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Tribhovandas Bhimji Zaveri Ltd.

BSE: 534369 Sector: Consumer
NSE: TBZ ISIN Code: INE760L01018
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OPEN 94.60
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VOLUME 15601
52-Week high 155.00
52-Week low 82.70
P/E 29.29
Mkt Cap.(Rs cr) 618
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 94.60
CLOSE 95.05
VOLUME 15601
52-Week high 155.00
52-Week low 82.70
P/E 29.29
Mkt Cap.(Rs cr) 618
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tribhovandas Bhimji Zaveri Ltd. (TBZ) - Director Report

Company director report

To

The Members of

Tribhovandas Bhimji Zaveri Limited

Your Directors are pleased to present the Tenth Annual Report on the business andoperations of your Company together with the audited financial statements and Auditor'sReport for the financial year ended 31st March 2017:

Financial Results:

The financial performance of your Company for the financial year ended 31stMarch 2017 is summarized below:

Particulars

Standalone Financials

31-Mar-17 31-Mar-16
Revenue from operations 170024.20 165477.72
Other Income 336.48 462.80
Total Income 170360.68 165940.52
Earnings before Finance Cost Depreciation and Amortization 7552.26 4418.39
Less:
Finance Cost 5018.88 5569.48
Depreciation and Amortization 870.61 1008.51
Net Profit before Exceptional items & Taxes 1662.77 (2159.60)
Add: Exceptional items - -
Net Profit for the year before Taxes 1662.77 (2159.60)
Less: Provision for Taxes
Current Tax (MAT) 165.27 -
MAT Credit (165.27) -
Deferred Tax Assets - 34.85
(Excess)/ Short Provision for tax of earlier years (190.35) 118.53
Profit after tax 1853.12 (2312.98)

 

Particulars

Standalone Financials

31-Mar-17 31-Mar-16
Add: Balance Brought Forward from Previous Year 19377.43 21690.41
Add: Employee Stock Options outstanding at the commencement of the year - -
Surplus Available for Appropriation 21230.55 19377.43
Appropriations:
Transfer to General Reserve - -
Proposed Dividend -
Dividend Tax -
Equity Dividend including dividend distribution tax paid for earlier years -
Total Appropriations -
Surplus Available after Appropriation 21230.55 19377.43
Add: Addition/(reduction) on option granted - -
Add: Balance in Security Premium Account 16791.35 16791.35
Add: Balance General Reserve 1401.47 1401.47
Add: Balance Capital Reserve - -
Balance carried forward to Balance Sheet 39423.37 37570.25

Financial Performance:

Your Company has reported revenue profit during the financial year 2016 - 2017. Totalincome increased to ' 170360.68 Lakhs from ' 165940.52 Lakhs in the previous financialyear at an increased rate of 2.66%. The profit before tax increased to ' 1662.77 Lakhsup by 176.99% while net profit after tax increased to ' 1853.12 Lakhs up by 180.12%.

Sale of Gold Jewellery decreased by 0.31% to ' 125427.45 Lakhs as compared to '125814.13 Lakhs during the previous financial year. Sale of Diamond-studded Jewelleryincreased by 5.83% to ' 37597.66 Lakhs as compared to ' 35526.47 Lakhs during theprevious financial year.

The Gross Profit Margin for the financial year 2016 - 2017 has increased to 14.61% ascompared to 14.22% in the previous financial year. In the absolute term the Gross Profithas increased to ' 24838.43 Lakhs as compared to ' 23527.30 Lakhs during the previousfinancial year.

The EBITDA for the financial year 2016 - 2017 has increased to 4.24% as compared to2.39% in the previous financial year.

During the current financial year your Company has opened two new franchisee showroomat Patna (Bihar) and Ranchi (Jharkhand) totaling the number of showrooms to thirty twoin twenty five cities and eleven states.

Dividend:

In view to conserve reserves for future expansion your Directors have not recommendedany dividend for the financial year ended 31st March 2017 against the NILdividend for the previous financial year ended 31st March 2016. The totaloutgo is ' NIL for current financial year ended 31st March 2017 as well asprevious financial year ended 31st March 2016.

Changes in nature of business if any:

During the financial year 2016 - 2017 there was no change in nature of business of yourCompany.

Material Changes:

There have been no material changes and commitments since the close of the financialyear i.e. 31st March 2017 till the date of signing of this Director's Reportaffecting the financial position of your Company.

Changes in Authorised Share Capital:

During the financial year 2016 - 2017 there was no change in the Authorised ShareCapital of your Company.

Changes in Paid-up Share Capital:

During the financial year 2016 - 2017 there was no change in the Paid-up Share Capitalof your Company.

Wholly owned Subsidiary Companies:

As required under Rule 8(1) of the Companies (Accounts) Rules 2014 the Board's Reporthas been prepared on the basis of standalone financial statements and a report onperformance and financial position of each of the wholly owned subsidiaries included inthe consolidated financial statements is presented and is stated in this report.

In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of your Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of your Companywww.tbztheoriginal.com. Further as per fourth proviso of the said section audited annualaccounts of each of the subsidiary companies have also been placed on the website of yourCompany www.tbztheoriginal.com. Members interested in obtaining a copy of the auditedannual accounts of the wholly owned subsidiary companies may write to the CompanySecretary at your Company's corporate office or email to investors@tbzoriginal.com.

For the year under review your Company has two wholly owned subsidiaries namely; (i)Tribhovandas Bhimji Zaveri (Bombay) Limited and (ii) Konfiaance Jewellery Private Limited.

Your Company has constituted "Policy on Determining Material Subsidiaries" inaccordance with the Regulation 16(1)(c) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015. The Policy will be used todetermine the material subsidiaries of your Company and to provide governance frameworkfor such subsidiaries. As per the Policy and as per the requirements of the provisions ofthe Companies Act 2013 and Securities and Exchange Board of India (Listing Obligation andDisclosure Requirements) Regulations 2015 none of the wholly owned subsidiary companiesare material subsidiary company of your Company. The Policy on determining materialsubsidiaries is available on your Company's website at the link:http://www.tbztheoriginal. com/pdf/TBZ-Material%20Subsidiary% 20Policy.pdf.

As per the requirements of the Securities and Exchange Board of India (ListingObligation and Disclosure Requirements) Regulations 2015 the audited consolidatedfinancial statements of your Company incorporating both its wholly owned subsidiarycompanies are prepared in accordance with applicable Accounting Standards are enclosedherewith.

i) Tribhovandas Bhimji Zaveri (Bombay) Limited

Tribhovandas Bhimji Zaveri (Bombay) Limited is operating its manufacturing activitiesfrom 106 Kandivali Industrial Estate Charkop Kandivali (West) Mumbai - 400 067. Thesaid property is taken on Leave & License basis from your Company (i.e. holdingcompany).

Tribhovandas Bhimji Zaveri (Bombay) Limited during the financial year 2016 - 2017 hasreported a total revenue of ' 1544.39 Lakhs and has incurred loss before tax of ' 391.41Lakhs and loss after tax of ' 378.29 Lakhs.

ii) Konfiaance Jewellery Private Limited

Konfiaance Jewellery Private Limited is a non-operational company. During the financialyear 2016 - 2017 has not reported any revenue and has incurred loss before tax of ' 0.77Lakh and loss after tax of ' 0.77 Lakh.

Performance/ State of Company's Affairs:

As on 31st March 2017 your Company was operating from thirty two showroomsin twenty five cities and eleven states out of which twenty nine showrooms are its ownshowrooms and three franchise showrooms and your Company has one Corporate Office atTulsiani Chambers Nariman Point.

Post 31st March 2017 and before signing of this Director's Report yourCompany has opened one more franchise showroom on 23rd April 2017 at JamnagarGujarat. As on date of signing of this Director' Report your Company was operating fromthirty three showrooms in twenty six cities and eleven states out of which twenty nineshowrooms are its own showrooms and four franchise showrooms.

Recent Development(s):

During the current financial year your Company has opened its second franchiseshowroom at Patna Bihar and third franchise showroom at Ranchi Jharkhand totaling thenumber of showrooms to thirty two in twenty five cities and eleven states.

Awards & Recognition:

During the year under review your Company has won following awards:

Year Awards
2016 Winning of two awards at 12th Gemfields Retail Jewellers India Awards 2016 in the field of (i) TV Campaign of the year and (ii) The Diamond Jewellery of the Year.
2016 Winning of best ring design over ' 250000 at the 'JJS-IJ Jewellers' Choice Design Awards 2016.

New Product Launch:

1) Your Company has launched a 'Floral Collection which are beautiful pieces ofjewellery with the theme 'Let Blessings Bloom' were inspired by flowers. Customers couldchoose from some gorgeous pieces with intricate design work.

2) Your Company has also launched 'Rosabelle Collection' by taking inspirationfrom the pantone shade of the year; Rose Quartz. It was an amalgamation of beinglightweight and minimalistic in design aesthetics to keep up with the styles of today.Rosabelle is one of the warmest and universally flattering metals for every occasion; afeminine pastel hue which is subtle and classic.

3) Every year your Company is coming out with new 'Wedding Collection' as theiconic jewellery brand with a legacy of over 150 year introduced its new collection ofdiamond and gold jewellery to mark the beginning of the festive and wedding season. Thecollection incorporated pearls and precious stones like emeralds rubies sapphires anduncut diamonds with meenkari designs adding a contemporary touch by enhancing the overallappearance of the jewellery.

Credit Rating

During the year under review CRISIL has reviewed the Credit Rating on the long-termbank facilities of your Company at 'CRISIL BBB+/ Stable' downgraded from 'CRISILA-/Negative and withdrawn rating of ' 500 Million Commercial Paper Programme 'CRISIL A2(Withdrawal) vide letter Ref. No. TBZPL/160034/BLR/071601366 dated 25th July2016 which is stated as follows:

Total Bank Loan Facilities Rated ' 7350 Million
Long-Term Rating CRISIL BBB+/ Stable (Downgraded from CRISIL A-/Negative)
' 500 Million Commercial Paper Programme CRISIL A2 (Withdrawal)

Decrease in Inventories:

The inventory of your Company as on 31st March 2017 has decreased by '9842.43 Lakhs as compared to the inventory on 31st March 2016. The decreasein inventory is due to inventory rationalisation.

Operations:

The operations of your Company are elaborated in the annexed Management Discussion andAnalysis Report.

Hedge Accounting:

Your Company uses derivative financial instruments to manage risks associated with goldprice fluctuations relating to certain highly probable forecasted transactions foreigncurrency fluctuations relating to certain firm commitments and foreign currency andinterest rate exposures relating to foreign currency loan if any.

Your Company had adopted recognition and measurement criteria relating to cash flowhedge accounting as set out in AS 30 "Financial Instruments: Recognition andMeasurement" issued by the Institute of Chartered Accountants of India ('ICAI') forcommodity forward contracts with effect from 1st April 2014. From 1stApril 2016 your Company has adopted the Guidance Note on Accounting for DerivativeContracts issued by the ICAI in 2015 which was effective from 1st April 2016for accounting of derivative instruments including hedge accounting. AS 30 standswithdrawn regarding matters covered under the guidance notes from 1st April2016 and was also subsequently completely withdrawn by the ICAI in November 2016.

This change in accounting standard/policy has no significant impact on the financialstatement of your Company.

The use of derivative financial instruments is governed by your Company's policiesapproved by the Board of Directors which provide written principles on the use of suchinstruments consistent with your Company's risk management strategy.

Hedging instruments are initially measured at fair value and are remeasured atsubsequent reporting dates. Changes in the fair value of these derivatives that aredesignated and effective as hedges of future cash flows are recognised directly in hedgingreserve and the ineffective portion is recognised immediately in the Statement of Profitand Loss.

Hedge accounting is discontinued when the hedging instrument expires or is soldterminated or exercised or no longer qualifies for hedge accounting. For forecastedtransactions any cumulative gain or loss on the hedging instrument recognized in hedgingreserve is retained until the forecast transaction occurs upon which it is recognized inthe Statement of Profit and Loss. If a hedged transaction is no longer expected to occurthe net cumulative gain or loss accumulated in hedging reserve is recognized immediatelyto the Statement of Profit and Loss.

Changes in the fair value of derivative financial instruments that have not beendesignated as hedging instruments are recognised in the Statement of Profit and Loss asthey arise.

Derivative Financial Instruments:

Your Company has adopted recognition and measurement criteria relating to cash flowhedge accounting as set out in Guidance note on Accounting for Derivative Contracts issuedby the ICAI in 2015 which is effective from 1st April 2016 for accounting ofderivative instruments including hedge accounting.

Your Company uses these commodity forward contracts to hedge its gold price fluctuationrisks on its highly probable cash flows from future sales transactions. These derivativesare not used for trading or speculation purposes. Your Company classifies such derivativecontracts that hedge gold price fluctuation risk associated with highly probable forecastsale transactions as cash flow hedges and measures them at fair value. Commodity forwardcontract of 20 kgs is outstanding as on 31st March 2017 (31stMarch 2016: Nil). Mark to market loss of ' 1.16 Lakhs as on 31st March 2017(31st March 2016: Nil) is accounted in other expenses.

Related Party Transactions:

All contracts/ arrangements/ transactions entered by your Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year there are no materially significant related party transactionsentered by your Company with Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of your Companyat large.

All related party transactions are placed before the Audit Committee and before theBoard for their approval. Prior omnibus approval of the Audit Committee is obtained forthe transactions which are of a foreseen and repetitive nature. The transactions enteredinto pursuant to the omnibus approval so granted are audited and a statement givingdetails of all related party transactions is placed before the Audit Committee and to theBoard of Directors at their Board Meetings for their approval on a quarterly basis.

There are no material related party transactions which are not in ordinary course ofbusiness or which are not on arm's length basis and hence there is no information to beprovided as required under Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014.

The policy on Materiality on Related Party Transactions and manner of dealing withRelated Party Transactions as approved by the Board is uploaded on your Company's websiteat the link: http://www.tbztheoriginal.com/pdf/Policy%20on%20

Materiality%20of%20Related%20Party%20Transcations%20 &%20Dealing%20with%20RPT.pdf.

None of the Independent Directors has any pecuniary relationships or transactionsvis-a-vis your Company.

A statement of related party transactions pursuant to Accounting Standard - 18 forms apart of notes to accounts.

Transfer to Reserves:

During the year under review your Company has transferred ' NIL to the GeneralReserve.

Particulars of Loans given Investments made Guarantees given and Securities providedunder Section 186 of the Companies Act 2013:

Particulars of loans given investments made guarantees given and securities providedcovered under the provisions of Section 186 of the Companies Act 2013 are given in thenotes to the standalone financial statements provided in this Annual Report.

Fixed Deposits / Deposits:

During the year under review your Company has not accepted or invited any fixeddeposits from the public and there were no outstanding fixed deposits from the public ason the Balance Sheet date.

Your Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014.

Insurance:

All the insurable interests of your Company including inventories buildings plant andmachinery and liabilities are adequately insured.

Corporate Social Responsibility (CSR) Initiatives:

As part of its initiatives under Corporate Social Responsibility (CSR) the CorporateSocial Responsibility Committee (CSR Committee) has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the activities tobe undertaken by your Company which has been approved by the Board and are in accordancewith Schedule VII of the Companies Act 2013.

The CSR Policy may be accessed on your Company's website at the link:http://www.tbztheoriginal.com/pdf/TBZ-%20CSR%20 Policy%20-%2004.08.2014.pdf.

Your Company is committed towards the "Corporate Social Responsibility (CSR)"initiatives as per the requirement of Section 135 of the Companies Act 2013("Act"). The details of the composition of the Corporate Social Responsibility(CSR) Committee are disclosed in the Corporate Governance Report forming part of thisAnnual Report.

As part of initiatives under "Corporate Social Responsibility (CSR)" for thefinancial year 2016 - 2017 your Company has shortlisted the specific activities/ projectsin the area of (a) 'Promoting Healthcare including Preventive Healthcare' which isfalling under item (i) of Schedule VII of the Act; (b) 'Promoting Education' which isfalling under item (ii) of Schedule VII of the Act and (c) 'Promoting gender equality andwomen's empowerment which is falling under item (iii) of Schedule VII of the Act. YourCompany will also undertake other need based initiatives in compliance with Schedule VIIto the Act.

As per Section 135 of the Companies Act 2013 the total amount of CSR contribution iscoming to ' 6725839 (Rupees Sixty Seven Lakhs Twenty Five Thousand Eight Hundred andThirty Nine Only) for the financial year 2016 - 2017 out of which your Company hasmade CSR contribution of ' 4795843 (Rupees Forty Seven Lakhs Ninety Five ThousandEight Hundred Forty Three only) for the financial year 2016 - 2017. Your Company hasmade short contribution under CSR activities of ' 1929996 (Rupees Nineteen LakhsTwenty Nine Thousand Nine Hundred and Ninety Six only) for the financial year 2016 -2017.

The total CSR contribution of ' 4795843 (Rupees Forty Seven Lakhs Ninety FiveThousand Eight Hundred Forty Three only) were contributed to (1) Cancer Patient AidAssociation (CPAA) of ' 350000 for Promoting Healthcare including Preventive Healthcare;(2) Salaam Bombay Foundation of ' 500000 for promoting education including specialeducation and employment enhancing vocational skills; (3) 8th South MumbaiJunior Soccer Challenger 2016 of ' 75000 for promoting education including specialeducation and employment enhancing vocational skills; (4) Paper Boat Project of yourCompany ' 10000 for promoting education; (5) Bal Ashram (Orphanage) of Raipur of ' 2250for promoting education. (6) Your Company has launched 'PANKHI' project which was launchedfor the promotion of gender equality and women empowerment and has contributed totalamount of ' 3858593 through various NGO's like (a) to SNEHA by making contribution of '2794567; (b) to Bharatiya Stree Shakti by making contribution of ' 535000; (c) StreeMukti Sangathan by making contribution of ' 506200; (d) Pankhi project administrativeexpenses of ' 22826. These NGO'S/ organization carry out projects are largely inaccordance with Schedule VII of the Companies Act 2013.

Your Company is fully committed to make contributions towards CSR Activities of yourCompany as per the requirement of Section 135 of the Companies Act 2013. As this beingthe initial years of CSR activity of your Company the members of the CSR Committee aswell as the members of the Board has decided to go ahead with CSR activities with properresearch and planning and decided not to make balance required contribution as statedabove in haste but decided to make the required contribution as and when your Companyfinds suitable projects or area in the coming financial years. Your Company is fullycommitted to participate whole heartedly under the CSR Activities.

The Annual Report on CSR activities is annexed herewith as "Annexure - B"

Business Risk Management:

SEBI has come out with the circular on the requirement of constitution of RiskManagement Committee of the Board as per the requirement of the Listing Agreement(Regulations). As per SEBI Circular Reference No. SEBI/LAD-NRO/GN/2015- 16/013 dated 2ndSeptember 2015 issued by Securities and Exchange Board of India (SEBI) and as per therequirement of Regulation 21(5) of the Securities and Exchange Board of India (ListingObligation and Disclosure Requirements) Regulations 2015 shall be applicable to top 100companies by market capitalization as at the end of the immediate previous financial year.

Accordingly constitution of Risk Management Committee is not compulsory for yourCompany. To follow Corporate Governance in the right spirit your Company has voluntarilyconstituted the Risk Management Committee of the Board. The details of the Committee andits terms of reference are set out in the Corporate Governance Report forming part of theAnnual Report.

Your Company manages monitors and reports on the principal risks and uncertaintiesthat can impact its ability to achieve its strategic objectives.

Your Company has a robust Risk Management framework to identify evaluate businessrisks and opportunities. This framework seeks to create transparency minimize adverseimpact on the business objectives and enhance your Company's competitive advantage. RiskManagement Committee provides assistance to the Board of Directors in fulfilling itsobjective of controlling / monitoring various risks prevailing in the functioning of yourCompany in day to day life including the Gold Price Risk Management Policy of your Companyas well as mitigating the risk on hedging in domestic as well as international market.

The key business risks identified by your Company and its mitigation plan are as under:

(i) Gold Price Fluctuation Risk:

Prices of gold keep on fluctuating and in last one year there were huge fluctuationsobserved in gold prices due to various international factors and stringent domesticgovernment policies. To mitigate this risk of gold price fluctuation your Company hasstarted doing hedging in domestic market to protect your Company from the gold pricefluctuation. Your Company's endure is to maximize procurement of inventory on gold loan aswell as procurement of gold bar under gold loan scheme from various banks which will alsohelp to reduce risk of your Company due to gold price fluctuation and takes care ofnatural hedging.

(ii) Competition Risks:

The jewellery industry is becoming intensely competitive with few organized sectors andmajority of unorganized sectors in local area with the foray of new entrants and many ofthe existing unorganized players adopting inorganic growth strategies. To mitigate thisrisk your Company is leveraging on its expertise experience and its created capacitiesto increase market share enhance brand equity/ visibility and enlarge product portfolioand various tactical offers.

Disclosure under Section 164(2):

None of the Directors of your Company are disqualified from being appointed asDirectors as specified under Section 164(2) of the Companies Act 2013.

Directors:

In accordance with the provision of Section 152 and all other applicable provisions ofthe Companies Act 2013 Independent Directors are not liable to retire by rotation andfor the purpose of calculation of 'total number of Directors' who are liable to retire byrotation this shall not include Independent Directors. Mr. Shrikant Zaveri Chairman &Managing Director of your Company is the Director not liable to retire by rotation. Ms.Binaisha Zaveri and Ms. Raashi Zaveri Whole-time Directors of your Company are theDirectors who are liable to retire by rotation.

Ms. Binaisha Zaveri (DIN: 00263657) Whole-time Director of your Company retires byrotation at the tenth Annual General Meeting of your Company and being eligible offersherself for re-appointment.

Pursuant to Sections 149 152 and all other applicable provisions of the Companies Act2013 read with the Companies (Appointment and Qualification of Directors) Rules 2014along with Schedule IV of the Act (including any statutory modification(s) or re-enactmentthereof for the time being in force) the Independent Directors can hold office for a termof five consecutive years on the Board of Directors of your Company. Mr. Kamlesh VikamseyMr. Ajay Mehta and Mr. Sanjay Asher; Independent Directors of your Company were appointedto hold office for the period of five consecutive years for a term upto 31stMarch 2019 in the seventh Annual General Meeting of your Company held on 24thSeptember 2014. Independent Directors shall not be liable to retire by rotation.

Your Company has a program to familiarize Independent Directors with regard to theirroles rights responsibilities in your Company nature of the industry in which yourCompany operates the business model of your Company etc. The purpose of FamiliarizationProgramme for Independent Directors is to provide insights into your Company to enable theIndependent Directors to understand its business in depth and contribute significantly toyour Company. Your Company has already carried out the familiarization programme forIndependent Directors. The Familiarization Programme Imparted to Independent Directors interms of Regulation 25(7) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is available on the website ofyour Company at link: http:// www.tbztheoriginal.com/pdf/TBZ-Familiarisation%20Prog.(16-17).pdf.

Statement of declaration given by Independent Directors under Section 149(7) of theCompanies Act 2013:

All the Independent Directors have given declarations under Section 149(7) of theCompanies Act 2013 that they meet the criteria of independence as laid down underSection 149(6) of the Companies Act 2013.

Key Managerial Personnel:

Mr. Shrikant Zaveri Chairman & Managing Director Ms. Binaisha Zaveri and Ms.Raashi Zaveri Whole-time Directors and Mr. Saurav Banerjee Chief Financial Officer (CFO)and Mr. Niraj Oza Head - Legal & Company Secretary of your Company are the KeyManagerial Personnel of your Company as per the requirement of Section 203 of theCompanies Act 2013.

Your Company does not have separate position of Chief Executive Officer (CEO) as allthe responsibilities of Chief Executive Officer (CEO) has been discharged by Mr. ShrikantZaveri Chairman & Managing Director of your Company.

Board Evaluation:

Pursuant to the provisions of the Companies Act 2013 and Regulations 17(10) 25(4) andall other applicable Regulation(s) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance and of its Directors individuallyChairperson of your Company as well as the evaluation of the working of its Committees.The manner in which evaluation has been carried out has been explained in detail in theCorporate Governance Report which forms part of this Annual Report.

Nomination Remuneration and Evaluation Policy:

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management theirremuneration and their evaluation. In compliance with the provision of Section 178 of theCompanies Act 2013 and the Listing Regulations Nomination Remuneration and EvaluationPolicy is forming a part of Director's Report as "Annexure - E".

Number of Meetings:

A calendar of Meetings is prepared and circulated in advance to the Directors.

The Board of Directors met for five times during the year and members of the AuditCommittee met four times during the year.

During the financial year 2016 - 2017 five Board Meetings were convened and held on 2ndMay 2016 3rd August 2016 19th September 2016 9thNovember 2016 and 7th February 2017. Total four Audit Committee Meetings wereconvened and held on 2nd May 2016 3rd August 2016 9thNovember 2016 and 7th February 2017. The details of the meetings are given inthe Corporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.

Directors' Responsibility Statement:

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

(a) that in preparation of the annual accounts the applicable accounting standardshave been followed and there are no material departures;

(b) that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent; so as to give a true andfair view of the state of affairs of your Company at the end of the financial year and ofthe profit and loss of your Company for that period;

(c) that they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013. They confirm that there are adequate systems andcontrols for safeguarding the assets of your Company and for preventing and detectingfraud and other irregularities;

(d) that they have prepared the Annual Accounts on a going concern basis;

(e) that they have laid down the proper internal financial controls to be followed byyour Company and that such internal financial controls were adequate and were operatingeffectively;

(f) t hat they have devised proper systems to ensure the compliance with all applicablelaws and that such systems were adequate and operating effectively.

Review of Annual Accounts by Audit Committee:

Financials of your Company for the financial year ended 31st March 2017were reviewed by the Audit Committee before being placed before the Board.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars as required under Section 134(3)(m) of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 are as under:

1. Part A & B pertaining to conservation of energy and technology absorption arenot applicable to your Company.

2. Foreign Exchange earnings and outflow:

Earnings - ' Nil
Outflow - ' 139.27 Lakhs

Significant and Material Orders passed against your Company by the Regulators or Courtsor Tribunals:

Pursuant to the requirement of Section 134(3)(q) of the Companies Act 2013 read withRule 8(5)(vii) of the Companies (Accounts) Rules 2014 it is confirmed that during theFinancial

Year under review there are no significant or material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status and your Company's operations infuture.

Audit Committee:

The Audit Committee comprises of two Independent Directors namely Mr. Kamlesh Vikamseyas Chairman of the Committee and Mr. Ajay Mehta as member of the Committee and Mr.Shrikant Zaveri Chairman & Managing Director of your Company as member of theCommittee. All the recommendations made by the Audit Committee were accepted by the Board.

The Committee interalia reviews the Internal Control System and reports of InternalAuditors and compliance of various regulations. The Committee also reviews at length theFinancial Statements before they are placed before the Board. The numbers of AuditCommittee its terms of reference the meetings of the Audit Committee and attendancethereat of the members of the Committee is mentioned in the Corporate Governance Report.

Vigil Mechanism / Whistle Blower Policy:

Your Company has adopted and established a vigil mechanism named "Whistle BlowerPolicy (WBP)" for directors and employees to report genuine concerns and to deal withinstance of fraud and mismanagement if any. The details of the Whistle Blower Policy isexplained in the Corporate Governance Report and also posted on the website of yourCompany's website at the link: http:// www.tbztheoriginal.com/pdf/TBZ-Whistle%20Blower%20Policy.pdf.

Human Resources and Employee Relations:

Attracting retaining and developing talent continued to be a focus area for yourCompany. The increased focus on capability enhancement and employee engagement had apositive impact on talent retention as reflected in the lower attrition levels. YourCompany has total employee strength of 1384 as on 31st March 2017. EmployeeRelations continued to be cordial at all levels.

Prevention of Sexual Harassment at workplace {Disclosure as required under Section 22of Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act2013}:

Your Company has always believed in providing a safe and harassment free workplace forevery individual working in its premises through various policies and practices. YourCompany always endeavors to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment. Your Company has adopted apolicy on Prevention of Sexual Harassment at Workplace which is in line with therequirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition andRedressal) Act 2013. The policy aims at prevention of harassment of employees and laysdown the guidelines for identification reporting and prevention of undesired behavior. AnInternal Complaints Committee ("ICC") has been set up from the senior management(with women employees constituting the majority) which is responsible for redressal ofcomplaints related to sexual harassment and follows the guidelines provided in the Policy.All employees (permanent contractual temporary trainees) are covered under the policy.

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. {There was no complaint received from any employee during thefinancial year 2016 - 2017 and hence no complaint is outstanding as on 31stMarch 2017 for redressal}.

Particulars of Employees:

In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules areprovided in the Annual Report. (Refer "Annexure - G").

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annual Report.(Refer "Annexure - F").

Extract of Annual Return:

In accordance with Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) ofthe Companies (Management and Administration) Rules 2014 an extract of the Annual Returnin the prescribed format (in form MGT 9) is annexed herewith as "Annexure -D".

Management Discussion and Analysis:

A detailed review of operations performance and future outlook of your Company and itsbusiness is given in the Management Discussion and Analysis which forms part of thisReport.

Corporate Governance:

Your Company acknowledges its responsibilities to its Stakeholders and believes thatCorporate Governance helps to achieve commitment and goals to enhance stakeholder's valueby focusing towards all stakeholders. Your Company maintains highest level oftransparency accountability and good management practices through the adoption andmonitoring of corporate strategies goals and procedures to comply with its legal andethical responsibilities. Your Company is committed to meeting the aspirations of all itsstakeholders.

Your Company is fully committed to and continues to follow procedures and practices inconformity with the Code of Corporate Governance enshrined in Regulation 17 to 27 andclauses (b) to (i) of sub-regulation (2) of Regulation 46 and Para C D and E of ScheduleV and all other applicable Regulation(s) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015. A detailed report onCorporate Governance forms part of this Report. The Statutory Auditor's Certificate as perthe requirements of Para E of Schedule V and all other applicable Regulation(s) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 on compliance with Corporate Governance requirements by your Company isattached to the Report on Corporate Governance.

General Shareholder Information:

General Shareholder Information is given in Item No. VII of the Report of CorporateGovernance forming part of the Annual Report.

Listing Fees:

The Equity Shares of your Company are listed on the BSE Limited (BSE) and the NationalStock Exchange of India Limited (NSE). Your Company has paid the applicable listing feesto the above Stock Exchanges for the financial year 2017 - 2018. Your Company's shares aretraded in dematerialized segment for all investors compulsorily and your Company hadentered into agreements with the Central Depository Services (India) Limited (CDSL) andNational Securities Depository Limited (NSDL) for custodial services.

Listing Agreement:

The Securities and Exchange Board of India (SEBI) on 2nd September 2015issued Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 with the aim to consolidate and streamline the provisionsof the Listing Agreement for different segments of capital market to ensure betterenforceability. The said regulations were effective from 1st December 2015.Accordingly all listed entities were required to enter into the Listing Agreement withinsix months form the effective date. Your Company entered into Listing Agreement with BSELimited and the National Stock Exchange of India Limited during November 2015.

Internal Financial Controls:

Your Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the designs or operations were observed.

Internal Control Systems and their adequacy:

The management continuously reviews the internal control systems and procedures for theefficient conduct of your Company's business. Your Company adheres to good practices withrespect to transactions and financial reporting and ensures that all its assets areappropriately safeguarded and protected against losses. The Internal Auditor of yourCompany conducts the audit on regular basis and the Audit Committee actively reviewsinternal audit reports and effectiveness of internal control systems.

Internal Control Systems are implemented to safeguard your Company's assets from lossor damage to keep constant check on the cost structure to prevent revenue leakages toprovide adequate financial and accounting controls and to implement accounting standards.

Stakeholders Relationship:

Stakeholders' relations have been cordial during the year. As a part of complianceyour Company has Stakeholders Relationship Committee to consider and resolve thegrievances of security holders of your Company. There were no investors' grievancespending as on 31st March 2017. A confirmation to this effect has been receivedfrom your Company's Registrar and Share Transfer Agent.

Enhancing Shareholders Value:

Your Company believes that its Members are among its most important stakeholders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.

Participation in the Green Initiative:

Your Company continues to wholeheartedly participate in the Green Initiative undertakenby the Ministry of Corporate Affairs (MCA) for correspondences by Corporate to its Membersthrough electronic mode. All the Members are requested to join the said program by sendingtheir preferred e-mail addresses to their Depository Participant.

Employee Stock Option Scheme (ESOP):

During the previous financial year 2015 - 2016 'TBZ ESOP 2011' the ESOP Scheme ofyour Company got closed. For the good Corporate Governance your Company is reproducingthe details of the 'TBZ ESOP 2011' which got closed in previous financial year 2015 -2016 along with Annexures - 'A' & 'AA' for your reference. For the current financialyear 2016 - 2017 your Company do not have any open ESOP scheme nor granted any freshstock option to its employees. Henceforth information on stock options will be given onlywhen fresh options are granted by your Company.

The details of the shares issued under ESOP as also the disclosures in compliance withthe Companies (Share Capital and Debentures) Rules 2014; {Clause 12 of the Securities andExchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines 1999} and Regulation 14 of Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 are set out in the "Annexure - A" &"Annexure -AA" to this Report.

No employee has been issued Options during the year equal to or exceeding 1% of theissued capital of your Company at the time of the grant.

Pursuant to the approval of the Members at the Extra Ordinary General Meeting held on12th January 2011 your Company adopted the Employees Stock Option Schemeviz. 'TBZ ESOP 2011' The Scheme has been in compliance with the relevant provisions ofSEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999.Your Company has granted total 208433 Equity Shares consisting of 111309 Stock Optionsof ' 149.93 each and 97124 Restricted Stock Units (RSUs) at face value of ' 10 eachwhich represents 0.42% of the pre-Issue paid up equity share capital of your Company and0.31% of the fully diluted post-Issue paid up equity share capital of your Company. Theseoptions were granted to seven employees of your Company. The granted options will bevested in three tranches at the end of 12 months 24 months and 36 months from the date ofgrant of option or from the date of listing (i.e. from 9th May 2012) whicheveris later.

Before starting of the vesting period of the first tranche of the option out of totalseven employees to whom ESOP were granted three employees have resigned and the total109048 Options consisting of 58235 Stock Options of ' 149.93 each and 50813 RestrictedStock Units (RSUs) of ' 10 each which were granted to these employees were cancelled.

Your Company has received in principle approval for the balance granted Equity Sharestowards Listing of your Company's 99385 Equity Shares consisting of 53074 Stock Optionsof ' 149.93 each and 46311 Restricted Stock Units (RSUs) of ' 10 each to be issued underpre-IPO Employees Stock Option Scheme viz. 'TBZ ESOP 2011' from both the StockExchanges viz. National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) andbearing reference no. NSE/LIST/201961-K dated 19th April 2013 and referenceno. DCS/IPO/NJ/ESOP- IP/051/2013-14 dated 23rd April 2013 respectively.

On 6th June 2013 your Company has allotted 37328 Equity Shares to thoseemployees who have exercised their options under first tranche of 'TBZ ESOP 2011' out oftotal 38843 vested Options under first tranche and the balance of unexercised 1515Stock Options were lapsed and got cancelled. Your Company's additional 37328 EquityShares got Listed w.e.f. 11th June 2013 on receipt of the Listing Approvalfrom BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) vide approvalletter No. 20130610-11 dated 10th June 2013 and letter No. NSE/LIST/206674-Qdated 11th June 2013 respectively.

Before starting of the vesting period of the second tranche of the Options (i.e. from 9thMay 2014) out of balance four employees who left after grant of first tranche to whomESOP were granted two employees have resigned and the total 20247 Options consisting of10812 Stock Options of ' 149.93 each and 9435 Restricted Stock Units (RSUs) of ' 10each which were granted to these employees were cancelled. After the first tranche ofallotment Equity Shares and cancellation of Options before starting of vesting period ofsecond tranche total net balance of 40295 Options consisting of 24572 Stock Options of' 149.93 each and 15723 Restricted Stock Units (RSUs) of ' 10 each were yet to beexercised in second and third tranche of 'TBZ ESOP 2011'

On 10th June 2014 your Company has allotted 15905 Equity Shares to thoseemployees who have exercised their options under second tranche of 'TBZ ESOP 2011' out oftotal 17288 vested Options under second tranche and the balance of unexercised 1383Stock Options were lapsed and got cancelled. Your Company's additional 15905 EquityShares got Listed w.e.f. 18th June 2014 on receipt of the Listing Approvalfrom BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) vide approvalletter No. 20140617-13 dated 17th June 2014 and letter No. NSE/LIST/242026-7dated 17th June 2014 respectively.

On 15th June2015 your Company has allotted 10720 Equity Shares to thoseemployees who have exercised their options under third tranche of 'TBZ ESOP 2011' out oftotal 23007 vested Options under third tranche and the balance of unexercised 12287Stock Options were lapsed and got cancelled. Your Company's additional 10720 EquityShares got Listed w.e.f. 25th June2015 on receipt of the Listing Approval fromBSE Limited (BSE) and National Stock Exchange of India Limited (NSE) vide approval letterNo. 20150624-23 dated 24th June 2015 and letter No. NSE/LIST/31205 dated 24thJune 2015 respectively.

Consolidated Financial Statements:

Your Directors are pleased to enclose the Consolidated Financial Statements pursuant toSection 129 and all other applicable provisions of the Companies Act 2013 and as per theapplicable Regulations of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and prepared in accordance with the AccountingStandards (AS) - 21 and all other applicable Accounting Standards prescribed by theInstitute of Chartered Accountants of India in this regard.

Auditors' Report:

The observations made in the Auditors' Report read together with the relevant notesthereon are self-explanatory and hence do not calls for any comment under Section 134 ofthe Companies Act 2013.

The Auditors' Report to the Members does not contain any qualification.

Statutory Auditors:

The Members at the 7th Annual General Meeting of your Company held on 24thSeptember 2014 had appointed M/s. B S R & Co. LLP (Firm Registration No.101248W/W-100022) Chartered Accountants Mumbai as Statutory Auditors of your Company toaudit financial accounts for the four financial years from 2014 - 2015 to 2017 - 2018subject to ratification by the members at every AGM.

Your Company has received a letter from M/s. B S R & Co. LLP (Firm Registration No.101248W/W-100022) Chartered Accountants Mumbai as the Statutory Auditors theratification of appointment if made shall be within the limits prescribed under Section141(3)(g) of the Companies Act 2013 and they are not disqualified in terms of Section 141of the Companies Act 2013 and related Rules to continue as the Statutory Auditors of yourCompany for financial year 2017-2018. As required under Regulation 33(1)(d) of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the auditors have also confirmed that they hold a valid certificate issued by thePeer Review Board of the Institute of Chartered Accountants of India.

Your Directors propose ratification of appointment of M/s. B S R & Co. LLP (FirmRegistration No. 101248W/W-100022) Chartered Accountants Mumbai as the StatutoryAuditors of your Company for the financial year 2017-2018.

The Statutory Auditors have issued a clean report on the financials of your Company andhave not issued any qualifications for the financial year ended 31st March2017.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hasappointed M/s. Pramod S. Shah & Associates a firm of Company Secretaries in PracticeMumbai to undertake the Secretarial Audit of your Company. The Report of the SecretarialAudit Report (in Form No. MR - 3) is annexed herewith as "Annexure - C".

Internal Audit:

The Board of Directors has re-appointed M/s. Aneja Associates Chartered Accountants asInternal Auditors of your Company for financial year 2017 - 2018.

Reporting of Fraud by Auditors:

There is no instance of fraud reported by the Auditors during the Financial Year 2016 -2017.

General:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend voting orotherwise.

• Issue of shares (including sweat equity shares) to employees of your Companyunder any scheme.

• Neither the Managing Director nor the Whole-time Directors of your Companyreceive any remuneration or commission from any of its wholly owned subsidiaries.

• No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

Acknowledgement:

Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment.

The Board place on record its appreciation for the support and co-operation yourCompany has been receiving from its investors customers vendors bankers financialinstitutions business associates Central & State Government authorities Regulatoryauthorities and Stock Exchanges.

Cautionary Statement:

Statement in the Board's Report and the Management Discussion and Analysis describingyour Company's objectives expectations or forecasts may be forward-looking within themeaning of applicable securities laws and regulations. Actual results may differmaterially from those expressed in the statement. Important factors that could influenceyour Company's operations include global and domestic demand and supply conditionsaffecting selling price of finished goods input availability and prices changes ingovernment regulations tax laws economic developments within the country and otherfactors such as litigation and industrial relations.

For and on behalf of the Board of Directors of
Tribhovandas Bhimji Zaveri Limited
Shrikant Zaveri Raashi Zaveri
Date: 3rd May 2017 Chairman & Managing Director Whole-time Director
Place: Mumbai (DIN: 00263725) (DIN: 00713688)