It is indeed my privilege to present the Annual Report of your Company for thefinancial year ended 31st March 2017. I am pleased to inform that ourresponsiveness and operational agility enabled us to improve on our previous year'sresults reinforcing that our strategies are right and we are headed in the rightdirection. The theme for this year's Annual Report: 'Determined. Definitive. Decisive.'aptly symbolises this resolute focus on growth and value creation for all stakeholders.
For over 150 years we have been privileged to be at the forefront of designing thefinest and most spectacular jewellery collections in India - jewellery that has exuded itsown distinct style and class and has passed the test of time. Our designs and collectionscontinue to evolve as we closely map global trends and infuse it with our deep insight ofthe contemporary tastes of our customers. We have held on to our traditional strengths andwhile retaining the best of Indian craftsmanship we have also invested in moderntechnology to enable fiawless execution. It is these deep- rooted pillars that set usapart and are poised to etch our mark even deeper. It is this strength of brand TBZ andour innate passion for making remarkable jewellery that plays an invaluable role in ourcore business strategy as we continue to expand our footprints pan India.
During the year we opened two new stores in Patna and Ranchi in the States of Biharand Jharkhand. With this we are now present in 26 cities across 11 states. We alsorenovated and re-launched our existing store in Vijayawada to offer a larger retail spaceand an enhanced experience for our customers. We have also extended our reach byassociating with leading online retailers.
We have successfully evolved the asset-light franchisee model wherein the stores areowned and operated by the franchisee. This approach enables us to expand operations withnominal capex and provides the business and entrepreneurial spirit of the country anopportunity to start their own venture in association with a trusted brand. Currently wehave a total of 33 stores including 4 franchised stores. Over the next three years weare optimistic of opening more franchised stores.
FY2017 was an important year for the country with the roll out of the one nation - onetax i.e. the Goods and Services Tax (GST) which unifies the country's US$ 2 trillioneconomy and catapults India into a select league of nations that have a national salestax. Earlier during the year the demonetisation move aimed at driving the nation towardsa cashless economy ensured greater transparency. While demand remained subdued for theensuing quarter it has slowly and steadily picked up subsequently.
At TBZ we remained focussed on our core business and achieved growth as we capitalisedon the high festive demand in the earlier part of the year and the extended weddingseason. By providing exclusive designs personalised attention and customised services wemaximised the available opportunities. Additionally we fine-combed our operations torecalibrate and keep overhead costs at the minimum. We consciously took measures torationalise our inventory and this enabled us to reduce debt and enhance liquidity forworking capital expenses. Our loyalty program - the Kalpavruksha scheme has beeninstrumental in not only increasing our customer base but has also incentivised customersto increase their value of purchase at the time of redemption.
To share our progress in numbers:
Total operating revenue increased to ' 170024.20 Lakh in FY2017 from ' 165477.72Lakh in FY2016. We registered a profit of ' 1853 Lakh in FY2017 as against a loss of '2313 Lakh in FY2016. On a year-on-year basis the gold jewellery average ticket sizeincreased by 9.4% to ' 80033 in FY2017 while the diamond average ticket size decreasedmarginally by 5.5% to ' 115213 in FY2017.
We believe that the low demand in FY2016 for gold in India was an aberration ratherthan a trend caused due to unique and one-off events. The underlying demand for gold andjewellery still remains robust given India's favourable demographics the huge popularityof Indian weddings and festivals and Indian customers' strong affinity for the yellowmetal. Two consecutive years of normal monsoons in most parts of the country is alsoexpected to boost the demand for gold from the rural market.
As customers increasingly seek extraordinary jewellery designs of the finest qualityand craftsmanship sealed with the promise of trust we believe that TBZ - The Original iswell-poised to serve and delight them. Through our planned expansion of Company- owned andfranchisee-owned stores while optimising costs we will continue to pursue theopportunities to grow our sales profitability and productivity.
On a concluding note my sincere gratitude to our shareholders for their continuedconfidence to our customers for their patronage our stakeholders for their support andto our employees whose passion and commitment enable our achievements.
We look forward to a successful year ahead and beyond.
Chairman & Managing Director