding companies along with the management of respective subsidiaries are considering various options for reviving and making them viable. Hence, the accounts of these subsidiaries are prepared on going concern basis.

NOTE 37: Changes in Group Investments1) Aston Luxury Group Limited The Group, with a view to consolidate the business model, appointed reputed firm of consultants to advise on future

business model and restructuring of domestic and overseas subsidiaries. Based on the recommendations, as part of restructuring of overseas subsidiaries, the Holding company has plans of disinvestment in equity share of three of the foreign subsidiaries to it’s another overseas wholly owned subsidiary namely Aston Luxury Group Ltd, Hong Kong. The Company has not yet completed the restructuring process. The Company has with the changed market scenario is reexamining the proposed restructuring which may include refunding the advance received.

2) Nakshatra World Limited. (NWL) The company acquired 1 share held by Bennett Coleman & Co limited of Nakshatra World Limited( formerly

Known as Gitanjali Brands Limited ) vide transfer on 26th November 2016 for a consideration of Rs 2,275.50whereby Nakshatra World Limited has become wholly owned subsidiary of the Company. As at March 31, 2017 Group holds 100% interest in the subsidiary.

3) Dynamic Infrazone Private Limited. (Dynamic) (Formerly known as Dynamic Multi Trading Pvt. Ltd.) During the year, Group has acquired 100% equity share holding of Dynamic Infrazone Private Limited on February

14, 2017 , for total consideration of Rs.26Lakhs.4) Bezel Jewellery (India) Private Limited. (Bezel) (Formerly known as D’Damas Jewellery (India) Private Limited) In December 2016, the group acquired an additional 49 percent interest in Bezel Jewellery (India) Private Limited

(Formerly known as D’Damas Jewellery (India) Private Limited) for INR 133.51lakhs by acquiring 6,93,558 equity shares of Rs. 10 each at a premium of 9.25 per share. The group consequently recognised a increase in NCI of Rs. 27.91 million. The difference of Rs. 14.56 million represents a increase in retained earnings.


(` in lacs)Carrying amount of NCI acquired 279.08Consideration paid to NCI (6,93,558 shares @ 19.25 per share) 133.51Increase in equity attributable to owners of the Company 145.57

5) Kiam Jewles DMCC (Kiam) Group has formed a subsidiary company with Limited Liability on March 12, 2017 in Dubai viz. ‘Kiam Jewels

DMCC’. Company’s capital contribution is yet to be firmed up. The said subsidiary has commenced operations in month of March 17.

6) Tianxin Diamonds (Shanghai) Co. Ltd. (Tianxin) During the year, the Group has disposed off its entire investment in Tianxin. Accordingly, Tianxin ceases to be a

subsidiary from March 1,2017. The Group has recognised the gain on sale of investment in its consolidated statement of profit and loss.

7) Preference shares of Bezel Jewellery (India) Pvt Ltd. The company had issued Non cumulative redeemable 4% preference shares amounting to Rs.1,997.64 Lakhs in the

year 2003 to the JV partners Gitanjali Gems Limited and Damas LLC in equal ratio, which are redeemable in three installments i.e. before 31st March 2016, 31st March 2017 and March 31, 2018. Two installments aggregating to Rs.1,620.00 Lakhs were due for redemption on March 31, 2017 and the final installment amounting to Rs. 377.64 Lakhs is due on April 1, 2018. The Holding company viz. Nakshatra World Ltd. has proposed to purchase preference shares held by Damas LLC. The company’s above proposal is under discussion for quite some time with the JV partner and was pending for decision as on 31st March, 2017. In view of which the company is considering option of extending the due dates of redemption to April 1, 2023 and carry out necessary procedures. As a consequence, the preference shares which were due for redemptions upto March 31, 2017 have not been redeemed.

NOTE 38: Business Combination1. Merger of “Gitanjali Exports Corporation Limited (GECL)” with Gitanjali Gems Limited (GGL) under Sections

391 to 394 of the Companies Act, 1956, was approved by the Hon’ble High Court of Bombay on June 17, 2016. The certified copies of the aforementioned orders approving the Scheme were filed with the Registrar of Companies, N.C.T. of Mumbai on August 24, 2016. On this date the Scheme became effective from the Appointed Date of April 1, 2014 and the same has accounted as per Pooling of interest method.

2. Merger of “Asmi Jewellery India Limited (Asmi) and Spectrum Jewellery Limited (Spectrum)” with Nakshatra Brands Limited (NBL) under Sections 391 to 394 of the Companies Act, 1956, was approved by the Hon’ble High Court of Bombay on June 14, 2016. The certified copies of the aforementioned orders approving the Scheme were filed with the Registrar of Companies, N.C.T. of Mumbai on July 7, 2016. On this date the Scheme became effective from the Appointed Date of April 1, 2014 and the same has accounted as per purchase method.

NBL has issued 12,45,675 fully paid up equity shares @ of ` 4,477.88 per share (Face value ` 10/- each, premium of ` 4,467.88 per share) to the shareholders of Asmi as a consideration of merger.

NBL has issued 64,140 fully paid up equity shares @ of ` 4,477.88 per share (Face value ` 10/- each, premium of ` 4,467.88 per share) to the shareholders of Spectrum as a consideration of merger.

3. Honorable high court of Mumbai vide order dated July 8, 2016 approved merger of two of Company’s fellow subsidiaries viz. Gitanjali Lifestyle Limited (GLL) and Gitanjali Jewellery Retail Limited (GJRL) with Gili India Limited (GILI). Pending completion of formalities under the Companies Act 1956/2013 entities are not merged with appointed date as per the scheme is April 1, 2014.

199

NOTE 39: Calculation of Earning per Equity Share (EPS)The numerators and denominators used to calculate basic and diluted EPS are as follows:Particulars Year ended

March 31, 2017 March 31, 20161 Profit attributable to Equity shareholder (A) ` 16,771.46 10,371.362 Number of Shares at the beginning of the year

of `.10 /-eachNumbers 10,24,37,724 9,81,20,451

Share warrant Converted to Equity During the Year

Numbers 1,61,78,282 43,17,273

Basic and weighted average number of Equity shares outstanding at year end

(B) Numbers 11,46,94,812 10,05,06,512

3 Nominal Value of equity share ` 10.00 10.004 Basic & Diluted EPS 14.62 10.32

NOTE 40: Contingent Liabilities and Commitments (to the extent not provided for)

Particulars March 31,2017 March 31,2016 April 1,2015Claims against the Group not acknowledged as debt 5,963.93 3,834.63 2,466.37Tax demand for various years as per TRACES 472.63 643.32 808.97The Group has filed appeal against service tax 889.03 730.53 808.06Outstanding letter of credit 174.38 1,161.64 627.48In respect of guarantees given by Banks 54.74 32.94 54.88In respect of Non receipt of sales tax declaration forms 1,625.49 1,632.63 2.321.23In respect of Disputed Income Tax 53,723.92 31,984.16 27,996.29In respect of Sales Tax Demand notice 9,460.86 8,858.91 7,123.18Disputed Interest & Penalty on Stamp Duty 12.62 12.62 12.62In respect of Guarantees given to revenue and legal authorities

17.73 46.91 42.53

Disputed liability under Central Excise 123.82 123.82 123.82Estimated amount of contracts remaining to be executed on capital account not provided for (net of advances) 1,645.23 1,645.23 45.23The Group is in dispute with landlords 131.00 - -Interest on society maintenance & other charges 15.41 - -The Group has filed appeal against VAT/CST assessments order 2,423.89 - -Society dues - 513.60 414.81

Except as described above, there are no pending litigations which the company believes could reasonably be expected to have a material adverse effect on the result of operations, cash flow or the financial position of the Group.

NOTE 41: Operating leases Assets taken/given on leaseThe Group has taken various office premises under operating lease or leave and license agreements. These are generally non-cancelable and ranges between 11 months and 5 years under leave and license, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The Group has given refundable interest free security deposits under certain agreements. Lease payments are recognized in the Statement of profit and loss under the head ‘Rent, rates and taxes’.


The future minimum lease payments are as follows: - (` in Lakhs)

Particulars March 31,2017 March 31, 2016 April 1,2015Not later than one year 9,876.04 10,242.02 9,510.87Later than one year and not later than five years 38,740.95 22,107.26 8,116.30Later than five years 119.48 14,512.91 6,104.36

The future minimum lease receivables are as follows: - (` in Lakhs)

Particulars March 31, 2017 March 31, 2016 April 1, 2015Not later than one year 490.00 268.23 268.23Later than one year and not later than five years 2,387.52 - -Later than five years 10,158.13 - -

Note 42: Property, Plant and EquipmentThere is no impairment loss on Property, Plant and Equipment assets on the basis of review carried out by the management. During the current year, the Group has carried out physical verification of it’s property, plant and equipment. The discrepancies between the book records and the physical inventory are not material and have been adjusted in the books.NOTE 43 InventoryThe inventory comprising of raw material and finished goods is physically verified by the management at regular intervals and as at the end of the year. In respect of stock lying with third parties as at the year-end written confirmations has been obtained by the management. The quantity and valuation inventory at the year end has been certified by the management.NOTE 44: Loans and Advances:Loans and advances to other than group parties as at March 31,2017 is NIL(March 31,2016 ` 546.03lakhs and March 31, 2015 ` 1,862.54 lacs) were considered irrecoverable and have been written off during the year.NOTE 45: Trade ReceivableThere are some cases where the export receivables are outstanding for more than permissible limits for which the company is in process of filing application to authorized dealer / Reserve Bank of India.a) The trade receivable as at March 31, 2017 includes dues of Rs. 13,570.61 lakhs (March 31,2016 Rs. 1,740.03 lakhs

and April 1,2015 Rs. 2,824.30 lakhs) where suits have been filed/ are in the process of filing suits for recovery of dues. The suits are maintainable in the court of law. The management expects favorable outcome. The management is of the opinion that these debts are good and recoverable and no provision is considered necessary at this stage.

b) The Group has reviewed its domestic and export receivables during the year and has written off receivables for the year ended March 31, 2017of Rs. Nil (For March 31,2016 is Rs.2,292.13 lakhs and March 31, 2015 Rs 2,824.30 lakhs). The Group is in the process of filing application to authorized dealers / Reserve Bank of India in this respect.

c) There are some cases where the export receivables are outstanding for more than permissible limits for which the company is in process of filing application to authorized dealer / Reserve Bank of India.

d) The receivable and payable from same party have been netted off for purpose of presentation in financial statement.e) The Group considers all trade receivables as good and recoverable other than those in respect of which provision

for doubtful debts is made.

201

NOTE 46: BorrowingsA. Non-Current Borrowings

(a) 12% Non-Convertible Debentures issued to LIC of India The Group had issued 12% Non-Convertible debentures in FY 2009-10 aggregating to ` 12,500 lakhs. The

repayment term were revised in the FY 2014-15. Principal Payable for future year as per revised schedule is as under:

(` in Lacs) Year Principal Amount repayable2017-2018 1,4042018-2019 1,4042019-2020 448

As at March 31, 2017 there is an overdue amount of ` 348.94 Lakhs which includes overdue interest of ` 114.94 Lakhs. The said debentures are secured by first pari passu charge over immovable properties in Hyderabad belonging to Hyderabad Gems Sez Limited, a wholly owned subsidiary.

In respect of debentures installments maturing during the following year, the issuer company could not create liquid assets of ` 148 Lakhs as required under Rule 18 (7)(c) of the Company’s (Share capital and Debenture) Rule 2014 due to continued cash flow constraints arising out of regulatory restrictions on import of gold and unfavorable INR v/s USD currency fluctuation since FY 2012-13.

(b) External Commercial Borrowings (ECB) During the financial year 2011-12 the company raised ECBs aggregating USD 107.19 million from the

following two banks : (USD in Millions)

Sr.No Name of Bank Amount1. IDBI Bank Limited (Dubai)* 57.192. ICICI Bank Limited(Dubai) 50.00

Total 107.19 * In respect of ECB from IDBI, on 22nd January 2012 IDBI downsold ECB of USD 10 million to Bank of

Baroda Out of the above ECB proceeds, USD 57.19 million was utilised to redeem the outstanding Foreign Currency

Convertible Bonds (FCCBs) and balance USD 50million was utilised towards capital expenditure in SEZ unit in Hyderabad and investment in overseas subsidiaries.

The request for restructuring of ECB has been approved by RBI vide its letter dated November 27, 2014 and by IDBI vide its letter dated January 6, 2015 IDBI/DIFC/LOI/37/2014-15. As per revised terms, principal is repayable in 10 structured half yearly installments beginning from September 30,2015,last installment being due on March 31,2020.Interest is set at 6 months LIBOR rate + 490 BPS.The borrower has entered into derivative contract for hedging interest rate related risk via interest rate swap agreement while availing ECB from IDBI, Dubai.

The said ECBs are secured by first pari passu charge over certain immovable properties belonging to the subsidiaries and second charge on the borrower’s assets, namely, raw materials, stock in progress, finished goods, all book debts, movable plant and machinery, consumable stores and stores and spares, both present and future. During FY 2013-14, additional security has also been provided by way of properties of various subsidiaries in respect of the said ECBs.

During the year, there have been delays in servicing the principal and interest in respect of these ECBs. Amount due in next 12 months is USD 43.45 million (Equivalent INR ` 28,174.23 Lakhs).


In respect of ICICI as at March 31,2017 principal overdue is USD 8.75 million(Equivalent INR ` 5,674.38 Lakhs). Interest outstanding as on March 31, 2017 is USD 0.97 million(Equivalent INR `631.71 Lakhs). In respect of IDBI (BOB portion) ECB as at March 31,2017 principal overdue is USD 0.73 million (Equivalent INR 474.99 Lakhs)

(c) Term Loan from Banks On December 18, 2013, one of the subsidiary has entered into a $10,000,000 term loan agreement with Gordon

Brothers Finance Company (“GB”), as agent for the several financial institutions which may from time to time be a party to the agreement. The agreement terminates at the earlier of September 27, 2018, the termination of the revolving credit with Wells Fargo orthe date on which the Company’s obligations could be accelerated in the event of default.

The annual rate of interest on borrowings under the term loan is determined by taking the greater of 0.5% or 90 days LIBOR and adding a factor ranging from 7.75% to 9.0% on a scale based on the subsidiary’s availability under the revolving credit facility with Wells Fargo.

The subsidary Company granted a security interest, secondary to the security interest held by Wells Fargo, in substantially all of its owned or thereafter acquired assets ascollateral.The loan and security agreement contains customary covenants that include restricting the incurrence of debt, restricting the disposal of assets, restricting the entering into anyinvestment, merger, consolidation, reorganization, or recapitalization, restricting storeclosings and openings, restricting transactions with affiliates outside the ordinary course ofbusiness, and certain financial statement covenants.

(d) Term Loan from Financial Institution The Holding company has obtained corporate loan facility from IFCI limited for meeting long term working

capital requirement of ̀ 2,500 Lakhs. The tenure of the loan is 36 months including moratorium of 12 months. Interest rate is 11.70% plus margin of 3.30% with floor of 15%. The loan is secured by pledge of shares of Gitanjali Gems Limited, hypothecation of studded jewellery and personal guarantee of Mehul Chokshi. The outstanding balance as at March 31, 2017 ` 2,500 lakhs.Principal Payable for future year as per schedule is as under:

(` in Lakhs) Year Principal Amount repayable2017-2018 520.832018-2019 1,250.002019-2020 729.17

(d) Borrowings from Related Party The Grouphas obtained interest free loan from related party as at March 31,2017 of ` 7,388.97 Lakhs (March

31,2016 is ` 15,976.24 Lakhs and April 1,2015 15,034.25 lakhs)without any stipulations for repayment.

The changes in RBI policy in the year 2013-14 resulted in the liquidity crunch affecting the cash flows of the company. This resulted in the non payment of interest and overdrawing’s in the working capital facilities. The JLF suggested the promoters to infuse funds to support the operations of the group. Accordingly, promoters infused interest free loan without any stipulations for repayment.

B. Current Borrowings:(a) Working Capital Borrowing – from consortium of bankers The total outstanding balance of Working Capital Borrowing from consortium of bankers as at March 31,2017

amounted to ` 755,575.71 lakhs. The above facility carries interest ranging from 4.5 % to 13% per annum. Working capital borrowing has been secured against certain immovable properties of the Group, premises owned

by director & relative of director and its subsidiaries and hypothecation by way of first charge on all present and

203

future goods, movable assets, vehicles, furniture, stock in trade, fixed deposits, book debts along with the personal guarantee of the Managing Director.

In the month of May/June 2013, there have been changes in RBI Policy relating to issuance of BG/LC for purchase of gold. Due to this restriction, there has been sudden and severe impact on cashflow which started in May 2013and continued to affect cash flows during 2016-17.

During the year there were delay in servicing the interest on working capital borrowing and repayment of principal amounts. As atMarch 31, 2017, the facilities are overdrawn by ` 6,648.94lakhs mainly on account of non-servicing of interest.

(b) Working capital facility from Financial Institution During the year, one of the subsidary company availed ICD for ` 1,500 lakhs from SICOM for a period of 365

days. The loan carries interest @16.25%. For delayed payment and overdue, penal interest is chargeable. The loan is secured by subservient charges on movable and current assets of the company pledge of equity shares of Gitanjali Gems Limited owned by Mr. Mehul Choksi, Personal guarantee of Mr. Mehul Choksi and demand promissory note. In addition to this SICOM also holds charge on Jewellery pledged by another company as joint security and is also subservient to the loan availed by another company. The SICOM also hold PDCs issued by ultimate holding company.

As at March 31, 2017 interest of ` 10.46 Lakhs (March 31, 2016 ` 85.70 lakhs and April 1, 2015 ` 34.62 Lakhs) is overdue.

ICD availed by Asmi Jewellery India Limited (the merged entity) from SICOM in earlier years has been repaid during the year.

NOTE 47: Public DepositsDuring FY 2013-14, the Ultimate Holding Company accepted deposits of ` 227.29 Lakhs from the public within the meaning of section 58A of the Companies Act, 1956. Fixed deposits were for the period ranging from 1 year to 3 year and accordingly carried interest rate variance from 11.50% to 12.50%. As on March 31, 2017, the company repaid all the deposits which were maturing during the year except unclaimed matured deposit amounting to ` 1.25 lakhs which will be repaid by the company as and when claimed by the Fixed Deposit holders. The Group did not accept any further public deposit within the meaning of Section 73 to 76of the Companies Act 2013 and rules framed there under during the year.

NOTE 48: Trade Payables

Suppliers covered by Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and Industrial (Development & Regulation) Act, 1951.

a) The Company is in process to obtain information from suppliers. Based on the details regarding the status of the suppliers, to the extent obtained, no supplier is covered under the Micro, Small and Medium Enterprises Development Act, 2006. The auditors have relied upon the management information in this regard.

b) To the extent information available with the Company, it does not owe any sum to small scale industrial unit as defined in clause (j) of Section 3 of the Industrial (Development & Regulation) Act, 1951.

c) As represented by the Company, does not owe any sum to micro enterprises and small enterprises. Accordingly, the Company has not made a separate disclosure under Trade Payables in Balance Sheet as required by the notification dated 04th September, 2015 pertaining to alterations in Schedule III issued by MCA.


NOTE 49: Segment ReportingThe company is primarily engaged in the business of Diamond and Jewellery comprising of Diamond studded Jewellery and Plain Gold Jewelley. This represents a primary segment. The company operates in India as well as abroad.

(` in Lakhs)

ParticularsYear ended

31.03.2017 31.03.2016Audited Audited

1. Segment Revenuea) Segment - Diamond 385,413.21 319,927.94b) Segment - Jewellery 1,360,734.20 1,125,145.44c) Segment - Others 760.14 1,094.84

Total 1,746,907.55 1,446,168.22Less: Inter Segment Revenue 89,620.93 47,718.85Net Sales / Income from Operations 1,657,286.62 1,398,449.37

2. Segment ResultsProfit / (Loss ) before tax and interest from each segment

a) Segment - Diamond 5,862.35 3,225.69b) Segment - Jewellery 83,018.83 83,826.26c) Segment - Others (3,346.83) (4,283.27)

Total 85,534.35 82,768.68LessFinance cost 69,394.27 72,986.54ii) Other Un-allocable expensesTotal profit before exceptional item & tax 16,140.09 9,782.14

3. Capital EmployedSegment Assets

a) Segment - Diamond 322,898.60 469,091.45b) Segment - Jewellery 1,791,583.70 1,639,344.37c) Unallocated net assets 673,771.54 (25,459.43)

Total 2,788,253.84 2,082,976.39

Segment Liabilitiesa) Segment - Diamond 224,314.96 317,564.25b) Segment - Jewellery 1,747,352.49 1,341,658.46c) Unallocated net assets 160,354.20 (208,820.22)

Total 2,132,021.65 1,450,402.49

205

NOTE 50: Related Party Disclosures

Related Party Disclosures as per Ind AS 24 as on 31st March, 2017:

A. List of related parties :

Name of Company Gitanjali Gems Limited

1. Subsidiary companies (Direct / Indirect)

Bezel Jewellery India Private Limited(Formerly Known As D'Damas Jewellery (India) Private Limited)

Subsidiary

Gili India Limited SubsidiaryNakshtra Brands Limited SubsidiaryKiam Jewels DMCC (Refer Note 38) SubsidiaryGitanjali Jewellery Retail Limited SubsidiaryGitanjali Lifestyle Limited SubsidiaryMMTC Gitanjali Limited SubsidiaryHyderabad Gems SEZ Limited SubsidiaryN & J Finstocks Private Limited SubsidiaryGitanjali Ventures DMCC SubsidiaryCrown Aim Limited SubsidiaryMaya Retail Limited SubsidiaryTri-star Worlwide LLC SubsidiaryAbbeycrest (Thailand) Ltd SubsidiaryAston Luxury Group Limited SubsidiaryAsmi Jewellery India Ltd (Refer Note 38) SubsidiaryDecent Investment & Finance Pvt Ltd SubsidiaryDecent Securities & Finance Pvt Ltd SubsidiaryDiamlink Inc SubsidiaryDiamlink Jewelry Inc SubsidiaryEureka Finstock Pvt ltd SubsidiaryGGL Diamonds LLC SubsidiaryGiantti Jewellery Trading (SH) Co. Ltd SubsidiaryNakshatra World Ltd. (Formerly known as Gitanjali Brands Ltd.)

Subsidiary

Gitanjali Infratech Limited SubsidiaryGitanjali USA Inc. SubsidiaryJewelry Marketing Company LLC SubsidiaryLeading Italian Jewels SRL SubsidiaryLeading Jewels of Japan KK SubsidiaryNashik Multi Services SEZ LTD SubsidiarySamuels Jewelers Inc. SubsidiaryTianxin Diamonds (Shanghai) Co. Ltd SubsidiaryVidarbha Multiproduct SEZ Ltd SubsidiaryGitanjali Jewels LLC SubsidiaryMobileNxt Teleservices Private Limited SubsidiaryLJOW Holdings LLC SubsidiaryGitanjali Export Corporation Limited (Refer Note 38)

Subsidiary

Spectrum Jewellery Limited (Refer Note 38) SubsidiaryDynamic Infrazone Private Limited (Refer Note 38)

Subsidiary


2. Key Managerial personnel(KMP) Mehul C. Choksi Managing DirectorPankhuri Warange Compliance officerChandrakant Karkare Chief Financial

Officer3. Enterprises under common

control of KMPAudarya Investments Pvt.Ltd.Coronet Gems Pvt LtdEvergold Jewels Pvt.Ltd.Gitanjali Gold & Precious LLP.Gitanjali Realtors LLPIvida Technologies Private LimitedJoyce Trading (formerly known as Gitanjali Capital Ltd.)LJOW Private LimitedMannatJewellery Manufacturing Pvt.LtdMast Jewellery Distributions LLPMerlyn Luxury Group Pte Ltd [formerly known as Leading Italian Jewels (Singapore) pte Ltd.Midas CreationsMobilenxt Teleservices Private LimitedMozart Trading Pvt.Ltd.Partha Gems LLPPriyanka Gems Pvt. Ltd.Rohan Diamonds Pvt. Ltd.Shubhlavanyaa Jewel crafts Pvt.Ltd.The Next Diamond Company (as HUF)

4. Relative of KMP Amita R. BhansaliLate Guniyal C. ChoksiNeena D. ShethRohan C. ChoksiMaitreyi Choksi

5. Associate Company Jewelsouk Marketplace Limited (formerly known as E Gitanjali Ltd.)GSTC Co Ltd (earlier known as Gems TV)

6. Enterprises controlled by the investing venturer of the subsidiary company.

Damas Jewellery LLC (Refer Note 38)

207

B. Transactions with the related parties :

The following transactions were carried out with the related parties in the ordinary course of business and at arm’s length.

( ` in Lakhs)Year Ended

Nature of Transaction Particular March,2017 March,2016

Sales Subsidiary companies - -Key management personnel 5.37 9.78Enterprise under common control of Key management personnel

10.44 -

Relative of Key management personnel - -Enterprises controlled by the investing venturer of the subsidiary company

- 92.12

Associate Company 25,028.53 15,155.40

Purchase Associate Company 950.50 2,364.15Enterprise under common control of Key management personnel

986.02 -

Reimbursement of Expenses Subsidiary companies - -Key management personnel - 0.11Enterprise under common control of Key management personnel

9.46 2.01

Enterprise controlled by relatives of Key management personnel

1.27 -

Relative of Key management personnel - -Enterprises controlled by the investing venturer of the subsidiary company

- 22.45

Associate Company 1.33 229.25

Compensation :Short term benefit

Key Managerial personnel 218.51 117.93

Termination benefit

Key Managerial personnel 0.30 -

Corporate Guarantees given to the bankers for letter of credit facility

Subsidiary Companies - 303,178.00

Loan Repaid Key Managerial personnel 9,041.04 601.77Loan Given(Net) Enterprise under common control of

Key management personnel268.63 66.27

Associate Company - 507.18Loan Taken Key Managerial personnel 21.00 3,118.60

Enterprise under common control of Key management personnel

0.05 -


Year EndedNature of Transaction Particular March,2017 March,2016

Receipt Associate Company - 40.85Payments Associate Company 36.48 32.41Sale of Investment Key Managerial personnel - 8.44Loan given received back Enterprise under common control of

Key management personnel146.55 66.83

Loan received given back Enterprise under common control of Key management personnel

- 808.27

Rent Paid Enterprise under common control of Key management personnel

- 1.20

Labour Charges Received Associate Company 0.04 -

Amount Outstanding Year EndedNature of Transaction

Particular March, 2017 March, 2016 March, 2015

Trade Payables Subsidiary companies - - -Key management personnel - - -Enterprise under common control of Key management personnel

0.33 359.99 0.69

Enterprises controlled by relative of Key Managerial personnel

3,375.12 4,171.91 4695.07

Enterprises controlled by the investing venturer of the subsidiary company

- - 33.87

Relative of Key Management Personnel

- - 88.95

Associate Company 47.07 155.90 -Trade Receivables Subsidiary companies - - -

Key management personnel 2.55 - -Enterprise under common control of Key management personnel

24.10 - -

Enterprises controlled by relative of Key Managerial personnel

- 797.99 1895.18

Relative of Key management personnel

- - -


- - 60.50

Associate Company 2,738.00 935.78 - Loans and Advances to Related Party

Subsidiary companies - - -Key management personnel - - -Enterprise under common control of Key management personnel

1.50 138.40 8.62


- - -


- - -

209

Loans & Advances From Related Party

Subsidiary companies - - -

Key management personnel 4136.66 13,498.91 7,940.01Enterprise under common control of Key management personnel

768.72 - -

Enterprise under common control of Relatives Key management personnel

74.02 - -


60.98 60.98 -


- - -

Advance Received Key management personnel - 1000.00 -Advance to Supplier Enterprise under common control of

Key management personnel7.51 7.51 514.87

Associate Company - 1,164.71 -

Loans & AdvancesEnterprise under common control of Key management personnel

- 780.04 -

Associate Company - 71.96 -Advances From Customer

Enterprise under common control of Key management personnel

0.05 - 808.28

Unsecured Loan Key management personnel 3,192.20 - -

NOTE 51: Demonetization Demonetization: As per MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank

Notes(SBN) held and transacted during by group for the period from November 8, 2016 to December 30, 2016, the SBNs and other notes as per the notification is given below:

(` in Lakhs)

ParticularsSBNs(1) Other denomination

notes (2)Total ` (1+2)

Closing cash in hand as on November 8, 2016 624.75 46.84 671.59(+) Permitted receipts 25.66 25.66(-) Permitted payments (23.51) (23.51)(-) Amount deposited in Banks (624.75) (2.58) (627.33)Closing cash in hand as on December 30, 2016 - 46.41 46.41

For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

NOTE 52: Interest in Associates The Group has interests in number of individually immaterial associates that are accounted for using the equity method. Details

of which are as below:

Particulars 31-Mar-17 31-Mar-16 1-Apr-15Aggregate carrying amount of individually immaterial associates

1306.32 1334.62 1397.23

Aggregate amounts of the group’s share of:Profit/(loss) from continuing operations - (99.00) NAOther comprehensive income - - NATotal comprehensive income - (99.00) NA


NOTE 53: Goodwill

Goodwill allocated to each operating segment is given below:

As atMarch 31, 2017 March 31, 2016 April 1, 2015

(i) Diamond - - -(ii) Jewellery 20,402.96 17,380.00 16,593.39(iii) Others 1,317.06 1,317.06 1,317.06Total 21,720.03 18,697.06 17,910.45

The recoverable amount of a Cash Generating Unit [CGU] is the higher of its carrying value less cost to sell and its value-in-use. The chief operating decision maker reviews the goodwill for any impairment at the operating segment level. The value-in-use is determined based on specific calculations. These calculations use pre-tax cash flow projections for a CGU/ groups of CGU over a period of five years. As of March 31, 2017, March 31, 2016 and April 1, 2015 the estimated recoverable amount of the CGU exceeded its carrying amount.

NOTE 54: Tax Expense

(a) Reconciliation of tax expenseRs. In Lakhs

Particulars For the year ended

March 31, 2017

For the year ended

March 31, 2016 Profit before tax 16,140.10 9,782.15 Company’s domestic tax rate 34.608% 34.608% Tax on profit before tax 5,585.77 3,385.41 Tax effect of:Income and expenses in nature of permanent differences or on which deferred tax is not recognised ( 2,497.34) (2,657.97) Unabsorbed loss on which deferred tax is not created (1,363.85) 212.82 Income exempt from tax (1,063.46) (796.20) Standard deduction (House Property) (2.57) (1.67) Disposal of subsidiary 114.42 - Tax adjustment of prior period 407.04 636.04 Income tax short provision - (13.91) Others (87.00) (57.15) Effect of difference in tax rates in other group companies (1,636.29) (1,485.11) Total Tax Expenses (543.28) (777.75)

211

Deferred Tax Assets & Liabilities (Rs. in Lakhs)Particulars As at

April 1, 2015

Chargefor year

As atMarch

31, 2016

Chargefor year

As atMarch

31, 2017Deferred Tax Liabilities:Impact on statement of profit and lossDeferred tax on unamortised processing fees 238.49 (84.78) 153.71 (65.65) 88.06Deferred tax on liability on account of preference shares 61.10 (30.26) 30.84 (24.49) 6.35Deferred tax on fair valuation of forward contract export 50.95 190.00 240.95 325.20 566.15Deferred tax on gain on Mutual Fund 11.02 (3.72) 7.30 - 7.30Deferred tax on differences in depreciation as per tax books and financial books 17,080.10 (1,565.31) 15,514.79 (1,440.26) 14,074.54Total Impact on statement of profit and loss 17,441.66 (1,494.06) 15,947.60 (1,205.20) 14,742.40Impact on statement on other comprehensive incomeDeferred Tax on actuarial gain/loss of post employment benefit plan - 8.38 8.38 (29.43) (21.05)Re measurement of Defined Benefit plan - 10.42 10.42 3.39 13.81Total Impact on other comprehensive income - 18.80 18.80 (26.04) (7.24)Total Deferred Tax Liabilities [A] 17,441.66 (1,475.26) 15,966.40 (1,231.24) 14,735.16Deferred Tax Assets:Impact on statement of profit and lossDeferred tax on Fair valuation of interest swap 36.83 (16.01) 20.81 (11.38) 9.43Deferred tax on Provision for leave salary/gratuity 314.86 90.11 404.97 106.98 511.95Unabsorbed business losses/depreciation 345.78 1,504.73 1,850.51 (1,524.55) 325.96Others 1,535.84 (1,535.84) - (0.08) (0.08)Deferred tax on gain due of fair value of financial instrument - 0.73 0.73 7.47 8.21MAT Credit Entitlement 15,026.92 2,935.10 17,962.02 3,070.94 21,032.96Total Impact on statement of profit and loss 17,260.23 2,978.82 20,239.04 1,649.38 21,888.43Other comprehensive income:Remeasurement of defined benefit plan - (17.02) (17.02) 26.19 9.17Total Impact on other comprehensive income - (17.02) (17.02) 26.19 9.17Total [B] 17,260.23 2,961.80 20,222.02 1,675.57 21,897.59Net Deferred Tax Asset/ (Liabilities) [B-A] (181.43) 4,437.06 4,255.62 2,906.81 7,162.43


NOTE 55: Undisputed Statutory Dues outstanding for a period over 180 days:As a result of change in RBI policy on gold imports, the company’s cash flow was severely affected from mid May 2013 onwards and it continued to affect the cash flows of the company during FY 2015-16. For the said reason, bank working capital facilities were overdrawn on account of non serving of interest. As a result, the company could not meet some of the statutory payments in time.As a result of the above, statutory dues as mentioned below remains outstanding for a period over 180 days from due dates as on

Nature of Liability March 31, 2017 March 31, 2016 April 1, 2015Direct Tax 1,458.92 2,058.62 2,959.12Other Statutory Dues 542.25 564.92 417.67

The recoverable amount of a Cash Generating Unit [CGU] is the higher of its carrying value less cost to sell and its value-in-use. The chief operating decision maker reviews the goodwill for any impairment at the operating segment level. The value-in-use is determined based on specific calculations. These calculations use pre-tax cash flow projections for a CGU/ groups of CGU over a period of five years. As of March 31, 2017, March 31, 2016 and April 1, 2015 the estimated recoverable amount of the CGU exceeded its carrying amount.

213

NOTE 56: Capital Management

a) The primary objective of the Group's capital management is to maximize the shareholders’ interest, safeguard its ability to continue as a going concern and reduce its cost of capital. Company is focused on keeping strong total equity base to ensure independence, security as well as high financial flexibility for potential future borrowings required if any. Company’s capital for capital management includes long term debt and total equity. As at March 31,2017 total capital is ` 693,863.16 lakhs (` 700,055.27 lakhs and ` 692,266.88 lakhs for March 31,2016 and April 1,2015 respectively). No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2017,March 31, 2016 and April 1,2015.

b) Dividend (` in.Lakhs)

Particulars March 31, 2017 March 31, 2016 April 1,2015(i) Equity sharesFinal dividend for the year ended March 31, 2016 of 0.5 per share approved in FY 2016-17

512.19

(ii) Dividend not recognised at the end of the reporting periodIn addition to the above dividends, since year end the directors have recommended the payment of a final dividend of ` 0.8 per fully paid equity share. This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

948.93

NOTE 57: Financial Instruments – Fair Values and Risk ManagementA. Accounting classification

` in Lakhs March 31, 2017 Fair value

through profit or loss

Fair value through OCI

Amortised Cost

Total

Financial assets - Non CurrentInvestments 577.98 4,294.73 2.63 4,875.34Loans - - 8,812.85 8,812.85Others - - 1,758.81 1,758.81Financial assets - CurrentTrade Receivables - - 1,282,866.04 1,282,866.04Cash and Cash Equivalents - - 8,656.67 8,656.67Other Bank Balances - - 19,888.72 19,888.72Loans - - 8,293.71 8,293.71Others - - 3,162.99 3,162.99Derivatives 1,573.92 - - 1,573.92Total Financial Assets 2,151.90 4,294.73 1,333,442.42 1,339,889.05Financial liabilities - Non CurrentBorrowings - - 37,630.98 37,630.98Others - - - -Financial liabilities – CurrentWorking Capital Loans - - 757,400.23 757,400.23Trade Payables - - 824,553.58 824,553.58Others - - 44,223.75 44,223.75Derivatives 27.25 - - 27.25 Total Financial Liabilities 27.25 - 1,663,808.54 1,663,835.79



` in LakhsMarch 31, 2016 fair value



Amortised Cost

Total

Financial assets - Non CurrentInvestments 550.05 3,059.12 2.63 3,611.80Loans - - 2,027.70 2,027.70Others - - 6,760.99 6,760.99Financial assets - CurrentTrade Receivables - - 1,154,268.73 1,154,268.73Cash and Cash Equivalents - - 7,849.92 7,849.92Other Bank Balances - - 17,877.98 17,877.98Loans - - 44,853.81 44,853.81Others - - 1,449.88 1,449.88Derivatives 705.42 - - 705.42Total Financial Assets 1,255.47 3,059.12 1,235,091.64 1,239,406.23Financial liabilities - Non CurrentBorrowings - - 67,481.36 67,481.36Other Non Current Financial Liabilities - - 2,394.50 2,394.50Financial liabilities – CurrentWorking Capital Loans - - 746,423.39 746,423.39Trade Payables - - 575,710.21 575,710.21Others - - 35,931.08 35,931.08Derivatives 69.34 - - 69.34 Total Financial Liabilities 69.34 - 1,427,940.53 1,428,009.88

` in lakhsApril 1, 2015 fair value



Amortised Cost

Total

Financial assets - Non CurrentInvestments 579.53 3,501.49 2.98 4,084.00Loans - - 14,787.14 14,787.14Others - - 4,073.76 4,073.76Financial assets - CurrentTrade Receivables - - 991,579.31 991,579.31Cash and Cash Equivalents - - 10,164.26 10,164.26Other Bank Balances - - 15,603.60 15,603.60Loans - - 9,649.37 9,649.37Others - - 11,623.50 11,623.50Derivatives 147.22 - - 147.22 Total Financial Assets 726.75 3,501.49 1,057,483.92 1,061,712.16Financial liabilities - Non CurrentBorrowings - - 79,504.58 79,504.58Other Non Current Financial Liabilities - - 6,040.46 6,040.46Financial liabilities – CurrentWorking Capital Loans - - 794,814.60 794,814.60Trade Payables - - 330,273.66 330,273.66Others - - 22,080.39 22,080.39Derivatives 106.41 - - 106.41Total Financial Liabilities 106.41 - 1,232,713.69 1,232,820.10

215


B. Fair value MeasurementAll assets and liabilities for which the fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Inputs are quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Financial assets and liabilities measured at fair value - recurring fair value measurements31 March 2017 Level 1 Level 2 Level 3 TotalFinancial assetsInvestments at FVTPLMutual fund - 577.98 - 577.98Derivative not designated as hedgeForward contract - 1,573.92 - 1,573.92Financial Investments at FVOCIQuoted equity instruments 3,459.55 - - 3,459.55Unquoted equity instruments - 835.18 - 835.18Total financial assets 3,459.55 2,987.08 - 6,446.63Financial liabilitiesDerivative not designated as hedgeInterest swap - 27.25 - 27.25Total financial liabilities - 27.25 - 27.25

Financial assets and liabilities measured at fair value - recurring fair value measurements31 March 2016 Level 1 Level 2 Level 3 TotalFinancial assetsInvestments at FVTPLMutual fund - 550.06 - 550.06Derivative not designated as hedgeForward contract - 705.42 - 705.42Financial Investments at FVOCIQuoted equity instruments 2,458.23 - - 2,458.23Unquoted equity instruments - 600.89 - 600.89Total financial assets 2,458.23 1,856.37 - 4,314.60Financial liabilitiesDerivative not designated as hedgeForward contract derivative liability - 9.20 - 9.20Interest swap - 60.14 - 60.14Total financial liabilities - 69.34 - 69.34



Financial assets and liabilities measured at fair value - recurring fair value measurements1 April 2015 Level 1 Level 2 Level 3 TotalFinancial assetsInvestments at FVTPLMutual fund - 579.53 - 579.53Derivative not designated as hedge -Forward contract - 147.22 - 147.22Financial Investments at FVOCI -Quoted equity instruments 2,816.25 - - 2,816.25Unquoted equity instruments - 685.24 - 685.24Total financial assets 2,816.25 1,411.99 - 4,228.24Financial liabilitiesDerivative not designated as hedgeInterest swap - 106.41 - 106.41Total financial liabilities - 106.41 - 106.41

Financial instruments measured at amortisedcost :The carrying value approximates fair value for long term financial assets and liabilities measured at amortised cost. There are no transfers during the year in level 1, 2 and 3. The Group policy is to recognize transfers into and transfers out of fair value hierarchy level as at the end of reporting period.

C. Financial risk managementRisk management frameworkThe Group’s board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework.The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.The Group has exposure to the following risks arising from financial instruments:i. Credit riskii. Liquidity risk andiii. Market risk

i. Credit riskCredit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due to the Group causing financial loss. It arises from cash and cash equivalents, deposits with banks and financial institutions, security deposits, loans given and principally from credit exposures to customers relating to outstanding receivables. The Group's maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at reporting date.The Group continuously monitors defaults of customers and other counterparties, identified either individually or by the Group, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with creditworthy counterparties.

217


In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. The Group has very limited history of customer default, and considers the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and cash equivalents, mutual funds, bank deposits, loans and derivative financial instruments is considered negligible, since the counterparties are reputable organisations with high quality external credit ratings.Group provides for expected credit losses on financial assets by assessing individual financial instruments for expectation of any credit losses. Since the assets have very low credit risk, and are for varied natures and purpose, there is no trend that the Group can draws to apply consistently to entire population. For such financial assets, the Group's policy is to provides for 12 month expected credit losses upon initial recognition and provides for lifetime expected credit losses upon significant increase in credit risk. The Group does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.

Reconciliation of loss allowance provision-Trade receivableParticulars ` in lakhsLoss allowances on April 1,2015 1,369.77Changes in Loss allowances (1,160.90)Loss allowances on March 31,2016 208.87Changes in Loss allowances (1.77)Loss allowances on March 31,2017 207.10

ii. Liquidity riskLiquidity Risk is defined as the risk that the Group will not be able to settle or meets its obligations on time at a reasonable price.In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Group’s net liquidity through rolling forecasts of expected cash flows.

a) Exposure to liquidity riskThe table below is an analysis of group's financial liabilities based on their remaining contractual maturities of financial liabilities at the reporting date.

` in LakhsMarch 31, 2017 Contractual cash flows


Non-derivative financial liabilities :Borrowings 37,063.96 39,807.89Working Capital Loan 757,400.22 -Trade payables 824,553.57 -Other Financial Liabilities 10,170.84 -Derivative Financial liabilities :Interest Swap 27.25 -Forward Contract 115.71





Non-derivative financial liabilities :Borrowings 26,737.21 71,958.02Working Capital Loan 746,423.39 -Trade Payables 575,710.21 -Other Financial Liabilities 7,278.65 -Derivative Financial liabilities :Interest Swap 60.14 -Forward Contract 9.20 -



Non-derivative financial liabilities :Borrowings 15,443.15 86,404.55Working Capital Loan 794,814.60 -Trade Payables 330,273.67 -Other Financial Liabilities 9,213.32 -Derivative Financial liabilities :Interest Swap 106.41 -Forward Contract - -

iii. Market riskMarket risk is the risk that changes in market prices that will affect the Group’s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments.

a. Currency riskThe Group is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Group’s functional currency. The Group as per its overall strategy uses forward contracts to mitigate its risks associated with fluctuations in foreign currency such contracts are not designated as hedges under Ind AS 109. The Group does not use forward contracts and swaps for speculative purposes.

Exposure to currency risk March 31,2017 March 31,2016 April 1,2015

Net Exposure Currency Risk (45,138.62) (42,530.66) 143,605.19A reasonably possible strengthening /weakening of the Indian Rupee against US dollars at March 31 would have affected the measurement of financial instruments denominated in US dollars and affects profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

219


Impact on statement of profit and loss (Net of tax)

Particulars March 31,2017 March 31,2016Strenghtening of USD [4%Movement (Previous year 5%)]

(1,180.68) (1,390.58)

Weakening of USD [4%Movement (Previous year 5%)]

1,180.68 1,390.58

b. Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Group’s position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio

Particulars Outstanding Amount at

March 31,2017

Outstanding Amount at

March 31,2016

Outstanding Amount at

April 1,2015

Fixed Rate Loan 22,031.24 28,485.85 28,931.53Variable Rate Loan 806,199.73 807,891.59 856,478.75Total 828,230.97 836,377.44 885,410.28

SensitivityBelow is the sensitivity of profit or loss and equity changes in Interest rates.Particulars Impact on statement of profit and

loss March 31, 2017 March 31, 2016

Interest sensitivity*Interest rates – increase by 100 basis points (100 bps)

(5,035.17) (5,038.09)

Interest rates – decrease by 100 basis points (100 bps)

5,035.17 5,038.09

* Holding all other variables constant



c) Price RiskThe Group’s exposure to price risk arises from investments in mutual fund held by the Group and classified in the balance sheet as fair value through Profit and Loss.SensitivityBelow is the sensitivity of profit or loss to changes in price of mutual fundParticulars Impact on statement of profit and

loss March 31, 2017 March 31, 2016

Interest sensitivity*Increase 10% ( Previous Year 10% ) 226.23 160.75Decrease 10% ( Previous Year 10% ) (226.23) (160.75)

Note: 58 Managerial remuneration

The managing Directors remuneration of Rs 48 Lakhs per annum, was approved by the Shareholders in the meeting held on September 28, 2012 for a period of five years ending 31st July, 2017. The Board of directors of ultimate holding company vide resolution dated December 14, 2016 has approved enhanced remuneration to Managing Director from Rs 48 Lakhs per annum to Rs 110 Lakhs per annum for remaining period, keeping all other terms and conditions unchanged. On account of above for Financial Year 2016-17 the remuneration is in excess by Rs 62 Lakhs. The increase in remuneration is subject to subsequent approval and ratification by the shareholders of the ultimate holding company in the Next ensuing General Meeting

Note : 59 Investor Education & Protection Fund

There has been no delay in transferring amount required to be transferred to Investor Education and Protection Fund by the Company.

Others

Previous year’s figures have been regrouped/rearranged/reworked wherever necessary and possible so as to confirm to current year’s classification.








221


Additional information required by Schedule III31 March 2017Name of the entity in the group Net assets (total assets

minus total liabilities)Share in profit or

(loss)Share in Other Comprehensive income (OCI)

Share in Total Comprehensive income (TCI)

As % of consolidated

net assets

Amount As % of consolidated net profit or

loss

Amount As % of consolidated

OCI

Amount As % of consolidated

TCI

Amount

ParentGitanjali Gems Limited (Refer note-1)

53% 348,530 24% 3,972 -8% 179 29% 4,151

SubsidiariesGitanjali Infratech Limited 1% 4,844 2% 338 0% 4 2% 342Hyderabad Gems Private Limited 17% 113,830 -11% (1,849) 0% 0 -13% (1,849)Nashik Multi Services SEZ Limited 1% 9,416 0% (5) 0% - 0% (5)Eureka Finstocks Private Limited 0% (428) 0% (29) 0% - 0% (29)N & J Finstocks Private Limited 0% (427) 0% (73) 0% - -1% (73)Decent Securities &Finanace Private Limited

0% (120) 0% (10) 0% - 0% (10)

Gitanjali Jewellery Retail Limited 0% (2,401) -1% (175) 0% 7 -1% (167)Decent Investment &Finanace Private Limited

0% 49 0% (17) 0% - 0% (17)

MMTC Gitanjali Limited 0% 701 0% (25) 0% 0 0% (24)Gitanjali Lifestyle Limited 0% (1,509) -7% (1,239) 0% 9 -9% (1,230)Maya Retails Limited -1% (3,455) 0% (53) 0% - 0% (53)VidarbhaMultiprodust SEZ Ltd 0% 4 0% (0) 0% - 0% (0)Nakshatra World Limited 13% 87,470 6% 1,026 1% (21) 7% 1,005Nakshatra Brands Limited (Refer note-2)

13% 87,844 38% 6,400 0% 6 44% 6,406

Bezel Jewellery India Private Limited (Refer note-3)

0% 1,828 0% 50 0% 1 0% 51

Gili India Limited 4% 26,532 16% 2,702 1% (32) 18% 2,670Dynamic Infrazone Private Limited (Refer Note-4)

0% (1) 0% (1) 0% - 0% (1)

Foreign SubsidiariesAston Luxury Group Limited 3% 20,500 0% (30) -69% 1,562 11% 1,533Crown Aim Limited 1% 4,665 2% 359 17% (381) 0% (22)Abbeycrest (Thailand) Limited 0% (1,548) 3% 511 29% (654) -1% (143)Gitanjali Jewels LLC 0% 2,179 0% 17 27% (610) -4% (593)Leading Jewels of Japan Kabushiki Kaisha

0% (995) -1% (97) -1% 18 -1% (79)

Leading Italian Jewels SRL 0% 2,055 -4% (747) -30% 667 -1% (80)Samuels Jewelers, Inc. 6% 41,000 1% 98 40% (900) -6% (801)Gitanjali USA, Inc. 1% 8,074 0% (61) 47% (1,059) -8% (1,121)



Diamlink INC subsidiaries (Refer note-5)

2% 12,183 1% 93 22% (489) -3% (396)

Tri-star Worldwide LLC 0% 398 0% 24 -39% 867 6% 891GGL Diamonds LLC 0% 1,699 0% 45 0% 3 0% 48Gitanjali Ventures DMCC 15% 98,283 17% 2,825 72% (1,628) 8% 1,197Giantti Jewellery Trading (SH) Co. Ltd 0% (2,200) -1% (131) -8% 190 0% 59Tianxin Diamonds (Shanghai) Co. Ltd (Refer note-6)

0% - -3% (458) 6% (130) -4% (587)

Kiam Jewels DMCC (Refer note-7) 0% 2,341 15% 2,421 3% (77) 16% 2,344Non controlling interests in all subsidiaries

1% 4,301 -1% (88) -10% 219 1% 131

Adjustment arising out of consolidation -31% (205,109) 5% 888 0% (0) 6% 888Total 100% 660,533 100% 16,683 100% (2,248) 100% 14,435

Note-1 : Merger of “Gitanjali Exports Corporation Limited (GECL)” with Gitanjali Gems Limited (GGL) under Sections 391 to 394 of the Companies Act, 1956, was approved by the Hon’ble High Court of Bombay on June 17, 2016. The certified copies of the aforementioned orders approving the Scheme were filed with the Registrar of Companies, N.C.T. of Mumbai on August 24, 2016. On this date the Scheme became effective from the Appointed Date of April 1, 2014 and the same has accounted as per Pooling of interest method.

Note-2 : Merger of “Asmi Jewellery India Limited (Asmi) and Spectrum Jewellery Limited (Spectrum)” with Nakshatra Brands Limited (NBL) under Sections 391 to 394 of the Companies Act, 1956, was approved by the Hon’ble High Court of Bombay on June 14, 2016. The certified copies of the aforementioned orders approving the Scheme were filed with the Registrar of Companies, N.C.T. of Mumbai on July 7, 2016. On this date the Scheme became effective from the Appointed Date of April 1, 2014 and the same has accounted as per purchase method. - NBL has issued 12,45,675 fully paid up equity shares @ of Rs 4,477.88 per share (Face value Rs 10/- each, premium of Rs 4,467.88 per share) to the shareholders of Asmi as a consideration of merger. - NBL has issued 64,140 fully paid up equity shares @ of Rs 4,477.88 per share (Face value Rs 10/- each, premium of Rs 4,467.88 per share) to the shareholders of Spectrum as a consideration of merger.

Note-3 : During the year the Group acquired 693,558 equity shares of Rs 10 each in its subsidiary namely Bezel Jewellery (India) Private Limited (Formerly known as D'Damas Jewellery (India) Private Limited) at premium of Rs 9.25 per share. Aggregate consideration is Rs13.35 million. Consequently w.e.f December 21, 2016, Bezel Jewellery (India) Private Limited has become wholly owned subsidiary of the Subsidiary company.

Note-4 : During the year, Group has acquired 100% equity share holding of Dynamic Infrazone Private Limited on February 14, 2017 , for total consideration of ` 26 Lakhs. Note-5 : Figures represents consolidated figure of Diamlink Inc., Diamlink Jewellery Marketing Company LLC and LJOW Holdings LLC.

Note-6 : During the year, the Group has disposed off its entire investment in Tianxin. Accordingly,Tianxin ceases to be a subsidiary from March 1,2017. The Group has recognised the gain on sale of investment in its consolidated statement of profit and loss.

Note-7 : Group has formed a subsidiary company with Limited Liability on March 12, 2017 in Dubai viz. ‘Kiam Jewels DMCC’. Company’s capital contribution is yet to be firmed up. The said subsidiary has commenced operations in month of March 17.

223


Form AOC-1(Information of Subsidiaries, JVs and Associates as required under first proviso to sub-section (3) of section 129 of the

Companies Act, 2013 read with rule 5 of Companies (Accounts) Rules, 2014)March 2017

Part ‘A’ - Summary of Financial Information of Subsidiary Companies` in Lakhs

Name of the subsidiary Reporting currency

Exchange rate

Capital Reserves Total assets

Total liabilities

Investments Turnover Profit before

taxation

Provision for

taxation

Profit after

taxation

Proposed dividend

% of share

holding

Country

Gitanjali Infratech Ltd INR - 5,000 (156) 21,573 21,573 31 - 369 30 338 - 100% IndiaHyderabad Gems SEZ Ltd INR - 5 113,825 122,691 122,691 - - (2,630) (781) (1,849) - 100% IndiaNashik Multi Services SEZ Ltd INR - 5 9,411 10,248 10,248 - - (5) - (5) - 100% IndiaEureka Finstocks Private Ltd INR - 5 (433) 657 657 - - (28) 1 (29) - 100% IndiaN & J Finstocks Private Ltd INR - 5 (432) 1,590 1,590 - - (72) 2 (73) - 100% IndiaDecent Securities &Finanace Private Ltd

INR - 5 (125) 792 792 - - (10) - (10) - 100% India

Gitanjali Jewellery Retail Ltd INR - 100 (2,501) 42,445 42,445 2 - (175) - (175) - 100% IndiaDecent Investment &Finanace Private Ltd

INR - 200 (151) 363 363 - - (16) 1 (17) - 100% India

MMTC Gitanjali Ltd INR - 1,149 (448) 3,450 3,450 - - (38) (13) (25) - 73.85% IndiaGitanjali Lifestyle Ltd INR - 2,500 (4,009) 35,854 35,854 3,444 - (1,239) - (1,239) - 100% IndiaMaya Retails Limited INR - 2,407 (5,862) 12,659 12,659 - - (53) - (53) - 95.94% IndiaVidarbhaMultiprodust SEZ Ltd INR - 5 (1) 55 55 - - (0) - (0) - 100% IndiaNakshatra World Ltd INR - 4,373 83,097 194,191 194,191 73,607 17,416 1,245 219 1,026 - 100% IndiaNakshatra Brands Ltd INR - 406 87,438 441,367 441,367 0 264,149 6,735 215 6,519 - 100% IndiaBezel Jewellery India Private Ltd (Refer Note-2)

INR - 510 1,277 32,912 32,912 - 2,687 21 11 10 - 100% India

GILI India Ltd INR - 660 25,872 276,219 276,219 1 170,795 2,770 (249) 3,018 - 100% IndiaDynamic Infrazone Private Ltd (Refer Note-3)

INR 26 (27) 25 25 - - (1) - (1) - 100% India

Aston Luxury Group Ltd USD 64.85 14,751 5,749 36,554 36,554 30,355 - (30) - (30) - 100% HongkongCrown Aim Ltd USD 64.85 3,144 1,521 52,230 52,230 - 63,537 364 5 359 - 100% HongkongAbbeycrest (Thailand) Ltd THB 1.88 3,156 (4,704) 17,810 17,810 - 23,370 511 - 511 - 99.99% ThailandGitanjali Jewels LLC USD 64.85 45 2,181 5,860 5,860 - 2,748 17 - 17 - 49% U.A.E.Leading Jewels of Japan Kabushiki Kaisha

JPY 0.58 62 (1,056) 3,075 3,075 - 415 (97) - (97) - 100% Japan

Leading Italian Jewels SRL EUR 69.29 5,163 (3,108) 6,451 6,451 - 975 (745) 3 (747) - 100% ItalySamuels Jewelers, Inc. USD 64.85 42,858 (1,858) 123,154 123,154 - 80,092 98 - 98 - 100% U.S.A.Gitanjali USA, Inc. USD 64.85 7,704 370 13,291 13,291 12,852 - (15) 47 (61) - 100% U.S.A.Diamlink INC subsidiaries (Refer Note-4)

USD 64.85 10,675 1,632 24,713 24,713 - 9,489 46 - 46 - 99.51% U.S.A.

Tri-star Worldwide LLC USD 64.85 640 (242) 2,992 2,992 - 8,827 24 - 24 - 100% U.S.A.GGL Diamonds LLC USD 64.85 1,742 (43) 4,259 4,259 - 2,594 45 0 45 - 100% U.S.A.Gitanjali Ventures DMCC USD 64.85 11,678 86,605 181,076 181,076 16,340 91,147 2,825 - 2,825 - 100% U.A.E.Giantti Jewellery Trading (SH) Co. Ltd

RMB 9.43 880 (3,080) 2,443 2,443 - 452 (131) - (131) - 100% China

Tianxin Diamonds (Shanghai) Co. Ltd (Refer Note-5)

RMB 9.43 - - - - - 802 (458) - (458) - 100% China

Kiam Jewels DMCC (Refer Note-6)

USD 64.85 - 2,341 7,290 7,290 - 7,465 2,421 - 2,421 - 100% U.A.E.

Note-1 : Merger of “Asmi Jewellery India Limited (Asmi) and Spectrum Jewellery Limited (Spectrum)” with Nakshatra Brands Limited (NBL) under Sections 391 to 394 of the Companies Act, 1956, was approved by the Hon’ble High Court of Bombay on June 14, 2016. The certified copies of the aforementioned orders approving the Scheme were filed with the Registrar of Companies, N.C.T. of Mumbai on July 7, 2016. On this date the Scheme became effective from the Appointed Date of April 1, 2014 and the same has accounted as per purchase method. - NBL has issued 12,45,675 fully paid up equity shares @ of ` 4,477.88 per share (Face value ` 10/- each, premium of ` 4,467.88 per share) to the shareholders of Asmi as a consideration of merger.



- NBL has issued 64,140 fully paid up equity shares @ of ̀ 4,477.88 per share (Face value ̀ 10/- each, premium of ` 4,467.88 per share) to the shareholders of Spectrum as a consideration of merger.

Note-2 : During the year the Group acquired 693,558 equity shares of ̀ 10 each in its subsidiary namely Bezel Jewellery (India) Private Limited (Formerly known as D’Damas Jewellery (India) Private Limited) at premium of ` 9.25 per share. Aggregate consideration is ` 13.35 million. Consequently w.e.f December 21, 2016, Bezel Jewellery (India) Private Limited has become wholly owned subsidiary of the Subsidiary company.

Note-3 : During the year, Group has acquired 100% equity share holding of Dynamic Infrazone Private Limited on February 14, 2017, for total consideration of ` 26 Lakhs.

Note-4 : Figures represents consolidated figure of Diamlink Inc., Diamlink Jewellery Marketing Company LLC and LJOW Holdings LLC.

Note-5 : During the year, the Group has disposed off its entire investment in Tianxin. Accordingly,Tianxin ceases to be a subsidiary from March 1,2017. The Group has recognised the gain on sale of investment in its consolidated statement of profit and loss.

Note-6 : Group has formed a subsidiary company with Limited Liability on March 12, 2017 in Dubai viz. ‘Kiam Jewels DMCC’. Company’s capital contribution is yet to be firmed up. The said subsidiary has commenced operations in month of March 17.

Part 'B' - Summary of Financial Information of Joint Ventures and Associates

Company Name Latest audited Balance

Sheet date

Reporting Currency

No. of Shares held by the company in associate/

joint venture on the year

end

Amount of Investment in associate

/ joint venture (Rs. In Lacs)

Extent of

Holding (%)

Influence Reason why the

associate/joint venture

is not consolidated

Net worth attributable

to shareholding as per latest

balance sheet (Rs. In

Lacs)

Share of Profit / Loss for the year

Considered in Consolidation (Rs. In Lacs)

Not considered in Consolidation (Rs. In Lacs)

Jewelsouk Marketplace Ltd(formerly known as EGitanjali Ltd)

March 31, 2017

INR 99,000.00 99.00 40% Controls more than

20% of the total

share capital

NA (99.00) (99.00) (99.00)








225

Notes


Notes

227

GITANJALI GEMS LIMITEDRegd. Office: A-1, 7th Floor, Laxmi Tower, Bandra – Kurla Complex, Bandra (E), Mumbai – 400051

Phone: 022 40354600 Fax: 022 40102005 Email : [email protected] website: www.gitanjaligroup.com CIN: L36911MH1986PLC040689

PROXY FORM[Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules,

2014]

Name of the member (s):

Registered address:

E-mail Id:

Folio No/ Client Id*:

DP ID*:

I / We, being the member(s) of ………..............…. Equity Shares of Gitanjali Gems Limited, hereby appoint

1. Name: __________________________________________________________________________________________________

Address: __________________________________________________________________________________________________

Email Id: _________________________________________________________________

Signature: ____________________________________________________________

or failing him

2. Name: __________________________________________________________________________________________________

Address: __________________________________________________________________________________________________

Email Id: _________________________________________________________________

Signature: ____________________________________________________________

or failing him

3. Name: __________________________________________________________________________________________________

Address: __________________________________________________________________________________________________

Email Id: _________________________________________________________________

Signature: ____________________________________________________________

* Applicable for investors holding shares in electronic form

Affix revenue Stamp

as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 31st Annual General Meeting of the Company to be held on Thursday, September 28, 2017 at 9.00 A.M at Boundary Hall, First Floor, MCA Recreation Centre, RG-2, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051 and at any adjournment thereof in respect of such resolutions as are indicated below:Sr. No Resolutions

Ordinary Business1 Adoption of Audited Financial Statement (including consolidated financial statements) for the year ended March 31, 2017

together with the reports of Board of Directors and Auditors thereon.2 Declaration of Dividend on equity shares for financial year ended March 31, 2017.3 Re-appointment of Mr. Dhanesh Sheth as Director who retires by rotation and being eligible offers himself for re-appointment.4 Appointment of M/s. Ambavat Jain & Associates, Chartered Accountants, as Statutory Auditors of the Company.

Special Business5 Appointment of Mr. Anil Haldipur as Independent Director of the Company.6 Appointment of Mr. Dhanesh Sheth as Whole-time Director of the Company.7 Ratification of the increase in remuneration of Mr. Mehul Choksi, Managing Director of the Company.8 Re-appointment of Mr. Mehul Choksi as Managing Director of the Company.9 Charging a fee from the members for delivery of documents.

Signed this ___________ day of _______ 2017

Signature of Shareholder .................................. Signature of Proxyholder ……………………Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company at A-1, 7th Floor, Laxmi Tower, Bandra – Kurla Complex, Bandra (E) Mumbai – 400051, not less than 48 hours before the commencement of the Meeting.